The 5 Biggest Healthcare Finance Trouble Spots

Rene Letourneau, for HealthLeaders Media , December 2, 2013

2. RACs

Mary Ann Freas

Mary Ann Freas, senior vice president and CFO at Southwest General Health Center in Middleburg Heights, OH
Dahlen is far from the only CFO to mention the Centers for Medicare & Medicaid Services' recovery audit contractors program to me this year. I've heard from many finance leaders that RACs are becoming more aggressive in their claims denials, which creates major headaches for providers.
Karen Testman, senior vice president, financial operations at MemorialCare Health System, a six-hospital organization based in Long Beach, CA, says that while she agrees with the concept of reducing improper Medicare payments—CMS's stated goal for the RACs—the administrative work it creates for providers is a "nightmare."

"As a taxpayer, I can certainly understand that you don't want someone abusing the system so that the government is paying for a fraudulent situation or claims they shouldn't be paying, but [RAC auditors] are getting into arguing about medical necessity, and we get caught in the middle," she says.

Mary Ann Freas, senior vice president and CFO at Southwest General Health Center in Middleburg Heights, OH, says the after-the-fact RAC review gives the auditors an unfair perspective.

"It is frustrating to have significant dollars taken back based on an auditor's retrospective review of the provider's delivery of care based on their professional judgment at the time. … It is particularly frustrating because the dollars have already been expended on taking care of those patients. … We don't expect this process to go away. It's a proven revenue source for CMS," she says.

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