RACs have leeway in lookbacks, court rules

A federal appeals court has ruled that providers cannot challenge auditors' decision to examine claims that are more than a year old, reported American Medical News.

The decision, handed down by the 9th U.S. Circuit Court of Appeals, is based on litigation brought by Palomar Medical Center near San Diego. It sued the U.S. Department of Health & Human Services in 2009, challenging a RAC's decision to recoup alleged overpayments on claims that had been paid 20 months prior, according to the article.

Under current Medicare regulations, RACs can question any claims that are less than one year old for any reason. It must have good cause to reopen claims that are more than one year and less than four years old.

The Palomar case comes at a time when RAC activity is soaring, with claims denials up 24 percent in the previous quarter, reported AHA News Now.

Palomar initially prevailed when it appealed the claim. An administrative law judge ruled in its favor, but it was overturned by the Centers for Medicare & Medicaid Services, according to amednews. Palomar's last chance was in federal court. A federal district court judge ruled in favor of HHS, but Palomar appealed that decision.

"In view of the goals of the RAC program, and the secretary's regulations stating that decisions to reopen are 'final' and 'not appealable,' we hold that the issue of good cause for reopening cannot be raised after an audit's conclusion and the revision of a paid claim for medical services," the three-judge panel said in the ruling.

To learn more:
- here's the court decision (.pdf)
- read the American Medical News article
- check out the AHA News Now brief

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