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RAC Appeals Process 'Broken,' AHA Says

Cheryl Clark, for HealthLeaders Media, January 16, 2014

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.

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2 comments on "RAC Appeals Process 'Broken,' AHA Says"


Thomas H (1/16/2014 at 1:48 PM)
This process is a nightmare I know I currently assist the RAC. Most of the high end personal dont have any clue of the process or procedures and seem to be very limited to being open to new structure or any ideas. I have been in the medical billing, collections, administrative field, etc for over 10 years now and the process needs to be fixed starting with the system upgrades and quicker transactions and either removing the sub contractors or requiring them to have a certain amount of personal. I have never been so frustrated or lost at certain times in my field until I ran into this process. I am greatful I have a job but I feel so unproductive because all the incorrect feedback and decision making. Well thats that I hope this process gets fixed quick for the better.

Karen Luther (1/16/2014 at 10:39 AM)
Thank you to the AHA for taking this stand!