And You Thought RAC Audits Couldn’t Get Any Worse

If there’s one thing that unites the hospital industry—even the fiercest competitors—it’s hatred of audits by recovery audit contractors, or RACs.  Why?  For one thing, because RACs operate on a contingency fee basis.  They get to keep a portion of the fees they force providers to repay.  It’s as though the state trooper gets a cut of the fine if he pulls you over and issues a citation.

But if the industry thought RAC audits couldn’t get worse, it may have been overly optimistic.  On May 13 the Government Accountability Office (GAO) recommended that Congress give Centers for Medicare & Medicaid Services (CMS) the authority to conduct pre-payment audits.  That’s right: RACs would audit a provider’s claim before it ever got paid.  That would surely mean, among other things, that the already-too-slow Medicare payment process would become even slower, at least for the claims that got audited.

The report, “Claim Review Programs Could Be Improved with Additional Prepayment Reviews and Better Data,” can be viewed here.

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