Guest Columns

Misinformation about RAC program persists

Kristin Walter
Kristin Walter

Recently, the Medicare Payment Advisory Council released their Report to Congress on Medicare and the Health Care Delivery System, which provides the rationale for recommended changes to the Medicare Fee-For-Service Recovery Audit Contractor program. Reports like these from advisory organizations and Congressional committees are common and often seem to have one unusual thing in common – the use of factually incorrect data provided by special interest groups.

While it's encouraging to see policy makers and influencers actively demonstrating concern for the long-term health of the Medicare program, it's concerning to see incorrect data cited to support the rationale of proposed program changes.  Unfortunately, this is often paired with a lack of awareness of previously released reports that clarify program issues as well.

A recent example of misleading facts being provided to Members of Congress took place at the Senate Special Committee on Aging hearing last month. A representative for the American Hospital Association testified citing data from a 2012 OIG report claiming that more than 70 % of RAC determinations are overturned on appeal. Those who have dug into that report easily find the statistic to be deceptive. The report cited analyzes 2010 data, a time when the RAC program was in its infancy. When read, the report actually shows that of all the claims that made it to the ALJ in 2010, there were only six RAC appeals that year. There may have been a 70% overturn rate that year overall, but that statistic does not correlate to RACs. The most recent Centers for Medicare & Medicaid Services RAC Report to Congress provides that only 9.3% of all RAC determinations are overturned on appeal.

It's no mistake that misleading data like this are among the key talking points of industry groups who rally on a daily basis for less oversight of their Medicare billing. They are banking on people being too busy or too distracted to actually dig into the myriad of reports to see if the data used is actually true. They are counting on people being too busy to notice that the “proof” they volunteer of a supposed hardship is taken from carefully manufactured surveys, which have no consistent or rigorous methodology. This incorrect information misinforms policy makers and influencers, who are frequently making important decisions about the program.

Correct information is easily available and those who influence important policy decisions must dig deeper, read more reports – especially those published by the Office of the Inspector General, the Government Accountability Office and CMS – and be more cautious about what they trust as facts from special interest groups, whose objective is to advance their cause through emotional appeal and political pressure.

In MedPAC's report, the organization shares that they are puzzled by how high RAC accuracy rates and low appeal overturn rates reported by CMS, can coexist with the huge appeals backlog at the Administrative Law Judge level. This is concerning since both the OIG and the Office of Medicare & Medicaid Hearings and Appeals have clearly stated the reason for this discrepancy – some providers are attempting to game the system, seeking to secure an overturn from an ALJ, who are widely known to rule outside of Medicare policy unlike lower appeal levels.

The report also questions the way RAC contractors are paid – using the industry best practice contingency fee model – and claims that RACs are not held accountable for their accuracy. Several years of CMS data demonstrates that RACs have consistently held an accuracy rate well above 90%. Additionally, the way RACs are held accountable and accurate is clear. The contingency fee model of payment, which requires RACs to bear all the costs associated with both the audit and appeals processes, ensures that RACs are only paid if their determinations are correct and upheld – thereby incentivizing very high accuracy rates.

Because of all the checks and balances CMS built into the contingency fee model, there is no other payment model that inspires this level of accountability and accuracy year after year. This payment structure is favored in private sector auditing for this very reason and is at the root of the demonstrated success of Medicare recovery auditing, which has returned nearly $10 billion to the Trust Fund while reviewing no more than 2% of all Medicare claims.

Medicare supports the health of more than 50 million Americans with our tax dollars, so there's a great deal at stake in efforts to improve the inner workings of the program. It should be a priority to policy makers to ensure that those resources are spent properly and that integrity safeguards are working at capacity to maintain the life of the program. Unfortunately, misinformation seems to be running rampant and distracting those who protect the program. As a result, Medicare is hemorrhaging funds at a rate $46 billion per year due to improperly billed Medicare claims. Most policy makers and influencers seem to be unaware or unconcerned that the program will be bankrupt in the year 2030, just 15 years from now.

Special interest groups are trying to take decision makers' eyes off of Medicare solvency, to their own gain. Let's ensure that all decisions to improve Medicare are made with true facts and sound arguments.

Kristin Walter is a spokeswoman for the Council for Medicare Integrity.

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