James M. Berklan, McKnight's Editor
James M. Berklan, McKnight’s Editor

It’s interesting how competition can make strange bedfellows. Nursing homes and hospitals, for example, are next-door-neighbors on the caregiving block. We all know who has the bigger house on this block, and it often creates resentment.

However, as much as nursing home advocates might chafe at casting the lesser shadow, it is still a relationship they must nurture. Sometimes it’s done with firm handshakes of questionable sincerity or while giving sideways glances from behind sunglasses. But it continues.

The provider groups regularly do battle over the federal funding pie. As a result, they find there is always good reason to keep an eye on one another, particularly when it comes to policy and regulations.

That’s why I’ll be very interested to see how one of the American Hospital Association’s latest complaints plays out. The mighty AHA has filed suit against the Department of Health and Human Services, claiming that the federal government is allowing its recovery audit contractors (RACs) to, well, run amok.

It’s safe to say long-term care operators can identify.

As the lawsuit states, these special auditors basically earn their commission off of the amount of Medicare reimbursement they can “claw back” from hospitals. It doesn’t matter if the RAC pencil pushers overrule physicians or other clinicians, hospital leaders lament. The RACs have power, and they can go back months or years to level their charges. If the RAC rules against the provider, it can reclaim payments made for anything it calls objectionable billing.

Sure enough, hospitals can appeal these decisions and, according to the AHA, they do indeed win a “large majority of appeals.” But the Centers for Medicare & Medicaid Services still holds up Part B reimbursements and responds weakly to Part A filings, according to the hospital lobby.

In the end, the hospitals want the U.S. District Court in the District of Columbia to declare the CMS Payment Denial Policy “arbitrary and capricious, as well as invalid.”

Hmmmm. Do you think at least a few nursing home operators wouldn’t like to see RACs get put in their place? Even just a little yank on RACs’ collar would be well received by skilled nursing leaders.


For their part, top nursing home lobbyists are not entering the public fray. That’s their prerogative. But in what must be akin to wishing your knock-down-drag-out competitor luck when he proceeds past you in the big tournament, long-term care operators must be hoping that the hospitals stagger CMS on this one.

A growing list of auditors recently has vexed providers more than ever. And they’re not really welcome in the neighborhood in the first place.

Follow Editor James M. Berklan regularly on Twitter @LTCEditorsDesk.