As RACs get more aggressive, denial costs soar

Medicare recovery auditors (better known as RAC) activity continues to ramp up aggressively, according to the latest American Hospital Association survey, noted AHA News Now.

The RACTrac survey, which includes more than 2,200 hospitals nationwide, reported that the number of RAC-related denials in the second quarter of 2012 was up 24 percent from the first quarter of 2012, while the number of medical records requests was up 22 percent compared to the prior quarter.

The total aggregated dollar value of RAC automated and complex denials has zoomed upward, more than doubling in less than a year. It averaged $224.8 million per the four geographical regions the AHA tracks during the second quarter. That compares to $185.2 million during the first quarter and $110.9 million during the fourth quarter of 2011.

Most of that amount was for complex denials: 97 percent in all. Complex denials also involve far more money, averaging $5,564 during the quarter, versus $548 for automated denials.

Tracking requests for records, coding and documentation and performing self-audits are ways to mitigate RAC activity, reported PhysBizTech.

Hospitals are still reporting a high success rate appealing RAC denials or recoupments. According to RACTrac, 40 percent of hospitals are appealing adverse rulings, and 75 percent are winning their appeals.

For more:
- read the AHA News Now news brief
- check out the RACTrac survey (.pdf)
- read the PhysBizTech article

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