Editor's Note

Justice Is a Relative Term

It's hard to play the Medicare game when the deck is stacked against you.

• By David Kopf
• Feb 01, 2014

Medicare’s massive expansion of its preand post-payment claims audits has been exasperating to say the least, but the recent decision by CMS’s Office of Medicare Hearings and Appeals to delay assigning an Administrative Law Judge to any new audit appeals by two years is downright jaw-dropping. It’s as though the agency is rewriting the rules to suit itself.

Ever since CMS ramped up its program integrity efforts (and budget) hospitals, physicians, and clearly DME providers have been mired in a swamp of confusing Medicare claims audits. The need and ability to appeal has been pivotal, given that so many audits are in mistake, and the various audit programs have significant overturn rates.

Moreover, the audits are so error prone, that they are part of the justification OMHA is using for its delay. There is a backlog of 357,000 claims going to appeal stacked up in the system, according to a letter from Nancy Griswold, OMHA’s chief judge. Prior to the delay announcement, the current turnaround for an appeal was 16 months. Griswold’s other justification for the delay is that beneficiary appeals should be put to the head of that line and processed first.

But the backlog is ultimately due to CMS’s radically revved up audits, which over the past three years have resulted in appeals growing by 184 percent. Meanwhile, “the resources to adjudicate the appeals remained relatively constant” at 65 administrative law judges, Griswold wrote in a rememo. While OMHA received 1,250 appeals a week in January 2012, it received more than 15,000 appeals a week by November 2013.

So, the backlog shouldn’t have come as a surprise to CMS. It directed considerable capital toward expanding its audit program, so why wouldn’t it expand its number of judges?

The one upside is that HMEs aren’t alone. OMHA’s delay decision is drawing criticism from all corners of healthcare. Some are even saying CMS is even breaking the law.

“Delays of at least two years in granting an ALJ hearing for an appealed claim are not only unacceptable, they are a direct violation of Medicare statute that requires ALJs to issue a decision within 90 days of receiving the request for hearing,” American Hospital Association Executive Vice President Rick Pollack wrote in a letter to CMS Administrator Marilyn Tavenner. “Further, this is not a new problem; prior to OMHA’s suspension of appeals assignments, ALJs were not adhering to their statutory deadline.”

Closer to home, those sentiments were reflected by HME industry audit expert, Wayne van Halem, CFE, AHFI, president of The van Halem Group LLC, which helps providers contend with Medicare claims audits.

“This is really frustrating,” van Halem says. “The huge increase in the volume of appeals is a direct result of the significant increase in the number of audits being conducted. CMS keeps awarding lucrative contracts to private audit entities to find t’s that aren’t crossed and i’s that aren’t dotted, yet the beneficiaries clearly needed the services that were provided.

“Getting before an ALJ is generally the first time where reason enters the equation and we still see a large number of claims overturned, so providers should and will continue to fight,” he adds. “Rather than spend hundreds of millions of dollars to increase the volume of audits which subsequently increases the volume of appeals, why not spend some money on increasing staff and lessening the burden on the judges in the Office of Medicare Hearings and Appeals?”

I’m with Wayne, and I’ll add that this whole scenario completely strains CMS’s credibility. Again, how could it not know an increase in audits would lead to an increase in appeals? If anything this serves as yet another example why providers need to diversify their revenue sources and reduce their reliance on playing Medicare’s funding game, because it’s looking rigged.

This article originally appeared in the February 2014 issue of HME Business.