RACs contracted by CMS in four regions of the country conduct automated reviews payments using computer software to detect improper payments, and they conduct complex reviews of payments using human review of medical records and other medical documentation.
The report found RACs denied $2.47 million in Medicare claims to 437 of participating hospitals reporting to the RAC Trac website.
Here are more RAC Trac findings for the first quarter of 2010:
- RACs’ automated reviews often targeted outpatient coding and billing while RACs’ complex reviews often targeted inpatient coding.
- Most RAC activity involved requests for medical records.
- Connolly Healthcare, the Region C RAC, covering the South plus Colorado and New Mexico, requested the most medical records, at more than 4,500 records, averaging 28 per reporting hospital.
- Complex reviews of medical records involved more than $117 million in payments nationwide and $72 million for Region C alone.
- Hospitals reported $2.47 million in denied claims, with 87 percent coming from complex reviews.
- Region C had the highest number of hospitals reporting denied claims, both complex and automated denials.
- Two-thirds of hospitals reporting automated denials experienced denials for outpatient coding and billing errors.
- Nearly all hospitals reporting complex denials experienced denials for inpatient coding errors.
- The average dollar value of an automated denial was $709 and the average dollar value of a complex denial was $6,542.
- RACs impacted 84 percent of hospitals, whether they experienced RAC reviews or not.
- RAC activity increased administrative costs at 49 percent of responding hospitals.
- One-sixth of hospitals using external resources to manage RAC activity reported spending an average of $91,636 on this expense.
Read the AHA RACTrac report on recovery audit contractors.
Read more Becker’s coverage on recovery audit contractors.
Hospitals Appeal 12.7% of RAC Decisions, Win 64.2% of Appeals
