Medicare Recovery Audit Contractor (RAC)

January 9, 2010 at 8:15 pm 4 comments

This is an article from Physicians Practice Website.

This program will close hospitals, doctor offices and ambulance companies for small paperwork errors. They also call some medical procedures once in a lifetime events and will disallow payments for more than one.

Bronchoscopy is one of these and many times it is needed more than once as I have seen the need as an ICU nurse. There are more of these procedures that are many times needed more than once and non medically trained bureaucrat will be making decisions on what was proper. This is a stealth way to socialized medicine and rationing care to medicare patients.

Ready for Medicare’s Audit Police? By Pamela Moore
Dwight Scott, a healthcare lawyer with McGlinchey Stafford in Houston, has a client near bankruptcy, and says you could be next. The ambulance company he represents was targeted by a Medicare Recovery Audit Contractor (RAC), one of the organizations CMS pays on contingency to find fraud. According to Scott, the RAC pulled 30 claims representing 26 patients from the company’s files, found a 94 percent error rate, and extrapolated that only 6 percent of all CMS’ payments have been correct. The rest? Medicare will recoup its payments from future checks, basically ensuring the demise of the ambulance group. If the company were really out to defraud American taxpayers, then it’s getting what it deserves. But Scott maintains his client merely made “small, small documentation errors.” Providers generate “9,000 claims a minute,” according to Scott’s estimates. “It’s no wonder if there are some small errors.” Scott blames President Obama for a CMS audit program run amok, citing his rhetoric about cutting costs in healthcare, but the reality is that a RAC trial has been in place since 2005. The permanent version rolling out now began in Texas on March 1, which explains the pressure Scott’s clients are feeling. The RAC pilot identified $992.7 million in overpayments through 2008. The pilot is now over and CMS considers it a smashing success. Auditors will be arriving in force in your neighborhood by year’s end if they’re not there already. Should you be worried? Well, you should be concerned, but not panicked. For one thing, most audits to date have focused on big-dollar targets — hospitals — and not on private physician practices. Ninety-five percent of the dollars collected by RACs during the trial were from hospitals, according to American Hospital Association, which is up in arms and tracking RAC activities closely. Still, expect auditors to increase their focus on private practices in the near future. And it would be hard to call the RAC process strictly fair. It’s not so much that auditors find errors; it’s that they’re allowed to extrapolate a sample as small as 30 claims to draw conclusions about a whole year’s worth of claims. Are 30 claims representative enough to force the shuttering of, say, an ambulance company? Probably not, but CMS allows RACs to use extrapolation wherever “there was evidence of a sustained or high level of payment error …” That means they’ll be able to extrapolate in virtually every case in which they find problems. And at what point can you consider a Medicare payment closed and safe from further scrutiny? RAC regulations allow auditors to go back as far as four years. (A pending legal case brought by Palomar Medical Center in San Diego could make it harder for auditors to go back more than one year, if Palomar prevails.) Add in the fact that RACs get paid commissions based on what they discover, and the whole thing starts to stink. Not even IRS auditors are paid bonuses based on how much money they “recover.” Isn’t that an incentive to find problems where none really exist? Well, according to CMS, 22 percent of claims denied by RACs were appealed, and providers prevailed in more than a third of those appeals. So that suggests that the RACs are overreaching a bit — but it also clarifies that there is a way to fight back. In the event of an audit, the best offense is a good defense. If auditors discover very little wrong in your billing, there is simply little reason for them to pursue the case. Do some serious self-audits, especially around your documentation of medical necessity and coding practices. Forty percent of the dollars recovered by RACs in the demonstration phase were for medical necessity problems. Another 35 percent were for incorrect coding. Now would be a good time to make sure everyone in your practice is doing things right. Whatever you do, don’t give into a victim mentality. CMS and RACs are not out to get you. Nor is the Obama administration. I wouldn’t want to pay for stuff I didn’t need to pay for, either, so why should the government? Those Medicare dollars are tax dollars — my dollars, your dollars — and it’s sure hard to argue with the idea that they should be spent well. This is less a case of us against them and more a case of us against the very bizarre system we ourselves have built. Approach it with reason, not angst. Pamela Moore is director of content and strategy for Physicians Practice. She can be reached at or via her Twitter account: This article originally appeared in the June 2009 issue of Physicians Practice.


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Conspiracy? Global Warming The Religion

4 Comments Add your own

  • 1. dancingczars  |  January 10, 2010 at 1:53 am

    I am absolutely shocked, you mean our government would do this to us? LOL J.C.

    • 2. hepsy  |  January 10, 2010 at 2:34 am

      You let them. You let your neighbors vote for Boxer and Pelosi.
      Congress needs to be audited, and Congress should be required to get a business license.

    • 3. GoodOleBoy  |  January 10, 2010 at 5:21 am

      It could be a plan coupled with the health care bill to nationalize hospitals.

  • 4. America Speaks Ink  |  January 10, 2010 at 4:03 am

    The Democrats Sell Out The People Over Swine Flu

    There has not been a bigger friend of corporate interest than the Democrat Party as of late. Wall Street and all the bankers are not the only ones who have found a friend with the Democrats. You can now add big pharmaceutical companies to the list who have found a new friend in the Democrat Party.

    With one stroke of the pen the Obama Administration sold out the people once again. Friday, July 17th, 2009, Secretary of Health and Human Services Kathleen Sebelius signed a document that prevents the people from suing the big drug companies for the up coming vaccines for the swine flu and all the side effects and death that could come from it. The document gives immunity to the drug companies who make the vaccine.

    Last time they made the swine flu vaccine, forty million people were vaccinated and tons of people filed claims stating that the vaccine made them sick and had terrible and debilitating side effects. Some people were struck with a paralyzing condition by the name of “Guillain-Barre Syndrome” and other nasty effects of the vaccine.

    swine2With one stroke of the pen all those corporate interests are protected again. Oh, they say they’ll put together a fund for you in case that happens, but good luck trying to collect the money. We all know how that works. You’ll be cold and gone before you get your hands on such a fund. The scary thing is to try to imagine the government making it mandatory for you to give the vaccine to your children or the elderly. Then you decide not to give this shot to your kid because of the health risks. Now you’re in trouble with Children and Family Services because you won’t shoot up your kid with this poison.

    If you give it to your loved ones and something goes wrong, well thanks to the Obama Administration you are simply out of luck if you want to take it on your own to make the big drug companies pay. How scary is that? It is a done deal now and there is nothing you can do about it. Even more scarier, the swine flu came back in the fall and winter not too long ago and killed tens of millions of people.

    Do you remember the day when you falsely thought it was the Democrat Party who was looking out for the common man? Now they are so drunk with unstoppable power that even JFK is rolling around in his grave. If the pharmaceutical companies won’t make vaccines unless they have immunity, don’t you think we should figure out another way to make them instead of being blackmailed and sold out by politicians? Is there no one in power who could come up with a plan? We just have to sit here and inject our children with this crap and if it goes wrong, the drug company is immune?

    What is wrong with this picture? Do you realize how fast they are rushing the creation of this vaccine to be here this fall? Do you think in all that haste, maybe something could go wrong here or be overlooked? Once again I lose by breath watching what our government is doing to us. There is no more proof needed to showcase how these two parties govern the same. Corporate America has both of them in their pockets. It is “we the people” that must grab our ankles and bend over.

    I heard there has been a one hundred percent production increase of Vaseline since Obama surfed into power on a tidal wave of change. Maybe we should buy stocks in Vaseline companies. That seems to be a solid bet with our money. Maybe they have immunity too if we get an infection from their product? Wouldn’t surprise me.

    C. Rich


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