Last week the Centers for Medicare & Medicaid Services (CMS) released a blog post from agency Administrator Seema Verma titled “Recovery Audits: Improvements to Protect Taxpayer Dollars and put Patients over Paperwork.” In the post, Ms. Verma talked about the Recovery Audit Contractor (RAC) changes CMS made back in 2015, including implementing an accuracy rate target of 95 percent, a maximum overturn rate of 10 percent, and the new lower additional documentation request (ADR) limits. She also noted that in the fiscal year 2018, the RACs were successful, recovering $73 million (which, by the way, is a drop in the bucket compared to the $2.4 billion recouped in 2014).
But here is the problem: this post came completely out of the blue. Why did Ms. Verma feel compelled to discuss this now? The information is not new. The RACs have been operating under their current statement of work for the last three years; they have reportedly been approved to audit 133 different issues, including 59 physician issues. In addition, the RACs are permitted to audit for diagnosis-related group (DRG) validation. So what inspired this?
Having touted the RACs in this fashion, it begs the question of whether it heralds some looming change. Is CMS planning to raise the ADR limit? Will CMS open the RACs up to short stays? Who really knows, except, perhaps, CMS. Yet, we did see a notice on the RAC web page reading that “CMS may require the RACs to review claims based on referrals from the OIG (Office of Inspector General) or Department of Justice, or the Unified Program Integrity Contractors (UPICs). These CMS-required RAC reviews are conducted outside of the established ADR limits.”
So maybe CMS is now going to use the RACs for criminal investigations? This couldn’t possibly lead to anything good for providers.
Then there’s another disturbing bit of recent news, these involving docs, and drugs.
Last week, the makers of Exparel, an injectable anesthetic agent used for pain management after surgery, reported a 22 percent increase in sales since January.
January just happened to be when CMS and other insurers started paying extra for this medication in ambulatory surgery centers (ASCs) to try to reduce opioid use. So if this drug is so good, why wasn’t it used before in ASCs? Because the doctors own the ASCs, and using a costly drug that is not directly reimbursed means fewer profits for them. Now that the cost was reimbursed, the use increased greatly.
Why didn’t CMS also start to pay extra if the drug is used after surgery in a hospital? Because doctors, as we understand, already use it whenever it is needed since it has no effect on their payment for the procedure.
Is incentivizing providers like this a good thing? Time will tell.
In the last six weeks, my colleagues and I have dealt with two situations in which clinics either missed or did not receive the orange
EDITOR’S NOTE: This article was originally published Monday, Dec. 8 by RACmonitor as a special bulletin. Many people are still seething mad about Aetna’s devious
Please log in to your account to comment on this article.
Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.
Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.
Sepsis remains one of the most frequently denied and contested diagnoses, creating costly revenue loss and compliance risks. In this webcast, Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, provides practical, real-world strategies to align documentation with coding guidelines, reconcile Sepsis-2 and Sepsis-3 definitions, and apply compliant queries. You’ll learn how to identify and address documentation gaps, strengthen provider engagement, and defend diagnoses against payer scrutiny—equipping you to protect reimbursement, improve SOI/ROM capture, and reduce audit vulnerability in this high-risk area.
Only ICD10monitor delivers what you need: updates on must-know changes associated with the FY26 IPPS, including new ICD-10-CM/PCS codes, CCs/MCCs, and MS-DRGs, plus insights, analysis and answers to your questions from two of the country’s most respected subject matter experts.
As AI reshapes healthcare compliance, the risk of biased outputs and opaque decision-making grows. This webcast, led by Frank Cohen, delivers a practical Four-Pillar Governance Framework—Transparency, Accountability, Fairness, and Explainability—to help you govern AI-driven claim auditing with confidence. Learn how to identify and mitigate bias, implement robust human oversight, and document defensible AI review processes that regulators and auditors will accept. Discover concrete remedies, from rotation protocols to uncertainty scoring, and actionable steps to evaluate vendors before contracts are signed. In a regulatory landscape that moves faster than ever, gain the tools to stay compliant, defend your processes, and reduce liability while maintaining operational effectiveness.
Get clear, practical answers to Medicare’s most confusing regulations. Join Dr. Ronald Hirsch as he breaks down real-world compliance challenges and shares guidance your team can apply right away.
Federal auditors are zeroing in on Inpatient Rehabilitation Facility (IRF) and hospital rehab unit services, with OIG and CERT audits leading to millions in penalties—often due to documentation and administrative errors, not quality of care. Join compliance expert Michael Calahan, PA, MBA, to learn the five clinical “pillars” of IRF-PPS admissions, key documentation requirements, and real-life case lessons to help protect your revenue.
During this essential RACmonitor webcast Michael Calahan, PA, MBA Certified Compliance Officer, will clarify the rules, dispel common misconceptions, and equip you with practical strategies to code, document, and bill high-risk split/shared, incident-to & critical care E/M services with confidence. Don’t let audit risks or revenue losses catch your organization off guard — learn exactly what federal auditors are looking for and how to ensure your documentation and reporting stand up to scrutiny.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
