California Hospital Association wants audit of auditor

In recent months, the California Hospital Association has vigorously challenged the high volume of Medicare denials issued by CMS contractor PRG-Schultz International. PRG-Schultz is part-owned by a company controlled by Richard Blum, husband of Sen. Dianne Feinstein (D-Calif.), a fact which has made the controversy hotter.

Now, the California Hospital Association has asked the Inspector General of HHS to investigate PRG-Schultz, which to date has rejected more than $100 million worth of Medicare claims from rehab hospitals. CMS acting administrator Leslie Norwalk is defending PRG-Schultz, contending it has followed Medicare law.

The CHA, meanwhile, questions whether the 20 to 25 percent bounty PRG-Schultz gets on each denied claim has caused it to reject the majority of rehab hospital care claims. These bonuses, part of a practice known as recovery auditing, is also being tested in Florida and New York, but in those states the contractors are not-for-profit organizations.

To find out more about the controversy:
- read this Sacramento Bee article

Related Article:
Calif. hospitals accused of overbilling Medicare. Report
Judge rejects hospitals' suit against chain in New Jersey. Report

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