New Legislation Introduced to Fix Medicare Audits, Bring Back Clinical Inference

Washington, D.C. (July 11, 2014)—The American Association for Homecare (AAHomecare) announced the introduction of a new piece of legislation to fix the broken Medicare audit system. The Audit Improvement and Reform Act (AIR Act), sponsored by Reps. Renee Ellmers (R-N.C.) and John Barrow (D-Ga.), will increase transparency, education and outreach, and reward suppliers that have low error rates on audited claims. The AIR Act would apply to all MACs, RACs, and all other contractors performing audits on durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) providers. Visit fixmedicareaudits.org to download a copy of the legislation, issue brief and learn how you can support the legislation.

Key provisions in the legislation include:

• Restoration of clinical inference and clinical judgment when evaluating audits. This provision will significantly reduce error rates.
• Requiring the reporting of error rates on audited claims after adjustment for those audited claims that have been overturned on appeal.
• Requiring each audit contractor to establish an education and outreach program that would help providers better understand the regulations and how to document medical necessity for Medicare patients. Funding for these programs will come from 25% of recoupments.
• Allowing HHS to ensure that all suppliers are audited at least once every two years and those with low error rates can be excused from some or all audits during that two year period. DMEPOS suppliers with a 15% or below audited clams error rate will be subject to only 1 claim audit a year.
• Require Medicare Contractor transparency and reporting.
• Limit documentation review periods to 3 years for all Medicare audits.
• For reoccurring claims, the Secretary shall toll the timely claim filing limits so DMEPOS supplier are not prohibited from taking an appeal from the determination of a claim in a pre or post payment audit, or the submission or resubmission for payment of any claims that follow sequentially from the audited claim on the basis that the timely claim filing limits have expired.
• The Secretary shall not implement policy changes or clarifications for DMEPOS audit requirements sooner than 6 months after publishing the changes in the Federal Register.

“This has been as unfair as it can possibly get,” said Thomas Ryan, AAHomecare president. “An out of control process fueled rampant audits, and then the victims of these audits no longer had an appeals process to challenge the findings. We applaud Reps. Renee Ellmers (R-NC) John Barrow (D-Ga.) and other sponsors of the legislation for recognizing that something had to be done to protect the rights of providers across the country.”

“With her background as a nurse, Rep. Ellmers knows health care and she knows DME,” said Jay Witter, VP of government affairs for AAHomecare. Rep. Ellmers has been an advocate for the HME industry, thanks to hard work from the North Carolina Association for Medical Equipment Services and HME providers in North Carolina. These members built a relationship with Rep. Ellmers and educated her on the issues such as competitive bidding and the out of control audit system that hurts businesses,” concluded Witter.

“There is fraud. We all know that there is fraud and abuse of the system, but you are going after the good guys to make up the dollar difference. You are not addressing the real fraud issues,” said Rep. Ellmers at a hearing before the House Energy and Commerce Subcommittee on Oversight and Investigations entitled “Medicare Program Integrity: Screening Out Errors, Fraud, and Abuse” on June 25. Rep. Ellmers presented problems that providers face with audits and the timetable for payment to Deputy Administrator and Director at the Center for Program Integrity at CMS, Shantanu Agrawal, M.D., and showed how difficult it is for providers to stay in business with the excessive audit demands they face—up to 46 percent of claims in some categories.

To support the legislation, AAHomecare launched fixmedicareaudits.org. The site brings together the key components of AAHomecare audit reform strategy. These include supporting the AIR Act, the HME Audit KEY audit data collection and reporting platform, and Share Your Audit Story, a place to share stories of how audits have hurt patients and providers. To learn more, visit fixmedicareaudits.org and follow @AAHomecare on Twitter.