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AHA: Hospital RAC Audits Rising

Cheryl Clark, for HealthLeaders Media, November 26, 2013

RAC audits are the U.S. Department of Health and Human Services effort to scrutinize hospitals' billed claims to correct

  • Over payments
  • Under payments
  • Inappropriately coded claims

The audits also seek to find cause to cancel payments for services deemed unreasonable, unnecessary or duplicative. The auditor program was created by the Medicare Modernization Act of 2003 and was officially launched in 2005.

Slow Response to Appeals
Among the survey's findings was that 94% of hospitals that appealed claims reported delays beyond the statutory 90-day-limit for a determination by an administrative law judge on whether the payment was appropriate.

Among the AHA's other survey findings:

  • Cumulative medical record requests have increased by 13% since the first quarter of 2013.
  • 58% of medical records reviewed by RACs "did not contain an overpayment."
  • 67% of hospitals indicated medical necessity denials were the most costly complex denials.
  • 71% of all appealed claims are still sitting in the appeals process.
  • 64% of short-stay denials for medical necessity were because the care was provided in the wrong setting, not because the care was medically unnecessary.
  • 43% of participating hospitals reported having a RAC denial reversed through utilization of the discussion period.
  • 70% of all hospitals filing a RAC appeal during the third quarter of 2013 reported appealing short-stay medically unnecessary denials.
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