Home Health & Hospice Week

Providers appealing RAC decisions find success.

If you’ve heard that recovery audit contractors have identified improper payments totaling more than a billion dollars, you heard correctly. But if you heard that CMS was making changes to ensure these issues don’t happen going forward, you may have gotten bad information.

So says the HHS Office of Inspector Gen-eral in a new report, Medicare Recovery Audit Con-tractors and CMS’s Actions to Address Improper Payments, Referrals of Potential Fraud, and Per-formance. The report addresses whether the Centers for Medicare & Medicaid Services has taken ac-tion based on previous RAC audits.

Background: In fiscal years 2010 and 2011, the RACs identified half of all claims that they reviewed as involving improper payments, which totaled $1.3 billion. Although CMS took corrective actions to address most vulnerabilities it found during those years, the agency "did not evaluate the effectiveness of these actions," the OIG says in its report. "Additionally, CMS did not take action to address the six referrals of potential fraud that it received from RACs," the report notes.

How this impacts you: The OIG has asked CMS to start closing in on vulnerabilities and taking immediate action on potential fraud. Therefore, if your MAC was sitting on its hands following RAC recommendations, it could be cracking down on your billing habits soon, so make sure you are filing claims properly.

In the years under study, RACs were focusing their efforts on big-money providers. The RACs found that two sources alone accounted for a startling 93 percent of improper payments, said the OIG’s David Samchok during a Sept. 4 podcast on the subject. The first area, Samchok said, was inpatient hospitals, followed by "physician and other medical practitioners, like nurses," he added.

But RACs have since turned their attention to hospice and home health topics as well (see Eli’s HCW, Vol. XXII, No. 12).

Most common states: The RACs found that 23 percent of all recovered or returned improper payments took place in two states. California accounted for $156 million in such payments, while New York came in second with $49 million in improper payments, the OIG report noted.

You should appeal: Although providers didn’t appeal about 94 percent of the RAC findings, those that did appeal found their cases overturned about half of the time in the provider’s favor. Therefore, if you’re sure that the RAC findings were incorrect, don’t be shy about appealing.

The OIG’s RAC report is at http://oig.hhs.gov/oei/reports/oei-04-11-00680.pdf.