Recovery audit appeals can be worth the time

The Centers for Medicare & Medicaid Services corrected even more Medicare over- and underpayments this quarter, suggesting hospitals should be keeping a close eye on the money.

CMS collected $657.2 million in overpayments and returned $44.1 million in underpayments this past quarter (April to June), compared to $588.4 million and $61.5 million, respectively, in the previous quarter (January to March), according to the CMS corrections sheet.

The top recovery auditor (better known as RACs) issue in the third quarter revolved around medical necessity, particularly for cardiovascular procedures and inpatient stays for minor surgeries and other treatments.

The CMS numbers don't reflect how many of those are overturned on appeal, but as Stacey Levitt, senior administrative director of patient care management at Lenox Hill Hospital in New York City, told HealthLeaders Media, "Not everyone is appealing their RAC demands (sadly), but those that do are usually successful."

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"I've seen [hospitals] not want to spend the money to fight it, and I don't agree. You sometimes have to send a message."
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For those who make the move to appeal, it's worth it. Seventy-five percent of denials from recovery auditors were overturned after a provider filed an appeal, according to the American Hospital Association's RACTrac program's first quarter report.

"I've seen [hospitals] not want to spend the money to fight it, and I don't agree. You sometimes have to send a message," Janice Jacobs, director of coding compliance for IMA Consulting in Chadds Ford, Pa., told FierceHealthFinance in an eBook, "Best Practices for Surviving Audits and Denials."

Rebecca Black, vice president of revenue cycle for St. Joseph's Hospital in Atlanta, part of the Georgia-based Emory Healthcare system, also encourages providers to stand their ground. "It's a matter of principle," she told FierceHealthFinance.

For more information:
- see the CMS announcement (.pdf)
- read the HealthLeaders Media article
- read the RACTrac data (.pdf)
- check out the FierceHealthFinance eBook, "Best Practices for Surviving Audits and Denials"

Related Articles:
The ins and outs of avoiding audits and denials
Self-auditing: Use nurse, staff expertise
RACs have leeway in lookbacks, court rules
As RACs get more aggressive, denial costs soar

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