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Learn who RAC is and how it may affect you and your organization. Includes answers to most often asked questions.
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Welcome to a “Medical Billing Errors & Omissions: Exposures and Solu;ons”. My name is Sco? Fikes, Vice President of Physician Services for InLight Risk Management, a specialty insurance firm exclusively serving the healthcare industry. During this Webinar, we will review Who RAC is, its objec;ves and solu;ons designed to protect your healthcare organiza;on from the unexpected financial loss of a government or commercial payor audit.
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In the Tax Relief and Health Care Act of 2006, Congress required a permanent and na;onal RAC program to be in place by January 1, 2010. The na;onal RAC program is the outgrowth of a successful demonstra;on program that used RACs to iden;fy Medicare overpayments and underpayments to health care providers and supplier. RAC is the acronym for Recovery Audit Contractors.
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The demonstra;on was limited to only a few select states mostly located in the west and east coast. The demonstra;on resulted in over $900 million in overpayments being returned to the Medicare Trust Fund between 2005 and 2008 and nearly $38 million in underpayments returned to health care providers.
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The goal of the recovery audit program is to iden;fy improper payments made on claims of health care services provided to Medicare beneficiaries. Improper payments may be overpayments or underpayments. Overpayments can occur when health care providers submit claims that do not meet Medicare’s coding or medical necessity policies. Underpayments can occur when health care providers submit claims for a simple procedure but the medical record reveals that a more complicated procedure was actually performed.
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RAC audits include Medicare Parts A & B.
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This illustra;on provides the proposed jurisdic;ons. Focusing on jurisdic;on “C”, Oklahoma, Texas,, Florida, New Mexico and Colorado will begin March 2009 with the remaining states to follow in August 2009 or later.
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Medicare delayed the contract award due to a dispute in the bidding process by two unsuccessful bidders for the RAC program. Under the GAO (General Accoun;ng Office), a deadline of 100 days was given to make a determina;on.
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On February 4, 2009 the par;es involved in the protest of the award of the Recovery Audit Contractor (RAC) contracts se?led the protests. The se?lement means that the stop work order has been liied and CMS will now con;nue with the implementa;on of the RAC program.
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In jurisdic;on “C”, Connolly Consul;ng, Inc. received the RAC award. All correspondence, websites and call centers will be in the name of the RAC’s.
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Connelly Consul;ng Associates, Inc. is located in Wilton, Connec;cut.
About Connolly Healthcare Connolly Healthcare, a division of Connolly Consul;ng, is the recovery audit expert that uses advanced data mining techniques to iden;fy and recover a broad range of erroneous medical claim payments, all with a high sensi;vity to important provider rela;onships. In 2007, Connolly reviewed more than $150 billion dollars in paid medical claims working with some of the largest health plans in the United States. Recovery audi;ng is recognized as a best prac;ce and Connolly's exper;se places it in a posi;on to propose vital process improvement recommenda;ons to reduce or eliminate future improper payments. Informa;on on Connolly Healthcare and its services can be obtained at: www.connollyhealthcare.com or by contac;ng Connolly's Press Release Contact: [email protected] SOURCE Connolly Healthcare William Pisani, +1-‐203-‐529-‐2000, of Connolly Healthcare
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1. Is RAC a new issue facing the healthcare industry? No. Medical facili;es have had RAC-‐related issues since the 1980s.
2. What were the biggest challenges confron;ng medical facilitates par;cipa;ng in the 3-‐year RAC demonstra;on program? Managing data such as the number of requests coming in and the paperwork going out of the facility. Another challenge was managing the review process and remi?ances, which included keeping track of monetary flows and differen;a;ng RAC requests from other requests. It is important to be prepared from a ROI standpoint. You must make sure you have adequate staff to handle requests and be able to handle DRG coding issues, which may lead to RAC denials which is a result of uneducated staff. Tracking RAC ac;vi;es is also cri;cal. Medical facili;es started out tracking data on Excel spreadsheets but later had to move the informa;on to a database because of the large amounts of informa;on.
3. What was the biggest obstacle that confronted RAC providers during the demonstra;on program? Last minute requests from par;cipa;ng medical facili;es asking for extensions on delivering RAC medical requests.
4. What was the most difficult area to target for par;cipa;ng medical facili;es? Separa;ng simple versus complex pneumonia cases, sepsis versus neuro-‐ sepsis, CHS, wound debridements, chest pains, syncope,, medical necessity, and denial of inpa;ent rehab encounters were all difficult.
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5. Does CMS offer documenta;on that pinpoints what caused the worst RAC issues for organiza;ons par;cipa;ng in the demonstra;on program? Yes. CMS offers two reports posted on their web site outlining the various issues encountered, including challenges with coding, medical necessity, etc. To see these reports, go to h?p://www.cms.hhs.gov/rac.
6. Was the RAC demonstra;on ini;a;ve random? No. The CMS was not commissioned to use a random approach. RACs are not only looking at DRGs but are also reviewing ICD9 diagnosis codes, charges, and length of stays for inpa;ents. A DRG payment that is significantly higher than the charges is a red flag to RAC and will probably be inves;gated.
