Public Policy

Hospitalist's Study Cited in Federal Recovery Audit Legislation Passed by Senate


Society of Hospital Medicine members have a real impact.

Dr. Sheehy

Dr. Sheehy

A paper published in the Journal of Hospital Medicine in April by Ann Sheehy, MD, MS, and colleagues was recently cited in Sen. Ben Cardin’s (D-Md.) amendment to the Audit and Appeal Fairness, Integrity, and Reforms in Medicare Act of 2015.1,2 The act aims to improve the accuracy and transparency of recovery audits (RA), which were the subject of testimony given by Dr. Sheehy—a hospitalist at the University of Wisconsin-Madison—by invitation before Congress twice in 2014.

Formally called recovery audit contractors, or RACS, RAs evaluate whether hospitals were overpaid for hospitalizations improperly deemed inpatient rather than outpatient via observation status. In the study cited before the Senate Finance Committee, Dr. Sheehy’s group found a three-fold increase in RA overpayment determinations from 2010 to 2013; concurrently, the number of decisions overturned in favor of cited hospitals, either in discussion or appeal, doubled, going from 36% in 2010 to nearly 70% in 2013.

RAs share a percentage of the money they recover for the Centers for Medicare and Medicaid Services, even when decisions are appealed and won by hospitals. As Dr. Sheehy testified last year: “Unfortunately, these contingency incentives favor aggressive auditing, without transparency, accountability, or repercussions for cases that should never have been audited.”

The bill passed the Senate on June 5, 2015.


  1. Sheehy AM, Locke C, Engel JZ, et al. Recovery audit contractor audits and appeals at three academic medical centers. J Hosp Med. 2015;10(4):212-219. doi: 10.1002/jhm.2332.
  2. United States Senate Committee on Finance. Master Amendments of the Audit and Appeal Fairness, Integrity, and Reforms in Medicare Act of 2015. Accessed July 7, 2015.

Next Article:

   Comments ()