Waiting Room: Medicare Appeals Tie Up Hospitals' Millions

by Mark Friedman  on Monday, Jun. 30, 2014 12:00 am  

The delays are “causing severe harm to providers of Medicare services,” such as hospitals, and “must be eliminated,” the lawsuit said.

“The stakes for America’s hospitals are high — billions of dollars in Medicare reimbursement hang in the balance,” the lawsuit said. “Deprived of the value of the services they already provided, hospitals are unable to use these funds to furnish patient care in the communities.”

HHS hadn’t filed a response in the lawsuit as of Wednesday. HHS referred calls to the press office of the Centers on Medicaid & Medicare Services, which administers the Medicare program for HHS. CMS didn’t respond to emails.

The RAC that handles the 17-state region that includes Arkansas is Connolly Healthcare of Conshohocken, Pennsylvania. It also didn’t immediately return an email for comment on Wednesday.

On its website, however, Connolly said that as many as 10 percent of all insurance payments are made in error. It said its work to “identify errors and address their root cause can help improve health care and make it more affordable for all of us.”

The RAC program is “aimed at reducing improper payments within Medicare programs as well as identifying process improvements to reduce or eliminate future improper payments,” Connolly said on its website.

The company touted the RAC program, saying it has “resulted in the correction of more than $8 billion in erroneous payments.”

Government Action

In February, 111 members of Congress, both Democrats and Republicans, signed a letter urging Kathleen Sebelius, secretary of HHS, to take action to improve the RAC program.

“Without more oversight measures in place, RACs have imposed a huge administrative burden on hospitals, which must spend valuable time and resources to appeal denied claims in order to be reimbursed for Medicare services provided,” the letter said.

The backlogs were also a concern to the members of Congress, who found it “alarming” that the “OMHA operates with 65 Administrative Law Judges, who already have 375,000 claims currently before them,” according to the Feb. 10 letter.

The members of Congress also “strongly recommended” that CMS provide more money to help clear the backlog of cases. And it suggested finding another way to pay RACs “to ensure RACs are not improperly incentivized to deny claims for profits and to ensure they focus on prevention of errors,” the letter said.



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