Access to Therapies Threatened
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SNF PPS Proposed Rule for FY15

Medicare Delays Auditor Contracts and
Therapy Manual Medical Review

Because of impending litigation, the Centers for Medicare & Medicaid Services (CMS) has agreed to postpone the new Recovery Auditor Contractor (RAC) contracts until August 15, 2014. One of the current RACs has filed a lawsuit in federal court to protest terms of CMS’s proposed RAC contracts. CMS agreed to delay the awarding of new contracts while the court moves forward with proceedings in the case.

Current RACs are no longer processing manual medical review of Part B therapy claims. However, CMS officials have suggested that all claims will be processed and documentation requests held for post-payment review by new contractors once contracts have been implemented. It is likely that therapists will receive the requests for review several months after payment has been received due to this contract delay. Payment will be recouped should review determine skilled services were not needed or provided.

Lawmakers defend providers over backlogged Medicare appeals

Frustrated lawmakers are criticizing the Medicare appeals process that has wilted with the increase in audits recently.  Federal officials from two key agencies agreed that the Medicare’s Recovery Audit Contractor (RAC) program needs to be revised.

A backlog of 460,000 appeals are pending for administrative law judge hearings.  One Representative stated it could take “10 years to clear” provided all administrative law judges called for by CMS were hired, a move that is not likely to occur.  This means provider payments may be help up while appeals are under way, a source of frustration and anger for lawmakers and providers. 

From 2007 to 2013, RAC appeals soared from 20,000 to 192,000, but funding for the Office of Medicare Hearings and Appeals (OMHA) did not increase.  Officials agree that more needs to be done to ensure program integrity as RAC audits have grown from 1,500 to 15,000 per week.