CMS: Providers lose almost 70 percent of RAC appeals

CMS has released a new report stating that Medicare has recovered more than $1 billion through the Recovery Audit Contractor program since 2005, with 85 percent of the money having been taken back from hospitals. When the costs of collecting the money were taken into account--along with the small number of refunds made to providers--CMS was able to return $693.6 million to the Medicare trust fund. Along the way, the agency reported that about one-third of of those providers who appeal RAC decisions actually win the fight.

In its analysis, CMS said that most of the improper payments made to providers occurred due to billing and coding errors, frequently when one procedure was billed repeatedly. Other problems discovered by RACs included incorrect procedure codes and submission of duplicate claims that both got paid.

When the RACs challenged Medicare reimbursements, 14 percent of providers appealed. Of those decisions that were appealed, 33.3 percent were eventually overturned. (Bear in mind that this means that almost 70 percent of providers lost their appeal--and those were the ones who felt they had a strong enough case to go through the appeals process!) Not surprisingly, CMS acting administrator Kerry Weems called the results a success.

That being said, the report also notes that CMS has made some significant changes to the program over time. For example, the agency changed the amount of time a RAC could look back into old provider records from a four-year window to three years. Still, providers and Congressional legislators continue to criticize the RAC program, which HHS is required to make a permanent, national effort by Jan. 1, 2010.

To learn more about the report:
- read this Modern Healthcare article (reg. req.)

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