Congressman to CMS: Fix RACs and the 2 Midnight Rule – or We Will

The Secretary has had to answer to Congress before... will it happen again?

The Secretary has had to answer to Congress before… will it happen again?

The Ranking Member of the House Ways and Means Subcommittee on Health suggested that the Secretary of the U.S. Department of Health and Human Services (HHS) make significant changes to the two primary causes of the huge backlog of Medicare appeals now facing the Office of Medicare Hearings and Appeals (OMHA), or soon face more “prescriptive” legislation action, in a letter dated March 18, 2014.

Rep. McDermott's letter to Sec'y Sebelius basically asks, "Are you gonna fix this or do we need to do it?"

Rep. McDermott’s letter to Sec’y Sebelius basically asks, “Are you gonna fix this or do we need to do it?”

U.S. Congressman Jim McDermott, as head of the Subcommittee, sent a three-page letter to HHS Secretary Kathleen Sebelius, to express two concerns about the backlog of appeals facing OMHA. His first concern was that beneficiaries, despite having their appeals moved to the front of the line, are having trouble having their appeals heard, due the sheer number of appeals. His second concern specifically called out Recovery Audit Contractors (RAC) as the “proximate cause” of the sudden increase in appeals causing the huge backlog of appeals, and goes on to suggest that the Secretary could reconsider several programs, in some very specific ways, in light of these concerns.

Rep. McDermott reveals that he has not previously supported many of the existing legislative efforts to modify the RAC program because he saw them as “quite prescriptive,” and that the Secretary could take several steps to deal with these issues and concerns, without “any intervention by Congress.”

In my opinion, this is a thinly veiled threat of Congress stepping in to make the modifications, if the Secretary cannot bring the program under control and deal with the backlog in an “effective” manner.

Briefly, here are the suggestions Rep. McDermott mentions:

  • Modify the Two Midnights Policy – Repeating his concerns from a July 2013 letter to CMS, he reiterates that the RACs are the true underlying issue, and the policy “will only exacerbate the appeals backlog.” He suggests the policy is not “ready for enforcement, not even limited enforcement through probe and educate reviews.”
  • Require Enhanced Accountability for RACs – Citing the fact that there is no penalty assessed to the RACs for overturned appeals, he suggests that future contracts, like the ones now being redone, “include performance standards of accuracy of collections from providers.”
  • Address These Problems During The “Pause” – Pleased to see the pause in the RAC program (never mind that the pause is really due to the fact that no contracts exist at the moment), he notes that all the claims can still be audited in the future, due to the lookback period. He suggests that the pause be extended until “appropriate modifications” to the programs are made, and the backlog of appeals is addressed. He further suggests that these claims be somehow removed from the lookback period.
  • Monitor Impact of Change Request 8425 – Suggesting that the true impact of permitting contractors to automatically deny related claims is no predictable, especially the impact on the appeals backlog, he recommend that CMS closely monitor this policy. Apparently, given that this policy was just rescinded the very next day after the letter, with no replacement in sight, CMS at least is in tacit agreement with this suggestion.

The letter ends with a final suggestion that the Secretary “work with me and other interested parties to ensure that these issues are timely addressed.”




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