RAC Auditor Profits

When your business revolves around what the government has created…you end up being the tail that is wagged.

HMS Holdings, one of the largest RAC auditing companies profits drop from $9.82 million to $7.04 million dollars.

Let me hear all the docs in unison: boo hoo, we feel so sorry for you!

There are not too many better business models that can be built.

The government has you scour the books, and for every mistake you find, you get a percentage of what is recovered.

This “plummet” in profits is blamed on “…challenges faced by our clients and carriers in adopting several new CMS-mandated claim transaction formats.”  Once again I know there are many docs out there feeling sorry for these guys.

Note that total revenue increased from $82.5 million to $107.3 million!

These guys are just printing money, on the back of physicians.

You better have a defense plan in place when the RACs really start coming after physicians

RAC Recoveries Accelerating, Look Out

Take a look at this summary report from the CMS.
It will open in a new window.

Basically from Oct 2009 to Mar 2011 the RACs have recovered $365.8M.

Of that over half was collected from Jan 2011 to Mar 2011.

Things are speeding up.

There has been, and still is, a learning curve going on at the RACs.

Once they get fully spun up…look out.

It is interesting to see, yet not surprising at all, that both Region C & Region D RAC top issue are identical.

Really, why not?

I would expect each RAC to share their results among each other to ensure each operates as efficiently as possible.

It is not like they are competing for the same “customers”.

What I don’t understand is how the 3 year demonstration period resulted in $1.03B in recoveries while now, about a year-and-a-half into the full blown program, the recovery is not on track to meet the same goal.

Granted, with the acceleration that is occurring, this exponential increase may take the actual recoveries well past the demo program.

Wake up and smell the coffee Docs…this is going to become a huge headache for you.

RAC Appeals and Reports to Congress

In the previously mentioned article on CMS Manual System changes, I touched on the fact that you need to be organized.

There is a second part to that CMS Manual change, and it deals with Monthly Appeals Reports and the proper method a RAC is to follow when they submit those reports.

About a year ago, I gave a presentation at a regional health meeting about HIPAA.  Prior to my speaking, there was a quick Q & A about a thing called a RAC Audit. I listened in shock as person after person described their method of tracking demand letters and files.   I heard spreadsheets, post-it notes…you name it.

When I got up to speak I couldn’t begin on my subject until I clarified a few items.  The first thing I did was ask: “how much time do you spend tracking this information?”

My answer wasn’t anything specific, but what occured was a low rumble, a murmur of gripes and complaints about how much time they spent.

My next question was: “how much value do these files have to your practice?”

That answer was much more specific as nothing less than “thousands of dollars” was yelled out.

I scribble a few notes to myself…and myRACTracker was born.

Here is the problem: as with almost all government programs, the RAC program is anything but simple.

And just like an insurance company, the last thing the RAC program wants to do is make it easy for a provider to appeal and KEEP their money.

For something as important and valuable as these files to be tracked on a spreadsheet or some other willy-nilly way shook me to my core.

Now we see the CMS want RAC’s to submit spreadsheets of appeals data to be used as reference for reports to Congress…SPREADSHEET!

There is mention in the manual update that this is until the RAC Data Warehouse is capable of tracking appeals, then they’ll “just” have to update that system instead.

These spreadsheets are going to be a confusing disaster.  It will probably take at least 2 full time employee at each RAC to generate these spreadsheets.

This is important stuff, and if you treat it like any other “thing” that needs to be followed, you are going to loose big time.

There are so many time line requirements to keep track of, you will lose your mind.

Nobody on the CMS side is looking to make this easy for you.

We are.

MyRACTracker.com will return sanity to your life, reduce the stress of your staff and let you actually see the value of the files the RAC’s request of you.

Not only will you be able to easily track everything RAC, you’ll be able to look at the system and instantly see how much money you have on the line.

You’ll see:

  • Total value of all files in review
  • Total amount of money recouped by the RAC
  • Total amount you have prevented the RAC from taking
  • There is much more to it, but money is really what this comes down to

Be smart and get on the waiting list to be a myRACTracker.com user.