At a time when the government claims to be doing all it can to lower healthcare costs, along comes a story.  This is probably not of great interest beyond the walls of most providers, but it should speak to a larger audience.  Here's the skinny:  RACs (Recovery Audit Contractors) are private entities contracted by CMS (Medicare) to audit medicare payments to hospitals over the last several years.  If a facility is found to have been overpaid for certain medicare services, it must write a check to the government for the overage.  If it is found to have been underpaid, then the government must pay the facility the balance of payment it should have received for the audited services.  Sounds simple enough, right?  Right?  Well, hang on a minute because it isn't so simple, and the horror stories of horrendous difficulty dealing with the RACs are stacking up.  Remember your last DMV phone call and read on...

I offer the following postulate: The government "reducing the cost" of anything is a laughable notion, no matter how simple the task, or how justified the goal.  Take the following from a facility in Indiana as an example: We are having a terrible time with CGI’s ability to accept faxed documentation. Their fax machine is slow to receive and cannot handle the volume of incoming faxes, therefore most attempts result in “error”. One fax that we were able to get through took two hours to complete. Customer service has informed us that CGI is aware of the problem but there are no plans to increase fax input. I sent an e-mail in mid-March to the CMS RAC project officer and he forwarded it to CGI. A CGI representative emailed me and said she would follow up with me personally but I have heard nothing. This week I sent another e-mail to the CMS RAC project officer and CGI official, but have not received any correspondence in return. If CMS lists faxing as an allowable method to forward documentation to the RACs, then the RAC should be set up to accommodate the volume of incoming faxes. 

You think?!  It gets better.

A second problem is the RAC's delay in logging the receipt of records on the provider portal of their Web site. Regardless of the method we utilize to forward the documentation, we can’t tell if they received our records because they are always behind in logging the information. This results in extra phone calls to customer service to verify that the records were received. Right now our RAC is still requesting small volumes of records. If the workflow is behind now, what will happen when they are requesting up to 300 records? 

You know what will happen - resources will be sacrificed to call, email, fax or send smoke signals to verify that records have been received.  And that's just getting the records TO the RAC.  Then comes the analysis and judgement and, you guessed it, the denial of the claim and request for payment.  In the RAC three year "demonstration" period, overpayments outpaced underpayments 96% to 4% respectively.  Moreover, RACs are incentivized to find overpayments and even share in the spoils!  Oh, my.  Of course the facility can appeal the judgement, but there goes more time, effort and....expense.  Who ultimately bears the load, covers the cost, picks up the tab?  You and me.  Ahh, sweet reform.