I’ve talked a lot over the past couple of years about RAC’s (Recovery Audit Contractors). The RAC’s are essentially a commission based gun for hire. The RAC’s get a percentage of every dollar they uncover that was supposedly paid to a hospital or provider in error. A RAC is allowed to question the medical decision-making of a physician and care provided to a patient even though the people working for the RAC and asking the questions are not physicians.
RAC’s don’t have a very good track record and almost 75% of their determinations that have been appealed have been overturned but when you get paid on commission there is nothing that deters you from making a wrong decision when you could make a potentially lucrative decision.
When a patient is admitted to a hospital a physician makes the call and that physician does so by applying years of training and judgement to the decision. It’s easy for a RAC to say after the fact that the patient should not have been admitted but that doesn’t mean the RAC is right.
A couple of Representatives have introduced legislation that would help level the playing field. Reps. Sam Grave, R-Mo. and Adam Schiff, D-Calif., introduced the Medicare Audit Improvement Act of 2012 just last week. The legislation would do the following:
- establish limits for medical record requests
- implement financial penalties for RAC’s when they are chasing dollars
- improve transparency
- improve hospital appeal rights
- require physicians to validate medical necessity denials issued by nonphysician auditors
We should all be held accountable in health care for providing appropriate services in the appropriate setting. RAC’s should be held accountable for applying appropriate audits for the appropriate reasons.