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When Fraud Isn’t Fraudulent: RAC And The Spanish Inquisition

Dr. Rob Lamberts does an admirable job explaining why physicians are worried about the Recovery Audit Contractor (RAC) approach to identifying Medicare fraud. Complying with Medicare coding and billing rules is so difficult that physicians regularly resort to undercharging for their services, just to avoid the perception of fraudulent practices. Any medical practice that bills more than average is potentially subject to RAC audit, and the auditors themselves are paid a commission for finding “fraud.” In many cases, the “fraud” amounts to insufficient documentation of appropriate and necessary work performed by the physician.

Dr. Rob writes:

The complexity of E/M coding makes it almost 100% likely that any given physician will have billing not consistent with documentation.  Those who chronically undercoded (if they are still in business) are at less risk than those who coded properly.  Every patient encounter requires that physicians go through an incredibly complex set of requirements to be paid, and physicians like myself have improved our coding level through the use of an EMR.  This doesn’t necessarily imply we are over-documenting, it simply allows us to do the incredibly arduous task of complying with the rules necessary to be paid appropriately.

Have I ever willingly committed fraud?  No.

Am I confident that I have complied with the nightmarish paperwork necessary to appropriately bill all of my visits?  No way.

Am I scared?  You bet.  The RAC will find anything wrong with my coding that they can – they are paid more if they do.

Dr. James Hubbard writes:

It would be fine if they were truly looking for fraud and abuse, but they look for some technicality or just a different interpretation. Forget about any recourse. A few years ago, I was asked to pay Medicaid back $5000. I protested they were completely wrong with their interpretation of their findings. The auditors said I had to pay it, but could argue for a refund by sending forms and proof to the “review committee”. I did that and received a reply that the $5000 was too small for the review committee to take up. I stopped taking Medicaid.

Sounds like the Spanish Inquisition, doesn’t it?


For more excellent analysis of the subject, I strongly recommend Dr. Rich Fogoros’ recent book: Fixing American Healthcare.

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2 Responses to “When Fraud Isn’t Fraudulent: RAC And The Spanish Inquisition”

  1. Michael Apolskis says:

    For an overview of the Medicare Recovery Audit Contractor Program see the Medicare Update weblog's post entitled “Medicare Recovery Audit Contractors: Don't Be Left in the Dark” at

  2. Michael Apolskis says:

    For an overview of the Medicare Recovery Audit Contractor Program see the Medicare Update weblog's post entitled “Medicare Recovery Audit Contractors: Don't Be Left in the Dark” at

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