In September the American Hospital Association (AHA) released its RACTrac for the second quarter of 2010. RACTrac is a nationwide survey conducted by the AHA which documents the ongoing Recovery Audit Contractor (RAC) activity. The purpose of the survey is to fill the void of information provided by the Centers for Medicare & Medicaid Services (CMS) on the RAC program’s impact on hospitals.
RACTrac reported that 1,389 hospitals participated in the survey from all of the RAC regions. During the first quarter of 2010, more than two thirds of these hospitals experienced RAC activity. The survey results indicated that the RACs primarily engaged in complex reviews. For instance, during the first quarter of 2010, 88 percent (over $15.5 million) of the reported RAC activity by hospitals participating in the survey was involved in complex reviews, while 20 percent was involved in automated reviews. Complex reviews require human review of the medical records and a determination of whether or not an improper payment was made. If an improper payment is identified, the hospital will receive a letter stating that the associated claim has been “denied.” Automated reviews, however, involve a claim determination without human review of the medical records. Instead, the RACs utilize software to detect certain types of errors. The RAC will send a demand letter to the hospital, providing notice that an overpayment has been detected.
Participating hospitals also reported appealing 16 percent of the RAC denials available for appeal. Of the claims that had completed the appeals process at the time of the survey, 13 percent were overturned in favor of the provider. However, 1,571 of the claims are still in the appeals process and the overturned rate may increase once the appeals process is complete.
The RACTrac Survey also documented information regarding the increased administrative burden on hospitals due to the RAC program. 76 percent of the responding hospitals reported that their RAC impacted their organization in the first quarter of 2010, regardless of whether they had experienced RAC reviews.
For more information on RACs or for assistance with a RAC or other Medicare Audit, please contact a Wachler & Associates attorney at 248-544-0888.