Congress Includes Audit Reform in Appropriations Bill

Last week, a $1.1 trillion appropriations bill was passed by Congress. The bill included language that will urge the Department of Health & Human Services (HHS) to address concerns that the recovery audit contractors (RACs) are incentivized to be overly aggressive. The bill also aims to focus CMS on preventing improper payments and paying claims right the first time. Specifically, the HHS Office of Inspector General will provide Congress with a report on its top 25 unimplemented recommendations to improve program integrity. In addition, CMS will have to implement feedback processes for the RACs, the Office of Medicare Hearings & Appeals (OMHA), and other CMS programs. Lastly, CMS will be required to provide notes on what plans the agency has in place to make sure the Medicare administrative contractors are following CMS policies.

Also last week, OMHA decided to suspend assigning appeals to administrative law judges that come from RAC audits for two years to clear up a massive 357,000 claim backlog. AAHomecare is investigating the legality of this decision which seems to contradict the statutes that regulate appeals.

Addressing audits has been priority for AAHomecare for quite some time, and the Association has had significant success in reducing some of the problems associated with audits. This work will have an even more prominent role in the Association’s goals for 2014.

Last fall, our Regulatory Council published a compliance workbook to help companies establish compliance programs. In December, the Council issued five service line-specific audit checklists and an audit tracking tool that allow a company to track their volume of audits and overturn rates. They plan to issue three more this year, and will keep watch over other potential problem areas in case more are needed. The Council has also developed a survey tool that it hopes to secure funding for and launch in 2014. The Association also has an Audit Task Force that convenes monthly.

AAHomecare has set up a dedicated email address ( to allow providers to quickly and easily share their audit stories with us. We will use these stories to help regulators and legislators understand the crushing impacts that audits are having on HME businesses.

In addition, AAHomecare is drafting legislative language on audit reform that includes contractor penalties, maximum audit volumes, and standards that allow providers to be removed from audits based on an error rate threshold.

AAHomecare’s goal is to continue to focus on ways to improve the audit process including working with other health care associations. AAHomecare has met with the American Hospital Association, American Academy of Physician Assistants, and other associations to see how we can partner to make audit reform a reality.

If you have any questions, contact Kim Brummett, AAHomecare senior director of regulatory affairs.

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