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Various Health Care Organizations Comment on CMS’ New Demonstration Programs

Recently, a group of 35 health care organizations wrote a letter to the Centers for Medicare and Medicaid Services (CMS) expressing their concerns regarding CMS’ new demonstration programs. The organizations requested that CMS rescind the Recovery Audit Prepayment Demonstration and revise the Prior Authorization Demonstration for power mobility devices. Both demonstrations were scheduled to begin on January 1, 2012, but were subsequently delayed due to the concerns expressed by numerous health care organizations. The revised scheduled start date for the demonstration programs is now on or after June 1, 2012.

In regards to the Recover Audit Contractors (RAC) prepayment demonstration, the organizations have requested that CMS rescind the program in its entirety. The reasons for this request include:

  • The demonstration would threaten patient access to care because patients who have the conditions under the targeted prepayment code sets may be inappropriately turned away due to the high level of cost-related scrutiny prescribed by the hospital’s policies and procedures. The organizations believe that physicians, when making potentially life-threatening diagnoses, should not be influenced by the hospital’s reservations that stem from increased government scrutiny and the risk of losing payments.
  • CMS’ use of RACs to perform prepayment review is an inappropriate utilization because: (1) RACs are currently inefficient at providing timely determinations and communications relating to post-payment audits; (2) RACs ability to make accurate prepayment decisions is suspect due to their poor record on appeal, which ultimately leads to a waste of providers’ time and money in defending the often inaccurate and unwarranted accusations; (3) RACs primary purpose of educating providers does not come to fruition because providers are consistently unsuccessful at directly communicating with RACs, which results in a unchanging improper payment rate; and (4) RACs are compensated on a contingency fee basis, which leads to extensive “fishing expeditions” that are overly burdensome on providers.

As it pertains to the Prior Authorization Demonstration for power mobility devices, the organizations have requested that CMS make the following revisions:

  • The demonstrations should focus on extreme statistical outliers, rather than on every provider who orders power mobility devises within the targeted states, because providers who infrequently order such devices will be unreasonably impacted.
  • CMS should consider the demonstration’s impact on the beneficiaries’ health due to the resulting delay in treatment associated with submitting prior authorization.

Finally, the organizations requested that CMS provide its methodology for determining the burden estimates and respondent costs (i.e. estimated time and costs that providers spend dealing with the prior authorization and prepayment process) , as well as consider the additional costs involved with erroneous determinations and the subsequent appeals process. The organization urged CMS to take a more “global view” when analyzing the demonstrations’ costs on the federal health care programs in general.

In addition their requests, the organizations posed a number of recommendations to CMS regarding the prepayment and prior authorization demonstrations, which include:

  • Engage with the Center for Program Integrity (CPI)
  • Require demonstration contractors to operate under existing guidelines
  • Hire a full time medical director at the Office of Financial Management (OFM)
  • Publish contact information for MAC medical directors
  • Publish Comprehensive Error Rate Testing (CERT) reports in their entirety
  • Utilize the OIG’s evaluation of the CERT program

If you have any questions regarding the Recovery Audit Prepayment Demonstration or the Prior Authorization Demonstration for power mobility devices, or if you have any other concerns regarding CMS audit activities, please contact an experienced health law attorney at Wachler & Associates at 248-544-0888.