AHA: Hospital RAC Audits Rising

Cheryl Clark, November 26, 2013

Audits of hospital claims data by Medicare Recovery Audit Contractors are growing dramatically and impose an "immense administrative burden" on hospitals, says an AHA official.

Hospitals are being hit hard with a "dramatic increase" in records requests and audits from Medicare Recovery Audit Contractors, with a 28% increase in complex denials in the third quarter of this year compared with the first.

Auditors sought to review medical records documenting more than $10 billion in Medicare payments from the inception of the permanent RAC program in 2008 to Sept. 30, 2013, of which $2.5 billion was denied. And of those RAC investigations that resulted in a denial of payment, hospitals appealed 47%, with a 67% success rate in getting the decision overturned.

Those are among several findings from the latest quarterly installment of RACTrac, the American Hospital Association's member survey of RAC experiences since 2010. This installment covers the third quarter of 2013 ending Sept. 30. Reports from more than 2,000 hospitals are included, 1,269 of which reported during the third quarter.

"The data show that RACs continue to demonstrate a high level of inaccuracy when reviewing claims, which means that hospitals must spend funds that could be used for patient care in order to appeal inappropriate denials," says Melissa Jackson, senior associate director of policy for the AHA.

An "Immense Administrative Burden" on Hospitals
Jackson says the RAC program "requires fundamental reform so that hospitals can avoid this immense administrative burden and focus on their mission to provide patient care."

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