Medicare auditors becoming more active, denying more claims, survey shows

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Requests for medical records by Medicare's fraud-detecting recovery audit contractors (RACs) jumped sharply from the first- to the second-quarter of fiscal year 2012, a new survey reveals.

RACs, which are contracted by the Centers for Medicare & Medicaid Services to detect healthcare fraud and recover Medicare and Medicaid overpayments from providers, requested 546,000 medical records in the second quarter of 2012. That's a 22% increase over the 448,000 the previous quarter, according to a survey conducted by the American Hospital Association.

Providers also experienced in increase in the denial of claims, both automated and complex over that same time, AHA survey results showed.

Automated RAC denials include billing or coding errors — such as the absence of documentation in a claim. A complex denial is based on human review of medical records.

The survey found that more than half of the providers surveyed had spent $10,000 to oversee the audit process, and 9% spent over $100,000 on it.

RACs have come under fire from lawmakers and provider groups for giving undue scrutiny to therapy claims and fanning hostility between regulators and providers. In March, CMS gave RACs the authority to request twice as many health records from skilled nursing facilities as they were previously allowed to.

Click here to read the AHA survey.

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