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Feb 17

The RACs are coming, the RACs are coming….

Frank Cohen recently completed a RAC survey of physician medical practices. Of those responding, 100 were subject to a RAC audit sometime in the past. Of these, nearly 50% stated that the RAC auditor claimed to use some form of random sampling in requesting the records to be reviewed. Of the total, 74% stated that the audit resulted in an overpayment demand and of those, approximately 65% stated that they appealed the RAC decision on one or more of the records audited. Only 6% said that their appeal went as far as an administrative law judge but of those records that were appealed, approximately one third were reversed in the practice’s favor.  

Now, there are a couple of very significant issues raised as a result of this survey. First of all, the CERT study reported that, for 2009, 7.8% of all records reviewed were determined to have been paid in error (including those that were under paid), yet our survey reports that nearly 10 times that, or 74%, reported that the records reviewed were paid in error (in this case, only over payments were reported). Secondly, when appealed, the over payment decision on nearly one third (32.30%) of those records that were claimed to have been paid in error were reversed in the practice’s favor, meaning two things; first, the RAC auditors may have been way over zealous (or inappropriate) in their findings and second, there very well may be a huge cost for those that don’t appeal. 

Demographically speaking, 80% of respondents were medical practices and response came from 46 different states, with nearly 50% from FL, OH, NY, NC, OR, SC, CA, IL, GA and IN. 

For complete details of the survey, go to www.frankcohengroup.com and click on the Download tab.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →