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Backlog of Medicare appeals is down significantly [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by Knicole Emanuel, an attorney at Practus, LLP to share some recent developments on the Medicare appeal backlog.

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Highlights of this episode include:

  • The latest news about the diminishing Medicare appeals backlog
  • How restrictions are changing for the RAC auditors
  • What are SMRC and TPE audits and the implications of additional audits on providers

Mike Passanante: Hi. This is Mike Passanante, and welcome back to the award-winning Hospital Finance Podcast. The Medicare appeal backlog is something that’s been an ongoing issue for years, but that’s rapidly changing. To share some recent developments on this front, I’m joined by Knicole Emanuel, an attorney at Practus, LLP, in Raleigh, North Carolina, where she concentrates on Medicare and Medicaid regulatory compliance litigation. Knicole, welcome back to the show.

Knicole Emanuel: Thanks. Thanks for having me. I’m excited to be here.

Mike: Well, we always like getting your insights, Knicole. And the first time you and I spoke about the Medicare appeals backlog, it was almost four years ago, if you can believe that.

Knicole: Wow. [laughter]

Mike: [laughter] I know. And things were kind of dire at that point, but since then they’ve changed quite a bit. What’s the latest news about the backlog?

Knicole: It’s good news. So it’s good news. Money has changed the backlog, and we expect the backlog to dissipate in the next year. Sometime this year, maybe the end of 2021, we expect the backlog to be back to 90 days, which is the statutory requirement, instead of the four to six years that we’ve been dealing with in the past four years.

Mike: That is a pretty dramatic change. How was CMS able to turn this around?

Knicole: It is pretty dramatic, and it has to do with money and the budget. They were given a large budget because of the Medicare appeals backlog, so they have had enough money in their budget. They hired 70 additional ALJs, and they opened six additional locations. This brings the number of the ALJs ruling over provider and Medicare appeals to over 100. They now have the capability to hear and render decisions for approximately 300,000 appeals per year. That’s pretty amazing.

Mike: Yeah, it is a big change. Well, so we started out with the good news, right? [laughter] So let’s jump in– maybe it’s not all bad news, but let’s jump into some things that you see maybe on the horizon and some of the cautionary advice you can offer around upcoming recovery audit contractor activity, the RACs. What’s happening there? What can you tell us?

Knicole: Well, once, about four years ago, when the backlog was completely out of hand, CMS put a lot of restrictions on the RAC auditors, i.e. only allowing a three-year lookback period and that sort of thing. Well, now that this backlog is potentially going to be gone, the RACs are going to be back in full gear. They may have some restrictions loosened, but they will be very excited to go ahead and get back into the swing of things like they were four years ago.

Mike: Yeah, that maybe isn’t the best news. Okay, well, let’s [laughter] keep on going. So there are a couple of other things that you noted in a recent blog article that you wrote. Two other types of audits that are exclusive to CMS, the supplemental medical review contractor, or SMRC, and the targeted probe and educate, TPE, audits. You also expect those audits are going to escalate soon. Can you explain what those audits are and the implications of additional audits on providers?

Knicole: Yes. So these are two lesser-known audits. The TPE’s been around for a while, but the supplemental medical review contractor, the SMRC, is relatively newer and exclusive to CMS. The SMRCs in particular do create some confusion. For example, some of them have been auditing ventilator claims. And these are really document intensive because there’s high amounts of money at issue for ventilators, because most people require ventilators for a long period of time. So sometimes there can be up to 3,000 claim lines for a ventilator claim. And the SMRC audits, while they’re not extrapolated, the amount in controversy is still high. The SMRCs will normally request documents for 20 to 40 claims, but you can imagine how much information that is if you’ve got a lot of claim lines. And they don’t give you very much time to comply, normally 45 days, although I do suggest asking for extensions. The TPE audits, on the other hand, are more for education and also looking for Medicare fraud and abuse. But the TPE audits tend to have a lot more document-intensive reviews than the SMRCs. While the SMRCs may only do 20 to 40 claims, the TPE auditors can come in and request quite a bit of records. They’re both burdensome and they both are definitely ones that you need to watch out for.

Mike: Do you think that the potential increase of those audits is driven by COVID in any way? And I’m just kind of circling in on the ventilator comment you made. Is it driven by that or is there something else behind it?

Knicole: I think the ventilator issue is probably because of COVID, because that got increased use so much during COVID. And there were a lot of COVID exceptions, if I can call them that, but a lot of changes that relaxed the regulations during COVID. And the COVID pandemic or the PHE is still ongoing, and so those exceptions are still in place. But as soon as the PHE is lifted, which most likely it will be lifted at some point this year once a certain number of people get vaccinated, those exceptions are now then going to be taken away, and the auditors are going to be running after those people who did not know that the exceptions were taken away because that’s low-hanging fruit for auditors.

Mike: That makes sense. Knicole, do you have any advice for providers as we enter a seemingly new phase of CMS audit activity?

Knicole: Keep informed. Be on the lookout. The worst thing that you can do – and I’ve had providers do this – is the people who open the mail don’t get the audit request or the request for documents to the appropriate person in a timely manner. So whoever is reviewing the mail and bringing these documents, make sure they’re on the lookout for document requests.

Mike: Simple advice, but pretty pertinent. [laughter] Yeah.

Knicole: It’s very pertinent, yeah.

Mike: Yeah. So great insights today, Knicole. If someone wanted to read more of your insights, where can they go?

Knicole: Well, I have a blog – it’s medicaidlaw-nc – that they are more than welcome to go see. I’ve maintained that blog since 2012. And I also am a weekly panelist on RACmonitor every week, every Monday for Monitor Monday.

Mike: Excellent. Well, it’s always a pleasure to have you on the show, Knicole. Thanks so much for joining us today on the Hospital Finance Podcast.

Knicole: Thank you for having me. I appreciate it.

 

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