The American Hospital Association (AHA) has appealed directly to the chief administrative law judge of the Office of Medicare Hearings and Appeals to assist in reforming a system currently overloaded with appeals of recoupments made by recovery audit contractors (RACs).
"Fundamental reform of the RAC process is at the heart of an effective and permanent solution to the appeal backlog problem and will enable hospitals to get timely administrative review that clearly is required by the Medicare statute," wrote Linda E. Fishman, AHA senior vice president of public policy analysis and development.
Among the best ways to reform the system, and what it claims is overreach by RACs, the AHA recommended levying a financial penalty against RACs for making inappropriate denials. It also called for waiving the one-year time limit for refiling a denied Medicare Part A claim as a Part B claim, which would "allow hospitals to pursue their appeals rights and receive a final determination on the Part A claim before rebilling."
Hospitals currently appeal about half of all RAC claims denials. That has led to a significant backlog of appeals in the administrative law court, which is undermanned relative to the volume of cases being filed. The AHA, two hospitals and a hospital system sued the U.S. Department of Health and Human Services earlier this year in an attempt to clear the backlog, claiming it could take up to three years to obtain a hearing for a claim.
The AHA also suggested placing time limits on when a RAC can pursue a particular issue, such as short-stay hospital claims, and curbs on how RACs use claims extrapolation as part of a pilot project due to "the significant financial incentives the RACS have to increase hospital claim denials."