Battle Lines Drawn between Hospitals, Medicare Auditing Contractors

Medicare’s Recovery Audit Contractors (RACs) are warning that if the Medicare Audit Improvement Act is passed, fraud and waste will be allowed to run rampant.

Last month Rep. Sam Graves (R-Mo.) and Rep. Adam Schiff (D-Calif.) introduced for the second time the Medicare Audit Improvement Act, which would amend the Medicare Modernization Act of 2003 to put a hard cap of two percent of hospital claims on Additional Document Requests (ADRs) by RAC auditors. The bill also limits the maximum ADRs at 500 per 45 days. The Act also would assess penalties for auditors that do not comply with basic program requirements such as deadline and issuance of demand letters.

Political blog The Hill reports the adversarial relationship between healthcare providers and RAC auditors has become more contentious and the Medicare Audit Improvement Act is at the center of the controversy.

RAC auditors complain that the bill, if passed, “will forfeit billions of taxpayer dollars in improper healthcare payments if hospitals are given more leeway,” according to The Hill.

“It’s understandable that the government wants to make sure they’re getting what they’ve paid for, but hospitals are having a very difficult time,” “It can take them two to three years to receive a final determination on a claim,”Michael Ward, senior associate director of policy with the American Hospital Association, told The Hill. “We need to streamline that system.”