Since the fourth quarter of 2012, medical record requests from Medicare Recovery Auditors, or RACs, to hospitals have increased 47 percent, according to the American Hospital Association's RACTrac Survey for the second quarter of 2013.
Over the same six-month timeframe, Medicare RACs have boosted their complex audit denials to hospitals by 58 percent. Of complex denials, two-thirds of hospitals said medical necessity denials are the costliest types of RAC requests.
More than 1,200 hospitals participated in the AHA's second-quarter RACTrac Survey. Here are other key findings:
• Nine out of 10 hospitals that participated in the survey said they experienced RAC activity during the first six months of this year.
• More than six out of 10 hospitals said they spent more than $10,000 managing the RAC process during the second quarter, while 45 percent spent more than $25,000 and 11 percent spent more than $100,000.
• About 60 percent of medical records reviewed by RACs did not contain an improper payment, which has been the trend among hospitals for the past several quarters.
• Sixty-two percent of medical necessity denials were for one-day stays in the wrong setting, not because the care was medically unnecessary.
• Roughly 75 percent of all appealed claims are still sitting in the appeals process.
• About $9.4 billion in Medicare payments were targeted for medical record requests through the second quarter of 2013. RAC denials represented $2.2 billion.
• Region C, which includes southern states like Florida and Texas and is monitored by Connolly, continued to have the highest number of hospitals reporting RAC activity.
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