Mixed Reviews Greet Settlement Conference Facilitation Pilot

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Original story posted on: July 16, 2014

WASHINGTON, D.C. – The announcement of the new pilot program from the Office of Medicare Hearings and Appeals (OMHA) intended to help mitigate the highly publicized backlog of appeals at the Administrative Law Judge (ALJ) level came at a propitious time last week, against a backdrop of two pertinent hearings on Capitol Hill.

OMHA’s Settlement Conference Facilitation Pilot (SCF) was quoted in a staff report from the U.S. Senate’s Special Committee on Aging and also was discussed during a committee roundtable held last Wednesday.

In their report, “Improving Audits: How We Can Strengthen the Medicare Program for Future Generations,” staff members described the SCF as “an alternate dispute resolution process designed to bring the Centers for Medicare & Medicaid Services (CMS) together with providers to agree on a resolution to claims pending at the ALJ level.”

“If a resolution is reached,” the report read, “a settlement document is drafted and the request for ALJ review is dismissed.”

The following day, Chief Administrative Law Judge Nancy Griswold testified before the U.S. House of Representatives Committee on Oversight and Government Reform and its Subcommittee on Energy Policy, Health Care & Entitlements, describing the pilot project as being the result of “alternative dispute resolution techniques during a facilitated settlement conference conducted by OMHA attorneys, who have been trained in mediation techniques.”

On its website, OMHA describes the program further, noting that the settlement conference facilitator uses mediation principles to assist appellants and CMS in working toward mutually agreeable resolutions. 

“The facilitator does not make official determinations on the merits of the claims at issue and does not serve as a fact finder, but may help the appellant and CMS see the relative strengths and weaknesses of their positions,” OMHA explained. “The settlement conference facilitator is an employee of the Office of Medicare Hearings and Appeals, which is a component of the HHS (U.S. Department of Health and Human Services) Office of the Secretary, and is organizationally and functionally separate from CMS.”

OMHA continues its description of the pilot with a list of eligibility requirements, explaining that “the amount of each individual claim must be less than $100,000.” 

“For the purposes of an extrapolated statistical sample, the extrapolated amount must be less than $100,000,” the description continued. “At least 20 claims must be at issue, or at least $10,000 must be in controversy, if fewer than 20 claims are involved.”

Moreover, OMHA has restricted eligibility to Part B providers only at this time. The announcement of the SCF comes at what must be an awkward time for CMS, as the agency is in the process of selecting new Recovery Audit contractors for the 2015 fiscal year.

“Based on the design parameters, specifically ‘at least 20 claims or at least $10,000’, this appears to be an attempt by OMHA to offload older third-level appeals in a more expeditious manner,” said J. Paul Spencer, director of regulatory and coding compliance for Providence Hospital in Washington, D.C., in an email to RACmonitor. “Given that these conferences are between the provider and CMS, I am curious as to what the current crop of sun-setting RAC contractors would have to say about being excluded from the appeal process when a provider asks for a settlement conference.”

Spencer was quick to point out that contractors have no say in the disposition of older claims after the second level of appeal.

“My guess is that this will not be well-received on the RAC side of the fence,” Spencer concluded.

During the aforementioned committee hearings last week — one in the Senate, one in the House —  the Recovery Auditors came under fire. One committee member said the auditors appeared to be pursuing “administrative” errors and not going after efforts to perpetrate “waste, fraud and abuse.”

Sean Weiss, vice president and chief compliance officer for Doctors Management, agreed. He told RACmonitor that he thought the huge backlog at the ALJ was caused by what he described as Medicare auditors being “overzealous” with their auditing.

“The problem you run into is this: Medicare auditors believe they have the ability to quantify levels of medical decision--making (MDM) just as a clinician does, rather than using the tools they along with the rest of us non-clinicians who perform audits have, which is to quantify the MDM,” Weiss explained. “Because there is such a high level of subjectivity in MDM, it leaves the door wide open to interpretation.”

Weiss advocated that Recovery Auditors use specific policies for auditing, as his company does for clients.

Mike Jamrog, the privacy and compliance officer for McLaren Bay Region in Bay City, Mich., believes that this concept is solid, recognizing that both parties are discussing the documentation of the case in order to settle the appeal. Jamrog, however, has reservations about the pilot, noting in particular that its parameters are what he describes as “very ambiguous.”

In his reading of the criteria for participation, Jamrog noted that the provider must give up all future appeal rights. That’s “never a good move,” Jamrog told RACmonitor.

“(The) provider (is) at a disadvantage because of group hearing of multiple claims for same service,” Jamrog said. “If (the) provider is to take advantage of SCF, (it) must bundle all like services together and mediate all claims. Win big or lose big. If you choose the SCF and lose, you have given up all future appeal rights on this case.” 

On the other hand, healthcare attorney Andrew Wachler, managing partner at Wachler and Associates, who has been handling appeals since the 1980s, sees value in what OMHA is trying to do.

“I view the SCF pilot as an excellent opportunity for Medicare Part B providers to consider an alternative route to the Administrative Law Judge (ALJ) hearing process, (which) could take more than four years before reaching a final resolution,” Wachler told RACmonitor.  “The SCF pilot is welcome news, and if successful, hopefully it will expand to Medicare Part A and C claims and audits with statistical extrapolations over $100,000.” 

About the Author

Chuck Buck is the publisher of RACmonitor and the executive producer and program host of Monitor Mondays.

To comment on this article go to editor@racmonitor.com

Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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