CMS has issued an updated report showing that providers appealed more overpayment decisions made by recovery audit contractors (RACs) between
2005 and 2008 than the Medicare agency first reported in July 2008. The revised report dated January 2009 reflects that of the more than 525,000
overpayment determinations made by the RACs, providers appealed more than 118,000, or 22.5%. The revised report shows that on appeal, 34%
were overturned in the providers' favor, resulting in a total of 7.6% of all RAC determinations ultimately appealed in favor of providers.
In its initial report in July 2008, CMS said that providers had appealed only 14% of all determinations, and that just 4.6% of all RAC
determinations had been overturned as a result of those appeal. While CMS has updated the appeals numbers for the RAC demonstration, it has not
revised the total value of improper payments corrected by RACs during the demonstration.
The July 2008 CMS report had been criticized by Medicare providers and hospital groups in the demonstration states who did not believe that the
report accurately reflected the total number or final outcome of RAC-related appeals because many cases were waiting to be heard by administrative
law judges at the first stage of the process or had moved to higher levels of appeal.
According to the revised report, Connolly Consulting Associates, the RAC for Region C — which will include Texas when the RAC nationwide
program is rolled out in 2009 — had the lowest total of appeals of overpayment determinations of all RACs in the pilot states. However,
Connolly had the highest percentage of appeals decided in favor of the provider (54.1%).
CMS continued to report that as of March 27, 2008, the RAC audits had “corrected” $1.03 billion in improper payments, including $37.8
million in underpayments to Medicare providers. RACs in the demonstration program are credited with returning nearly $700 million to the
Medicare program.
The nationwide RAC program rollout was originally scheduled to come to Texas by March 1, 2009. However, a bid contest of the RAC bid awards may
delay the scheduled roll out. The Centers for Medicare & Medicaid Services (CMS) was required to impose an automatic stay in the contract work
of the four RAC program. This action was the result of protests filed in late 2008 by two unsuccessful bidders for the RAC program with the
Government Accountability Office (GAO). The automatic stay has stopped work for all four RAC regional awards until a determination is made by
GAO. The GAO has 100 days to issue its decision, which means a decision would be due for these protests in early February. The four RAC contracts
— and any work under those contracts — are on hold pending the outcomes of the protests.
The January 2009 CMS report did not contain any information regarding the impact of the automatic stay on the proposed schedule for the nationwide
RAC program roll out.
If you have any questions regarding this e-Alert, please contact Carla Cox
at 512.236.2040 or cjcox@jw.com.
If you wish to be added to this e-Alert listing, please
CLICK HERE
to sign up. If you wish to be removed, please reply to this e-mail with REMOVE in the subject line and include your first and last name.
