The American Hospital Association is calling on members to contact their congressional representatives and ask that they support newly introduced legislation to revamp the Recovery Audit Contractors program.

Rep. Sam Graves (R-Mo.) is sponsoring H.R. 6575, the Medicare Audit Improvement Act of 2012, with co-sponsors Billy Long (R-Mo.), Todd Akin (R-Mo.) and Adam Schiff (D-Calif.). The bill would provide guidance for medical necessity audits that include requiring physician validation for medical necessity denial of a claim, establish a limit for medical record requests, improve recovery auditor transparency and restore due process rights, improve auditor performance by implementing financial penalties, and permit denied inpatient claims to be billed as outpatient claims when appropriate, according to a letter AMA sent to Graves.

“While the AHA has zero tolerance for real fraud and abuse, these recovery auditors are paid contingency fee payments, a potential conflict of interest, leading to concerns that they focus on claims and services that have the highest likelihood of error, in order to increase their fees,” the letter states. “Hospitals are experiencing a significant number of inappropriate denials amounting to hundreds of thousands of dollars in unjust recoupment payments for medically necessary care. According to AHA data, hospitals are successfully overturning RAC denials 75 percent of the time.”

Text of H.R. 6575 is available at

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