CMS is reporting that providers are winning favorable decisions on appeals 64.4 percent of the time since the launch of the demonstration through March 9, 2010.

In its Update to the Evaluation of the 3-Year Demonstration, issued last week, CMS reports that providers chose to appeal 12.7 percent (76,073) of the RAC determinations. Overall, data indicate that while 8.2 percent or 48,993 of all RAC determinations were overturned on appeals, providers prevailed 64.4 percent of the time.

Looking back, the previous update to the evaluation, released in January 2009, only 7.6 percent of RAC determined were overturned on appeal with providers winning 34 percent of the time.

Provider Appeals of RAC-Initiated Overpayments: Cumulative Through March 9, 2010, Claim RACs Only

SOURCE: CMS UPDATE TO THE EVALUATION OF THE 3-YEAR DEMONSTRATION

Differences in the Data

In explaining the difference between the update issued last week for the period ending March 9, 2010 and the January 2009 update, CMS reported several factors accounted for the differences, namely:

• There has been an increase in the number of claims with overpayment determinations - 525,133 in January 2009, compared to 598,238 in March 2010 -due to the number of additional claims being manually included that were not entered into the RAC warehouse prior to the end of the demonstration. CMS noted these claims were initiated by the RACs, but were adjusted after the end of the demonstration; and

• There has been a "significant" decrease in the number of claims providers have appealed, going from 118,051 in January 2009 to 76,073 in March 2010. CMS offers several explanations for this occurrence, noting that the previous method of arriving at this figure (118,051) "counted claims appealed to multiple levels at each level of appeal." CMS states that the "revised" method counts an appealed claim only once, regardless of the number of appeal levels. Another reason, notes, CMS, is that the agency no longer includes appeals reversed by a claims processing contractor when additional documentation was submitted - what it calls "clerical reopenings," or appeals withdrawn by the provider. Finally, reports, CMS, duplicate claims that were identified in the previous data have been removed.

CMS issued the report to update information in the Evaluation report that it issued in July 2008. That report included information through March 27, 2008. The report issued last week includes information related to appeals for RAC claims but does not include Medicare Secondary Payer (MSP) issues that were reviewed in the RAC demonstrations.

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