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Medicare RAC Program – They can easily fix their mistakes

admin on 06 9, 2010

In a follow up to last weeks article on our fragile medical system I found some very interesting news about the Tax Relief and Health Care Act of 2006.  It seems that Medicare has had the ability to audit historical medical records for over/under payments.  They have contractors that go through these records and get paid a percentage of over/under payment.

Officially:

“The Tax Relief and Health Care Act of 2006 made permanent the Medicare Recovery Audit Contractor (RAC) program to identify improper Medicare payments – both overpayments and underpayments-in all 50 states.”

So here’s the good for medicare: they are recouping more over payments than under payments.

“Approximately 96 percent ($992.7 million) of the improper payments were over payments collected from providers, while the remaining 4 percent ($37.8 million) were under payments repaid to providers.”

Every time a Doctor admits a patient to the hospital they follow certain guidelines.  These guidelines are written by the hospital to accommodate all insurances that they accept.  These guidelines are often strictly enforced by the hospital because they will not get paid if not followed.  Now that Medicare is broke, they are pushing harder and harder to recoup as much as they can.  This entire process has put a very dire outlook for Doctors who admit to hospitals.  Doctors have nothing to hide and operate in a very documented profession.  As standards change, Doctors change with it.  That is why the approval process is there, that if the Doctor feels the patient needs something then they have to make sure the insurance will cover it.  Really not the best thing for the patient, but that is the way it works.

Now after years of a bad approval process, they are going back to try to recoup any over payment.  A simple example could be from a patient that was seen two years ago and one of the “RAC” scavengers finds that even though at the time the person was being admitted or taken care of in the hospital according to the guidelines of the hospital which was set forth my Medicare, that something was not done according to some new audited standard.  So they Medicare screws up in their approval process two years ago that resulted in overpayment to either the hospital or a Doctor.  Now two years later, Medicare is coming back to recoup payment plus interest for that hospital/doctor.  The approval process was put in place to find make sure that medicare would pay for said procedure, but now they are turning around and changing their minds.  This is kind of like and IRS audit several years later.  This is creating more headaches then it is worth.  What I think has to happen here is that Medicare has to become more efficient on the initial approval process not try to go back years later to recoup where they screwed up.

I wish I could do this when I make a bad trade.  I bet any business person who makes a bad decision on marketing or partnership wish they could just take it back two years later.  I guess when you are big government you have the ability to correct any mistakes at any time.  Of course this comes when hospitals and Doctors are already facing a 21% pay cut from Medicare.

How many Doctors do you think will continue to accept these government run programs without being forced through licensing?

This does change the fact that more people are going into medicare/medicaid and less people are paying into into because of the population retirement.  Combine this facts that more patients are going in and less Doctors are going to accept these patients because of their 21% pay cut and we have an explosive medical system problem.   Ask your Doctor how these two points are affecting their practice and please shoot me an email on it:

Ryan@cheapiv.com