A new government report out earlier this week shows that the Medicare Recovery Audit Contractor (RAC) program recouped almost $4 billion in improper payments. The majority—$3.65 billion—were overpayments, with 94% of that figure resulting from inpatient hospital claims. Many were from short-stay inpatient hospital admissions determined after the fact to be medically unnecessary.
The results have met with mixed reactions throughout the week. While some groups, like the American Coalition for Healthcare Claims Integrity, touted the results as a sign of the importance of the program, at least one provider group attorney criticized the program for using "fuzzy math."
"At 10.1%, the Medicare fee-for-service error rate is the highest of all federal programs," Kristin Walter, spokesperson for The American Coalition for Healthcare Claims Integrity. "Our coalition urges lawmakers to support the RAC program and the important role it plays in maintaining a stronger, more efficient Medicare program for the millions of retirees and disabled individuals who rely on these critical benefits each day."
According to the report, providers appealed 500,269 claims, or 31% of the total claims with overpayment determinations. 151,645 of these appeals were overturned in favor of the provider. That win percentage, however, doesn't account for the significant costs that hospitals are forced to absorb in fighting the RAC denials, according to the American Hospital Association's general counsel Mindy Hatton.
Meanwhile, according to a report from the Government Accountability Office, the Centers for Medicare and Medicaid Services (CMS) auditing process is rife with errors and duplications.
"CMS has a duty to safeguard scarce taxpayer dollars and streamline postpayment claims reviews, but as GAO says, it has failed to do so," said Sen. Orrin Hatch (R-UT), ranking member of the Senate Finance Committee. "CMS' current efforts to coordinate with contractors in reducing duplicative programs are simply inadequate."
At minimum, according to Elizabeth Elias, an attorney with Hall, Render, Killian, Heath & Lyman who represents providers in RAC cases, the report casts some doubt on how CMS has structured its appeal settlement. Currently, hospitals have until the end of this month to decide whether to accept a reimbursement offer of 68% of their inpatient claims awaiting appeal (currently bogged down in backlogs). Either way, hospitals have to give up something substantial: the time they invested fighting the RACs or a good chunk of the money they believe they are owed.
"If providers were winning only 18.1% of their RAC appeals, I'm not sure [CMS] would've offered such a favorable settlement," Elias told Modern Healthcare.
Here are the biggest stories in the healthcare industry this week:
Hospitals have made progress on palliative care, but there is still a long way to go.
Critics have historically slammed Epic for being a "closed" system. Will the launch of a new API open up its EMR to other IT developers?
After years of slow growth for telemedicine services, many employers and health plans are now changing their minds.
The collaboration will include EMR integration.
The ACO Improvement Act takes a multi-pronged approach to supporting accountable care organizations.
The controversial release mandated under the Sunshine Act launched on Tuesday.
And here's what we were reading:
This week, we take a look at some of the best healthcare tweets from around the industry.
3/3 What I found? A little underwhelming. My doctor eats a lot of donuts and bagels, courtesy of Big Pharma.— Katie Thomas (@katie_thomas) September 30, 2014
Healthcare is 13.8% of household spending, second only to housing. its why healthcare consumerism will rise. Paul Keckley #2014ihasummit— Harry Wolin (@HarryWolin) September 30, 2014
How the economy's new healthcare jobs break down: Home health: 6,800 jobs ↑ Hospitals: 6,200 ↑ Doctors offices: 400 ↓— Dan Diamond (@ddiamond) October 3, 2014