A picture of Senator Orrin G. Hatch
Orrin H.
Republican UT

About Sen. Orrin
  • Statements on Introduced Bills and Joint Resolutions

    by Senator Orrin G. Hatch

    Posted on 2015-12-08

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    HATCH: S. 2368. An original bill to amend title XVIII of the Social Security Act to improve the efficiency of the Medicare appeals process, and for other purposes; from the Committee on Finance; placed on the calendar.

    Mr. HATCH. Mr. President, today Senator Wyden and I have officially introduced the Audit and Appeal Fairness, Integrity, and Reforms in Medicare, or AFIRM, Act of 2015, a bipartisan bill developed earlier this year in the Senate Finance Committee. The AFIRM Act was actually ordered reported out of the committee in June, passing by voice vote with no recorded opposition.

    This legislation, comes mainly in response to the concerns many have expressed with regard to program integrity and the overall solvency of the Medicare Trust Fund.

    A recent report from the Government Accountability Office found that, in fiscal year 2014 alone, Medicare covered health services for approximately 54 million elderly and disabled beneficiaries at a cost of $603 billion in Federal funds. And, according to GAO, of that figure, approximately 10 percent of the funds were improperly paid.

    That is nearly $60 billion in improper payments--either errors or fraud--in a single fiscal year. That is an astronomical figure, and about 33 percent higher than the number we saw the year before.

    This unacceptably high level of improper Medicare payments has led to an increased number of audits to identify and recapture those funds. While officials at the Centers for Medicare & Medicaid Services have been reasonably successful in their mission to conduct audits on the more than one billion claims submitted to Medicare every year, they face an uphill battle in their efforts to recover improper payments.

    In 2014, for example, CMS recovery audit contractors recovered over $2.57 billion. While this may sound like a large number, that is less than of the 2014 Medicare improper payments estimate of $45.8 billion, hardly a figure anyone should be proud of.

    Coming on the heels of this massive loss in taxpayer funds and our Government's utter failure to retrieve them is an equally massive unintended consequence.

    Due to the increasing number of audits, there has been a predictable, yet dramatic, increase in the number of Medicare appeals. Currently, there are so many appeals being filed in response to these audits that the Office of Medicare Hearings and Appeals can't even docket them for 20 to 24 weeks after they are filed.

    In fact, within the last month, the total backlog of Medicare appeals eclipsed 900,000. You heard that right: There are more than 900,000 appeals currently pending at the Office of Medicare Hearings and Appeals.

    In fiscal year 2009, the majority of Medicare appeals were processed within 94 days. Now, 6 years later, it takes, on average, 547 days--or roughly a year and a half--to process an appeal. This is an incredibly frustrating amount of time, not only for physicians and other health care providers, but for Medicare beneficiaries as well.

    Think about that for a second. It takes, on average, a year and a half for Medicare beneficiaries--many of whom live on fixed incomes-- filing an appeal to find out whether their services will be covered in the end. It takes a year and a half for doctors--an increasing number of whom are already opting to not accept Medicare patients--to find out if they will be paid.

    Contributing to this problem is the fact that large portions of the initial payment determinations are reversed on appeal. The Department of Health and Human Services Office of Inspector General reported that, of the 41,000 appeals made to Administrative Law Judges, or ALJs, in fiscal year 2012, over 60 percent were partially or fully favorable to the defendant.

    Such a high rate of reversals raises questions about the quality of initial determinations and whether providers and beneficiaries are facing undue burdens up front.

    In order to protect beneficiaries, provide certainty for doctors, and take steps to at least partially shore up the Medicare Trust Fund, we need to address these issues now. That is why Senator Wyden and I introduced the AFIRM Act.

    If enacted, our bill will improve oversight of the Medicare audits and appeals process, effectively addressing the staggering Medicare appeals backlog. It will make the most fundamental changes to the appeals process since Medicare began. It will lay the groundwork for a more level playing field, reducing the burden on providers and suppliers, while giving auditors the tools necessary to better protect the Medicare Trust Fund.

    The AFIRM Act will address these issues in five ways.

    First, it will improve the audit programs by coordinating efforts between auditors and CMS to ensure that all [[Page S8497]] parties receive adequate training on current policy, increasing transparency in the audit process, and requiring that CMS create new incentives to improve auditor accuracy.

    Second, the bill will make reforms to the Medicare appeals process to address the appeals backlog without sacrificing quality. Part of this will be done by raising the amount in controversy for review by an ALJ to match the amount for review required by a District Court. For cases with lower costs, a new Medicare Magistrate program will be created to allow senior attorneys with expertise in Medicare law and policies to decide cases in the same way as ALJs. This will allow more cases to be heard more quickly, while still providing ALJs full focus on the more complex cases.

    Third, the bill will allow for the use of sampling and extrapolation of Medicare claims, with the appellant's consent, to expedite the appeals process.

    Fourth, the bill will establish voluntary alternate dispute resolution processes for multiple pending claims with similar issues to be settled as a unit, rather than as individual appeals. This will reduce administrative costs while still providing reasonable consideration to pending claims.

    Finally, the bill will also require that CMS create an independent Ombudsman for Medicare Reviews and Appeals to help resolve complaints made by appellants and those considering appeal. As with any federal program, continuing oversight and good leadership are required to have any measure of success.

    These are thoughtful, bipartisan improvements, agreed on by the entire Finance Committee that will address the appeals backlog while still allowing us to improve program integrity going forward. I believe it is the best approach we can take to continue our efforts to recover lost taxpayer funds without creating undue burdens for health care providers and suppliers.

    Oftentimes in Congress we find ourselves shying away from bipartisan compromises like this. Some may feel that they have more to gain, politically, if they thumb their noses at the other party. Or, inversely, they have something to lose if they actually agree on an issue with members on the other side.

    Let me clearly state, for the record, that we have neither the time, nor the money to play partisan games with this issue.

    The average amount of time for an appeal to get processed has gone up by more than 550 percent in just 6 years. You heard me correctly--that increase is just in the time it takes to get the appeal processed, not even ruled on. If this trend continues, and absent congressional action, I think we can assume that it will continue, imagine how much more strained, expensive, and ineffective the Medicare appeals system could become.

    Truly, there is no time better than now to actually do our job and stem this rising tide.

    Before I finish I want to thank Senator Wyden for working with me on this effort and for making this a truly bipartisan endeavor. I hope all of my colleagues--on both sides of the aisle--will support the AFIRM Act.

    ______ By Mrs. FEINSTEIN (for herself and Mr. Burr): S. 2372. A bill to require reporting of terrorist activities and the unlawful distribution of information relating to explosives, and for other purposes; to the Committee on the Judiciary.

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