On February 10, 111 bipartisan members of Congress sent a letter to the Centers for Medicare & Medicaid Services (CMS) Secretary Kathleen Sebelius requesting reform of the Recovery Audit Contractor (RAC) program and adoption of the reforms contained in the Medicare Audit Improvement Act of 2013, House Resolution (H.R.) 1250.
The letter cited several operational problems with the program, such as that the commission structure, which ranges between 9 and 12.5 percent, incentivizes RACs to deny claims even when they are correct and that inaccurate denial of claims places a higher out-of-pocket financial burden on Medicare beneficiaries. The letter also calls out the recent announcement from the U.S. Department of Health and Human Services (HHS) Office of Medicare Hearings and Appeals (OMHA) that it has suspended assignment of claim appeals to an Administrative Law Judge (ALJ).
“[W]e strongly recommend that CMS consider dedicating additional resources to help resolve OMHA’s backlog issue in order for the claims appeal process to resume as usual. Furthermore, we strongly urge CMS to immediately reform the RAC process. We believe CMS should implement reforms to ensure that auditors are charged with identifying real claim coding and medical documentation errors, as well as provide a more transparent mechanism through which providers can be informed of errors so as to avoid them in the future. An alternative payment arrangement with auditors should be considered….”
