CMS Aims to Reduce Fraud
Staff Writers
This month, the Centers for Medicare and Medicaid Services [CMS] will name the auditing firms that will review hospitals’ books for payment mistakes, while hospital officials say results in other states suggest the auditors will give priority to recovering overpayments.
The RAC Program
Under the so-called Recovery Asset Contractor [RAC] program, CMS pays auditors a fee based on the amount of improper payments discovered.
Hospital officials worry this “bounty hunter” approach – the second for CMS after medical practice audits – will create a bias in auditors to focus only on collecting government overpayments, reported the Pittsburgh Business Times on June 16, 2008.
Pilot Program Results
Some hospitals point to a pilot audit program in New York, Florida and California, which found $357.2 million in overpayments and just $14.3 million in underpayments. Medicare estimates its error rate at 3.9 percent in 2007, down from 9.8 percent in 2003, but still totaling $10.8 billion in improper payments
Conclusion
Your thoughts and comments are appreciated. Is this another instance of brute intimidation or just honest review?
Related Information Sources:
Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759
Physician Financial Planning: http://www.jbpub.com/catalog/0763745790
Medical Risk Management: http://www.jbpub.com/catalog/9780763733421
Healthcare Organizations: www.HealthcareFinancials.com
Health Administration Terms: www.HealthDictionarySeries.com
Physician Advisors: www.CertifiedMedicalPlanner.com
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Filed under: Health Economics, Health Insurance, Healthcare Finance, Insurance Matters, Practice Management Tagged: | CMS, Health Economics, health fraud, Healthcare Finance
RAC Audit Recoveries
Did you know that auditors have already recovered nearly $700 million in Medicare overpayments to hospitals and other medical providers in a half-dozen states under the controversial Recovery Asset Contractors [RAC] program that pays the auditing firms a portion of amounts they identify?
In all, the agency’s recovery audit contractor program caught $1.03 billion of improper payments over about three years, primarily in New York, California and Florida, about $992.7 million of which was overpayments by Medicare, according to the Wall Street Journal, July 12, 208.
The audits also identified about $38 million that providers should have received, but didn’t. The program’s expenses amounted to about 20 cents on the dollar, including $187.2 million paid to the audit firms, and medical providers successfully challenged about $60 million of overpayments identified by the auditors.
Auditors pointed to the low appeal rate – about 14 percent of overcharges were appealed, and 4.6 percent of the total was overturned – as evidence that the audits succeeded.
Your thoughts are appreciated as we wonder if “anyone is surprised.”
-Ann
RAC Study,
It seems like people aren’t very optimistic about their chances of escaping a Recovery Audit Contractor [RAC] review unscathed, according to a new study.
The study, done on behalf of Wolters Kluwer Health, concluded that 40 percent of hospital HIT directors expect to owe funds for Medicare overpayments if audited. The survey found that only 5 percent of HIT directors surveyed think that RAC audits will lead to repayment of funds from Medicare underpayments. Forty-eight percent expect their facility to come out more or less even.
Your comments are appreciated.
-Ann
RAC
Did you know that CMS announced four new contractors to administer its Recovery Audit Contractor (RAC) program? The contractors, responsible for auditing provider reimbursement requests, are:
1. Diversified Collection Services of Livermore, CA
2. CGI Technologies and Solutions of Fairfax, VA
3. Connolly Consulting Assoc. of Wilton, CT, and
4. Health Data Insights of Las Vegas.
So, expect more contentious debate in the future.
Jackson
Here is an article by Cara Engle on what hospitals might do, and expect, with a RAC audit.
http://www.healthcarefinancenews.com/blog/what-hospitals-should-be-capturing-and-tracking-their-rac-audits
Cordially,
Amy
False Medical Claims Recovery
Pursuant to Section 6032 of the Deficit Reduction Act of 2005, hospitals and healthcare entities should have a written policy for employees, contractors or agents that provide detailed information about false claims, false statements and whistleblower protections under applicable federal and state fraud and abuse laws.
This written policy should include a specific discussion of the laws and detailed information regarding other policies and procedures for detecting and preventing fraud, waste and abuse, as well as the rights of employees to be protected as whistleblowers.
In December 2006, CMS published guidance about implementation of Section 6032 indicating, among other things, that certain contractors or agents (“Covered Contractors/Agents”) should themselves each adopt a policy in compliance with Section 6032.
According to CMS, Covered Contractors/Agents means any contractor, subcontractor, agent or other person which or who, on behalf of any healthcare entity, furnishes or otherwise authorizes the furnishing of Medicaid health care items or services, performs billing or coding functions, or is involved in the monitoring of health care provided by the entity.
Forewarned is Forearmed
Because now, the RACs are nationwide:
http://pvwlaw.wordpress.com/2009/07/09/recovery-audit-contractors-to-operate-nationwide/
Dr. David E. Marcinko, MBA
[Editor-in-Chief]
Recovery Audits Expanding to Include Medicaid
The Centers for Medicare & Medicaid Services is working to expand its recovery audit contractor program to all of Medicare and to the Medicaid program by the end of the year, although an agency official told Congress in July that CMS faces challenges in getting that done on time.
RACs are third-party auditors hired by CMS to comb through Medicare claims from hospitals, physicians and others to identify improper payments. A three-year RAC demonstration program that launched in California, Florida and New York in 2005 identified roughly $1 billion in Medicare overpayments, according to CMS.
Source: Chris Silva, AMNews [7/26/10]