Make the Most of the RACs Summer Recess: Three Areas to Assess, Improve and Level-Up

Posted on June 19, 2014 I Written By

The following is a guest blog post by Dawn Crump, VP of Audit Management Solutions at HealthPort.
Dawn Crump - HealthPort
2014 brings the first significant break in RAC activity for healthcare providers. Hospitals have been taking advantage of the RAC break to assess current programs, review historical data and centralize their audit management processes.

Steps taken now to improve RAC processing will drive significant returns when the RACs reconvene. This article highlights recent RAC announcements and three process improvement steps to take now…while you have the time.

What’s New with RACs?

There are no new record requests sent by RACs to hospitals (pre-payment requests stopped on February 28) and no additional documentation requests (ADRs) for now (post-payment requests stopped on February 21). While programs were initially expected to revamp this month, there has been no announcement from CMS (I don’t anticipate one until later this summer).

Secondly, CMS announced that administrative law judge (ALJ) delays may extend upwards of twenty-six months, leaving providers holding the bag for cases already in appeal. And finally, the passage of H.R. 4302 (the infamous SGR patch) in April 2014 delayed implementation of ICD-10 and extended the timeframe prohibiting review of two-midnight rule by RACs.

Three Areas to Focus

Perhaps 2014 is the year for delays. If so, providers are the benefactor. Here are three important areas to assess during the delay.

Top 10 Lists

Healthcare is riddled with lists. Medicare’s recent list of highest-priced surgeries and DRGs is a good place to identify future RAC targets. . Take a good look at this report and any others relevant to your organization. They point the way to future RAC reviews.

Short stay admissions

Medical necessity rules surrounding short stays are changing due to the Two Midnight Rule. Include short stays in your internal documentation audits and be aware that other third party payers are following the RACs’ lead.

National reports

Analyze most recent RACTrac and PEPPER reports and see how you compare. These reports are great places to find clinical documentation and coding improvement targets in ICD-9 while you wait for the RAC program to restart.

RAC Data: Take a Closer Look

Your historical RAC data is another goldmine of improvement opportunities and steps to mitigate future risk. Take a hard look at your data and ask yourself these questions:

  • How many cases and dollars are awaiting appeal? Where are these cases in the appeal process?
  • Are any cases eligible for rebilling? If so, should they be rebilled?
  • What are our most common denials and can we improve documentation, coding and billing for these cases?
  • Is a deeper level of data analysis needed? Can our audit tracking software drill down further for better business intelligence?

Centralize Your Audit Management Efforts

Finally, there’s no way around it. Audit management is expensive.

When employees repeat the same audit processing steps across multiple locations and departments, your costs skyrocket. Now is a great time to centralize your audit management process to:

  • Reduce administrative costs associated with RAC audit processing.
  • Eliminate duplicate audits and redundancies.
  • Establish consistent policies, procedures and workflows.
  • Bolster internal audit knowledge and expertise.

Most hospitals have already centralized their business offices (CBOs). Centralizing the audit management function, including RACs, is a natural next step. Take a close look at audit processing across your entire organization looking for these costly inefficiencies.

  • Each HIM department may be processing and tracking RAC requests differently.
  • Each case management department may be reviewing RAC denials differently.
  • Staff spending up to 25% of their time on audits, but no one making RAC a priority.
  • Multiple locations received RAC (auditor) requests for records and appeal correspondence.

By creating a centralized team, you establish lean processes and reduce overall costs associated with audit management. RAC is the best place to start since there are already established guidelines and rules. Once established, expand your centralized department to other audits (e.g. OIG, MACS pre and post payment, Medicaid, ZPICS, etc.)

The Summer Ahead

Beyond the steps mentioned above, I encourage you to remain vigilant with regard to other forms of audits, including commercial plans, MACs (Medicare administrative contractors) and Medicaid audits . We all have some breathing room with regard to RAC, but preparation is key.

About Dawn Crump

Dawn Crump, MA, SSBB, CHC, has been in the healthcare compliance industry for more than 18 years and joined HealthPort in 2013 as Vice President of Audit Management Solutions. Prior to joining HealthPort, Ms. Crump was the Network Director of Compliance for SSM. She has healthcare experience in education, organization development, quality improvement and corporate compliance.

Trained as a six sigma black belt, Ms. Crump used this holistic, fact-based approach to establish audit tracking (RAC) programs. Her expertise includes coding and billing compliance as well as HIPAA compliance and government audit programs for acute care facilities. She is a former board director of the Greater St. Louis Healthcare Finance Management Association chapter and currently serves as the networking chair. Ms. Crump is also a member of the Health Care Compliance Association (HCCA).