RAC activity continues its steady rise

Hospitals continue to report rising rejections of claims connected to Recovery Audit Contractor (RAC) scrutiny, but they still can prevail if they undertake the appeals process, reported AHA News Now.

Ninety-three percent of the more than 2,400 hospitals surveyed say they experienced RAC activity during the third quarter of the year, compared to 92 percent during the second quarter, according to the American Hospital Association's RacTrac survey. Among teaching hospitals, 97 percent reported some form of activity.

The number of RAC-related medical records requests increased 13 percent since the first quarter of this year, the survey said. Complex audit denials climbed 28 percent, with nearly 442,000 performed, up nearly 100,000 from the first quarter. The average dollar value for a complex denial was $5,663. The biggest reason for a denial by far was short-hospital stays determined to be medically unnecessary.

As a result of the short stay issue, the Centers for Medicare & Medicaid Services formulated new rules about hospital admissions and observation care that it intends to establish next spring.

The value of the claims denied through the third quarter totaled $2.53 billion, according to report. That compares with $1.9 billion through the first quarter of the year. Only a tiny fraction involved automated denials, totaling $75.6 million.

Despite the continued rise in audits, hospitals do have tools to respond. According to the survey, hospitals appealed 47 percent of all denials, representing more than $1.4 billion in claims. CMS oveturned more than two-thirds of appeals--67 percent--although that's lower than the 75 percent rate from a year ago.

Meanwhile, 71 percent of all appealed claims have yet to be completely adjudicated. The logjam appears biggest when a hospital requests a hearing in front of an administrative judge, the second step in the appeals process. Eighty-three percent of hospitals report delays of 120 days or more, and 40 percent of claims involve a ruling that took longer than the 90 days permitted under statute.

To learn more:
- read the AHA News Now article
- here's the RACTrac survey (.pdf)

Related Articles:
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Part A redeterminations skyrocket
Medicare RACs recoup $2.4B in overpayments in nine months
OIG blasts Medicare, RACs for weak oversight
RAC medical record requests up 47%

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