While the American Hospital Association recently accused Medicare officials of breaking the law by suspending appeals of Recovery Audit Contractor decisions to administrative law judges for two years to reduce a huge backlog, an association representing contractors has a different perspective.

The American Coalition for Healthcare Claims Integrity, representing RACs and other health payment contractors working for government agencies, on January 21 sent a letter to members of Congress asking for reform of the RAC appeals process. Here’s the letter:

“The nation is currently facing the systemic dismantling of healthcare integrity programs that fight an epidemic of wasteful spending among Medicare providers.

“Last week, the Department of Health and Human Services’ Office of Medicare Hearings and Appeals announced it would no longer accept certain appeals of Recovery Audit Contractor (RAC) decisions. Citing a backlog of 357,000 cases, HHS said it would not accept appeals from providers to an administrative law judge (ALJ) for up to two years.

“As you know, RACs work on behalf of taxpayers and Medicare beneficiaries to recover improper Medicare payments.  Since 2010, RACs have returned more than $7 billion to the Medicare Trust Fund – all while reviewing only 2% of medical records.

“The findings of recovery auditors have an average accuracy rate of 95%, and RACs comply with Medicare policy at every stage of an audit, including provider appeals.

“The ALJ process, however, is in dire need of reform.  In refusing to review RAC decisions, the ALJ is undermining the audit process, weakening the RAC program and subverting established Medicare policy.  In addition, officials recently cited the ALJ for haphazardly granting disability benefits and draining the Social Security Trust Fund.  These actions compound threats to the RAC program after CMS last year suspended RAC auditing through March 2014.  This decision alone is likely to cost taxpayers millions in unrecovered Medicare funds.

“We encourage HHS to reverse the recent ALJ decisions and instead offer solutions for long-term reform of the RAC appeals process.  Meaningful reform would allow the ALJ to effectively manage incoming appeals – an outcome sought by providers and auditors.

“On behalf of Medicare beneficiaries and American taxpayers, we urge you to oppose any efforts to further restrict the RAC program, which if allowed to resume audits under a more effective appeals process, will remain the most effective Medicare integrity program in U.S. history.”

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