RAC Nightmare Continues for Providers

, September 16, 2013

Karen Testman, senior vice president of financial operations at MemorialCare Health System, agrees with the concept of reducing Medicare overpayments, but takes issue with the administrative work it creates for providers.

The goal of CMS's Medicare Recovery Audit Contractor program is to identify and correct overpayments—and, to be fair, underpayments—made on claims for healthcare services provided to Medicare beneficiaries. That sounds good in theory, given that the government can hardly afford to waste billions of dollars on care that isn't necessary.

Yet, as with most things, theory is a far cry from reality, at least in the eyes of many hospitals and health systems.

Karen Testman, senior vice president, financial operations at MemorialCare Health System, a six-hospital institution based in Long Beach, CA, says that while she agrees with the concept of reducing Medicare overpayments, the administrative work it creates for providers is a "nightmare."

"As a taxpayer, I can certainly understand that you don't want someone abusing the system so that the government is paying for a fraudulent situation or claims they shouldn't be paying, but [RAC auditors] are getting into arguing about medical necessity, and we get caught in the middle," she says.

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