Providers urge federal investigation into inaccuracy of RAC audits

HHS Inspector General Daniel Levinson

A major hospital group has called for a federal investigation into mistakes made by recovery audit contractors. “Numerous inaccuracies” often result in improperly denied payments and decisions that go unpenalized, laments a letter sent by an American Hospital Association leader.

Long-term care professionals also are frequent critics RACs. The contractors are charged with identifying improperly made reimbursements, which could lead to fraud and other law enforcement investigations.

On a continuing basis three-fourths of appealed RAC decisions are reversed according to a database maintained by the hospital association.

The special auditors are “often wrong but not penalized for their numerous inaccuracies,” AHA Executive Vice President Rick Pollack wrote Wednesday in a letter to Department of Health and Human Services Inspector General Daniel Levinson. Pollack called for an end to improper payment denials and the streamlining of various auditing and integrity programs run by the Centers for Medicare & Medicaid Services. In re-emphasizing his request for serious review of the RAC process, Pollack noted that the contractors have incentive to be overzealous since they retain a percentage of funds removed from provider payment streams.

A copy of the letter can be found here. Last week, AHA was among the providers supporting the introduction of a new bill that would limit audit contractors' powers.