Make auditors also pay for their mistakes, doc group insists

Recovery Audit Contractors making incorrect accusations should also be penalized, the American Medical Association is telling lawmakers and regulators. Physicians, long-term care operators and other providers have long criticized the RAC system, which rewards the government’s contracted investigators based on the volume of “improper payments” they point out.

The AMA decried RACs’ “bounty hunter-like tactics” and claimed there are not enough disincentives for auditors who make false accusations without merit. Among other things, the AMA is also petitioning the Centers for Medicare & Medicaid Services to pay providers interest when they successfully appeal a finding.

Currently, there is a two-year RAC appeals backlog that federal regulators are attempting to work through. More than 60% of appeals are being upheld, the AMA says in a letter sent Wednesday to CMS Administrator Marilyn Tavenner.

“Without action by Congress and CMS to relieve the burden on physicians, RACs will continue to operate under their current financial incentives and resist changes that would improve audit accuracy, reduce the number of appeals, and mitigate the burden on physicians,” AMA Executive Vice President and Chief Executive Officer James L. Madara wrote in the letter.