Ahead in 2013: Providers Fight over RAC Audits, Medicaid Integrity

It appears that 2013 is shaping up to be a contentious one when it comes to the Centers for Medicare and Medicaid Services fraud detection and other integrity programs.

In November, the American Hospital Association filed suit against CMS claiming that its Recover Audit Contractor (RAC) auditors are unfairly overturning physician’s decisions sometimes years after the fact. As a recent study by the AHA found, millions of dollars of healthcare provider revenue are trapped in the RAC audit system.

This case represents the first foray by providers to use the courts to push back on the RAC program. The timing is critical, because the entire Medicare and Medicaid Integrity Program, of which RAC auditors are part, is being reviewed having completed its first 5-year program. As reported earlier this month, the General Accountability Office (GAO) found that various divisions in the Medicaid Integrity Group’s audit program were not cooperating and actually duplicating tasks in its effort to ferret out fraud and waste.

CMS Undeterred

The Medicaid Program Integrity efforts have been effective, recovering almost $2.5 billion in Fiscal 2010, up from almost $1.3 billion in Fiscal 2007, so providers should expect these activities to cut out the waste as requested by the GAO, but continue to pursue providers.

Expect RAC auditors next year to focus on is the use of the CPT evaluation/management code 99215 by physicians. They already announced a pilot investigation into in Region C, which includes the states of Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia, as well as Puerto Rico and the U.S. Virgin Islands.

This new auditing scheme comes on the heels of the Center for Public Integrity investigation that reported marked increases by physicians in the use of CPT codes 99214 and 99215, for which Medicare reimburses at the highest rates. Although the U.S. Department of Health & Human Services’ Office of Inspector General reported similar findings last spring, although its speculation of possible fraud were far below the $11 billion touted by CPI.

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