No one would say that modern medicine is perfect or that it is free of bad actors. Yet, most of those involved in dealing with the repercussions of Recovery Audit Contractor (RAC) audits have probably sighed in exasperation over the length of time an appeal takes.
You weren’t imagining things. A study in the April issue of the Journal of Hospital Medicine1 found that three hospitals, representing three of the four RAC regions, experienced audit rates related to observational care of an average of 8%. The Centers for Medicare & Medicaid Services (CMS) says it should be 0.3%. Audit appeals will take years before adjudication.
These were just two of the findings Ann Sheehy, MD, MS, a hospitalist at the University of Wisconsin’s medical center, and her colleagues, from Johns Hopkins Hospital and University of Utah Hospital made.
“We thought we would find a lot of hospital wins,” Sheehy says of her feelings going into the study. “There has been nothing in the literature on it, and there has been a lot of pressure in its use due to the RAC program.”
She was surprised by the length of time appeals take. “Two years? That is a failure of due process. And the number of cases settled in discussion is large.”
CMS rules say that appeals should be heard in two months for level 1 or 2 appeals, and three for a level 3 appeal. Sheehy and her coauthors are unsure that the delays in the process will not accumulate again, particularly in a system where so many more cases are being audited than the system was designed for.
All three hospitals had the same experience in the pre-appeals discussion phase. And all three experienced the huge burden of audits, far higher than CMS says anyone should be. That this uniformity existed was also a shock, she says. “We felt we were three clean hospitals being audited at a high rate.”
What a shock
That was surprising. The other thing was sheer volume of audits: 8%, rather than 0.3%, with a range of 20% at University of Utah, and a tenth that rate at Johns Hopkins. All are still over the 0.3% CMS espousal. “That is a huge burden,” she says, “and it was across three of four RAC regions.”
Right now, RAC does not have to publish what happens in discussion, the time in appeals, or the number of cases they are auditing. Sheehy says if that happened, there would be a bigger push for reform. “This is not good governance, and transparency does not cost anything.” However, the way RACs are managing the process now is costing hospitals money and taking up resources that would be better spent on patient care or some other quality-improving method.
Sheehy is keen to mention that none of the audits ever question patient care, just the place it is given. “None of the audits are uncovering unnecessary care for patients.”
Also the contingency fee payment plan, under which RACs operate, needs to change. At a time when the entire healthcare system is being weaned off of fee-for-service and onto a quality-based payment system, Sheehy says it is ironic that the auditing function is being paid based on how much work they can muster up. It makes sense then that they would do 25 times the work that CMS thinks they should be doing.
What would it take?
These changes require congressional action, and this is one case when Sheehy thinks a good action for hospital stakeholders to take is to actually write to their congressional representatives and senators. They have heard from stakeholder groups, she says. But hearing from the front line staff who have to deal with it? That might be more powerful.
She would like to see a time when there are not five full-time staff devoted to handling audit issues, “and that does not include the case management staff who have to get involved,” Sheehy says. She would like to see high-risk programs and providers targeted, and bad actors weeded out. “This does not do that. This is about status and billing and is a huge waste of time and energy. Out of 8,000 encounters, they found nothing wrong with the care we delivered, and the bulk of the cases were found in favor of the hospitals. They would be better off looking for medical fraud, for care that was billed but not delivered, not this.”
Completely clean hospitals will be audited, and the only advice Sheehy can give based on her findings is to meet the deadlines. Other than that, take up your pen and paper, and settle in for a long wait for your money if you appeal. “If you have access to this data, it is a good idea to keep it and track it, too. If you write a letter, include it with the letter. That could be a powerful tool.”
Is she afraid her vocal criticism will lead to more attention from the RACs? No, Sheehy says. “If they come after us harder, we’ll just publish again. If there are more flaws, we want people to see them.”
For more information on this topic, contact Ann Sheehy, MD, MS, Department of Hospital Medicine, University of Wisconsin School of Medicine and Public Health, Madison, WI. Email: [email protected].
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Sheehy AM, Locke C, Engel JZ, Weissburg DJ, et al. Recovery Audit Contractor audits and appeals at three academic medical centers. J Hosp Med. 2015 Apr;10(4):212-9. doi: 10.1002/jhm.2332.
