RAC Audit Reform Legislation Gets Second Chance in Congress

A bipartisan bill to cap onerous Recovery Audit Contractor (RAC) documentation requests has been reintroduced in Congress for the second time in two years.

Last week Rep. Sam Graves (R-Mo.) and Rep. Adam Schiff (D-Calif.) introduced the Medicare Audit Improvement Act, which would amend the Medicare Modernization Act of 2003 to “reinstate and make statutory a hard cap on Additional Document Requests (ADRs) on the part of Medicare auditors to two percent of hospital claims with a maximum of 500 ADRs per 45 days,” according to a press release from the Congressmen.  ”Smaller hospitals in particular have expressed deep concern over the administrative burdens being placed on them by Medicare audit contractors, including large increases in the number of documents being requested.”

According to Rep. Schiff, “Doctors and nurses should be focused on caring for patients, not trying to comply with the ever-increasing requests for documents.  My bill would put in place common-sense reforms allowing auditors to still conduct adequate oversight of billing problems without an open-ended invitation from CMS to continually bombard hospitals.  Our smaller, rural hospitals are especially ill-equipped to deal with this increased administrative burden.”

According to the press release, the Medicare Audit Improvement Act also would assess penalties for auditors that do not comply with basic program requirements such as deadline and issuance of demand letters.  The American Health Information Management Association (AHIMA) and the American Hospital Association (AHA) support the legislation, which was originally introduced last Congress in October 2012.