The AHA's RACTrac survey of 1,850 hospitals nationwide reported the following findings on activities of recovery audit contractors in the fourth quarter of 2010.
1. Almost four of five hospitals had RAC activity. Altogether, 1,454 hospitals reported RAC activity. Region C had the highest number of hospitals reporting RAC activity, and hospitals in Region A reported a significant increase in RAC activity.
2. Automated reviews rising. Seventy-four percent of reporting hospitals reported automated reviews, up from 64 percent in the third quarter. In comparison, however, 83 percent experienced complex reviews, up from 80 percent in the third quarter.
3. Medical record requests now total $1.7 billion. Hospitals said $1.7 billion in Medicare payments were targeted for medical record requests through the fourth quarter of 2010. Region B hospitals experienced the greatest volume of medical record requests overall as well as per hospital.
4. Value of denials doubled. Hospitals reported $86 million in denials, more than double the $42 million reported in the third quarter, and 90 percent of denied dollars were complex denials worth more than $78 million dollars. Regions B and C accounted for nearly 80 percent of all reported denials. The average value of an automated denial was $399 compared with $5,281 for a complex denial.
5. Complex denials show greater impact. While 89 percent of hospitals reported automated denials in the outpatient service area, 96 percent had complex denials in the inpatient service area. Outpatient services had the largest financial impact for automated activities while inpatient services had the largest financial impact for complex denials.
6. Automated reviews centered on outpatient billing. Seventy percent of hospitals with automated activity cited outpatient billing as a reason for the denial. Automated denials for outpatient billing errors had the largest financial impact on reporting hospitals. Hospitals in Region B experienced 53 percent of all reported automated denials. Region A hospitals were more likely to cite outpatient coding errors as the top reason for automated denials.
7. Complex denials in full swing. All regions are now reporting a significant number of complex denials, with 38 percent of them occurring in Region C. Fifty-seven percent of participating hospitals with complex denials cited medically unnecessary as a reason for denial. Incorrect MS-DRG continued to be the most costly reason for complex denials, but 23 percent now rank medically unnecessary as the top reason for denial.
8. Half of hospitals won underpayments. Nearly half of all hospitals with RAC activity received at least one underpayment determination. Hospitals reported RAC identified underpayments totaling $11.6 million dollars. Three-quarters of hospitals with underpayment determinations cited incorrect MS-DRG as a reason for the underpayment.
9. High percentage of denials overturned on appeal. Of the claims that have completed the appeals process, 85 percent were overturned in favor of the provider. Region B had the highest overturn rate upon appeal at 95 percent. Hospitals reported a total of $4.9 million in overturned denials, with $2.8 million in Region B alone.
10. Heavy administrative burden. Three-quarters of hospitals said RAC impacted their organization, and 50 percent reported increased administrative costs. More than one-third of hospitals reported using external resources spent money on copying records, and nearly a quarter of them hired a utilization management company or other consultant.
Read the AHA RACTrac survey (pdf).
http://www.aha.org/aha/content/2011/pdf/Q4ractracresults.pdf
Read the latest coverage of RACs.
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https://www.beckershospitalreview.com/hospital-financial-and-business-news/racs-now-allowed-more-requests-from-high-volume-hospitals.html
New Website to Show Status of Medicaid RACs
https://www.beckershospitalreview.com/hospital-financial-and-business-news/new-website-to-show-status-of-medicaid-racs.html
15 Requirements for Medicare Part C RACs Requested by AHA
https://www.beckershospitalreview.com/hospital-financial-and-business-news/15-requirements-for-medicare-part-c-racs-requested-by-aha.html
1. Almost four of five hospitals had RAC activity. Altogether, 1,454 hospitals reported RAC activity. Region C had the highest number of hospitals reporting RAC activity, and hospitals in Region A reported a significant increase in RAC activity.
2. Automated reviews rising. Seventy-four percent of reporting hospitals reported automated reviews, up from 64 percent in the third quarter. In comparison, however, 83 percent experienced complex reviews, up from 80 percent in the third quarter.
3. Medical record requests now total $1.7 billion. Hospitals said $1.7 billion in Medicare payments were targeted for medical record requests through the fourth quarter of 2010. Region B hospitals experienced the greatest volume of medical record requests overall as well as per hospital.
4. Value of denials doubled. Hospitals reported $86 million in denials, more than double the $42 million reported in the third quarter, and 90 percent of denied dollars were complex denials worth more than $78 million dollars. Regions B and C accounted for nearly 80 percent of all reported denials. The average value of an automated denial was $399 compared with $5,281 for a complex denial.
5. Complex denials show greater impact. While 89 percent of hospitals reported automated denials in the outpatient service area, 96 percent had complex denials in the inpatient service area. Outpatient services had the largest financial impact for automated activities while inpatient services had the largest financial impact for complex denials.
6. Automated reviews centered on outpatient billing. Seventy percent of hospitals with automated activity cited outpatient billing as a reason for the denial. Automated denials for outpatient billing errors had the largest financial impact on reporting hospitals. Hospitals in Region B experienced 53 percent of all reported automated denials. Region A hospitals were more likely to cite outpatient coding errors as the top reason for automated denials.
7. Complex denials in full swing. All regions are now reporting a significant number of complex denials, with 38 percent of them occurring in Region C. Fifty-seven percent of participating hospitals with complex denials cited medically unnecessary as a reason for denial. Incorrect MS-DRG continued to be the most costly reason for complex denials, but 23 percent now rank medically unnecessary as the top reason for denial.
8. Half of hospitals won underpayments. Nearly half of all hospitals with RAC activity received at least one underpayment determination. Hospitals reported RAC identified underpayments totaling $11.6 million dollars. Three-quarters of hospitals with underpayment determinations cited incorrect MS-DRG as a reason for the underpayment.
9. High percentage of denials overturned on appeal. Of the claims that have completed the appeals process, 85 percent were overturned in favor of the provider. Region B had the highest overturn rate upon appeal at 95 percent. Hospitals reported a total of $4.9 million in overturned denials, with $2.8 million in Region B alone.
10. Heavy administrative burden. Three-quarters of hospitals said RAC impacted their organization, and 50 percent reported increased administrative costs. More than one-third of hospitals reported using external resources spent money on copying records, and nearly a quarter of them hired a utilization management company or other consultant.
Read the AHA RACTrac survey (pdf).
http://www.aha.org/aha/content/2011/pdf/Q4ractracresults.pdf
Read the latest coverage of RACs.
RACs Now Allowed More Requests to High-Volume Hospitals
https://www.beckershospitalreview.com/hospital-financial-and-business-news/racs-now-allowed-more-requests-from-high-volume-hospitals.html
New Website to Show Status of Medicaid RACs
https://www.beckershospitalreview.com/hospital-financial-and-business-news/new-website-to-show-status-of-medicaid-racs.html
15 Requirements for Medicare Part C RACs Requested by AHA
https://www.beckershospitalreview.com/hospital-financial-and-business-news/15-requirements-for-medicare-part-c-racs-requested-by-aha.html