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RAC Reform Movement Gains Some Traction

Joe Cantlupe, for HealthLeaders Media, March 28, 2013

Battle to Cap RAC Requirements Ensues
Now the American Hospital Association and some members of Congress are trying to derail the RACs, or at least make them more manageable.

"Our current litigation is part of a larger strategy around RACs and the concerns hospitals have about [them]," Hughes, the AHA lawyer, says. That includes support of legislation, the so-called Medicare Audit Improvement Act , which would include a "cap" on documents that could be sought by Medicare audit contractors.

"Smaller hospitals in particular have expressed deep concern over the administrative burdens being placed on them by Medicare audit contractors, including large increases in the number of documents being required," one of the co-sponsors, Rep. Sam Graves, (R-MO) said in a statement.

The voluminous records sought by RACs are only one problem, Hughes says. "RACs [also] have a poor record in terms of accuracy of their decisions" related to denying hospital claims. And overall "transparency," is another issue the AHA is concerned about, Hughes adds. "The RAC bill is also focusing on improving the performance by a number of contractors."

Appeals Costly
A CMS study reveals that about 40% of RAC findings are appealed, but providers win those appeals about 75% of the time. Despite the good odds of winning an appeal, providers complain that the process is cumbersome and too costly.

In the past, RAC audits solely focused on Medicare. Soon, they will expand to include Medicaid. And RAC audits are only some of the financial reviews hospitals face. Others include Medicaid integrity contractors, zone program integrity contractors and state Medicaid program integrity audits.

It's important to "get your documentation as good as it can possibly be—what was documented and what was billed. That's the position you want to be in," says Elion.

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