Audits Costly for Hospitals
Dealing with a RAC audit involves hospital expense, the survey showed. About 12% of hospitals responding said they spent more than $100,000 managing the RAC process, and 49% spent more than $25,000.
The survey noted that hospitals were incurring significant administrative costs to deal with RAC audits, including expenses for training, software, additional hours from clinical staff, modify admissions criteria and create internal task forces to prevent negative audit findings.
See Also: 3 RAC Audit Survival Tips
More than three-fourths of all hospitals, including teaching and non-teaching, rural, urban, and critical access hospitals were audited during the survey period, beginning in 2010. Through the third quarter of 2013, smaller and rural hospitals were slightly less likely than others to receive audits.
The survey revealed wide variation in RAC activity by region, with the greatest number of hospitals reporting audits located in the southern and southeastern part of the country, from West Virginia and Virginia, Louisiana, Oklahoma and Colorado to the Mexican border.
The most commonly cited reason for complex denials was a medically unnecessary short stay in a hospital. Of short-stay denials for medical necessity, 64% were because care was provided in the wrong setting, "not because the care was medically unnecessary," the AHA reported.