Legislation to Fix Audits Unveiled

Bill introduced by Reps. Ellmers and Barrow boosts transparency, rewards low error rates.

Representatives Renee Ellmers (R-N.C.) and John Barrow (D-Ga.), have released the Audit Improvement and Reform Act (aka, the AIR Act), a bill designed to address key problems with Medicare’s unchecked audit system by boosting transparency within the program; providing better education and outreach; and rewarding suppliers that have low error rates on audited claims.

“Thousands of small businesses across the country are facing complex and unnecessary burdens just so they can get compensated for the medical equipment they are providing for our seniors,” Rep. Ellmers said in a public statement. “This is happening because of an excessive auditing system enforced by the Department of Health and Human Services (HHS).”

The AIR Act, H.R. 5083, would apply to all MACs, RACs, and all other contractors performing audits on durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) providers. Key provisions include:

  • Providers will receive a score on their error rates. Suppliers with low errors rates will receive fewer audits.
  • Providers with error rates of 15 percent or lower will only be subject to one random audit for the year they have a low error rate.
  • Clinical inference and clinical judgment when evaluating audits is restored in the audit process.
  • Look-back periods are limited to three years rather than five years for MACs and four years for RACs.
  • MACs and RACs must provide quarterly training on avoiding frequent payment errors, including notice of all new audit procedures and education to avoid clerical errors. Funding for these programs will be derive from 25 percent of recoupments.
  • Requiring the reporting of error rates on audited claims after adjustment for those audited claims that have been overturned on appeal.

The full text of the bill, as well as other issue-related information can be found at www.FixMedicareAudits.org, a site launched by the American Association for Homecare in support of the legislaion. The site brings together the key components of AAHomecare audit reform strategy, including support for the AIR Act; the HME Audit KEY audit data collection and reporting platform; and Share Your Audit Story, a place to share stories of how audits have hurt patients and providers.

“This has been as unfair as it can possibly get,” said AAHomecare President Tom Ryan. “An out of control process fueled rampant audits, and then the victims of these audits no longer had an appeals process to challenge the findings. We applaud Rep. Renee Ellmers (R-N.C.) John Barrow (D-Ga.)  and other sponsors of the legislation for recognizing that something had to be done to protect the rights of providers across the country.”

“With her background as a nurse, Rep. Ellmers knows healthcare and she knows DME, said Jay Witter, vice president of government affairs for AAHomecare. “Rep. Ellmers has been an advocate for the HME industry, thanks to hard work from NCAMES and HME providers in North Carolina. These members built a relationship with Rep. Ellmers and educated her on the issues such as competitive bidding and the out of control audit system that hurts businesses.”

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on LinkedIn at linkedin.com/in/dkopf/ and on Twitter at @postacutenews.

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