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I Just Got RAC’d by Medicare

April 22, 2012
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First, let me acknowledge that many billions of dollars are lost by Medicare each year for outright fraud. I have heard that drug kingpins in Florida have looked at this enterprise as being just as lucrative as selling drugs, but with less potential prison time.

A RAC is a Recovery Audit Contractor, which is a type of company hired by Medicare to go around the country finding fraud and abuse. If one of these companies finds a charge that it believes didn’t meet the Medicare rules, then it alerts Medicare, which then demands its money back plus interest and penalties, and the RAC company gets a percentage.

Over a year ago while I was the attending physician on a hospital teaching team, we admitted a woman for heart failure. She had the classic signs and symptoms: worsening shortness of breath, swelling in her feet, and evidence by physical exam and x-ray of a build up of fluid in her chest. Her situation was compounded by the fact that she had fairly severe heart and lung disease and was on oxygen at home (though her initial oxygen levels at the hospital were still abnormal in spite of being on her home oxygen dose).

Almost always in this teaching environment, some other doctor writes the initial admission orders before I see the patient. These orders were to “admit” this patient to the hospital.

We gave her IV diuretics and other medicines to force her kidneys to make more urine than they normally would, which draws the fluid out of her chest and legs, which eases the workload on her heart, which helps her breath better and feel stronger. By the next day after we “admitted” her, she was feeling much better and the swelling was much improved. Through most of this day her oxygen levels were really good, but her potassium level had dropped from 4.1 to 3.1, which is abnormal and potentially dangerous for her heart. This is a known side effect of some diuretics, but this was a larger drop than we usually see in just 24 hours so I had no way of knowing if this was real or a lab error. If it was real, it could have been really dangerous if that dropping potassium rate had continued if we had discharged her that day.

Over the next 24 hours, we gave her extra potassium, kept the strong diuretic medicines going 24 more hours, and sent her home the next day. Her potassium levels were normal again.

According to the RAC folks, I had just committed Medicare fraud by unnecessarily admitting her to the hospital. This gotcha exercise was the result of rule changes made about 15 years ago. Medicare made this artificial distinction between “admitting” a patient and “observing” a patient. It developed books of rules that nurses read to see if patients in a hospital still qualify to be there.

Therefore, I was accused of committing Medicare fraud literally because some doctor wrote “Admit to …” instead of “Observation” in the original physician orders. Nothing else was felt to be wrong about her time in the hospital. Because I was the discharging doctor, I was assigned the responsibility for everything that happened before me. All this for a woman who clearly needed to be in a hospital but — because of our appropriately aggressive care — was only there for about 48 hours. The ultimate stupidity of this accusation is that patients can be observed for up to 48 hours, so the only issue was one of language on the original orders.

How long should any patient stay in a hospital? Once again, this is a huge issue the NIH funds little research to answer. It funds research in miracles, not efficiency. Like so many other issues relating to the efficient delivery of healthcare, the real issues are risk and cost. If a patient is feeling better than when she was first admitted to the hospital, but not 100%, what is the risk of sending the patient home? How much risk is so low it just is not worth the cost? Instead of facing these issues and funding research to give all physicians who care for hospitalized patients answers, Medicare takes the easy way out and just writes silly rules with no solid research base to back it up.

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4 Responses to I Just Got RAC’d by Medicare

  1. David on April 22, 2012 at 9:50 pm

    I hope you were able to fight this successfully

    • Richard Young MD on April 24, 2012 at 9:42 pm

      Don’t know yet. I appealed it but haven’t heard anything.

  2. Ron Sautter, MD on April 23, 2012 at 11:21 pm

    That’s one reason I don’t do hospital work anymore. It’s all a trap so Medicare can get out of paying the bills.

  3. Tracie Updike MD on April 24, 2012 at 8:17 pm

    Observation is pretty tricky because sometimes you admit and other times you observe! I am no longer able to do hospital work it is just too hard to be up to date on every thing.

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