It’s a new year, but the American Hospital Association is fighting the same battles that kept health care leaders up at night in 2013 — mainly, politicians in Washington repeatedly using Medicare as a “piggybank” to pay for other things, and burdensome “bounty hunters” from the Recovery Audit Contractors program snatching dollars away from hospitals.
Hospitals have absorbed some $113 billion in cuts since 2010, including $53.8 billion slashed as part of sequestration, AHA officials said in a conference call with reporters this morning, highlighting legislative priorities for the nonprofit. So, it’s natural that one of the association’s top priorities this year is to try and preserve payments to providers.
“There seems to be a pattern here, which is very disturbing,” said Tom Nickels, the AHA’s senior vice president of federal relations. “Obviously, using health care dollars to pay for other programs continues to be a dangerous precedent. We can’t really afford — and our patients can’t afford — for Congress to continue to use Medicare as a piggybank to pay for other programs.”
But of particular consternation for hospitals is RAC, a controversial federal program that uses private contractors to audit hospital billings, looking for Medicare reimbursements paid in error. For a deeper dive on the topic, you can check out this article from the January issue of Hospitals & Health Networks. Thus far, four RAC companies have collected more than $2 billion from hospitals during the last two years, we reported.
AHA officials said on the call that the idea of rooting out fraud and improper payments in Medicare is sound in principal, but not in how it’s been practiced. RAC auditors have behaved like bounty hunters, casting a wide net without concern for getting claims denials right the first time (one survey found that hospitals have appealed 40 percent of denials and were successful some 72 percent since 2010).
Hartford HealthCare has been subjected to about 4,000 claims denials since October 2010, with some $40 million at stake, according to Steven Hanks, M.D., vice president of medical affairs, central region, for the five-hospital system in Connecticut. Hartford is appealing 95 percent of those denials, Hanks said during the call, but the process to do so has been slow and “torturous.”
“We’re spending precious health care dollars — in the case of Hartford HealthCare an excess of seven figures, systemwide — to basically claw back dollars that have been deemed, after the appeals process, to have been legitimate payments,” Hanks said.
He believes the program is in dire need of more transparency and accountability, and relief could be on the way. A bill up for consideration in the House and Senate, called the Medicare Audit Improvement Act, could establish limits on records requests, along with imposing financial penalties on RACs that fail to comply with program guidelines, and make RAC performance evaluations publicly available.
Other things in the AHA’s radar in early 2014:
- The short-term physician fix and several Medicare extenders expire on March 31, and the nationals’ borrowing expires on Feb. 7.
- Several policies “crucial” to rural hospitals must be extended, including the Medicare-dependent Hospital program, low-volume adjustment and ambulance add-on payments.
- The AHA also is pushing to further extend the delay in enforcement of the two-midnight rule, which specifies that patients should be admitted based on the expectation that they will stay at least two midnights. The rule went into effect on Oct. 1, though enforcement has been delayed by six months. AHA officials said they’d like to see enforcement delayed further, until at least the end of 2014.