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RAC Nightmare Continues for Providers

Rene Letourneau, for HealthLeaders Media, September 16, 2013

Appeals Process Slow
According to the American Hospital Association's RACTrac survey, which monitors and summarizes the impact on providers of RAC activity, hospitals are generally pretty successful when it comes to appealing cases. In the second quarter of 2013, hospitals appealed 40% of all RAC denials with a 70% success rate.


Mary Ann Freas


Mary Ann Freas, senior vice president and CFO at Southwest General Health Center in Middleburg Heights, OH

Melissa Jackson, senior associate director for policy at the AHA, agrees with Testman that the RAC process is still costly for providers, even those with a high overturn rate.

"The process creates an administrative burden on hospitals. Our most recent RACTrac data show that 63 percent of hospitals spend $40,000 or more just managing the RAC process," Jackson says.

"… [O]ur data show that 60% or more of claims audited by RACs contain no error, and 72% of inpatient claims denied by RACs are reversed by an administrative law judge," she adds.

Additionally, the appeals process is slow and cumbersome, Jackson notes. "RACs can audit claims for up to three years after the service is provided, and if a hospital appeals a RAC's decision, it can take up to two additional years to work through the appeals system."

Mary Ann Freas, senior vice president and CFO at Southwest General Health Center in Middleburg Heights, OH, also believes the after-the-fact RAC review gives the auditors an unfair perspective.

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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.