Small physician practices are losing time with patients and face unfair, expensive administrative burdens in attempting to comply with the Recovery Audit Contractor demonstration program, medical groups testified before a House Small Business subcommittee.
The RAC program was created by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 to address improper payments to healthcare providers participating in fee-for-service Medicare, and audit contractors get to keep a percentage of the improper payments they recover from providers.
This type of compensation system provides an incentive to RAC contractors to deny borderline claims and effectively forces physicians, whose time is better spent caring for patients than reviewing old documents and pursuing appeals, to simply yield to unproven RAC claims, William Dolan, a member of the American Medical Associations board of trustees, testified before the panels subcommittee on regulations, healthcare and trade.
During its three-year run, the RAC program corrected more than $1 billion in improper payments, testified Timothy Hill, director of the CMS Office of Financial Management. However, of the $980 million in overpayments collected by the contractors, only $12.8 million represented overpayments made to physicians, Hill said. Most of the overpayments had been collected from inpatient hospitals, he added.
HHS is required by law to make the demonstration a permanent, national program by Jan. 1, 2010. -- by Jennifer Lubell
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