Two recent developments leave healthcare providers with some welcome relief but much uncertainty in the Medicare claims audits and appeals arena. Effective on February 21, 2014, CMS ordered Recovery Audit Contractors ("RACs") to temporarily stop all medical record requests amid complaints from the provider community about RACs in particular and the overburdened appellate system generally. This development followed the Office of Medicare Hearings and Appeals ("OMHA") hosting a highly anticipated Medicare Appellant Forum ("Forum") on February 12, 2014 in Washington, D.C. to provide an opportunity for appellants to communicate and share ideas directly with OMHA in light of crippling delays in the appeals process. OMHA officials explained multiple factors behind the delays of more than two years in processing hearing requests and offered several initiatives in development to bring greater efficiency and transparency to the process. However, an appellant community looking for immediate fixes expressed its dissatisfaction with seemingly distant solutions.
On February 18, 2014, CMS announced that RACs would suspend all medical record requests in anticipation of the procurement of the next round of RAC contracts. CMS attributed this suspension to current RACs’ need to wind down claims audits by the end of their contracts while allowing time for CMS to improve the program. CMS identified several topics it is reviewing, including additional documentation requests ("ADRs") limits, timeframes for review, and communication between RACs and providers. The announcement did not offer start dates for the next round of RACs, leaving the suspension open ended.
State of Appeals
The Forum kicked off with a presentation by OMHA's Chief Administrative Law Judge Nancy Griswold who addressed the current state of appeals. The OMHA has seen a significant uptick in the number of appeals it has received in the past few years. This uptick can be contributed to the continuing expansion of audit entities, especially the Recovery Audit Contractors, more active state Medicaid agencies, and an increase in Medicare beneficiaries. Chief Administrative Law Judge Griswold admitted that the OMHA is facing "significant challenges" due to the exponential increase of appeals.
Several statistics underscore the severity of the situation facing OMHA and appellants. In fiscal year 2009, OMHA received 35,831 appeals as compared to 236,227 appeals received in the first three quarters of fiscal year 2013. In fiscal year 2009, ALJs wrote 551.1 decisions per fiscal year on average compared to 1,220 decisions in fiscal year 2013. In fiscal year 2012, OMHA received 117,371 appeals and issued 61,517 decisions. In fiscal year 2013 to date, it is estimated that OMHA received 350,629 appeals and issued 79,303 decisions. In January 2012, OMHA received 1,250 appeals per week. In January 2013, OMHA received over 15,000 appeals per week. In fiscal year 2009, appeals were processed in 94.9 days on average. In fiscal year 2014 to date, cases are being processed in 329.8 days on average. There are currently 480,000 appeals stored in OMHA’s Central Operations awaiting assignment to an ALJ. These numbers will likely continue to increase.
To address this significant increase, OMHA is deferring assignment of judges to new appeal requests received after April 2013 until their dockets can accommodate them. The assignment delay is expected to be up to 28 months except in beneficiary-initiated appeals, which are prioritized. It is estimated to take another 6 months to obtain a hearing after assignment. Deferred appeals will be held in OMHA's Central Operations until the docket backlog shrinks. These delays are in sharp contrast to the CMS appeal guidance, which states that decisions will be issued within 90 days of an ALJ hearing request.
Amidst pressure to reduce the delay in hearing appeals, Judge Griswold stated that adjudication quality remains important. OMHA received an 18.6 percent increase in appropriations, but Judge Griswold cautioned that it will take time to hire and train new staff. There has been no corresponding increase in appropriations to the Departmental Appeals Board ("DAB"), the next level of appellate review after OMHA. Increased output of case decisions from the OMHA level and subsequent appeals may move the appellate bottleneck to the DAB. As Judge Griswold repeated numerous times, the answer to these massive delays and inefficiencies must be "holistic" and involve all levels of appeal to truly provide relief to appellants.
Judge Griswold announced several initiatives that OMHA is developing to improve the appeals process, including publication of an adjudication manual detailing procedural rules and effective case processing practices and the creation of several successive online platforms that will allow appellants to view their appeals' statuses online and communicate with OMHA. Bruce Goldin, OMHA’s Director of Information Management and Systems Division, anticipated that the ALJ Appeal Status Information System (AASIS) will be implemented in Spring 2014 and will provide public access to appeals statuses, allow users to search for level 2 and level 3 appeal numbers, and find appeals data, such as ALJ and field office assignment.
