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FAH Weighs In on Senate Finance Medicare Appeals Process Reform Legislation

June 03, 2015 | FAH Hospital Policy Blog Team

Category: Hearings, Legislation, Medicare

Yesterday, the FAH submitted a letter to the Chairman and Ranking Member of the Senate Finance Committee weighing in on the Audit & Appeal Fairness, Integrity, and Reforms in Medicare Act of 2015.

The bill will be discussed and marked up by the Committee this morning at a hearing scheduled for 10:00 am. The FAH appreciates the work of the Committee and its outreach for input from various stakeholders on this critical issue. The Federation supports the efforts of the Committee to develop legislation that will help reform the Medicare appeals process—a greatly needed change. We applaud certain provisions in the legislation as a positive step in addressing an overly-burdened Medicare appeals process.

As described in the letter:

“The bill contains various provisions to provide the resources needed to adequately respond to appeals. For example, the legislation would provide increased resources to the Office of Medicare Hearings and Appeals and the Departmental Appeals Board to conduct activities related to reviews, hearings and appeals, along with additional HHS staff (Medicare Magistrates) with expertise in the Medicare issues under appeal. The legislation also would promote transparency and consistency in applying the Medicare review guidelines to appeals, and would provide assistance through a Medicare Ombudsman in resolving complaints about the Medicare appeals process, with recommendations for improvement.”

The FAH encourages the Committee’s efforts, and urges inclusion of additional provisions that would strengthen the legislation, such as:

  • The scope of RAC reviews should exclude any medical necessity matter involving physician judgment.
  • ADRs should be limited to those where the likely appeals can be resolved by ALJs within 90 days of receipt.
  • Payments to hospitals should not be recouped until after a final resolution of an ALJ appeal confirming an overpayment.
  • RAC denials should be reviewed and approved by a physician on staff at a RAC before being issued to a provider.
  • CMS should implement an exception to the timely filing requirement which permits hospitals to opt for a Part B payment remedy when faced with a post-payment redetermination which occurs beyond one year from the date of the original claim.
  • CMS should enforce the RAC deadlines to issue claims decisions and prohibit RACs from making denials when deadlines are not met.
  • RACs should be subject to a financial penalty when their post-payment denials are overturned on appeal at a significant rate.
  • CMS should seek regular stakeholder input with regard to RAC activities.
  • CMS should enforce the statutory timeframe within which appeals determinations must be made by entering a default judgment for the hospital or beneficiary if an appeal is not heard within the required timeframe.
  • Hospitals should not be required to wait for ALJ acknowledgment letters of hospital dismissals of Part A appeals before seeking Part B payment, and should not be required to recode and rebill the claims as Part B claims.

Further, while the bill has many promising policy components, the FAH is concerned about the possible funding requirements for implementation of the new legislation.

To be clear, the Federation strongly objects to more hospital cuts as a means to pay for any components of the legislation. Hospitals are facing more than $140 billion in cumulative cuts since just 2010. As a result of these cuts, hospitals now face record-setting negative Medicare margins, projected to be -9% in 2015. These are record-low margins, and part of a years-long trend of negative Medicare margins.

The FAH vehemently opposes any additional cuts that would further impact seniors’ access to care. Reforming the critically important appeals process, which has been overly and unfairly burdened for years, is a significant issue for hospitals and patients across the nation.

The FAH commends the Committee for developing the legislation through an open and transparent process and we look forward to this morning’s markup and working with the Committee to improve the legislation.