Billing E&O / Physician Regulatory Insurance / RAC Audit Insurance
The chances of undergoing a Medicare audit have increased over the past few years. Recently, the government has begun relying on contract workers to conduct its Recovery Audit Contractor (RAC) program, raising the number of investigations it can conduct each year.
RAC identifies improper payments made to healthcare organizations through Medicare and recovers those payments for the federal government. This includes fraud, but also much more, such as payments made in error or using improper codes. Oftentimes, the healthcare organizations themselves have no idea they have received the money mistakenly.
Examples of improper payments include:
- Services billed under the wrong code
- Duplicate services
- Services not covered under Medicare
The aim of the RAC program is to reduce abuse and fraud within the system. But organizations that are not committing these violations can also be impacted by RAC. To protect yourself against an audit that brings surprising news, you need billing errors and omissions insurance.
What Is RAC Audit Insurance?
The government anticipates it will spend billions less on Medicare in the next decade due to cost savings from audits. Clearly, it sees these audits as a necessary and serious part of its mandate to taxpayers. Your healthcare organization needs to be ready to account for stepped-up scrutiny of your practices.
RAC audit insurance can protect your company if an audit uncovers any billing errors or omissions. Whether those errors are intentional or unintentional, your healthcare provider must take responsibility and could be charged large fines. Insurance will ensure you can pay them.
What Should I Look for in RAC Audit Insurance Coverage?
Medical billing E&O insurance should cover:
- The costs a healthcare provider needs to fund its defense
- Legal and reproduction costs, consulting and shadow audit work
- Audit fines and penalties
Statistics Related to RAC
Just how significant are the billing irregularities and other violations uncovered by RAC? They can add up to billions of dollars each year for the federal government. Without insurance, a healthcare company's future could be compromised by the penalties or fines imposed for an unknowing violation. Consider these false claims statistics:
- In 2016, auditors increased the improper payments recovered by 7.5%.
- Healthcare providers have filed more than 800,000 claims challenging denials of Medicare claims stemming from RAC.
- An estimated 3.9% of Medicare claims filed do not comply with government regulations.
- Huge settlements have been reached in RAC cases, including $360M by a pharmaceutical company using a nonprofit to pay Medicare co-pays and a hospital chain paying $260M for false claims and kickbacks.
Get More Information on Medicare RAC Audit Insurance and Physician Regulatory Insurance
To protect your practice, you need medical billing errors and omissions insurance. If auditors uncover medical billing irregularities related to Medicare, you want to avoid high regulatory fines that could be imposed if you lack the proper coverage. Contact Arthur J. Gallagher & Co. today to learn more about medical malpractice insurance options or to request a quote.
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