Hospitals urge audit suspension amid appeal stoppage

Jan. 17, 2014

The American Hospital Association is urging suspension of Medicare audits until a backlog of appeals is cleared.

The suspension in the Recovery Audit Contractor (RAC) program is needed, Rick Pollock, executive vice president of AHA, said in a Jan. 14 letter to Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services (CMS), because that program drove a surge in appeals that swamped the Medicare appeals process.

An appeals backlog of almost 357,000 claims has led CMS to suspend appeals for some hospitals and health systems, according to a U.S. Department of Health and Human Services (HHS) official.

Nancy Griswald, chief administrative law judge for HHS, wrote to an unknown number of hospitals and health systems in late 2013 to notify them that her office has “temporarily suspended” providers' appeals of adverse findings by RACs. The notices were sent to providers with “a significant number of Medicare appeals currently pending before” the Office of Medicare Hearings and Appeals (OMHA).

Sixty-five administrative law judges, who adjudicate the third level of the five-level Medicare claim appeals process, have seen their workload grow by 184 percent over the last four years, Griswald wrote. Over the past two years, their appeals backlog has grown from 92,000 claims to more than 460,000 claims. And the arrival of new appeals has increased from a weekly average of 1,250 in January 2012 to more than 15,000 in December.

Medicare beneficiary appeals will continue to receive hearings.

“Assignment of all other new requests for hearing will resume as administrative law judges are able to accommodate the additional workload on their dockets,” Griswald wrote.

She estimated that it would take two years for the backlog to be reduced enough for administrative law judges to begin accepting new cases.

Griswald’s office is working with CMS and the Departmental Appeals Board to “better utilize resources to address the increased demand for hearings.”

“The OMHA letter provides ample evidence of a system in chaos,” Daniel Landon, senior vice president of government relation for the Missouri Hospital Association, wrote to Sen. Roy Blunt (R-Mo.) about the suspension.

Landon blamed much of the backlog on shortcomings on the RAC program, which had two-thirds of its payment denials overturned on appeal, according to the American Hospital Association.

To ultimately reduce the backlog, Landon urged support for legislation that would impose new limits on the RAC program, including the addition of penalties for contractors whose adverse findings are rejected on appeal.

The OMHA plans a forum to address the backlog and appeals suspension on Feb. 12 in Washington DC.

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