Recovery Audits Targeted by House Bill, AHA Suit

Something is terribly wrong with the RA program when the appeals success rate is that high on the providers side, says Debbie Mackaman, a regulatory specialist for HCPro, Inc., in Danvers, MA.

"By the time providers appeal and win, they have often times exceeded the actual reimbursement that was originally recouped by the RA," she says. "There is a cry across the country that the providers have to get control of the skyrocketing healthcare costs, but when you look at the administrative burdens placed on them—and some of those programs are not being adequately policed, like the RAs—how can this happen?"

While the administrative and financial burden that the appeals process can put on a hospital is strenuous, appeal is a necessary step, suggests Wiik.

"Our counsel, our RAC committee, our regulatory and compliance department, and our physician advisor all agree that we do not want to send the message that Medicare, Connolly, or other RACs are right in determining that these are really outpatient claims. That sets a precedent that you can never come back from, and that scares us."

Herein lies another problem for providers: When the RA determines that the patient should have been an outpatient, hospitals must return the reimbursement for inpatient services. The hospitals then receive little to no money back for the "outpatient" services provided, even though the RA does not dispute that the hospital provided reasonable and necessary care. According to the AHA, that practice is inherently flawed.