Hospitals Report Burden of RAC Audits

Amajority of hospitals (63 percent) reported spending more than $10,000 in the first quarter of 2013 to handle Recovery Audit Contractor (RAC) requests, with 46 percent spending more than $25,000, and 10 percent spending over $100,000, according to the latest American Hospital Association RACTrac report. The report found some of the hospital RAC spending resulted from working with outside consultants. For example, 53 percent of hospitals reported working with an external utilization management consultant to handle RAC issues, at an average cost of $58,000 per hospital, and 11 percent reported working with an external legal counsel, at an average cost of $33,000 per hospital. A total of 1,324 hospitals participated in the RACTrac report during the first quarter of 2013. Overall, 2,380 hospitals have taken part in RACTrac through March 2013. In addition to the administrative burden, hospitals reported an uptick in the number of appeals filed against RAC claim denials. The report, which includes cumulative hospital RAC data from January 2010 through March 2013, found that hospitals have appealed 44 percent of the 428,000 RAC denials issued over that time frame, an increase from the 40 percent reported in the RACTrac report from the fourth quarter of 2012.