Provider groups push for RAC reform

Hospital industry groups said Thursday they'd rather the government reform the Recovery Audit Contractor program than simply throw more money at fixing an onerous backlog of more than 800,000 Medicare appeals cases.

The only way to truly remedy the backlog is by overhauling the RAC program altogether, constituents told Bloomberg BNA Thursday. Like hospitals, long-term care professionals have long criticized the RAC program for its tactics. The RAC program identifies improper underpayment or overpayment for Medicare providers in all 50 states, with investigators incentivized to find more.

The president's 2016 fiscal federal budget for Health and Human Services allocates $270 million in funding for the Office of Medicare Hearings and Appeals – $183 million more than it was given in 2014. Roughly half of the 2016 funding would come from a budget proposal to revise the law to allow Health and Human Services to tap into RAC collections, according to news reports. Without the additional funding, the agency estimates the case backlog would approach three million by the end of 2016.

About a year ago, new casework in the RAC program came to a grinding halt to allow the caseworkers to catch up. In December, the Centers for Medicare & Medicaid Services announced some RAC reforms designed to reduce the administrative burden on providers, enhance CMS's oversight and increase program transparency.