Representative Jim McDermott (D-WA) wrote a letter to the U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius on March 18, addressing the backlog of Medicare claims appeals and suggesting remedies to reduce the backlog including assessing financial penalties against Recover Audit Contractors (RACs) if a provider wins an appeal and money is returned to the provider.
“I suggest that there needs to be some financial penalty associated with RA collections that are overturned on appeal,” wrote McDermott, the ranking member of the Ways and Means Subcommittee on Health. “If providers are winning these appeals by large margins, which seems to be the case, this seems only fair.” He also suggested that future RAC contracts, which the Centers for Medicare & Medicaid Services (CMS) is in the process of recompeting, include performance standards for accuracy of collections from providers.
Additional suggestions were to ensure the recent “pause” in document requests associated with the RAC program continues until relevant parties have a plan in place so a similar backlog does not occur in the future; monitor the impact of Change Request 8425, which gave audit contractors permission to automatically deny related claims; and modify the two-midnights policy.
