Bipartisan Legislation to Improve the RAC Program Now Introduced in the U.S. Senate

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An identical version of the Medicare Audit Improvement Act (MAIA), reported on in the March 25, 2013 issue of Health Headlines when it was introduced in the House, has now been introduced in the Senate by Senator Roy Blunt (R-MO).  As explained in the March 25th Health Headline, this proposed legislation would amend the Medicare Modernization Act of 2003 to ease the burden imposed on providers by the often onerous Recovery Audit Contractor (RAC) program and reduce the incentives of the Medicare contractors to unnecessarily overturn initial claims determinations.  In particular, the proposed legislation would require audit contractors to “pay a fee to the prevailing party in the case of a claim denial that is overturned on appeal” the amount of which should “reflect the cost incurred by a typical hospital in appealing a claim denial.”  The proposed legislation also imposes greater transparency upon the RAC program by requiring the Secretary to post annual reports detailing the “appeals volume and outcome at each of the 5 stages of appeal” for each RAC. Other safeguards include placing a cap on the number of Additional Document Requests Medicare auditors are permitted to make and limiting certain medical necessity audits to scenarios involving “widespread payment error rates.”  If enacted, the legislation would apply to all new contracts entered into by HHS after enactment.

The proposed legislation also provides that the resubmission of a claim for payment under Medicare Part B that a hospital originally submitted for payment under Part A, but for which a RAC determined inpatient services were not medically necessary, be treated as an “original claim” including for purposes of the “requirements of the timely submission of claims.”

Similar legislation was introduced in 2012 but died in committee. We will, therefore, continue to monitor the progress of the MAIA in Congress and other legislative movement with respect to the Medicare audit system.  Parties that would like assistance in lobbying their congressional delegation to support this legislation can contact the authors below.

The text of the Senate bill (S. 1012), is available by clicking here. 

Reporters, Daniel J. Hettich, Washington, D.C., +1 202 626 9128, dhettich@kslaw.com and Allison Kassir, Washington, D.C., +1 202 626 5600, akassir@kslaw.com.

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