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AFIRM Act Seeks to Improve the Medicare Audit and Appeals Process

On December 9, 2015, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) introduced Senate Bill 2368, the Audit & Appeal Fairness, Integrity, and Reforms in Medicare (AFIRM) Act of 2015. The purpose and goal of AFIRM is to improve the Medicare audit and appeals process by reducing the burden on providers and implement reforms to the Medicare audit and appeals process.
In fiscal year 2014, the Centers for Medicare & Medicaid Services (CMS), conducted audits of more than one billion claims in an effort to curb approximately $60 billion in improper Medicare payments. This many audits has resulted in a corresponding number of appeals leading to a backlog of nearly one million claims causing a near two year backlog.
Among the many ways that AFIRM seeks to resolve this backlog are the following:
 Increase the amount in controversy limits for review by an administrative law judge (ALJ) to $1,500 or more. For cases not meeting this threshold, a Medicare Magistrate program allows senior attorneys with expertise in Medicare law and related policies to adjudicate cases in the same way as ALJs. This is intended to allow ALJs to maintain their focus on complex cases (AFIRM § 1-3).
 Establish a process whereby an ALJ can certify an appeal for expedited access to judicial review (AFIRM § 5).
 Establish a voluntary alternate dispute resolution process allowing multiple claims with similar issues of law or fact to be settled together where they are submitted by the same individual or entity (AFIRM § 6).
 Permit an adjudicator, with the consent of the appellant, to use statistical sampling and extrapolation in reaching a decision (AFIRM § 6).
 Establish a process whereby the Office of Medicare Hearings and Appeals and the Departmental Appeals Board of the Department of Health and Human Services (HHS) can refer cases to law enforcement where there is a credible suspicion of fraudulent activity (AFIRM § 7).
 Publish on the internet appeal information that includes at least the following (AFIRM § 9):
o the percentage of appeals that received fully favorable, partially favorable, and unfavorable decisions;
o the percentage of appeals that received fully favorable, partially favorable, and unfavorable decisions for each ALJ;
o for each type of service, the percentage of appeals that received fully favorable, partially favorable, and unfavorable decisions; and o the average length of time that has passed between the initial request for review and a final decision.
 Establish alternative resolution dispute processes permitting an individual or entity entitled to a redetermination by a Medicare administrative contractor, or a reconsideration by a qualified independent contractor, to enter into an alternative dispute resolution with CMS (AFIRM § 9).
 Authorize the Secretary to designate a point of contact to oversee and undertake at least the following (AFIRM § 10):
o Develop a strategy for claim review determinations that identifies and reduces claim errors that have the largest impact on improper payment rates and are likely to negatively affect quality of care, in addition to reducing unnecessary burdens on providers of services and suppliers;
o Develop methods to ensure review contractors do not unnecessarily conduct duplicate reviews of individual claims;
o Work with review contractors to develop a uniform, consistent, and transparent review process to reduce the burden on providers of services and suppliers;
o Develop qualification standards for review contractors requiring prepayment and post-payment reviews of claims to be conducted or approved by medical doctors with knowledge of relevant Medicare laws, regulations, and program instruction;
o Verify that decisions by review contractors are consistent with Medicare laws, regulations, and program instruction; and
o Determine whether additional punitive actions against ineffective review contractors could be taken and what, if any, financial incentives or disincentives could be used to promote accuracy of a review contractor’s reviews.
 Appoint a Medicare Reviews and Appeals Ombudsman who will (AFIRM § 11):
o identify, investigate and assist in the resolution of complaints and inquiries related to the Medicare audits and appeals process;
o identify trends in complaints and inquiries to provide recommendations for improvements to the claims review and appeals system;
o design a system to measure and evaluate reviewer responsiveness to addressing inquiries from providers of services and suppliers; and o publish appeal data.
 Establish a compliance incentive program to increase the accuracy of providers of services and suppliers in addition to encouraging consistency with review guidelines, regulations and program instructions for review contractors (AFIRM § 13).
Jessica Gustafson and Abby Pendleton, founding partners of The Health Law Partners, P.C., practice in all areas of healthcare law devoting a substantial portion of their practice on Recovery Audit Contracts and Medicare audit appeals. For more information, please contact Abby Pendleton, Esq. or Jessica Gustafson, Esq., or visit The HLP website.

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