Electronic Health Records


Consumer advocates opposing Medicare Audit Improvement Act

By Kyle Murphy, PhD

- In letters to the United States House of Representatives and Senate, the Council for Citizens Against Government Waste in calling for Congress to oppose two bills both entitled Medicare Audit Improvement Act of 2013 (HR.1250, S.1012) which “would have a chilling effect on the RAC program, one of the government’s few successful initiatives to identify and recover waste, fraud, and abuse in Medicare.”

According to CCAGW, the Centers for Medicare & Medicaid Services (CMS) has recouped $4.5 billion to the Medicare Trust Fund as a result of the recovery audit contract (RAC) program designed to identify improper payments and fraud. The organization is claiming that the enactment of the proposed bills would have the opposite effect on Medicare reform.

“Despite the bill’s purported intent to relieve the cost of compliance for some of the nation’s hospitals,” the authors of the letters write, “this legislation will instead perpetuate shoddy billing practices by Medicare providers and relax, rather than increase, oversight of Medicare billing practices.”

In particular, CCAGW is urging members of Congress to disabuse themselves of the notions put forward by the bills’ sponsors in the House and Senate.

Here are some highlights from the letters:

The bill would penalize the RACs for overturned determinations. Yet RACs are compensated on a contingency basis, operate at no cost to the taxpayers, and receive no compensation for any decisions that are overturned on appeal. According to CMS, RACs have an accuracy rating of more than 90 percent, and only 3 percent of their improper payment determinations were overturned on appeal in FYs 2010 and 2011.

The bill’s sponsors have argued that the program is burdensome on hospitals and have included a cap on the number of medical records a RAC may request from a health care provider. However, RACs are the only program integrity contractors that already are subject to such a cap, which is a mere 2 percent of a hospital’s Medicare claims volume. The bill instead consolidates this 2 percent cap collectively across the other audit program integrity efforts.

It is difficult to believe that members of Congress would support legislation that allows Medicare providers to bill improperly, so long as they do not hit an error rate over 40 percent. This astonishing stipulation is tantamount to sanctioning a 60 percent “success” rate, the equivalent of a failing grade in school.

According to Govtrack.us, neither bill currently has a significant chance of being enacted. Most recent movement of the bills occurred on May 22, 2013, when the Senate bill was referred to the Senate Finance Committee.

A report published earlier this month by the Office of Inspector General (OIG) indicated that RACs fell short of taking proper action to combat fraud in several areas. While $1.3 billion in improper payments between 2010 and 2011 was identified by the program, CMS didn’t take the necessary steps to evaluate the effectiveness of their payment adjustments, keeping open the opportunity for providers to overbill accidentally or maliciously.






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