Of the 1,408 denied claims, the Hospital of Central Connecticut agreed with the auditors on 5%, but appealed 1,344. Of those, 198 have completed the appeals process and "we won 95%." The rest are still waiting for a hearing.
Another reason why these denials seem so unfair, Hanks points out, is that they reclassify inpatient stays, which are paid a flat rate, or DRG, based on a diagnostic category, into outpatient care which pay less.
The DRG rate was derived by calculating the average length of stay for a patient with that condition. Some patients might stay three days, some five, some 20, but all are reimbursed at the same rate.
Hanks says that he believes the system is set up to "take the chance that the hospital won't have the resources" to go through the appeal process while waiting to get paid. Additionally, RAC auditors incur no penalty for getting it wrong, so they "continue to come after a hospital like mine which keeps winning these cases," he points out. "Let's face it, we all know what this is about," Hanks says.