AHA: Time to rein in Recovery Audit Contractors

Recovery audit contractors have run amok and act more like bounty hunters than impartial judges, says Rick Pollack (pictured right), executive vice president of the American Hospital Association. He urged hospitals to contact their legislators and demand they rein in RACs by supporting the Medicare Audit Improvement Act, which would place limits on how they conduct audits.

"It's time to stop the RAC auditors who are sitting in a cubicle and second guessing medical decision made by physicians…sometimes three years earlier," said Pollack (pictured right) on Monday, during the opening plenary session of the AHA's annual membership meeting in the District of Columbia.

The government set up RACs to assess medical claims for payment accuracy. But Pollack said that the auditors act "more like bounty hunters who prosper financially on each rejected claim." And when hospitals protest and appeal the decisions, they usually prevail. Hospitals appeal 49 percent of RAC denials and win 72 percent of the time, said Pollack, pointing to the fourth quarter, 2013 findings of the AHA's RACTrac Survey and an Office of Inspector General November 2012 report.

"They must stop wasting resources on paperwork rather than patient care," he said. "It's time to pass the Medicare Audit Improvement Act."

If approved, the legislation would set a limit for medical record requests; impose financial penalties on RACs who fail to comply with program requirements; make RAC performance evaluations available to the public; and allow hospitals to bill denied inpatient claims as outpatient claims when appropriate.

Pollack also called on hospitals to urge legislators to:

  • reject further cuts to Medicare and Medicaid funding for hospital services
  • support the Two-Midnight Rule Coordination and Improvement Act, which directs the Centers for Medicare & Medicaid Services to further delay enforcement of the two-midnight rule and develop a standard that provides clarity on whether to bill a patient's care as inpatient or outpatient
  • support the DSH Reduction Relief Act, which would provide relief from the first two years of scheduled cuts to the Medicare disproportionate share hospital program

To learn more:
- check out the RACTrac Survey findings (.pdf)
- here is the OIG report.pdf)
- read the AHA's Advocacy message card (.pdf)

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