By Nina Youngstrom - April 6, 2012

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Some hospitals have quit the recovery audit contractor (RAC) rebilling demonstration program, CMS and hospitals say, apparently because they are frustrated they had to relinquish appeal rights and/or didn’t understand the implications of this and other aspects of the demonstration. The Part A-to-Part-B rebilling demonstration allows participating hospitals to resubmit claims for allowable Part B payment after an auditor has determined that the Medicare beneficiary met the requirements for Part B services but not for an inpatient stay. There are two catches: CMS pays only 90% of the Part B reimbursement for rebilled claims, and hospitals can’t appeal if they’re deemed ineligible under Part B. Rebilling is allowed for medical-necessity denials by RACs, Medicare administrative contractors and the comprehensive error rate testing (CERT) contractor. The demo was limited to 10% of the nation’s hospitals — 360 participants — but “CMS has opened up a waiting list for providers to join in the event hospitals withdraw and additional spaces are available,” says Connie Leonard, director of the Division of Recovery Audit Operations. Leonard tells me that “a small number of facilities did withdraw” from the demonstration, typically because of the loss of appeal rights. The reason the loss of appeal rights is a condition of participating in the demonstration is because “CMS wants to ensure the provider is not paid more than once for the same claim,” Leonard says. “The appeals process can take years, and CMS wants to ensure the provider does not rebill the claim and then get the entire claim paid on appeal.”

Did your hospital sign up for the rebilling demonstration?

What is your experience?

If you quit, what was your reason?