From the Washington Office: Medicare audit accountability



The Recovery Audit Contractor (RAC) program was launched in 2010 by the Centers for Medicare and Medicaid Services (CMS) with the intention of identifying and preventing improper payments to Medicare providers. Recovery Audit Contractors are paid on “contingency fee” basis, i.e. a commission on each claim that they deny. Some have thus likened their actions to those of ‘bounty hunters.” Though there is an appeals process, hospitals and physicians bear the cost of audits, denials, and appeals, regardless of the ultimate outcome of the appeals process.

Dr. Patrick V. Bailey

Dr. Patrick V. Bailey

Because of the lack of accountability in the RAC process, concern has been expressed about both the number of inaccurate findings as well as the high volume of appeals. As evidence, the American Hospital Association (AHA) reported that the Office of the Inspector General (OIG) found that 49% of hospital denials are appealed and 72% of the appeals brought before an Administrative Law Judge are overturned in favor of the hospital.

In response to these concerns, Rep. George Holding (R-NC) introduced the H.R. 2568, the Fair Medical Audits Act in May 2015. The bill was jointly referred to the Ways and Means and Energy and Commerce committees in the House of Representatives for further consideration. Currently, H.R. 2568 has 23 cosponsors.

H.R. 2568 addresses many of the concerns in the RAC program by:

• Enhancing transparency in the audit process to improve compliance.

• Improving the claims-review process by mandating that contractors meet appropriate knowledge and experience requirements.

• Promoting provider education while increasing RAC accountability for inaccurate audit findings.

• Ensuring accuracy of those overpayment amounts calculated by contractors using extrapolation methodology.

• Requiring contractors to reimburse certain documentation requests to reduce provider burdens.

• Delaying payment to RACs until after external appeal.

• Reducing the appeals backlog by shortening the “look-back” period.

On Dec. 3, 2015, the American College of Surgeons joined 10 other surgical associations in sending a letter of support to Representative Holding thanking him for introducing the Fair Medical Audits Act. In addition, an ACTION ALERT was posted on the SurgeonsVoice website to facilitate the efforts of Fellows in contacting their individual representatives urging they support the legislation. I would urge all Fellows to log onto, and then click on the “TAKE ACTION” tab on the right side of the screen. It takes only a few moments to send a message to your Member of Congress requesting their assistance in passing this sensible legislation increasing accountability in the Medicare Recovery Audit Contractor program.

Until next month …

Dr. Patrick V. Bailey is an ACS Fellow, a pediatric surgeon, and Medical Director, Advocacy, for the Division of Advocacy and Health Policy, in the ACS offices in Washington, D.C.

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