AHA: RAC activity, audits up

Medicare's recovery audit contractors are keeping up pressure on claims denials, according to a new survey by the American Hospital Associations.

AHA's voluntary RACTrac survey on Medicare recovery audit contractor activity has reported $19.2 million in denied claims during the second quarter of 2010, including $11 million in Medicare Region C, according to data compiled by RACTrac. The region, which comprises the Southeastern U.S., represents about 36 percent of the RACTrac participants.

Most of the denials--both automated and complex--came from coding and billing errors. Altogether, about 16 percent of the RAC denials that may be appealed have been appealed. About $421,000 worth of denials have been overturned.

Although there has been some success in getting denials overturned, more than half of the hospitals surveyed claimed increased administrative costs, particularly among the medical records staff. Hiring an outside utilization management consultant cost $48,770 on average, though only 11 percent of hospitals reported doing so.

The data is among the first reported by RACTrac, which became active in January 2010. According to the AHA, 1,389 hospitals are participating. Of those, 972 facilities--or 70 percen--have reported RAC activity. Most of those are non-teaching hospitals with 200 or fewer beds.

For more:
- read the RACTrac Survey results
- read RACTrac program background material