Med­i­caid RAC overkill

Re­views of med­i­cal treat­ment worry hos­pi­tals

Modern Healthcare - - The Week In Healthcare - Rich Daly

Hos­pi­tals fear Med­i­caid’s new au­dit pro­gram could mean mul­ti­ple ex­am­i­na­tions of the same is­sues from dif­fer­ent re­view­ers, as well as more re­views of the med­i­cal ne­ces­sity of hos­pi­tal care.

The fi­nal rule es­tab­lish­ing a Med­i­caid re­cov­ery au­dit con­trac­tor pro­gram ad­dressed some con­cerns raised by hos­pi­tals over an ear­lier draft, but not all of them.

The new pro­gram, set to be­gin Jan. 2, 2012, un­der reg­u­la­tions is­sued last week, comes as the Obama ad­min­is­tra­tion pushes var­i­ous ini­tia­tives to re­duce waste, fraud and abuse in fed­eral health­care pro­grams. Sev­eral Repub­li­can mem­bers of the deficit re­duc­tion su­per­com­mit­tee last week called for more such ef­forts as a way to re­duce health- care spend­ing (See story, be­low).

Re­cov­ery au­dit con­trac­tors, which are paid con­tin­gency fees to iden­tify im­proper pay­ments, were de­ployed first in Medi­care and ex­tended to Med­i­caid by the Pa­tient Pro­tec­tion and Af­ford­able Care Act. They are ex­pected to re­cover $2.1 bil­lion from Med­i­caid providers over the first five years of the pro­gram, with the amount in­creas­ing in suc­ceed­ing years, ac­cord­ing to ad­min­is­tra­tion es­ti­mates. About $668 mil­lion has been re­cov­ered so far this year in the Medi­care ver­sion of the pro­gram, ac­cord­ing to a CMS of­fi­cial.

The CMS of­fi­cial said he ex­pected that Med­i­caid RAC au­di­tors, who will be paid by states, will re­ceive 10% to 12% of re­cov­ered funds, about the same per­cent­age as the CMS pays Medi­care con­trac­tors.

The Med­i­caid au­dit pro­gram will al­low states to de­sign their own pro­grams, with fed­eral of­fi­cials pro­vid­ing fi­nal ap­proval.

Hos­pi­tal ad­vo­cates praised the fi­nal rule for di­rect­ing states to cre­ate proper ap­peal pro­cesses for providers to dis­pute “ad­verse de­ter­mi­na­tions” from the con­trac­tors and for en­cour­ag­ing con­trac­tors to fo­cus on Med­i­caid un­der­pay­ments, as well.

An­other re­vi­sion that drew pos­i­tive re­views was the additional re­quire­ment that each con­trac­tor em­ploy a full-time med­i­cal di­rec­tor. How­ever, hos­pi­tals re­main con­cerned that the reg­u­la­tions do not re­quire those physi­cians to have any knowl­edge about the state’s Med­i­caid pro­gram.

“As ev­ery­one knows, ev­ery state Med­i­caid plan is in­cred­i­bly com­plex and very unique,” Xiaoyi Huang, as­sis­tant vice pres­i­dent for pol­icy at the National As­so­ci­a­tion of Pub­lic Hos­pi­tals and Health Sys­tems, said in an in­ter­view.

Hos­pi­tals also are trou­bled that the fed­eral rules only “strongly en­cour­age”—but don’t re­quire—states to adopt rules aimed

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