Waiting Room: Medicare Appeals Tie Up Hospitals' Millions

by Mark Friedman  on Monday, Jun. 30, 2014 12:00 am  

U.S. Sen. Mark Pryor, D-Ark., also is pushing for legislation to rein in the RAC program.

Pryor was a sponsor of Senate Bill 1012, introduced in May 2013 and now in the Senate Finance Committee.

“I introduced this common-sense bill to help eliminate duplicative audits, unmanageable medical record requests, and inappropriate payment denials related to Medicare Recovery Audit Contractors that are overwhelming our health providers and diverting much-needed resources from patient care,” he said in an email statement to Arkansas Business last week. “I’m also continuing to work with Arkansas Medicare providers and my colleagues to ensure there is a fair, timely process for appeals.”

‘Common’ in Arkansas

Baxter isn’t the only hospital in Arkansas frustrated with the appeals process, said Paul Cunningham, executive vice president of the Arkansas Hospital Association. “It’s very common throughout the state,” he said.

Baptist Health of Little Rock, a health system with eight hospitals in its network, has $14.5 million tied up in the appeals process, said Chief Financial Officer Bob Roberts.

He said Baptist has “limited capital spending pretty significantly during this period.” No specific project has been shelved, he said, but replacing or upgrading equipment might be deferred.

“As long as the equipment is still working effectively, we may delay [upgrades] a few months or a year until the money is available,” Roberts said.

In the meantime, Baptist has a full-time employee and other part-time workers assigned to handling the paperwork in connection with the audits and the appeals.

“There’s a lot of record-keeping that goes with making sure we’re staying on track with their deadlines,” Roberts said.

Payment Problems

The Medicare Modernization Act of 2003 created the Medicare Recovery Audit Contractor program. But it wasn’t until 2010 that it became a massive headache for hospitals.



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