RAC appeals backlog continues to grow

Hospitals now appeal about half of all RAC payment denials, which cause long delays associated with the process, according to the latest survey from the American Hospital Association.

Nearly all the 1,805 general surgical hospitals that participated in portions of the survey through the fourth quarter of 2013 --93 percent--say they experienced some form of RAC activity, although rural facilities and hospitals under 200 beds reported less activity overall.

Most audits in the fourth quarter focused on medically unnecessary short inpatient stays, although that is down from 73 percent in the third quarter. The drop is likely connected to the temporary moratorium on short-stay reviews while the Centers for Medicare & Medicaid Services reformulates its rules for hospitals on observation care cases.

Through 2013, the number of medical record requests reached 1.15 million, tied to $9.9 billion in Medicare payments. Complex denials topped 456,000. Automated denials reached 91,393. Altogether, the denied claims represented $2.6 billion in claims, with 97 percent of that sum tied to complex denials.

The average complex denial claim was $5,659 and $882 for an automated denial.

Of those records reviewed, 56 percent did not contain an improper payment.

Hospitals appealed more than half of the dollar value of the claims--$1.5 billion, with each hospital appealing an average of 343 claims to date.

However, the report reveals a slowdown in the appeals process. Hospitals reported that RACs didn't review an average of 86.5 of their appealed claims within 60 days of submission. And 88 percent of hospitals say they experienced a 120-day or longer delay in awaiting for an appeals ruling from an administrative law judge.

To learn more:
- read the report (.pdf)