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RACs’ Limited Restart and Partial Payment Window Opens

Posted on September 15, 2014 I Written By

The following is a guest blog post by Dawn Crump, VP of Audit Management Solutions at HealthPort.
Dawn Crump - HealthPort
The RACs are back and they’re offering acute care and critical access hospitals a sweet deal—at least for now.

The Recovery Audit Contractor (RAC) program had been on hold due to the reassigning and re-contracting of regions. In addition, there was a lawsuit pending between Centers for Medicare and Medicaid Services (CMS) and CGI over RAC reimbursement rates, models and approaches. The lawsuit was resolved in August. But CGI quickly appealed causing further delay in full resumption of the RAC program.

So while everyone awaits another court decision and green light from CMS, two important RAC announcements were made by CMS.

  • A “limited” restart of the RAC program began in August, 2014, including a restricted number of claim reviews and service targets.
  • Some claims currently pending appeals of inpatient-status claim denials by RACs may be eligible for a partial payment settlement.

Limited Restart Underway

Until the RAC program is 100 percent back in session, some reviews will be conducted. These will be mostly automated reviews, but there will be some records requests and a limited number of complex reviews in certain select areas. During the restart, RACs will not review claims to determine whether the care was delivered in the appropriate setting. CMS said it hopes that the new RAC contracts will be awarded later this year.

From the Aug. 5 edition of the American Hospital Association’s News Now: “CMS will allow current RACs to restart a limited number of claim reviews beginning this month. The agency said most reviews will be done on an automated basis. However, a limited number will be complex reviews on certain claims, including spinal fusions, outpatient therapy services, durable medical equipment, prosthetics, orthotics and supplies, and Medicare-approved cosmetic procedures.

One example of the latter is blepharoplasty, also known as an eyelid lift. The number of claims for this procedure has tripled in recent years, so I expect the RACs will make this procedure a hot target. To be covered under Medicare, vision must be impaired. What’s needed? Physician documentation of the reasons for surgery (e.g., eyelid droop interfering with vision).

Here are three specific steps to take with regard to the limited RAC restart:

  • Stay abreast of all RAC news and announcements and remain diligent in communicating with your regional peers regarding new RAC region assignments, contacts and educational opportunities.
  • Conduct an internal probe to ensure you’re following all of Medicare’s National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs).
  • Educate coders, billers and physicians around documentation, coding and billing for specific targets as mentioned above.

But the limited restart wasn’t the only important news.

Partial Repayment Deal Announced

In their September 9th, 2014 inpatient hospital reviews announcement, CMS announced an administrative agreement for acute care and critical access hospitals.  To reduce the backlog of cases in appeal status and overall administrative costs, these hospitals now have the option to withdraw their pending appeals in “exchange for timely partial payment (68% of the allowable amount)”, according to the CMS administrative agreement.

Of course there are parameters to understand and details to sort out regarding the settlement opportunity. Here is what we know so far:

  • Only acute care and critical access hospital claims are eligible.
  • Claims must already be in the appeals process for inpatient-status claims with an admission date prior to October 1, 2013.
  • Services might have been found reasonable and necessary by the Medicare contractor, but treatment as an inpatient was not.
  • Hospitals may choose to settle some claims and continue to appeal others.
  • Hospitals should send their request for settlement to CMS by October 31, 2014.

Many more details are available on the CMS.gov website.

Settle….Or Not?

Eligible hospitals must determine if requesting a settlement offer makes sense for cases in appeal that meet the specified parameters. For some cases, it will make sense to take the 68 percent settlement and cut your losses. For other denials, waiting out the appeal process may be a better choice.

Each denial will be different and each case unique. Time, money and resources must be balanced against the potential revenue retained or returned potential. Audit management directors, in conjunction with their revenue cycle and finance teams, must analyze RAC data for each eligible case.  It’s a complicated equation. And with a deadline of October 31, 2014, there is no time to lose.

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 is a former board director of the Greater St. Louis Healthcare Finance Management Association chapter and currently serves as the networking chair.

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).

3 Suggestions for Dealing with Healthcare Audits

Posted on November 14, 2013 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

While at AHIMA 2013, one of the big topics people were discussing was all of the audits that the HIM staff are having to deal with on an ongoing basis. