AHA asks to modify reach of RACs

The American Hospital Association is asking the Centers for Medicare & Medicaid Services to reconsider its revisions regarding the admission of patients previously in observation care, and to begin financially penalizing recovery audit contractors for any errors they make in denying claims, AHA News reported.

The CMS was prompted to change its rules regarding observation care after complaints from hospitals that inpatients admitted for a day or two were being unfairly targeted by RACs. As a result, many patients were being kept in observation care days at a time.

Under the proposed CMS rule change, any admission that is more than one utilization day--crossing two midnights--would be considered reasonable and medically necessary.

However, the AHA asked that CMS scrap the proposal.

"Unlike a treating physician, the view of RACs and other federal contractors is always in hindsight and, therefore, can consider the patient's length of stay and final outcome rather than focus on his or her presenting condition," AHA Executive Vice President Rick Pollack observed in a letter to CMS Administrator Marilyn Tavenner.

As an alternative, the AHA asked the agency to exclude from RACs any information in the patient's medical record after admission. It also asked that the CMS instruct RACs to examine the entire medical history and co-morbidities of patients when reviewing the propriety of payments. And lastly, it asked that RACs be subject to a fine if they improperly deny a claim.

"If CMS had been more clear and straightforward with its contractors to begin with, these beneficiaries would have been treated in the inpatient setting all along. Hospitals would not have been forced to move them to the outpatient setting and they would not appear to be moving back to the inpatient side under the proposed policy," Pollack wrote.

In separate correspondence, Pollack also asked CMS to reconsider its formula for doling out DSH funds to hospitals that treat large numbers of uninsured patients, as well as electronic data collection for quality reporting efforts.

To learn more:
- read the AHA News article
- read the AHA letter on RACs (.pdf)
- read the letter on DSH payments (.pdf)

 

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