CMS aims to improve RAC program, Tavenner says

CMS Administrator Marilyn Tavenner assured hospital administrators Tuesday that the CMS is examining ways to improve its Medicare recovery audit program and provided insight into some ways it might accomplish that goal.

Addressing attendees at the Federation of American Hospitals annual meeting, Tavenner said that her agency is applying a multi-pronged approach to address concerns with the Recovery Audit Contractor program, which is responsible for detecting improper Medicare payments, and that the CMS is currently in the “beginning stages” of re-competing the current RACs.

Last month, the CMS announced it would pause any new document requests to providers from RACs in the current program until new contracts are settled. That's an attempt to create a smooth transition and reduce provider confusion, Tavenner said.

During this pause—which Tavenner said would take “some period of months”—the CMS will refine and improve the program. That could spell good news for healthcare providers, who have said the program to identify improper Medicare payments comes at a great expense and administrative burden to hospitals.

The CMS is considering and discussing several changes, such as making sure RAC auditors allow providers more time to respond to a denial. “At this point, we're looking at 30 days,” she said.

Another change would be to ensure that the RACs cannot receive contingency fees until the second level of an appeal has been exhausted. The CMS is also considering that RACs must acknowledge within three days that they received records from a hospital during the audit process.

As the CMS considers way to improve the RAC program, Tavenner called on the meeting's attendees—who represent investor-owned or managed hospitals—for their feedback in this area and other issues, such as the two-midnight rule, which directs Medicare's contractors to assume hospital admissions are reasonable and necessary for patients who stay in a hospital through two midnights.

“Our cost trends would not be where they are today without the work that you all have done,” Tavenner said. “Our quality would certainly not be where it is today without the hard work inside each of your organizations. And so now I'm asking for your help in improving the RAC process and other areas that you think we can benefit from.”

Follow Jessica Zigmond on Twitter: @MHjzigmond