Health Care Providers Brace for Medicare Audits

More Appeals Expected 

As the RAC program expands across the country, health care providers are expected to appeal more “denials” – the term for a RAC claim for overpayment to a provider. Although only a small percentage of denials were appealed during the demo phase, this is likely to change. “In the permanent program, health care providers are going to be more interested in appealing and fighting these denials,” said Steve Lokensgard, a health care lawyer and special counsel to Faegre & Benson in Minneapolis, who previously worked as chief compliance officer to Allina Hospitals and Clinics.

The appeals process has five levels, including a hearing before an administrative law judge and a fifth stage before a U.S. District Court. It’s important for providers to hire an attorney early on, as soon as they get a request for records, said Phyllis Flora, a health care attorney at Dwyer & Collora in Boston. Jessica L. Gustafson, a partner at The Health Law Partners in Southfield, Mich., agreed. She noted that hiring a lawyer before the hearing stage helps create a record for presenting and preserving evidence for the next level. Attorneys who have represented health care providers in RAC appeals said they have had a high success rate.
“These appeals are winnable,” said Gustafson, who co-chairs her firm’s Medicare and RAC practice group.

Abby Pendleton, who co-chairs The Health Law Partners’ Medicare and RAC Practice Group with Gustafson, said appeals can be made on two grounds. Some appeals are based on the substantive merits of a claim – such as by presenting a physician’s testimony as to why a patient was treated as an in-patient rather than as an out-patient. Others are based on legal grounds – such as whether records are beyond the time frame of allowable requests or whether the standards for determining in-patient care were clear.

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