Recovery audit contractor audits and appeals at three academic medical centers. Issue 4 (24th February 2015)

• Record Type: Journal Article
• Authors: Sheehy, Ann M.; Locke, Charles; Engel, Jeannine Z.; Weissburg, Daniel J.; Mackowiak, Stephanie; Caponi, Bartho; Gangireddy, Sreedevi; Deutschendorf, Amy
• Is Part Of: Journal of hospital medicine. Volume 10:Issue 4(2015)
• Page Start: 212
• Page End: 219
• Publication Date: 2015-02-24
• Subjects: Hospital care -- Periodicals; Clinical medicine -- Periodicals; 610
• DOI: 10.1002/jhm.2332
• Languages: English
• ISSNs: 1553-5592

Abstract

<abstract abstract-type="main"> <title> <x xml:space="preserve">Abstract</x> </title> <sec id="jhm2332-sec-0001" sec-type="section"> <title>BACKGROUND</title> <p>Outpatient (observation) and inpatient status determinations for hospitalized Medicare beneficiaries have generated increasing concern for hospitals and patients. Recovery Audit Contractor (RAC) activity alleging improper status, however, has received little attention, and there are conflicting federal and hospital reports of RAC activity and hospital appeals success.</p> </sec> <sec id="jhm2332-sec-0002" sec-type="section"> <title>OBJECTIVE</title> <p>To detail complex Medicare Part A RAC activity.</p> </sec> <sec id="jhm2332-sec-0003" sec-type="section"> <title>DESIGN, SETTING AND PATIENTS</title> <p>Retrospective descriptive study of complex Medicare Part A audits at 3 academic hospitals from 2010 to 2013.</p> </sec> <sec id="jhm2332-sec-0004" sec-type="section"> <title>MEASUREMENTS</title> <p>Complex Part A audits, outcome of audits, and hospital workforce required to manage this process.</p> </sec> <sec id="jhm2332-sec-0005" sec-type="section"> <title>RESULTS</title> <p>Of 101, 862 inpatient Medicare encounters, RACs audited 8110 (8.0%) encounters, alleged overpayment in 31.3% (2536/8110), and hospitals disputed 91.0% (2309/2536). There was a nearly 3‐fold increase in RAC overpayment determinations in 2 years, although the hospitals contested and won a larger percent of cases each year. One‐third (645/1935, 33.3%) of settled claims were decided in the discussion period, which are favorable decisions for the hospitals not reported in federal appeals data. Almost half (951/1935, 49.1%) of settled contested cases were withdrawn by the hospitals and rebilled under Medicare Part B to avoid the lengthy (mean 555 [SD 255] days) appeals process. These original inpatient claims are considered improper payments recovered by the RAC. The hospitals also lost appeals (0.9%) by missing a filing deadline, yet there was no reciprocal case concession when the appeals process missed a deadline. No overpayment determinations contested the need for care delivered, rather that care should have been delivered under outpatient, not inpatient, status. The institutions employed an average 5.1 full‐time staff in the audits process.</p> </sec> <sec id="jhm2332-sec-0006" sec-type="section"> <title>CONCLUSIONS</title> <p>These findings suggest a need for RAC reform, including improved transparency in data reporting. <italic>Journal of Hospital Medicine</italic> 2015;10:212–219. © 2015 Society of Hospital Medicine.</p> </sec> </abstract>