Hospitals are seeing 24 percent more denials by recovery auditors (RACs) in the second quarter of 2012 than in the previous quarter, according to the American Hospital Association’s most recent RACTrac survey.

The dollar amount of those denials is 21 percent greater than the previous quarter, the survey report stated.

Hospitals also are dealing with 22 percent more medical record requests, though nearly two-thirds of medical records reviewed did not contain improper payments, the survey report stated.

More than two-thirds of denials for lack of medical necessity were for one-day hospital stays in which care was provided in the wrong setting, the report stated.

On the bright side, hospitals appealed more than 40 percent of RAC denials with a 75 percent success rate, though almost 75 percent of the appeals are pending, the report stated.

Region A RAC Changes Name

Providers in Region A’s 11 states and the District of Columbia should take note that their recovery auditor has changed its name from Diversified Collection Services (DCS) to Performant Recovery Inc. The RAC’s processes, people, email addresses and phone numbers stay the same, but watch for Performant Recovery Inc. logos on letters and envelopes and listen for changes in phone messages. For more, visit

In other RAC news, just one RAC posted an issue this week. See the chart below for more details.

Inpatient hospital

Name of issue

Date posted or approved

Regions/states where it is active

Description of issue

Document sources

Same day, same hospital readmission


RAC Region A

Identification of overpayments resulting from readmissions to the same hospital on the same day of discharge for a related medical condition.

42 CFR 412.4 discharges and transfers; CMS Pub. 100-08 chapter 6; CMS Pub. 100-04 chapters 3, 25; CMS change request 3389 dated 7/30/09; CMS change request 2716 dated 8/1/03; OIG reports A-03-01-00011, A-01-98-00504, A-12-88-01220

About the Author

Karen Long is the editor of Physician Solutions for DecisionHealth and oversees products that relate to fraud and abuse and HIPAA compliance for physician offices and home health agencies, and accreditation compliance for hospitals. In her almost four years at DecisionHealth, Karen also has been the compliance editor and a reporter for Home Health Line, nation’s leading independent authority on home healthcare business, regulation and reimbursement.

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