RAC audits targeting DRGs

Two prominent healthcare attorneys say that a specific group of diagnosis-related group (DRG) codes are drawing the most attention in terms of Medicare recovery audit contractor (RAC) and prepayment audits.

Particular RAC hotspots at the moment concern hospital inpatient treatments for urinary tract disorders, mental healthcare and short inpatient stays (typically two days or less), according to Scott McBride, a partner in the Houston office of Baker & Hostetler law firm.

McBride and Jason Pinkall, an associate counsel for Dallas-based hospital chain Tenet Healthcare Corporation, presented at the Healthcare Financial Management Association's annual conference in Las Vegas late last month.

Pinkall noted that audit attention is being drawn to 19 specific DRGs where hospitals are "feeling some pain." They mostly focus on spinal fusion, hip replacements and unspecific treatment at hospital emergency rooms, usually for nausea and vomiting.

The vast majority of RAC audits result in overpayments being refunded rather than underpayments to providers, according to the Centers for Medicare & Medicaid Services. Nearly three-quarters of RAC overpayment determinations are successfully appealed, according to the American Hospital Association's RACTrac program.

Both McBride and Pinkall urged those entities undergoing audits and ordered to pay back funds to be extremely organized when appealing such judgments, a complex process that can take months, if not years.

To learn more:
- read about the RAC program
- check out the AHA's RACTrac program