RAC audit abuse answers vary

John O'Connor
John O'Connor

It has been more than 2,400 years since Plato demanded to know who will watch the watchmen.

The question is suddenly taking on a modern flavor, as nursing homes, hospitals, doctors and other providers line up to decry the practices of Recovery Audit Contractors.

At the front of this line is the American Medical Association, which recently upped the kvetching ante. The organization that represents about a quarter of a million physicians is now calling on lawmakers and regulators to take a closer look at the way auditors do their jobs – and penalize those who mess up.

In a recent letter, the AMA complained about “bounty hunter-like tactics.” The provider association also asserts RACs do not have enough checks to curb their enthusiasm.

One concern is the commission-like incentives RAC auditors receive. These bill checkers get to keep anywhere from 9% to 12.5% of the improper payments they uncover.

“Hold on just a second,” RAC defenders would counter. Auditors returned more than $3 billion to the Medicare program last year, according to a recent CMS report to Congress. And if RACs are so out of line, why is it that more than four-out-of-five provider appeals are unsuccessful, they might add.

So who is right? Are providers being unfairly singled out by bounty hunters gone wild? Or are RACs performing a necessary function reasonably well?

It's not too hard to see which side of the argument providers would choose. But for what it's worth, the HHS Office of the Inspector General has found that despite its many imperfections, the RAC program is more accurate than many of its detractors claim.

My view is that the best arguments from each side have merit. RACs exist for a legitimate reason: to make sure that organizations submitting Medicare claims are not stealing, or being careless/stupid in ways that waste tax dollars. But I also have empathy for operators who feel persecuted by hired hands who seem to have every incentive to turn the screws.

So perhaps some adjustments that make the audits a bit more fair are a good idea. But providers who think that the government is going to dismantle RACs have another thought coming. For billions of reasons.

Yes, Medicare rules can be bizarre, difficult to understand and rapidly changing. But if you are going to accept money from the government, you'd better make darn sure you can legitimately justify every dollar received. If that's not the case, you might have more than Medicare billing auditors to worry about.

John O'Connor is the Editorial Director at McKnight's.

Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Emily Mongan.

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