A three-year pilot program launched in 2006 helped CMS start taking a much closer look at Medicare claims, processes, and errors relating to them. The Recovery Audit Contractor (RAC) program, initially performed in only a few states, is now being introduced nationwide.
As part of the RAC auditing process, healthcare providers are able to appeal denied Medicare claims, as well as overpayments discovered by the contractor.
Some facilities have met the RAC review process with hesitation, as it is still relatively new in most states, says Maggie M. Mac, CMM, CPC, CPC-E/M, ICCE, a consulting manager at accounting firm Pershing Yoakley & Associates in Clearwater, FL. Those who are new to the process have found some initial difficulty with coding records properly or providing correct or sufficient information to the RACs. This makes additional education crucial to ensuring that the RAC process runs smoothly in the future, Mac says.
Mac says there are currently numerous appeals pending from providers all across the country. She notes that so far, approximately 118,000 providers have filed appeals—34% of which have been overturned in favor of the provider.
"I think we can expect to see the [appeals] activity raised this year," Dugan says.
The appeals process includes five steps:
1. Written request for redetermination. This must be completed within 120 days of the initial claim denial or an overpayment identified by a RAC. The Medicare carrier has 60 days to review the determination and respond with an explanation of the decision.
2. Reconsideration. This is the next step in the appeals process, should the provider be dissatisfied with the redetermination decision. Redetermination requests are reviewed by an independent contractor and must be submitted in writing.
3. Administrative law judge. Those dissatisfied with the redetermination of a claim that is at least $110 also have the option of having the appeal reviewed by an administrative law judge, an attorney who works for HHS. A hearing—the request for which must be submitted in writing—is held with the provider who submitted the claim and appeal, as well as the beneficiary. The judge has 90 days from receipt of a hearing request to present a written ruling on the appeal.
4. Medicare Appeals Council. Providers can request that the appeal be reviewed by the Medicare Appeals Council if they are not satisfied with the decision of the administrative law judge; this must be filed within 60 days of the judge's decision. The council must then review the appeal and issue a determination within 90 days.
5. Lawsuit. Should the provider be dissatisfied with the appeals council's decision, a final option is to file a lawsuit in federal district court within 60 days of that decision. The claim being appealed must total more than $1,090.
The RAC program should be at the forefront for nearly all healthcare providers. As the full implementation requirement deadline approaches, Mac says too many hospitals, physician practices, and health systems don't know much about it.
This article was adapted from the April 2009 issue of The Doctor's Office, a HealthLeaders Media publication.