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HHS Unveils Statistical Sampling Pilot Program for ALJ Hearings on Medicare Audit Appeals

Last week, the Office of Medicare Hearings and Appeals (OMHA) announced the Statistical Sampling Pilot Program (Pilot Program). The Pilot Program offers Medicare providers an alternative route, along with the Settlement Conference Facilitation Pilot, to reach a final determination for claims pending at the administrative law judge (ALJ) hearing level without enduring the 2-3 year delay for hearing. Although the Pilot Program offers a time-saving and perhaps more efficient option for Medicare providers, engaging in the Pilot Program also comes with risks as Medicare providers may “put all of their eggs in one basket” and rely on a single ALJ to issue a decision that affects a large volume of claims. In some cases, the provider may know the identity of the ALJ prior to agreeing to statistical sampling, but in other cases the provider will not.

The Pilot Program is available to Medicare providers that have requested an ALJ hearing following a Medicare Qualified Independent Contractor (QIC) reconsideration decision. At this time, the ALJ hearing requests must either be assigned to an ALJ or must have been filed between April 1, 2013 and June 30, 2013 and it must meet all jurisdictional requirements, including that it was filed timely. In order to be eligible for the Pilot Program, the Medicare provider must have a minimum of eligible 250 claims and the claims must be one of the following: (1) pre-payment claim denials; (2) post-payment non-RAC claim denials; or (3) post-payment RAC claim denials from one RAC. In addition, claims that are assigned to different ALJs or were requested in different consolidation groups may be incorporated into the request for statistical sampling.

A Medicare provider that meets the eligibility requirements for the Pilot Program may request statistical sampling by submitting a “Request for Statistical Sampling” form that is available on OMHA’s website. The provider must also submit a spreadsheet, a template is also available on OMHA’s website, that provides detailed information about the claims requested to be included in the statistical extrapolation.

After a request is submitted, if granted, a consent template will be sent to the Medicare provider. The consent template will request the Medicare provider to consent in writing to statistical sampling. After written consent is obtained, a pre-hearing conference will be held to confirm the consent, establish the universe of claims from which the sample will be taken and agree to other matters related to the hearing. Following the pre-hearing conference, the ALJ will issue an order and if no objections are received within 10 days of receipt of the order, the order will become binding. Once the pre-hearing conference order becomes binding, consent for the statistical sampling may not be withdrawn.

After the pre-hearing conference order becomes binding, OMHA will combine the universe of claim appeals agreed to in the pre-hearing conference under a single ALJ appeal number. The appeal will be assigned to the next ALJ on the rotation unless all of the appeals had been assigned to an ALJ prior to the statistical sampling request. The random statistical sampling will be compiled by a trained and experienced statistical expert who will develop appropriate sampling methodology in accordance with Medicare guidance. At the hearing, the ALJ will review the sample units and make a decision regarding those units. It is important to note that either CMS or a CMS contractor may participate in the hearing. The decisions on the sample units will be extrapolated to the universe of claims at issue.

The Pilot Program offers an opportunity to eligible Medicare providers with large volumes of claims to seek an alternative, and perhaps more efficient, avenue to final resolution of the claims. The new program is a welcomed creative development to solving the backlog of appeals waiting for assignment for ALJ hearing. However, Medicare providers should carefully consider before engaging in the process and fully understand the implications of agreeing to statistical sampling. Wachler & Associates will continue to provide updates on the developing Pilot Program. For more information on ALJ appeal strategies and the Pilot Program, please contact an experienced health care attorney at 248-544-0888 or wapc@wachler.com.