"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Tuesday, September 30, 2014

Sympathy for the Recovery Audit Contract (RAC) Process, Really?

I read an editorial this AM from the editor of Fierce Health Finance and I think that it's a first........someone sympathetic to the RAC process.  I have written a number of blogs on this topic in the past as to the absurdity of the RAC process.  Centers for Medicare and Medicaid (CMS) created this process to rid health care of waste and inefficiency.  For the most part, I have no problem with the concept since both exist and need to be eliminated.  It was the way in which CMS went about putting the program in place.  

Their contractors deny virtually every appeal at the first two appeal levels, where the CMS contractor gets paid a percentage for every identified RAC claim.  At the third level where the appeal involves an administrative law judge who is outside of the RAC contractors' purview, the game changes.  At the ALJ level, WMHS has won virtually every appeal.

Unfortunately, CMS and their contractors got greedy and as a result, hospitals and health systems are now challenging every denial at the administrative law judge appeal level.  Previously, many hospitals budgeted a percentage for the RAC process as a cost of doing business, but not any more.  As a result, it would take decades to hear every appeal at this level.  

Since CMS put a flawed process in place, they are now offering hospitals 68 cents on the dollar to settle short stay claims and scrambling to figure out a solution to their backlog of the rest of their cases.  Of course, hospitals are taking advantage of the settlement offer.  
At WMHS, we have had over $10 million dollars tied up in all RAC appeals; and through the settlement just for short stay disputes, we should receive over $3 million.  

Now the editor of Fierce Health Finance is equating hospitals to the five year old who hasn't gotten his way.  Really?  I took the opportunity to read previous editorials from this same guy and he is obviously no friend of hospitals.  It's time to cancel my subscription to Fierce Health publications; if you can't be balanced in your editorials, I have no use for your tainted opinions.

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