How hospitals deal with RACs is a symptom of our era

As I was growing up in the 1970s, there was still a lot of the "can-do" attitude in America for which a large part of its populace is now nostalgic, if not wistful. There were moon shots, space shuttle tests, research to take all jets supersonic and many other touchstones of daring and optimism.

But as the country's mood and fortunes turned, that spirit has inverted. There is now a remarkable amount of reveling in obstruction as opposed to achievement. Members of Congress run for reelection on their record of blocking President Obama. States block Medicaid expansion. In California, there has been a movement to try and shut down the just-commenced bullet train project. Most other states turned down federal funding for such a project flat. Corporations seem to spend as much time trying to figure out how to avoid paying taxes than create new products and jobs.

Now, even as Cinemax broadcasts a show called "The Knick" intended to show how hospitals a century ago battled royally to overcome high mortality rates and develop new pathways or care, in real life they have also turned to the obstruction racket.

Medicare is being rooked to the tune of $60 billion a year as the result of overcharges and outright fraud, according to a recent article in the New York Times. And despite the efforts of the Obama administration to reduce that number, it is only getting back about $4 billion a year.

The work of recovery audit contractors, or RACs, appeared to be leading the pack--they've clawed back about $8 billion since they began claims auditing in 2009. But the Times noted their work has pretty much ground to a halt, primarily due to "hospital resistance."

Marsha Simon, a healthcare policy expert interviewed by the Times for the article, offered a description of the RACs' plight that might as well be a quote for our era: "They've been brought to a halt by their very success."

The American Hospital Association has been the unabashed leader in halting the RAC auditors in their tracks (although the lack of communication between the Medicare fiscal intermediaries that run the RACs haven't been much of a help either). "It's time to stop the RAC auditors who are sitting in a cubicle and second-guessing medical decision made by physicians…sometimes three years earlier," AHA Executive Vice President Rick Pollack said at the group's annual meeting last May.

Among the many hospital officials and attorneys I have interviewed regarding RACs, there has never been an outright denial that overbilling exists. It is merely about the money. Holding onto the money. Meeting deadlines so you don't lose the money. Reaching a certain level in the appeals process so your chances of keeping the money improve.

Not every RAC clawback is contested, but few hospitals talk about the ones they decided not to fight, and why they made that decision. Ditto for modifying their treatment patterns to improve claims compliance. The discussion is dominated by demonizing and fighting the RACs.

Meanwhile, healthcare delivery costs twice as much in the U.S. as any other country in the world. I expect that will remain unchanged for the remainder of my lifetime, and well beyond.

Pollack's argument is part of that. It's a twist on the old claim that's been used to try and block healthcare reform--don't give everyone coverage, because some government bureaucrat in a cubicle will make all the decisions instead of your doctor.

Try getting to the moon with an exhortation like that. Not nearly as stirring as President John F. Kennedy stating that we chose to go there not because it was easy, but because it was hard.

As I am not a historian or anthropologist, I don't know if this is the type of attitude that defines a society in a rut or decline, or is a byproduct of such a society, or if it represents something else. But hearing some stirring, optimistic words--whether on healthcare finance or anything else--would be a welcome change. - Ron(@FierceHealthcare)

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