Tuesday, September 9, 2014

CMS Recovery Auditor Procurement in Limbo

Dan Ciolek and Dianne De La Mare

Recently, the U.S. Court of Federal Claims (COFC) blocked the Centers for Medicare and Medicaid Services (CMS) from proceeding with issuing contract awards to seven Recovery Auditors (RA) pending a court appeal from CGI Federal. CGI is a current RA and is challenging the terms for three of the new RAC contract requisitions, arguing they violate federal procurement law by delaying payments to the RACs. CMS had indicated that the new process of waiting to issue payments to RAs until the second level of appeals is resolved is intended to provide a disincentive for RAs to issue inappropriate denials. Specifically, CMS stated “…these changes will result in a more effective and efficient program, including improved accuracy, less provider burden, and more program transparency.”

The Sept. 2 court order prevents CMS from awarding the affected RA procurement contracts until the appeal has been resolved through the Federal Circuit Court of Appeals. However, the current median disposition time of such appeals in this court is over ten months. It remains uncertain whether CMS will challenge the appeal, or whether they will instead decide to revise the contract language to address the CGI complaint and restart the procurement process, which would probably take another year to complete.

CMS has been preparing for such a possibility. Current RA contracts were set to expire in February, at which time all RA review activities, including Part B therapy manual medical review (MMR), were put on a pause until the planned new contracts were to be issued this summer. As the procurement process delays persisted due to various protest activities, CMS announced on August 4, “Due to the continued delay in awarding new Recovery Auditor contracts, the CMS is initiating contract modifications to the current Recovery Auditor contracts to allow the Recovery Auditors to restart some reviews. Most reviews will be done on an automated basis, but a limited number will be complex reviews of topics selected by CMS.” To date, the CMS website has indicated that such contract modifications have been issued to the current RAs in Regions A,B, C, and D.

AHCA continues to monitor this issue and is communicating with CMS regularly. We will inform AHCA members when any additional details become available, particularly related to when and how CMS intends to proceed with the limited RA reviews (including Part B therapy MMR) in the near future. For any additional information, please contact dciolek@ahca.org.

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