Thats the word that Gerald Worrick, president and chief executive officer of 25-bed Door County Memorial Hospital, in Sturgeon Bay, Wis., uses to describe the new federal Medicare Recovery Audit Contractor program that was officially unveiled last week.
The RAC program was created by the Medicare Modernization Act of 2003 to identify and correct improper Medicare payments paid to healthcare providers in fee-for-service Medicare. Under the program, third-party auditors get to keep a percentage of improper payments they identify and collect from providers. The CMS, which pilot-tested the RAC program in several states, believes it will cut down on fraud and save the government money.
Hospital industry executives dont see it that way. The program essentially assumes that hospitals are trying to cheat the system, despite the fact that most providers try to make decisions that are in the best interests of the patient, Worrick said.
I find it fascinating that after the federal government designs the most complicated billing system on earth, they come back and audit us with another new complicated system that is going to test hospitals on how well-versed they are on the thousands of pages of regulations that govern the billing process, Worrick said. Its a system of gotchas, he said in summary of what lays ahead for the hospital industry.
HHS is required by law to implement the RAC program in all 50 states by Jan. 1. For now, each of the four companies named last week as RACs will be auditing providers in 19 states under the first phase-in of the program that began last week. Each RAC will be responsible for identifying overpayment and underpayments in approximately one-quarter of the country, according to the agency. When the CMS announced the four contractors last week, PRG-Schultz International was excluded as one of the four contractors, a decision that was welcomed by some providers (See story, p. 7).
Despite some changes made to the program between the pilot and final versions of the program, providers and consultants still are finding fault with the RAC program. They argue that changes made between the pilot program and the version unveiled last week didnt go far enough to solve problems with the program. They also say that question marks still hang in the air over unresolved appeals to audits that took place during the programs three-year demonstration project, and that over the long term, hospitals and other providers will lose, not gain from the program.
Bottom line, the long-term impact is CMS has allowed bounty hunting in healthcare, said Bruce Hallowell, a partner and practice director of the finance and revenue cycle for Computer Sciences Corp., or CSC, a consulting, systems and outsourcing company in Falls Church, Va.