Healthcare Business News

AHA lends support for recovery audit contractor program changes

By Jessica Zigmond
Posted: October 16, 2012 - 6:00 pm ET

The country's hospitals offered their support Tuesday for federal legislation that would make changes to the recovery audit contractors program and other national audit programs.

Introduced by Rep. Sam Graves (R-Mo.) in a pro forma session during a congressional recess, the Medicare Audit Improvement Act of 2012 would impose financial penalties—which would be paid to the Medicare program—for those recovery auditors who show a pattern of failing to comply with basic program requirements.

"While the AHA has zero tolerance for real fraud and abuse, these recovery auditors are paid contingency-fee payments, a potential conflict of interest, leading to concerns that they focus on claims and services that have the highest likelihood of error," Rick Pollack, executive vice president at the AHA, wrote in a letter to Graves (PDF). "Hospitals are experiencing a significant number of inappropriate denials amounting to hundreds of thousands of dollars in unjust recoupment payments for medically necessary care," Pollack wrote, adding that AHA data shows hospitals have overturned RAC denials successfully 75% of the time.

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Meanwhile, the legislation (PDF) would ensure that a Medicare contractor's additional documentation requests of a hospital could not exceed 2% of all claims submitted for the year with a limit of 500 additional documentation requests per 45 days. It also would allow denied inpatient claims to be billed as outpatient claims in appropriate cases and require physician review for Medicare denials.

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