Hospitals Get $2 Billion “Free Pass” With Suspension of Medicare Claims Reviews


November 6, 2013

CONTACT:  Kristin Walter
kristin.walter@rubinmeyer.com (202) 898-0995

Hospitals Get $2 Billion “Free Pass”  With Suspension of Medicare Claims Reviews

Coalition highlights devastating financial impact of audit suspension

Washington, D.C. – Members of the American Coalition for Healthcare Claims Integrity (ACHCI) are voicing concerns about the Center for Medicare and Medicaid Services (CMS) recent suspension of Recovery Audit Contractor (RAC) reviews of short stay inpatient hospital claims. The auditing suspension was initially to last from October 1, 2013 until January 1, 2014.   However, this week CMS quietly updated their website to reflect a new extension of that suspension until March 31, 2014.

The CMS Recovery Audit Program, which reviews and corrects hospital billing errors, has successfully recovered more than $7 billion in improper Medicare payments since the program began in 2009. This new auditing interruption will amount to an estimated loss of nearly $2 billion for the Medicare Trust Fund, or more if the delay continues.

“The suspension of audits will cause a staggering loss of recoveries for Medicare,” said coalition spokesperson, Kristin Walter.  “Auditors were initially put in place by Congress to protect Medicare from billing mistakes and overbillings. The suspension will result in improper payments going uncorrected, putting the Medicare Trust fund in further jeopardy.”

The American Hospital Association’s (AHA) recent complaints about the RAC program have put increasing pressure on CMS to weaken the program, despite government data that demonstrates the precision of RAC findings – with an average accuracy rate of 95 percent.  According to CMS data, America’s hospitals are responsible for 88% of the overbillings to Medicare.

“The Recovery Audit Contractor program is one of the government’s few successful initiatives to identify and recover waste, fraud and abuse in Fee-for-Service Medicare,” said Thomas Schatz, President of the taxpayer watchdog group Citizens Against Government Waste.  “The highly effective RAC oversight program has saved billions of taxpayer dollars and helped to extend the life of the Medicare Trust Fund.”

“It is the responsibility of hospitals to ensure they are providing proper care to patients while fully complying with Medicare billing policies,” said Walter.  “Therefore, we respectfully encourage CMS to reconsider the audit suspension, so we may continue to ensure the delivery of high-quality care at the highest value for the 51 million Americans who rely on Medicare benefits every year.”

For more information, please visit: www.properpayments.com

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About the American Coalition for Healthcare Claims Integrity

Founded in 2009, the American Coalition for Healthcare Claims Integrity (ACHCI) is a non-profit organization committed to working toward achieving 100% accuracy in payment claims submitted to public and private sector healthcare payors. The coalition’s mission is to educate policymakers and other stakeholders regarding the importance of healthcare integrity programs that help identify and correct improper payments.  ACHCI’s founding members are partners in critical accountability initiatives including the federal Recovery Audit Contractor (RAC), Zone Program Integrity Contractor (ZPIC), and Medicaid Integrity Contractor (MIC) programs.

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