On June 3, 2015, the Senate Finance Committee approved by voice vote the Audit & Appeal Fairness, Integrity, and Reforms in Medicare (AFIRM) Act of 2015.  Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) were joined by Committee members in commending the bill as a good balance between rooting out waste and eliminating “bureaucratic water torture” for responsible providers.  Several Senators, on both sides of the aisle, voiced strong support for reforming the Medicare audit program in order to reduce burdens on providers.   

The AFIRM Act includes several provisions designed to reduce audit burdens for Medicare providers, including:

  • Making the audit practices and review methodologies of Medicare contractors more transparent, and requiring the Secretary’s approval of contractor audit review guidelines before their use by Medicare contractors;
  • Directing CMS to publish specific statistics by contractor and provider type that reveal the success rate for providers who appeal Medicare contractor denials;
  • Creating an Ombudsman for Medicare Reviews and Appeals who would be tasked with identifying, investigating, and assisting in the resolution of complaints and inquiries involving the Medicare review or appeals process;
  • Establishing a “secure internet based system” to determine the status of claims under review by any Medicare audit or oversight contractor or in process as an appeal;
  • Creating an alternative dispute resolution process for voluntary resolution of large volumes of pending appeals involving similar issues of law or fact; and
  • Directing the Secretary of HHS, within six months of enactment, to report to Congress on recommendations to change the payment structure for Recovery Audit Contractors (RACs) from incentive-based to non-incentive based without additional financial burdens to providers.

Others provisions of the AFIRM Act are designed to reform the Medicare administrative appeal system in order to lower the number of pending appeals, including raising the amount in controversy for review by an Administrative Law Judge (ALJ).

The next step in the legislative process is to convert this Chairman’s Mark of conceptual language to legislative language, at which point it is anticipated that a bill would be introduced in the Senate.  The Chairman’s Mark and related amendments and materials are available on the Senate Finance Committee’s website by clicking here.

The King & Spalding RAC Coalition continues to press for fundamental and lasting RAC reform.  The Coalition is an ad-hoc group of hospital clients created in April 2013 in an effort to communicate jointly to CMS and Congress the need for meaningful and common-sense reforms to the RAC program.