Legislation would change Medicare recovery audits

The Medicare Audit Improvement Act of 2013, introduced to Congress today, is designed to address critical operational problems that exist with the Medicare recovery audit program and ensure that Medicare recovery auditing is efficient, transparent, and fair, according to its co-sponsors in the House of Representatives.

Under the current program, recovery audit contractors (RACs) are private organizations that contract with the Centers for Medicare and Medicaid Services to identify and collect improper payments made in Medicare’s fee-for-service (FFS) program. The Medicare Audit Improvement Act of 2013 would take steps, according to its sponsors, to:

establish a consolidated limit for medical record requests;

improve auditor performance by implementing financial penalties and by requiring medical necessity audits to focus on widespread payment errors;

improve recovery auditor transparency;

allow denied inpatient claims to be billed as outpatient claims when appropriate

require physician review for Medicare denials.

The American Health Information Management Association (AHIMA) supports the proposed legislation.

“We don’t oppose audits. They provide needed checks and balances to achieve quality healthcare through quality information,” says Thomas Gordon, MBA, RHIA, CAE, FACHE, FAHIMA, chief executive officer of AHIMA. “However, the existing RAC program is broken and needs immediate changes.”

“Health information management professionals are deeply involved in the collection of the health data that [are] the subject of the recovery audits, making them the point of contact for responding to the various and numerous audit requests,” Thomas Gordon says. “Although our members agree that it is important to review, audit, and identify improper Medicare payments, the process has become overly burdensome and ineffective as evidenced by the high percentage of successful appeals.”