RAC Under Attack
Saying he fears “no retaliation from anyone,” the CEO of a small California hospital has filed suit in U.S. District Court claiming that $1.1 million in Medicare claims flagged by recovery audit contractors have been in limbo “for years.”
California’s only non-profit independent rehabilitation hospital has filed suit to force the federal government to resolve disputed Medicare billing appeals within its mandated 90-day window.
Felice Loverso, president and CEO of the 68-bed Casa Colina Hospital and Centers for Healthcare in Pomona, says the federal government has “for years, years” been holding about $1.1 million in claims that were flagged by recovery audit contractors. Casa Colina has appealed the claims denials, but, he says, HHS hasn’t come close to providing a hearing in front of an administrative law judge within the 90-day window mandated by Medicare law.
“Chasing a System that Seems to be Broken”
Casa Colina generates about $11 million in net revenue each year, Loverso says, so the $1.2 million in deferred claims and the $2.1 million in reserves represent “a big chunk of money.”
“When you run a small hospital and you have to reserve $2.1 million, there is a lot of children with autism who could be treated with that money, there is a lot of free care I could be doing, prostheses I could be putting on people. There are a lot of things I could do with that $2.1 million rather than chasing a system that seems to be broken.”
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There are five levels to the Medicare Appeals Process, and the timing appears to be ample for what is required. Here is the amount of delay involved if you wait until the last minute:
120+180+60+60+60=480 days or 16 months. However, it appears that most if not all cases take much longer than that, particularly as higher levels of appeals are confronted.
Original Medicare (Parts A and B Fee-For-Service) Appeals Process
There is a detailed write-up by Elissa K. Moore, R. Brent Rawlings, and Jessica L. Smith of McGuireWoods here. Title: “A Primer on RAC Appeals“. Moore also is associated with the Annals of Health Law published at Loyola University Chicago School of Law.
The case of Michael King, M.D. and Kinston Medical Specialists, P.A. before the Department of Health and Human Services, Departmental Appeals Board, Medicare Appeals Council (MAC), Docket M-10-321 offers one of the most distressing cases of acceptance of an unreliable statistical extrapolation.
Of particular note in this case is how the precision changed as the case moved from the original sampling through the Qualified Independent Contractor QIC reconsideration until after the Administrative Law Judge (ALJ) decision.
Another way to see this is to examine the range of precision allowed by the MPIM and that accepted in this case by the MAC.
At Barraclough, we have been involved in a number of Medicare appeals, and unfortunately, we must report to you that this case is not atypical.
In our view, the type of statistical work routinely accepted by the Medicare Appeals Council (MAC) does not meet Federal Evidence Standards Rule 702 “Testimony by Expert Witnesses“.
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
So here is our question: Is =/- 40% a case of “reliably applied”?