CMS Gets Aggressive on Medicare Claims, Denials Rise 24% in Q2

More healthcare providers are seeing their Medicare reimbursement claims denied and are needing to provide more information to the Center for Medicare & Medicaid Services (CMS) Recovery Audit Contractors (RACs), according to results of the American Hospital Association’s RACTrac Survey for the second quarter of 2012, as the agency continues its attempts to limit inaccurate claims. 

RACs conduct automated reviews of Medicare payments to healthcare providers using computer software to detect improper payments, AHA says in its report on the survey, along with conducting complex reviews of provider payments using human review of medical records and other medical documentation to identify proper payments to providers. If supporting documentation isn’t received in a “timely” manner, these claims are denied automatically. 

AHA created RACTrac, a web-based survey designed to collect cumulative RAC experience data, and more than 2,200 hospitals have participated in this survey since data collection began in January of 2010. 


Participants have continued to report “dramatic increases” in RAC activity, according to AHA, as medical record requests increased 22% compared to the last quarter, while the number of denials jumped 24% relative to the previous quarter. In dollar value, denials went up 21%.

However, nearly two-thirds of medical records reviewed by RACs did not contain an improper payment, and hospitals reported a 75% success rate for the 40% of RAC denials they appealed.

The more aggressive rate of denials could be tied into CMS’ efforts to crack down on Medicare fraud and preserve the program’s funds. The Affordable Care Act extended the RAC program to Medicaid, Medicare Advantage, and Medicare Part D programs, which the agency believes could help build on the success of the Medicare fee-for-service RAC program that recouped nearly $800 million in overpayments in fiscal year 2011.


Access the results of the RACTrac survey at AHA.

Written by Alyssa Gerace 

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