Possible Hospital RAC Audits in 2014: Pow! Right in the Kisser!

by Williams Mullen
Contact

Muhammad Ali said, “Everybody has a plan until they get punched in the face.”

Whew…it’s a new year.  While I thoroughly enjoyed 2013, I am excited and hopeful for 2014.  Work is so busy that it seems like I’ve barely had time to breathe this January….that’s a good thing, right?  Hey, anyone see me on TV? :)  Check out WRAL.

Hospitals, on the other hand, may be anxious and doubtful about their 2014s.  Hospitals have good reason to wonder about the future.  Our NC General Assembly was fairly harsh on hospitals in the last session, passing numerous session laws that directly or indirectly negatively affect hospitals.

But to be fair, the 2013 NC General Assembly didn’t ONLY affect hospitals…see Stephen Kobert’s report on North Carolina legislature.  Kobert’s graphic simulation is hilarious!

Senate Bill 4 entitled “No NC Exchange/No Medicaid Expansion,” was one of the first bills out of the gate.  While I am not necessary an advocate for expanding Medicaid (see my blog “Medicaid Expansion: Bad for the Poor“), I understand that Medicaid expansion would greatly benefit the hospitals, as well as Medicaid recipients. 

Here is an interesting scenario:

Bradford Regional Medical Center and Olean General Hospital sit only 20 miles apart on opposite sides of the Pennsylvania/New York border. (See “Hospitals Facing Big Divide In Pro- and Anti- ACA States” by Beth Kutscher).  New York expanded Medicaid and Pennsylvania did not.  New York also opted to set up its own health exchange, which is working.  Pennsylvania is floundering with healthcare.gov.  Olean projects billions in lost revenue due to non-Medicaid expansion.  I bet Olean wishes it could move the border of New York!  Or its hospital!

House Bill 998 capped the sales tax refund that non-profit organizations, which was largely aimed at non-profit hospitals. 

House Bill 834 and Senate Bill 473 require certain hospitals and health care facilities to publicize the costs many health care procedures.  So when you need a CAT scan, you can see what UNC’s costs are for a CAT scan versus WakeMed’s and make an individual choice as to which hospital to present yourself.  Sounds like a fair and reasonable request, but imagine the administrative cost for the hospitals to abide by the requirements.

Furthermore, the budget reduced hospital outpatient payments from 80% to 70% of costs. The budget further instituted a 3% Medicaid reimbursement “withhold” that the states calls a “shared savings plan.” The budget changed the hospital provider assessment state retention formula.  Now the state can collect 25.9% of total assessment, instead of the cap of $43 million.

Not just the NC General Assembly affects hospitals.  On the federal level, the Center for Medicare and Medicaid Services CMS) also took a stab.  A new CMS rule converts the current Medicare 5-level, intensity-based payment system for clinic visits to one, single outpatient visit code.  Prior to this change, a hospital could be reimbursed for a Medicare patient visit anywhere from $56.77 for a level 1 new patient to $175.79 for a level 5 new patient.  Now all Medicare clinic visits are reimbursed at $88.31.  You can see that some hospitals would not like this change.

But, as Ali said, “Everyone has a plan until they get punched in the nose.”

The possible punch to NC Hospitals?

Medicaid RAC audits…

For two years, we have been required to sign up Medicaid recovery audit contractors (RACs).  But we have been slow.  HMS, the RAC with contracts in 28 states, including North Carolina says that it has been slow getting started with Medicaid RACs because the state-by-state data have been scant and the procedural hurdles were difficult.  But, according to “Report on Medicare Compliance,” Medicaid RAC audits will be in full swing for hospitals this year.

According to the same article, in North Carolina, two targets are tonsillectomies/adenoidectomies and ambulance services.  Also, at issue in NC, are the DRGs and the medical necessity of inpatient admissions vs. outpatient services.  While RACs are only to audit going back 3 years, the RACs can get permission to go back 5 years.

Medicaid RACs collect contingency fees anywhere between 9.5% to 12.5%, so they have the incentive to find problems. 

HMS boasts that in two mid-Atlantic states, the Medicaid RAC recovered over $12.5 million through credit balance audits of inpatient facilities.

Pow!! Right in the kisser!

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Williams Mullen | Attorney Advertising

Written by:

Williams Mullen
Contact
more
less

Williams Mullen on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!