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November 14, 2017

CMS' latest effort to clear the Medicare appeals backlog

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    CMS earlier this month announced that it has launched two new initiatives aimed at clearing a backlog of Medicare claims appeals.

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    Backlog details

    Medicare's recovery audit contractor (RAC) program identifies situations in which health care providers allegedly inappropriately billed Medicare and recouped overbilled funds.

    In May 2014, the American Hospital Association and a group of hospitals filed a lawsuit against HHS that claimed the length of time it takes to challenge a RAC decision violates the Medicare Act, which sets a 90-day-limit for such appeals to be settled.

    HHS agreed that the review process was taking too long but said the process has slowed because administrative judges' workloads between 2012 and 2013 increased by a factor of five. The department contended that it lacks sufficient funding to remedy the issue.

    A federal judge in December 2016 ordered HHS to clear the backlog by 2021 and to file progress reports every 90 days. To help remedy the issue, HHS last year issued a proposed rule aimed at simplifying the claims appeals process and reducing the backlog, which had reached more than 700,000 cases. However, HHS in a progress report filed in March said it lacks the money and resources needed to meet the court-ordered deadline to clear the backlog.

    CMS launches new initiatives aimed at clearing backlog

    In an effort to clear out the backlog, CMS announced that it was launching a low-volume appeals settlement option for certain health care providers.

    CMS said the new process would apply to providers with fewer than 500 Medicare Part A or Part B claims appeals—totaling no more than $9,000 per claim—pending with the Office of Medicare Hearings and Appeals (OMHA) and the Medicare Appeals Council as of Nov. 3. According to RACmonitor, CMS on its website states that providers also will need to meet "certain other conditions" to be eligible for the low-value appeals settlement option, but does not detail those conditions. CMS said it would settle qualifying appeals at 62% of the net allowed amount. The agency directed interested providers to continue monitoring its website for further details.

    In addition, CMS said OMHA would expand its settlement conference facilitation process for certain providers that do not qualify for the low-volume appeals option. CMS said it would release more details about that initiative on OMHA's website in the coming weeks (Ellison, Becker's Hospital CFO Report, 11/10; Wachler/Diesel Roumayah, RACmonitor, 11/9; Burris, Niecko-Majjum, National Law Review, 11/9).

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