News from the Week of February 14

OMHA Forum Shockers

Honorable Nancy Griswold, Chief ALJ Led a Brave Discussion

Honorable Nancy Griswold, Chief ALJ Led a Brave Discussion

Quoting staggering numbers of appeals that are stuck in the mail room, much less not yet assigned to a Judge, the Administration Law Judges gave an organized forum.

Chief ALJ Nancy Griswold stated that OMHA is committed to addressing the backlog and will not “artificially limit the number of appeals” filed. ALJ hearings are not suspended, and claim to be ongoing, despite the fact that it has suspended the assignment of cases to ALJ dockets. [This reporter fails to see the practical or effective difference.] Judge Griswold did make the point that OMHA is “operationally and functionally separate” from CMS and its contractors, and does not create policy. As such, it processes Level 3 hearings within the policy framework that applies to the claims at issue.

The scope of challenges facing OMHA from the increase in appeal volume are not to be minimized, and can be attributed to several causes, including the growing Medicare population, and more active Medicaid agencies (increased dual eligible workload). Nevertheless, it is pretty obvious by inspection that the overwhelming expansion of post-payment audit programs, the majority of which are RAC audits, have been responsible for the largest increase in appeal volume.

There were some new figures shown in their presentations, which can be found on the OMHA site. A nice review of the day can be found in this article at King & Spalding.

The biggest surprise of the day was reserved for the ALJs themselves. Denise Wilson of Appeal Masters brought to their attention that the RACs have been seen to come to ALJ hearings with cases that they know are dubious, and known to be improperly denied. This came as a complete surprise to both the ALJs and the CMS representatives present.

One question was raised by an attendee about the regulatory basis for the suspension of assignment to an ALJ docket. OMHA’s response made it obvious that there is no such authority, it is simply being done because OMHA does not have the resources to follow the requirement to review such cases within 90 days after assignment. It remains to be seen if there is any statutory requirement about assigning cases to a docket within a specific time frame, and if there is, if there is any reason to think that the OMHA will fulfill such a requirement.

MY BIG QUESTION: Who gets to pay for the interest on the appeals that get overturned 2-5 years from now.  How many dollars are being held by the government for the 480,000 claims now sitting in limbo, awaiting adjuducation? My calculations say that CMS may need to give back about 33% of the $2.5 Billion dollars that the RACs alone claim to have “saved” us. What’s the interest on that for 2 years? And as for who gets to pay that interest… you can be sure the RACs won’t be paying it.  You and I get to pay it.


Congress Urges RAC Reform

Even Congress Can See This is BROKEN

Even Congress Can See This is BROKEN

A bipartisan group of 111 members of the United States House of Representatives sent a letter to HHS Secretary Kathleen Sebelius on February 10, 2014, urging the Secretary to reform the Medicare Recovery Audit Contractor (RAC) program.  The letter noted that RACs’ compensation structure – a percentage commission of every denied claim – provides an incentive for RACs to deny claims “even when the claims are correct.”  Hospitals have been successful in appealing 72 percent of RAC denials, but the logjam of appeals at the administrative law judge level places a “huge administrative burden on hospitals.”  The letter also expressed concern about the increased out-of-pocket expenses beneficiaries incur when a paid claim under Part A is reversed to payable under Part B.

Credits: More Than 100 House Members Urge HHS to Reform RACs


A New Kind of Denial:  Lack of Market Necessity



Just when you thought you’d seen all the kinds of denials possible… the US District Court for Idaho ruled in favour of the plaintiffs (ie, the FTC, the Idaho attorney general and St Alphonsus, a competing hospital system), who had challenged St Luke’s Health System’s acquisition of the Saltzer Medical Group, a 41-physician multi-specialty group, including 16 adult primary care physicians, located in Nampa, Idaho. The court concluded that “improved care in the Treasure Valley” could be achieved by other means… kinda like saying, “you could do this as outpatient instead of inpatient.

Credits: District court blocks hospital acquisition of physician practice


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