RACs Recoup, Hospitals Appeal with Success
Recovery audit contractors (RACs) recouped $797.4 million in alleged Medicare overpayments to health care providers and paid providers $141.9 million in underpayments since October 2010, according to a new report from the Centers for Medicare & Medicaid Services (CMS). CMS claims Medicare RACs collected $354 million in overpayments in the third quarter of fiscal year 2011 alone.
Hospitals participating in the American Hospital Association’s (AHA’s) latest RACTrac survey report, however, appealed about one in three claim denials, of which 77 percent were overturned on appeal. The CMS report does not reflect these overturned denials. According to CMS, coding errors and a lack of sufficient documentation to support medical necessity were among the top overpayment issues cited in the four RAC regions.
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