Physicians who decide to appeal a Medicare overpayment ruling face a long waiting period before they are granted a hearing. A single case can take two years or longer to complete the entire appeals process, an extended period that many medical organizations think is far too long.
In response, the AAFP recently signed on to a letter requesting that HHS review(4 page PDF) the appeals process and reduce the frequency of incorrect decisions made by the Recovery Audit program, which uses recovery audit contractors (RACs) to investigate overpayments and underpayments made by Medicare.
If an RAC determines that a physician has received an overpayment, but the physician believes the decision was made in error, the only recourse is to file an appeal. The Office of Medicare Hearings and Appeals (OMHA) is responsible for handling the appeals.
One of the medical community's primary criticisms of the audit process is the long delay involved when a physician decides to appeal a finding by the RAC. Because there is a large case backlog of appeals, the OMHA recently informed physician organizations that requests for a hearing before an administrative law judge could take 28 months before the hearing is scheduled.
The communication prompted a number of medical organizations to team up to write the letter, which suggests that RACs are too aggressive in making these determinations, as evidenced by the percentage of cases that are overturned. According to the letter, a recent CMS report to Congress indicated that 43.6 percent of Medicare overpayment claims by auditors are overturned on appeal. The organizations sent the letter to raise awareness within HHS regarding the frustration the RAC process causes within the medical community.
"By delaying the assignment of cases to administrative law judges by more than two years, OMHA is denying due process, which is predicated on the timely disposition of disputes for physicians and other providers who experience erroneous determinations by Medicare contractors," says the letter. "We therefore strongly urge OMHA to develop a comprehensive solution to the Medicare appeal backlog problem so that appealed cases may be assigned and adjudicated without delay."
Physicians are required to devote significant time and expense to the appeals process, and "The proposal to further delay processing appeals is the most recent example of the barriers to obtaining payment for the delivery of medically necessary and reasonable services to Medicare beneficiaries," the letter states. "Over the course of years, physicians have increasingly assumed the cost of producing medical records (often repeatedly at various levels of appeal), meeting exacting deadlines and filing a succession of appeals."
In the fourth quarter of 2013, CMS collected $816 million in Medicare overpayments while dispersing just $88.1 million in underpayments to physicians, according to a recent Medicare Fee for Service National Recovery Audit Program Quarterly Newsletter(www.cms.gov).
RACs are awarded a percentage of any overpayment fees they collect, so there is an inherent incentive to investigate overpayments before underpayments. The contingency fee ranges from 9 percent to 12.5 percent, according to CMS. RACs must return the fee if the overpayment is overturned at any level in the appeals process, so they are motivated to vigorously defend against an appeal.
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