Convinced that your hospital billing department is doing its job well, and yet your claims get denied by a RAC? You’re not alone. Did you know that in one study it was determined that 77% (!) of these denied hospital claims were overturned in appeal processes to the benefit of hospitals? According to a survey by the American Hospital Association responding hospitals appealed at least one healthcare billing claim in the specified period. What about other claims and those providers who did not appeal at all, settling the issues as a business matter decision? You know what I mean, chose the less costly or less aggravating option.
Some additional hospital claim denial observations involving RACs include …
- About 66% of medical records reviewed by RACs did not contain an improper payment.
- Since the first quarter of 2010, hospitals have reported $355 million in denied claims.
- As a result of the appeal process, 51% reported increased administrative costs.
- RACs responsiveness and communication was “fair” or “good,” but the average wait time for a RAC response varied.
The AHA’s survey documenting these stats included more than 2,100 hospitals and began in January 2010. Considering that such a large number of hospital claims were overturned makes one think and ask if the system needs fixing. Allowing the use of statistical analyses with an extrapolation follow up calculation will make some of us wonder. That many “false positive” RAC audit results are not acceptable.
Of course, one should be considering a well organized and systematic hospital billing claims appeal process, whenever it makes sense, not just to be right. I consider it best to be a business decision, considering ROI and other factors. How sure are you that your documentation, coding and hospital billing processes are a reflection of best practices?
Internal hospital billing audits … an ounce of prevention is worth a pound of cure
CMS states, “… health care providers should consider conducting an internal/external assessment to ensure that submitted claims meet the Medicare rules.”
The easier and less costly way to deal with the review of your hospital billing practices and documentation by regulatory entities is of course an ongoing, well organized compliance program. Regular internal audits, whether administered by a team of well qualified staff members or expert third party, regular hospital billing staff training, and follow up on the findings will be the proverbial “ounce of prevention.”
Proactive strategies will make it much less likely for any audit to find reasons for a denial of your hospital claim. It’ll also give you much more ammunition and confidence to challenge a denial, thereby raising the ROI of the process when necessary.