Articles Posted in Recovery Audit Contractors (RACs)

On April 2, 2013, the Centers for Medicare & Medicaid Services (CMS) held an Open Door Forum to discuss CMS’s Administrator’s Ruling (CMS-1455-R) and Proposed Rule (CMS-1455-P) that provide for significant changes to Medicare’s Part B payment policy when a Part A hospital inpatient claim is denied as not medically necessary because the care was not provided in the appropriate setting.

During this Forum, CMS Representatives advised that hospitals do not have to wait until CMS’s Change Request 8185 implementation date of July 1, 2013 to rebill Part B for Part A inpatient claims denied as not reasonable and necessary pursuant to the interim ruling. CMS Representatives stated that additional instructions for rebilling Part B claims will be released shortly and should be similar to those found in the now defunct Part A to Part B Rebilling Demonstration Program. CMS representatives also confirmed that the interim ruling does not apply to Medicare Advantage.

For those unable to attend the Open Door Forum, a recording of the Forum is available by phone beginning at 5:00 pm on April 2, 2013. To access the recording, dial 1-855-859-2056 and reference conference ID: 78861443. The recording expires after two business days. If you have questions regarding these recent developments or questions about the Medicare appeals process, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.

On Tuesday, April 2, 2013 (2:00-3:00 pm EST), the Centers for Medicare & Medicaid Services (CMS) will be holding an Open Door Forum for stakeholders in the healthcare community to call in and discuss the recent changes to the Medicare Part B payment policy in light of recently issued CMS Ruling. The CMS Ruling allows for hospitals to submit a Part B claim when a Part A inpatient claim is denied as not reasonable and necessary.

Tuesday’s Open Door Forum will be conference call only. To participate by phone, dial 1-800-837-1935 and reference conference ID: 78861443. Persons participating by phone do not need to RSVP. TTY Communications Relay Services are available for the Hearing Impaired. For TTY services dial 7-1-1 or 1-800-855-2880. A Relay Communications Assistant will help. Encore is an audio recording of this call that can be accessed by dialing 1-855-859-2056 and entering the Conference ID beginning 2 hours after the call has ended. The recording expires after 2 business days. The number for Encore is 1-855-859-2056; Conference ID: 78861443.

The Office of Medicare Hearings and Appeals (OMHA) has released its instructions and recommended request form for withdrawing a Part A appeal pursuant to the Center for Medicare & Medicaid Services (CMS) Ruling 1455-R. On March 13, 2013, CMS issued Ruling 1455-R, which allows hospitals to bill for certain services under Part B when a Part A inpatient claim was denied as not reasonable and necessary. The Ruling remains in effect until the proposed rule becomes finalized. Under the Ruling, a hospital must withdraw its Part A appeal in order to submit claims for Part B reimbursement.

Wachler & Associates will continue to monitor the developments of CMS’s revised policy on Part B billing following the denial of a Part A inpatient hospital claim. If you have any questions regarding these developments or questions regarding the RAC appeals process, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.

Senators Charles Schumer (D- NY) and Sherrod Brown (D – OH) are co-sponsors of the “Improving Access to Medicare Coverage Act of 2013 bill that would count observation stays toward the three-day minimum required for Medicare to cover the costs of follow up care after a serious hospitalization.

In recent years, the Centers for Medicare & Medicaid Services (CMS) has expanded its auditing programs in order to control the cost of Medicare and to prevent fraud and abuse. The auditing program scrutinizes claims for care that was not medically necessary and reasonable. If a Medicare contractor concludes that a beneficiary was allegedly improperly admitted as an inpatient, the contractor will request that the hospital return the identified overpayment. Although hospitals may appeal to challenge a Medicare contractor’s conclusion that an inpatient admission was not medically necessary and reasonable, it is evident that the audits have affected hospitals’ inpatient admission rates. Specifically, the unfortunate consequence of Medicare audit contractors’ aggressiveness is some hospitals may be motivated to place patients in observation status to avoid auditors’ scrutiny and potential financial penalties. An indication that this consequence is being realized is that the number and length of observation stays have skyrocketed. A study by Brown University reports a 34% increase in observation stays from 2007-2009. Currently, in order to receive rehabilitation or in home nursing care after a hospital stay, a Medicare patient must have a three-day inpatient hospital stay. However, hundreds of thousands of seniors are being denied Medicare coverage for therapy each year because they are admitted to the hospital under observation status instead of inpatient status.

Senator Schumer claims that correcting this “observation stay loophole” will save seniors money and will allow hospitals to provide better care for patients. CMS would have to cover the additional cost of follow up services for patients who have had a three-day stay in observation status. In the midst of the national budget debate, it will be interesting to see if the Improving Access to Medicare Coverage Act of 2013 will get any traction in Congress. In 2011 a similar act was introduced in both houses of Congress, but did not go anywhere.