"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.

Wednesday, May 28, 2014

Did She Really Say That?

During Tuesday's House Committee on Ways and Means Subcommittee on Health, a regional inspector for the Department of Health and Human Services blamed hospitals for the backlog in processing Recovery Audit Contractor (RAC) audit appeals.  She said that we are filing too many appeals.  Really?  

How dare we challenge a severely flawed process that is creating a crushing burden on hospitals across the US.  From the American Hospital Association, over two thirds of the medical records reviewed by RACs contain no errors.  They also reported that when claim denials are appealed at the Administrative Law Judge (ALJ) level, hospitals prevail over 72 percent of the time.  

At WMHS, each time that we appeal at the RAC level, we lose almost 100% of the time because there is a financial incentive at stake for the RAC.  When we appeal at the ALJ level (the next level of appeal) where there is no financial incentive to keep hospital monies, we win almost 100% of the time.  Unfortunately, at the ALJ level, the backlog at this point is so great that it would take many years to hear the current cases under appeal. 

Earlier this month, I again wrote to Senator Mikulski, following up on a letter from a year ago that went unanswered.  I advised her that what was previously over $10 million being tied up in the RAC process for WMHS alone has now grown to $14 million in less than a year.  I asked Senator Mikulski to support legislation that would allow hospitals to retain monies until all appeals have been concluded and to ensure that the necessary resources are provided for timely ALJ reviews within the 90-day statutory time frame.  My letter is attached.  

Some action is occurring in Congress with bills being created to make RACs more accountable, but CMS is fighting the changes.  They say that they respond to hospital complaints and that the process is flawed, but then we get responses like the one above that hospitals are the problem when they appeal RAC audits that are part of a severely flawed process.  CMS says that they need the RAC process to collect these monies and support Medicare programs.  What they are failing to realize is that, previously, many hospitals simply budgeted for the RAC process, but when the process grew and millions and millions of dollars were being impacted, hospitals began to challenge the RAC audits.  A la the backlog.  All that we are asking is to improve the process and apply the correct standards going forward.

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