Resources to Manage RAC Audits
Since its full inception in 2009, CMSs Recovery Audit Contractor (RAC) program has dramatically impacted healthcare. From 2012 to 2013 the number of RAC requests for medical claims reviews increased “dramatically,” according to the American Hospital Association’s (AHA) Q3 2013 RACTrac survey. More than 1200 hospitals reported 47% more requests than the year before, as well as 58% more complex audit denials.
Other key findings from the RACTrac study for Q3 of 20131 included:
- According to the RAC, 58% of medical records reviewed by RACs did not contain an overpayment.
- 67% of hospitals indicated medical necessity denials were the most costly complex denials.
- 64% of short-stay denials for medical necessity were because the care was provided in the wrong setting, not because the care was medically unnecessary.
- 68% of all hospitals reported spending more than $10,000 managing the RAC process during the third quarter of 2013, 49% spent more than $25,000 and 12% spent over $100,000.
Clearly, managing these audits has been an enormous challenge in terms of time and money, and while the future of the RAC program is still evolving, it’s unlikely that the challenge is going away any time soon. When we ask hospitals why they don’t appeal more cases, most tell us it’s because they don’t have the resources. So how best to analyze the threats, prepare your system, and defend your claims against audits?
- RAC Rules and Assessing Risk
- How to Pick a Winning RAC Appeal Strategy
- Comparing RAC Software Tools
- How to Write a RAC Appeal Letter
- How to Prepare a Winning RAC Appeal
As we move into an uncertain audit future, Craneware will continue to work toward helping clients understand and manage their audit processes as part of their journey to revenue integrity. We invite you to Join the Movement for Revenue Integrity at revenueintegritymovement.com, and join the conversation at our blog, the Revenue Integrity Round Table.
The dollars that Recovery Auditors are taking back from hospitals is growing at an unrelenting pace. Consider: In just the first two quarters of FY12, Medicare Recovery Auditor take-backs were more than they were for all of FY11. The encouraging news is that hospitals win 74% of the Recovery Audit cases they appeal.1 The discouraging news is that they appeal only 31% of those cases. When we ask hospitals why they don’t appeal more cases, three-quarters of them tell us it’s because they don’t have the resources.
1. American Hospital Association, RACTrac