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An AHA-backed bill to reform RAC and other audit programs

March 22, 2013

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Responding to hospital concerns about recovery audit contractors (RAC) and other Medicare auditors, Reps. Sam Graves, R-MO, and Adam Schiff, D-CA, Tuesday introduced the AHA-backed “Medicare Audit Improvement Act,” H.R. 1250. The bill, previously introduced last October, would restructure the way RACs can review providers.

The legislation would establish annual limits on documentation requests from RACs, impose financial penalties on RACs if they fall out of compliance with program requirements, make RAC performance evaluations publicly available and allow denied inpatient claims to be billed as outpatient claims if necessary, among other measures. For example, the
bill would limit the number of “additional document requests” to 2% of hospitals claims, with a maximum of 500 per 45 days.

“Doctors and nurses should be focused on caring for patients, not trying to comply with the ever-increasing requests for documents,” Graves said in a statement.

AHA Executive Vice President Rick Pollack said the bill “provides much needed guidance for auditors while keeping them out of making medical decisions that should be between patients and their physicians.” He said it also would “improve recovery auditor transparency and allow denied inpatient claims to be billed as outpatient claims when appropriate.” (For more on RACs, see the stories on page 1.)