President Obama signed the Patient Protection and Affordable Care Act into law on March 23, 2010. Reaction has ranged from jubilation to threats of violence.
Meanwhile, various public opinion polls conducted just prior to and after the enactment of this so-called massive overhaul of the nation's healthcare system reported most citizens opposing the legislation by a slight margin.
Whether one is a supporter or not, however, it is time to familiarize ourselves with the Patient Protection and Affordable Care Act, as it will have substantial impact on healthcare providers, patients, employers and taxpayers as it is implemented during the next eight years.
Of particular concern to healthcare providers is the act's mandated expansion of the RAC program to Medicaid. By no later than December 31, 2010, states must establish programs to contract with one or more recovery audit contractors for the purpose of identifying underpayments and overpayments and recouping Medicaid overpayments. Payments will be made to contractors only on amounts recovered and will be issued on a contingent basis. Individual states may specify the contractor contingency fees for overpayments and underpayments.
The only bright side to RAC expansion to Medicaid is that each state must have an appeal process in place and coordinate recovery efforts with "other contractors or entities performing audits," plus federal and state law enforcement agencies.
The expansion of the RAC program to Medicaid is not unexpected given the GAO's recent estimate of $18.6 billion per year in "improper payments" and the apparent lack of meaningful financial return from the MIC audits conducted through the Medicaid Integrity Program.(1) The MIC contactors are not paid on contingency. I anticipate that the RAC Medicaid contractors will be far more aggressive in their audit efforts given the fact they are paid on contingency.
Furthermore, the act mandates expansion of the RAC program to Medicare Parts C and D. Recovery audit contractors are required to be under contract to ensure that every Medicare Advantage plan under part C and every prescription drug plan under part D has an anti-fraud plan in place. The anti-fraud plans must be reviewed along with the prescription drug plans' estimates of enrollment of high-cost beneficiaries compared to actual numbers of such beneficiaries.
Healthcare providers truly need to tighten their belts as the cost savings and deficit reductions anticipated to emerge as a result of the act will, in my opinion, come in large part from providers though reduced reimbursement and takebacks. As we know, the GAO has described our nation's long-term fiscal outlook as "unsustainable," and the GAO has pointed to alleged "improper payments" in the Medicare and Medicaid programs as a major culprit.(2) However, many of the so-called "improper payments" are not improper at all. Rather, many denials involve allegations of lacking medical necessity made hastily by after-the-fact reviewers (often without proper qualifications) with the benefit of the 20/20 hindsight of Monday morning quarterbacks.The high overturn rate in the Medicare appeals process is a testament to the inappropriateness of many of these denials. Sadly, I believe all of these new fiscal pressures ultimately will result in a reduction of the quality of available healthcare despite the promises of those who somehow think we can get more by spending less. Meanwhile, healthcare providers are advised to make sure they are doing everything possible to prepare for an onslaught of audits and pre- and post-payment denials.
Linda Fotheringill blogs regularly at RACMonitor.com.