AAHomecare's Ryan: New Audit Bill Is "Very Passable"

• By Laurie Watanabe
• Jul 16, 2014

H.R. 5083, the new Audit Improvement & Reform Act, was written to be and is anticipated to be very passable, says AAHomecare CEO/President Tom Ryan.

The bill is also referred to as the "AIR" Act - an apt nickname given the breathing room it hopes to provide DME suppliers whose businesses are being strangled by layers of Medicare audits. Just a few days after Rep. Renee Ellmers (R-N.C.) introduced H.R. 5083, Ryan and AAHomecare VP of Public Policy Jay Witter talked about the bill in an interview with Mobility Management.

AIR Act's Sponsor Knows Healthcare

Of course, the AIR Act is hardly the only DME-related bill in front of Congress at the moment. Among others are H.R. 4920, the Medicare DMEPOS Competitive Bidding Improvement Act of 2014 that would make bids binding, and H.R. 1717, the Medicare DMEPOS Market Pricing Program Act of 2013.

On the complex rehab technology (CRT) side of the industry, H.R. 942 and S. 948 seek to create separate benefit categories for seating & mobility equipment used by severely involved Medicare beneficiaries.

But when it comes to the Medicare policies that weigh down DME and CRT businesses every day, few wield the crippling power of the agency's various types of audits.

"This is one we're very, very excited about," Ryan said about the new bill. "It was just dropped on Friday (July 11), and I think if we polled our members, we'd understand that trumping competitive bidding, the audit scenario is one that when it comes to the day-to-day concerns of our providers at hand and what affects them the most from a cashflow situation and an operational standpoint, it's been audits. So we've been spending a lot of time trying to come up with certainly tools to fix the problem, but this is going to be one great fix."

Ryan added that Witter worked with Rep. Ellmers' office "on a day-to-day basis basically, working on this so it would be something that could be very passable."

Ellmers' background made her especially suited to introduce the bill, Witter said, noting that the team working on the bill examined language used in the past by the Senate Finance Committee.

"The Congresswoman is a former registered nurse, knows the healthcare system and knows our industry," Witter pointed out. "But she also knows the political system. She's on the committee of jurisdiction. She wants a bill that can pass."

H.R. 5083 Highlights

The bill has a number of components, but they seemed to have one goal in common: transparency.

For instance, Witter explained, the Outreach & Education component would ensure that each DME supplier "will know what their [error rate] score is. The error rates are based on audited claims and not just claims submitted."

And there would be strong motivation for suppliers to maintain low error rates: "There'll be incentives for those who lower their error rate through this education process. And in fact if you get [an error rate of] 15 percent or less, you're only subject to one audit claim a year."

To put that into perspective, Witter noted, "Some folks in North Carolina told us they had 2,600 audits last year. So that would be a significant relief."

The AIR Act would also reinstate the use of clinical inference to the audit process.

"The OIG [Office of Inspector General] and GAO [Government Accountability Office] talk about these huge error rates," Witter said. "Well, before 2009 we used to use clinical inference and clinical judgment to decide whether a claim should be paid or not. That was removed in 2009, and the error rate skyrocketed."

"We had an error rate of about 10 percent on these CERTs [Comprehensive Error Rate Testing audits]," Ryan said. But following the removal of clinical inference from the audit process, error rates have "gone up to over 65 percent. When you're looking at lower-limb prosthetics and you're seeing an error rate of 70 percent, it's obviously a technical error. It's not that the patient didn't need the prosthetic device. So we believe clinical inference is a big component that's going to help in these statistics."

Witter said another reason for the high error rates is that suppliers aren't given sufficient warning regarding policy changes.

"CMS [Center for Medicare & Medicaid Services] changes the rules constantly and doesn't give the profession enough notice to really take a look at what these changes mean," he said. "So there's a provision in [H.R. 5083] that basically gives a six-month grace period for any policy or technical change in the whole documentation and audit process. That's extremely helpful."

The bill also would address the problem of timely filings - an issue, for instance, with power mobility products that Medicare purchases via 13 monthly payments.

"If the first-month claim is audited and rejected," Witter pointed out, "the provider is forced to continue to submit the other 12 months [claims], knowing that they're going to be rejected. And then [the provider has] to fight 13 audits instead of just one."

What the new bill would do: "This would not change the decision, but it would basically eliminate the time requirements so you can fight the first claim, and then if you're successful, you have time enough to resubmit the other 12 claims. If you're denied on your first month, you don't submit the additional 12 claims. That will significantly cut down on audits, it will significantly cut down on the burden to the provider, and it'll get what everybody wants. You know if the claim is going to get paid or not."

Transparency in the Appeals Process

Part of the motivation for reducing the number of appeals is the current backlog at the Administrative Law Judge (ALJ) level.

In December, the ALJ announced it was not accepting most new appeals until it could clear a backlog that numbered more than 350,000.

The AIR Act would require CMS and its auditing contractors to provide additional data about claims being handled at each appellate level.

"Renee Ellmers is a policy person," Witter said, "and she included a provision that says not only do the RACs [Recovery Audit Contractors] and MACs have to report on the error rates, but they have to break it up into categories and they also have to break it up to the different levels of appeals. What's the overturn rate of the first level, what's the overturn rate on the second level, what's the overturn rate at the ALJ?

"And what that'll do is show what everybody suspects: that the first two levels of appeals are rubber stamped, and the real adjudication is at the ALJ level. So there are a number of things there to ensure transparency, but also having CMS forced to educate providers and referral sources and physicians really sets in stone what the rules are. Our members just want to follow the rules; they don't want these huge error rates. CMS has really never given a clear indication of what those rules are. They change all the time. This will ensure that everybody knows at the very beginning what the rules are and how to reduce error rates. That's a huge key for the profession."

Ryan noted that the timing of the AIR Act's introduction coincides with a key audit initiative from AAHomecare: the creation of a system to track audit activity among industry providers.

"It'll be an Internet-based tool where we can begin to look at the types of audits that are out there," Ryan said. "And now that there'll be more transparency, it'll be a great data-mining tool, and we can then provide that as an educational piece where we've seen a need for education."

Witter emphasized the importance of providers and their clients contacting members of Congress and urging them to support H.R. 5083, and said the word is getting out among Medicare beneficiaries. The Center for Medicare Advocacy, he noted, recently filed a lawsuit against the Department of Health & Human Services that alleges audits are adversely affecting patient care.

So finally, audit relief may be on the horizon for beleaguered providers.

"The stars are aligned and we need to get a fix here," Ryan said. "I think we're very thrilled that we can really get one."