AHA Advocates for 3 Changes to RAC Program

The American Hospital Association is urging CMS to alter how Medicare Recovery Auditors, or RACs, review the medical necessity of Medicare Part A inpatient hospital stays.

The AHA wrote a letter to CMS Administrator Marilyn Tavenner based on a CMS proposal from earlier this year. CMS said Medicare RACs can assume an inpatient hospital admission is "reasonable and medically necessary" if a Medicare beneficiary needs at least one Medicare utilization day, or a time period that crosses "two midnights." Hospital services that span less than two midnights, CMS said, should have been treated and billed as outpatient services.

In its letter, AHA Executive Vice President Rick Pollack said three changes must be made to the RAC program, in light of the recent proposals and focus surrounding hospitals and observation care:

1. RAC reviews should be limited to information in the medical record that was known to the physician at the time of the patient's admission.

2. RACs should take more factors into consideration for their audits, such as patient history, comorbidities, severity of signs and symptoms, risk of an adverse event and others.

3. CMS should penalize RACs for incorrectly denying an inpatient stay, "not just to recoup their contingency fee," but also to "provide some check on the strong financial incentive" RACs have when assessing patient admission statuses.

More Articles on Medicare RACs:

Craneware: Medicare RACs Heavily Target Hospital Pharmacy Issues
AHA: Hospitals Successfully Appeal 72% of Medicare RAC Denials
Senate Pitches Companion Medicare RAC Reform Bill

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