We live in interesting times as it pertains to numbers.
As human beings have scoured writings left behind throughout recorded history, one can usually find more than a single opinion on any given tome based on the insight or prejudices of the reader. Numbers aren’t supposed to be that way. Based on centuries of evidence, it should be impossible to find anyone who states that 5 plus 5 equals 10. It is with some surprise that we find ourselves in a global economic meltdown with this information, until we find out that banks were taking the manure pile consisting of mortgages in jeopardy and selling them to brokers under the guise of a pile of platinum securities.
Internalizing all of this as the new reality assists me greatly in reviewing the latest RAC numbers from CMS.
As has become their custom, CMS released the data on Medicare RAC collections for the last quarter this past Monday, along with a supplemental report for the entirety of Fiscal Year 2011.
For the final quarter, the recovery auditors reported identifying $353.7 million in claims corrections, with $277.1 million in overpayments collected and $76.6 million in underpayments returned to providers. This represents a cumulative increase of 22% over all reported corrections identified in the third quarter.
HDI, the Region D RAC, continues its significant lead among the RACs in identifying overpayments, with $108.2 returned to the Medicare program. This represents slightly over 39% of all monies returned in the final quarter of the Fiscal Year.
The storyline behind underpayments returned to providers has shifted dramatically. Connolly, the Region C RAC, returned $60.7 million to providers in the final quarter. This number represents more than an eightfold increase from the $7.4 million returned by Connolly in the third quarter. Significantly, this number represents nearly 50% of all claims corrections identified by Connolly in the final quarter of FY 2011. In contrast, HDI, which identified $33.7 in underpayments in the third quarter, saw their total plummet to $6.9 million in the final quarter.
There were only moderate changes in the top claims issues identified by the recovery auditors. DCS in Region A and HDI in Region D have seen no change from their top issues identified. Region A continues with medical necessity of renal and urinary tract disorders in the inpatient setting. HDI maintained minor surgery and other treatment billed as inpatient as their top issue.
CGI in Region B has seen cardiovascular surgical procedures move to the top of its issue list, while Connolly has seen acute inpatient admission for neurological disorders make a similar jump.
The numbers from the final quarter bring the total identified claim corrections for Fiscal Year 2011 to $939.4 million, with $797.4 million in overpayments collected and $141.9 million in provider underpayments returned. Based on the numbers from FY 2010 in the Report to Congress on RAC activity that was released in September, the auditors have seen more than a tenfold increase in claim corrections in FY 2011.
While this panoply of numbers would appear to be encouraging to CMS, it is worth noting that CMS’ quarterly reports routinely make no mention of appeal success rates. CMS has now established that it will make official appeal rates available in its annual Report to Congress, which provides ample time for multiple levels of claims appeals to work their way through the system. It is worth noting that the latest AHA RACTrac report, which was released on November 21st, indicated a provider success rate of 77% for appealed claims among their member hospitals that reported data. If this percentage is remotely close to the nationwide average, we should expect to see a significant reduction in the FY 2011 number of $797.4 million in overpayments in next year’s congressional report.
If we don’t see a reduction, we can state categorically that we have found yet another modern case where the certainty of numbers crumbles in the wrong hands.