Will RACS have to pay for failed recoupments?

Healthcare recovery auditors (better known as RACs) could face a potential financial penalty for every judgment against a provider that is overturned if a pending bill gets signed into law, according to HealthLeaders Media.

The bill, H.R. 6575, sponsored by Rep. Sam Graves (R-Mo.), would allow for the Secretary of the U.S. Department of Health & Human Services to impose a penalty based on a published fee schedule.

Currently, 75 percent of RAC judgments against providers get overturned when they are appealed, mostly at the administrative law level, where a federal judge is making a decision, according to the American Hospital Association RACTrac Survey. The total number of judgments under appeal during the first quarter of 2012 are valued at $380.3 million.

In addition to affixing financial penalties, the bill also would grant much wider leeway to the HHS in determining whether billing errors by hospitals are widespread, rather than granting that power to RACs, HealthLeaders reported.

The AHA and hospitals have complained bitterly about the RAC process, and recently filed suit against HHS to recoup denied payments.

To learn more:
- read the HealthLeaders article
- check out the bill
- here's the RACTrac survey data

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