According to the latest statistics from CMS, between October 1, 2010 and September 30, 2011, Part A providers filed 27,158 appeals from RAC repayment demands while 20,406 appeals were filed by Part B providers and an additional 9,056 appeals were filed by DME companies. The FY 2011 budget of the Department of Health and Human Services estimated that in FY 2011, Medicare ALJs would receive 282,000 non-RAC appeals and an additional 54,000 RAC specific appeals. Because of delays in the nationwide implementation of the RAC program, the Department’s FY 2012 budget estimates that only 41,000 RAC specific appeals will be filed with the Office of Medicare Hearings and Appeals by September 30, 2012. In FY 2011, CMS reports that of the Part A appeals decided, 6,226 were favorable to the provider, 14,352 Part B appeals were decided favorably and 3,930 DME appeals were favorably decided. CMS did not, however, provide the total number of appeals decided in any category, so it is impossible to calculate the provider’s “win” percentage from the CMS data.
In addition to CMS, the American Hospital Association, through its RACTrac Initiative, has been compiling data on the impact of RAC audits on its members. In its 1st Quarter 2012 report, the AHA reports that its data shows that through the first quarter of 2012, reporting hospitals have appealed 61,729 RAC repayment demands. Of the appeals decided so far, the hospitals have won 75% of the appeals, but 71% of all the appeals are still awaiting a decision.
The Costs of an ALJ Hearing
By the time a claim reaches the ALJ, a provider, in addition to incurring the costs associated with producing the relevant portions of the beneficiary’s medical records, usually has incurred costs in reviewing professional articles and studies describing the appropriate treatment of the beneficiary’s condition, and/or retained counsel or other agents for assistance and representation at the Level 1 and/or Level 2 appeals. There can be additional significant costs associated with hearings before the Administrative Law Judge including the costs of medical or scientific experts and if not previously retained, the costs of counsel or other agents for representation at the ALJ hearing.
The Equal Access to Justice Act (5 U.S.C. § 504)
Section (a)(1) of the EAJA provides that:
An agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust. Whether or not the position of the agency was substantially justified shall be determined on the basis of the administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought.
Therefore, if when the ALJ appeal was filed, (1) the provider met the definition of “party,” (2) the ALJ hearing style=”color:blue”was an “adversary adjudication,” (3) the provider was the prevailing party and (4) the position of CMS was not “substantially ifintitled to an award of fees and other expenses.
In part 2 of this post, I will discuss what the requirements mean and a recent decision by the Third Circuit Court of Appeals.
Please contact us if we can be of any assistance in analyzing any of the various Medicare-Medicaid Audit World statistics or in helping to resolve an issue with any of the CMS legion of auditors.