Program Integrity

Hospitals take seriously their responsibility to help combat waste, fraud, abuse and payment errors in federal health programs.

In recent years, the Centers for Medicare & Medicaid Services has drastically increased the number of program integrity auditors that review hospital claims to identify improper payments. These audit contractors include recovery audit contractors (RACs) and Medicare administrative contractors (MACs). RACs are charged with identifying improper Medicare and Medicaid fee-for-service payments – both overpayments and underpayments. They are paid on a contingency fee basis, receiving a percentage of the improper payments they identify and collect. MACs conduct pre-payment and post-payment audits and also serve as providers’ primary point-of-contact for enrollment and training on Medicare coverage, billing and claims processing.

No one questions the need for auditors to identify billing mistakes; however, responding to the increasing number of audits and challenging inappropriate denials drains hospitals’ time, funding and attention that could more effectively be focused on patient care.

Hospitals are drowning in the deluge of unmanageable medical record requests and inappropriate payment denials. CMS and Congress need to make the audit processes more fair and transparent.

RACs - Recovery Audit Contractors

The AHA continues to work with government stakeholders to improve the RAC program and prevent abuses that prevent hospitals from receiving payment for necessary medical care. The AHA also provides education to members to help prevent payment denials and navigate the Medicare appeals pro...

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