Health care providers who have been audited suffer from billions of dollars being held in escrow until their cases are settled.
This situation is being exacerbated by the growing backlog in appeals. It places tremendous strain on a provider when their payments are being impounded. According to Bryan Cave LLP “the appeals process for claims deemed improper by RACs is far too slow and leaves significant funds tied up for … years. . . . [T]his has a significant impact on the ability of hospitals and providers to serve patients. They have had to cut jobs and delay purchasing new equipment.”
Health care providers appeal because appeals work. In 2014, hospitals reported that 52% of RAC denials had been appealed, and the success rate was 66%. It appears that 43% of all Administrative Law Judge (ALJ) appeals are successful.