title: Recovery Audit Contractor audits and appeals at three academic medical centers.
abstract: BACKGROUND
  Outpatient (observation) and inpatient status determinations for hospitalized Medicare beneficiaries have generated increasing concern for hospitals and patients. Recovery Audit Contractor (RAC) activity alleging improper status, however, has received little attention, and there are conflicting federal and hospital reports of RAC activity and hospital appeals success.
  
  
  OBJECTIVE
  To detail complex Medicare Part A RAC activity.
  
  
  METHODS
  Retrospective descriptive study of complex Medicare Part A audits at 3 academic hospitals from 2010 to 2013.
  
  
  METHODS
  Complex Part A audits, outcome of audits, and hospital workforce required to manage this process.
  
  
  RESULTS
  Of 101,862 inpatient Medicare encounters, RACs audited 8110 (8.0%) encounters, alleged overpayment in 31.3% (2536/8110), and hospitals disputed 91.0% (2309/2536). There was a nearly 3-fold increase in RAC overpayment determinations in 2 years, although the hospitals contested and won a larger percent of cases each year. One-third (645/1935, 33.3%) of settled claims were decided in the discussion period, which are favorable decisions for the hospitals not reported in federal appeals data. Almost half (951/1935, 49.1%) of settled contested cases were withdrawn by the hospitals and rebilled under Medicare Part B to avoid the lengthy (mean 555 [SD 255] days) appeals process. These original inpatient claims are considered improper payments recovered by the RAC. The hospitals also lost appeals (0.9%) by missing a filing deadline, yet there was no reciprocal case concession when the appeals process missed a deadline. No overpayment determinations contested the need for care delivered, rather that care should have been delivered under outpatient, not inpatient, status. The institutions employed an average 5.1 full-time staff in the audits process.
  
  
  CONCLUSIONS
  These findings suggest a need for RAC reform, including improved transparency in data reporting.
authors.affiliation: Department of Medicine, Division of Hospital Medicine, University of Wisconsin School of Medicine and Public Health, Madison, Wisconsin.
authors.forename: Ann M
authors.initials: AM
authors.lastname: Sheehy
authors.forename: Charles
authors.initials: C
authors.lastname: Locke
authors.forename: Jeannine Z
authors.initials: JZ
authors.lastname: Engel
authors.forename: Daniel J
authors.initials: DJ
authors.lastname: Weissburg
authors.forename: Stephanie
authors.initials: S
authors.lastname: Mackowiak
authors.forename: Bartho
authors.initials: B
authors.lastname: Caponi
authors.forename: Sreedevi
authors.initials: S
authors.lastname: Gangireddy
authors.forename: Amy
authors.initials: A
authors.lastname: Deutschendorf
mesh_terms: D000046:Academic Medical Centers / Q000592:standards* / Q000639:trends; D005607:Fraud / Q000517:prevention & control / Q000639:trends; D006801:Humans; D008485:Medical Audit / Q000379:methods / Q000592:standards* / Q000639:trends; D016344:Medicare Part A / Q000592:standards* / Q000639:trends; D014481:United States