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RAC Nightmare Continues for Providers

Rene Letourneau, for HealthLeaders Media, September 16, 2013

RACs are paid a percentage of the money they recover from hospitals and other providers, and commonly determine that procedures billed as inpatient hospital care under Medicare Part A should instead have been delivered as an outpatient procedure under Medicare Part B.

'Hindsight is 20/20'
Auditors have the unfair advantage of looking at cases after the patient has been released, Testman says, while physicians have to make realtime decisions about care. "If a physician orders a test and admits a patient based on looking at the clinical data that the patient is presenting, and someone comes along after the fact, then the physician is being second guessed all the time. Hindsight is 20/20."

Testman says she expects the problem will only get worse because "auditors are becoming more and more aggressive with their denials."

The cost of managing RAC audits is considerable. To deal with RAC cases, MemorialCare has added an FTE to coordinate and track appeals. The system also pays fees for lawyers and medical experts for each case that makes it far enough into the appeals process to reach an administrative law judge for a final decision. On top of these expenses, there is the lost cash flow for rightful payments that are held up for years.

"Our overturn level is significant… We are winning the appeals, but even if they ultimately pay you back, there is a cost to them keeping your money for years," says Testman.

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3 comments on "RAC Nightmare Continues for Providers"


Jeff Angel (9/23/2013 at 8:17 PM)
This will continue until organized medicine makes a stand. I dont know why we are cowering down to cms and auditors over this blatant money grab from hard working people. We all need to just say no!!!!!! MPHs need to help us figure this out[INVALID][INVALID]penalizing hard workers with post audits when we dont know rules is one of yhe most stressful things in medicine. Another reason for smart kids to go into medicine. If we have surgeons in 20 years it wi be a miracle!!!!!

Ronald Hirsch (9/19/2013 at 2:53 PM)
RAC's claim they are fighting fraud and that RACTrac data is faulty and self-selected http://goo.gl/Yf6GJU yet they have only found 8 cases of fraud in 7 years. Irony at its best

daniel dulnikowski (9/16/2013 at 8:20 PM)
We were hit with three a few months ago. Two Breast Cancer patients, and an Ovarian Cancer patient. All had Lymphedema, and needed compression pumps. I looked and the paperwork and it was all solid. One had already be fought to the ALJ level, and won. We submitted our paperwork, and LOST. Two of these patients shoudl be covered under the Women's Cancer Health Act of 1998. But they were denied anyway. If they can do it to these patients, they can do it to anybody.