Providers ask Senate committee to rein in RACs

Executives from some of the most prominent hospital systems in the United States urged the Senate Finance Committee last week to curb some of the practices of recovery audit contractors (RACs), reported AHA News Now.

Hospitals have been complaining that RACs have been overzealous in rejecting their claims, particularly for shorter hospital stays, leading to costly appeals.

"When we couple ... RAC activity with all of the other entities currently reviewing our patient billing, the combined audit activity becomes overwhelming. In total, we are currently being audited by the Medicare RAC, Medicaid, Medicare Advantage, commercial payers and others," Jennifer J. Carmody, director of reimbursement for Billings Clinic, told the committee.

Carmody said that since RACs began auditing the Billings Clinic system in Montana in 2010, it has reviewed 6,000 records and $45 million worth of claims. Appealing a single one of the RAC's decisions to reverse a payments costs a minimum of $400.

Suzanne Draper, Intermountain Health Care's vice president of ethics and compliance, praised the RACs for providing specificity about what they plan to audit, but still observed that the Utah-based hospital system has had a heavy burden in complying with RAC audits. Intermountain has so far complied with 16,000 record requests, and added 22 employees to handle the workload, most of whom are engaged in appeals.

Draper also noted that while Intermountain is held to strict deadlines regarding the submissions of records when appealing RAC decisions, the RACs are not held to deadlines and they tend to be more error-prone in their work than other auditors.

Both Carmody and Draper asked for better federal oversight of RACs. And both Sens. Max Baucus (D-Mont.) and Sen. Orrin Hatch (R-Utah) called for more efficient guidelines for providers to comply with RAC requests.

"I support requirements that minimize burdens on providers by reducing the look-back period to three years, limiting the number of medical records requested, and accepting electronic copies of requested documents," Hatch said in a statement.

During the hearing, the American Hospital Association called for financial penalties for RACs that do not adhere to guidelines, make their performance evaluations publicly available, and allow denied inpatient claims to be rebilled as outpatient claims when possible.

To learn more:
- read the AHA News Now article
- here's Jennifer Carmody's statement (.pdf)
- check out Suzanne Draper's statement (.pdf)
- refer to Sen. Hatch's statement (.pdf)
- read. Baucus's statement (.pdf)
- see the AHA statement (.pdf)