RAC Program Recouped $3B for Medicare in FY 2013, Report Finds
Medicare's recovery audit contractors recovered $3.75 billion in inappropriate payments to physicians and hospitals in fiscal year 2013, according to CMS' annual RAC report to Congress, Modern Healthcare reports.
According to Modern Healthcare, RACs recovered Medicare funds from providers if:
- Allegedly unnecessary care was provided;
- Codes were incorrectly listed; or
- Proper medical documentation is not provided for a claim (Herman, Modern Healthcare, 9/29).
According to the report, $3.65 billion of the funds were related to 1,489,638 overpayment claims (CMS report, 2014).
After accounting for RAC shares of the recouped funds, which can range from 9% to 12.5%, as well as underpayments and appeals costs, CMS recouped $3 billion for Medicare's trust fund.
The report noted that providers were successful in 18.1% of claims appeals.
The American Coalition for Healthcare Claims Integrity touted the report as proof of the RAC program's success "and the critical role these contractors play in our nation's health care system."
However, some provider groups have said the data are inaccurate. For example, the American Hospital Association has reported that hospitals appealed 50% of RAC denials in the first quarter of 2014 and won 66% of those appeals. AHA's data include only final decisions in the appeals process, so each appeal is only counted once.
Meanwhile, CMS said its report could count each appeal several times, accounting for it at each level of the appeals processes (Modern Healthcare, 9/29). The report explained, "For example, if a claim was appealed to the first level and received a decision in FY 2013, then appealed to the second level and received a decision in FY 2013, both decisions would be counted" (CMS report, 2014).
AHA General Counsel Mindy Hatton wrote in a blog post Monday that because of this discrepancy, CMS' report relies on "fuzzy math." She added that the report does not account for costs that providers absorb when appealing RAC denials (Modern Healthcare, 9/29).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.