Additionally, the Medicare Appeals Template System (MATS) will host fillable forms used to submit requests online and is scheduled to be rolled out nationally in the second quarter of 2014. The Electronic Claims Adjudication and Processing Environment (ECAPE) system, a shared system of record, will expand upon the MATs system in the long term to handle case intake, assignment, workflow management, exhibiting, decision writing, closing and management information. ECAPE is expected to be released in stages between Spring 2015 and Summer 2016.
Jason Green, Director of OMHA’s Program Evaluation and Policy Division, described additional initiatives related to case processing efficiency through the provision of more information to adjudicators and the offering of alternate adjudication models. Such alternative adjudicative models include statistical sampling using OMHA-provided statisticians, mediation of claims through OMHA that would result in “agreed decisions,” fast-track review of potentially favorable cases or those with narrow issues by OMHA attorneys, and regulations that would increase efficiency in the long term.
Best Practices Recommendations
Griswold and other OMHA officials offered multiple recommendations for the appellant community to assist them in reducing the processing time of appeals, including the following:
- Do not submit duplicate requests for hearing
- If filing late, submit a request for an extension of time to request a hearing with the request
- Submit additional information after assignment to an ALJ as any additional filings sent after the request to OMHA’s Central Operations may not be associated with the request
- Do not send a courtesy copy of the request to the QIC
- Do not submit copies of documentation already submitted at prior levels as the QIC should forward it to OMHA
- Prominently list the Medicare Appeal Number on the request and ensure the beneficiary information matches the appeal number
- List the beneficiary’s full HIC number
- Include the first page of the QIC decision or prominently list the full name of the QIC
- Use form CMS-20034 A/B
- Document proof of service to other parties
- Mail request via tracked mail
- New evidence submitted by suppliers or providers must be accompanied by a statement explaining why the evidence was not previously submitted
- Limit hearing request attachments to appointment of representative form (if appropriate), first page of QIC decision, and proof of service to other parties
- Prepare a separate request form for each Medicare Appeal Number in an aggregated group of appeals
- Prominently provide the request to aggregate claims language on the cover letter and submit all requests in one package
- Consolidate as many similar claims as possible into one appeal request at level 1
Appellant Community Feedback
While appreciative of the Forum and the opportunity to communicate directly with OMHA officials, appellants and their representatives voiced their frustrations over a system that is at best inefficient and at worst a deprivation of due process. Several comments demanding concrete action elicited cheers from the audience. Much criticism focused on the quality of review at the first two levels of appeal and technical denials that unnecessarily clog the appeals process. Judge Griswold and CMS representative Arrah Tabe-Bedward promised to take these criticisms under advisement as they work towards a comprehensive overhaul involving all levels of review. Healthcare providers should continue to closely monitor the dialogue between the OMHA and provider community as they consider appropriate steps to respond to the significant delays of processing appeals.
Impact of Recent Developments
Relief from medical record requests and audits by RACs is a positive development for providers, but may be short-lived depending on when new RAC contracts are awarded and it does not address underlying problems in the RAC program. The reprieve also grants no relief for providers already dealing with RAC denials and claims appeals in a desperately stalled process. Providers should consult legal counsel to develop a plan to protect their rights due to delays in the appeals process. Open communication with auditors and participation in all informal processes will allow for questions to be answered and all records produced. In addition to maintaining a healthy appeals strategy, providers should remain vigilant in their billing procedures to ensure claims are filed correctly the first time. Although RACs may be temporarily unable to request medical records for audits, other audit entities, including MACs and ZPICs, continue to perform claims audits and data analysis. Providers should take advantage of the indefinite break from RAC audits to confirm their billing and coding procedures are appropriate. The delay in the processing of appeals represents an additional incentive to proactively avoid denials if possible.
As CMS examines the RAC program and other issues raised by appellants at the Forum, providers should watch for announcements related to new RACs and participate in industry feedback sessions on audit and appeals matters.