Recently, United States Representative Sam Graves introduced the bill HR 2156, otherwise known as the Medicare Audit Improvement Act of 2015. Currently pending, the Medicare Audit Improvement Act addresses the aggressive nature of recovery audit contractors (“RACs”). Since the beginning of the RAC program, contractors have been paid on a contingency fee basis, thus incentivizing them to find improper payments.
The Medicare Audit Improvement Act is intended to curb such practices. The bill would eliminate the contingency fee for RACs and replace it with a flat fee rate–similar to other Medicare integrity contractors. Additionally, the bill would reduce a RAC’s payment at the end of each fiscal year if the RAC had a high overturn rate resulting from the Medicare appeals process. The bill defines a “high overturn rate” as 10% or more in a contract year. Under these circumstances, the RAC’s payment would not only be reduced, but would also have increasing levels of reduction. The Center for Medicare and Medicaid Services (“CMS”) would be required to calculate the fee reduction for each RAC within six months at the end of each contract year. CMS would have the discretion to determine how to apply the reduction to a RAC’s fees–either a per-claim reduction or a reduction in the overall fee paid.
The Medicare Audit Improvement Act also includes a measure that would create a statutory exception for the timely filing requirements for Part B rebilling. Currently, hospitals are permitted to rebill denied Part A inpatient stay claims as Part B outpatient claims, but are required to do so within one year of the date of service (“DOS”). The exception would allow these denied Part A claims to be rebilled under Part B within 180 days after a final determination by the contractor or 180 days following the exhaustion of the provider’s appeal rights.