65% of RAC denials overturned in favor of provider

The AHA has released the results of its RACTrac Survey from the fourth quarter of 2015, which aims to give industry officials a snapshot of the Recovery Auditor Contractor program.

Since the AHA began the RACTrac survey in January 2010, 2,575 hospitals have participated, and 745 hospitals provided information in the fourth quarter of 2015.

Below are ten statistics to know from the survey.

1. The average dollar amount of an automated RAC denial and a complex denial was $834 and $5,427, respectively.

2. Nationwide, hospitals reported appealing 49 percent of RAC denials.

3. Of hospitals that appealed RAC denials in the fourth quarter, 55 percent reported appealing inpatient coding denials.

4. Nationally, 78 percent of hospitals reported incorrect MS-DRG or other coding errors as their top reason for complex RAC denials.

5. Inpatient coding errors was the most commonly cited reason for a complex RAC denial overall from the second, third and fourth quarters of 2015. 

6. About 40 percent of hospitals reported having a denial reversed during the discussion period.

7. Approximately 65 percent of claims were overturned in favor of the provider.

8. Hospitals reported a variety of administrative burdens due to RACs, including training and education initiatives (28 percent), increased administrative costs (25 percent) and investing in RAC tracking software (25 percent).

9. Of respondents, 48 percent of hospitals spent more than $10,000 in managing the RAC process, and 29 percent spent more than $25,000.

10. Hospitals reported a variety of administrative problems in the RAC program, including not receiving notification of a RAC denial (41 percent), receiving a review results letter dated more than 30 days after the date on a demand letter receipt (37 percent) and receiving demand letters that lacked a detailed explanation of the audit contractor's decision to deny a claim (31 percent).

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