Drastic Cut in Hospital ADR Limits
The Centers for Medicare & Medicaid Services (CMS) is cutting the Recovery Audit Contractors’ (RACs) universe of hospital claims to review, and the number of records they may request from a hospital, by 75% as of January 1, 2016, according to The Wall Street Journal. In their article of October 30 (subscription required), WSJ reports that the four contractors received a “technical direction letter” from CMS dated Oct. 28, cutting the amount of claims they may review for any hospital or provider to only 0.5% of claims, every 45 days. Previously, RACs could request records every 6 weeks totaling up to 2% of claims submitted by the provider to CMS for reimbursement.
Hospitals Score with Feedback
WSJ quotes a Medicare spokesman saying that CMS made the changes “based on stakeholder feedback,” and the new rules “help strike the right balance between [the Medicare agency’s] responsibility to ensure that Medicare claims are paid appropriately, that beneficiaries continue to have access to necessary services, and that program integrity efforts are focused on providers…who present the greatest risk to the program.”
CMS has not publicly discussed the change, and as of this writing, has not posted any changes to their website.
Physicians, Home, Hospice & DMEPOS: No Change
According to the article, there are no changes to the number of claims from physicians that RACs may review, which seems to coincide with the desire of CMS to focus on areas not much pursued by the existing RACs. The attitude of CMS is fairly obvious from the verbage on their RAC Updates page, and from the structure of the “new” national Medicare RAC program, even to the point of including a single RAC contractor to focus solely and exclusively on Home Health Agencies, Hospice and DMEPOS providers and suppliers.
The Second Move by CMS to Refocus RACs
Congress may have helped CMS to see that the RACs were out of control. Recent legislation and hearings may have prompted CMS’ changes in the “future” RAC program, which include severely limiting RAC reviews of inpatient admission status, now only allowed after January 1, 2016, and then only if referred by the very limited number of reviews to be done by the two BFCC-QIOs, KEPRO and Livanta. But there has also been considerable lobbying by the American Hospital Association (AHA), who has “long urged” Medicare to address the amount of administrative burden the RACs impose on hospitals.
Hence, this move by CMS can be seen as the second major change made to further control the RACs, in a fairly obvious reaction to the RACs’ focus on inpatient hospital admissions. Over the past few years, convoluted CMS regulations, inconsistent regulatory guidance from CMS, and the pure greed of the RAC contractors led to a backlog of over 800,000 appeals sent to the third level of the Medicare appeals process. Providers learned to move their appeals to that level as soon as possible due to the historical and typically huge favorable appeals decision rate decided by the Administrative Law Judges, who are not part of CMS, and not necessarily bound by CMS interpretations and instructions on how to “interpret” regulations and law.