7. On average, how may RAC reviews uncover an improper payment finding? Three out of 10 reviews reveal an improper payment. HealthPort :: RAC Preparedness
8. How important is day-‐to-‐day coding when it comes to the RAC demonstra;on? Very important. RAC’s methodology is based on ICD9 and CPT4 coded data because payment is based on coding. RAC will easily recognize a sepsis that is a two-‐day stay and a secondary UTI diagnosis.
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9. Did facili;es par;cipa;ng in the RAC demonstra;on follow CMS’s instruc;ons on extrapola;on methodology for internal findings? No. None of the par;cipa;ng facili;es did extrapola;on. For extrapola;on a provider must have a high level of error that can be demonstrated by a sta;s;cian and other similar professionals. For more details on extrapola;on, go to www.cms.hhs.gov/manuals.
10. Will extrapola;on eliminate the RAC process for organiza;ons? No, because it is targeted to limited areas. HealthPort :: RAC Preparedness :: RAC FAQs h?p://www.healthport.com/RAC_FAQs.aspx
11. Did RAC focus on one type of medical facility over another (i.e. profit or not-‐for-‐profit, teaching or non-‐teaching hospital, urban or suburban facility, acute care or long-‐term cri;cal access? No. They included all types of medical facili;es.
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12. Were states that had less CMS beneficiaries reviewed differently? A final decision has not been made on the limita;on cap. During the RAC demonstra;on, PRG Connolly based medical record limits on the number of monthly chart requests; however, HDI thought it was fairer to base it on Medicare revenue per provider.
13. Whom should a medical facility appoint as gatekeeper for the RAC process? While it is each facility’s decision, based on its par;cular needs, an onslaught of coding and reimbursement issues would necessitate that the Health Informa;on Management (HIM) department should be gatekeeper. HIM also holds the records. However, if the biggest area of risk is medical necessity, than Case Management or Pa;ent Financial Services may want to handle this responsibility. A facility may also develop a task force that includes Corporate Compliance, Revenue, and the Central Business Office, with HIM heading up the task force.
14. Will RAC use cer;fied coders and medical directors in the na;onal program? Yes. RAC’s statement of work requires hiring only cer;fied coders. During the early por;on of the RAC demonstra;on, some non-‐cer;fied coders were ini;ally used. However going forward, RAC has s;pulated that only cer;fied coders should be used. Likewise, in the na;onal program, the four RACs will be required to use medical directors, as well.
15. When will CMS start distribu;ng the RAC le?ers? It is an;cipated that the RAC le?ers will begin going out in April or May 2009. HealthPort :: RAC Preparedness :: RAC FAQs h?p://www.healthport.com/RAC_FAQs.aspx
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Selected under a full and open compe;;on. The RACs will be paid on a con;ngency fee basis on both the overpayments and underpayments they find. The selec;on was based on a best value determina;on for the Federal government that included a sound technical approach for the level and quality of claim analysis and detail to excep;onal customer service, conflict of interest reviews and lowest con;ngency fee.
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Medicare RAC Appeals / Denials / Overpayment Determina7on The following informa;on MUST be included with your request for all appeal levels: Beneficiary name Medicare Health Insurance Claim (HIC) Number Specific service(s) and/or item(s) for which the redetermina;on / reconsidera;on is being requested Specific date(s) of the service; and Name and signature of the provider or the representa;ve of the provider First Level – Redetermina7on (Medicare Administra7ve Contractor) Claim denials or overpayments must be ini;ally reviewed (appealed) to the appropriate Medicare Administra;ve Contractor (MAC) by reques;ng a redetermina;on of the claim within 120 days of the RACs ini;al decision. Medicare Administra;ve Contractors are required to respond to a provider’s request for redetermina;on within 60 days of receipt. Second Level – Reconsidera7on (Qualified Independent Contractor) If a provider is dissa;sfied with the outcome of the Level 1 appeal or redetermina;on process, a request for “reconsidera;on” may be filed with the appropriate Qualified Independent Contractor (QIC) within 180 days of the redetermina;on. Requests for reconsidera;on are required to be processed within 60 days by the QIC. Third Level – Administra7ve Law Judge Hearing If a provider is not sa;sfied with Level 2 and the result of reconsidera;on, a hearing before an Administra;ve Law Judge (ALJ) can be requested. The amount in controversy must be a minimum of $120 and requests for a hearing from an ALJ must be received within 60 days of the provider’s no;ce of the reconsidera;on outcome. Fourth Level – Medicare Appeals Council (MAC) If the Level 3 appeal and decision by the ALJ is considered unfavorable by the provider, a fourth level appeal request may be filed with the Departmental Appeals Board (DAB) / Medicare Appeals Council (MAC). Requests for a MAC review must be filed within 60 days of receipt of the ALJ’s decision. The MAC must subsequently issue a determina;on within 90 days of the review. FiIh Level – U.S. District Court Review If the Level 4 decision of the MAC is deemed unfavorable to the provider, the final step in the appeals process is to file suit in U.S. District Court. Requests must be filed within 60 days of the MACs decision and the amount in controversy must be at least $1,180.
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