RAC groups battle provider plea for short-stay payment relief

Safety commission weighs petitions for total bed-rail ban, seeks input
Safety commission weighs petitions for total bed-rail ban, seeks input

Third-party firms that audit Medicare bills for payment issues are pushing back hard against a hospital association plea for more favorable short-stay reimbursements, adding to the ongoing unwelcome specter of audits among all providers, including those in long-term care.

The American Coalition for Healthcare Claims Integrity, which advocates for Recovery Audit Contractors, told one media outlet Tuesday that Medicare billing errors have reached an unprecedented $46 billion per year that could make the Medicare program insolvent by 2030. The group called the American Hospital Association's current request “part of an ongoing effort on the part of the hospital industry to weaken oversight.”

At the head of a complaint line, which includes long-term care advocates, the AHA has blamed the incentive-guided contracted auditors for causing a “tremendous burden on hospitals and the appeals process.”

Last Friday, the AHA urged the Centers for Medicare & Medicaid Services to offer potential payment solutions for hospital stays of less than two-midnights whenever it finalizes its proposed rule for the fiscal year 2016 inpatient prospective payment system. The hospital group also asked the agency to extend the partial enforcement delay of its “two-midnight” policy, and repeal an “unlawful” 0.2% reduction to the standardized amount that was implemented in FY 2014.

Under the policy, Medicare beneficiaries are only covered as inpatients when an admitting doctor expects their hospitalization to last at least two days, or consecutive midnights. Hospitals have complained the rule results in “incorrect” reimbursements because they are shortchanged on costly resources to care for overnight inpatients.

The AHA has previously offered solutions to supplement the short-stay policy, including two that incorporate either a “short-stay” diagnosis related group for 61 specific conditions known to have the highest rate of RAC denials because of the frequency at which they are used, or a so-called DRG refinement model that splits the existing DRG into short- and non-short stay cases.

A large number of hospital industry groups have already asked the government to reform the RAC program, rather than simply throw more money at fixing an onerous backlog of more than 800,000 Medicare appeals cases.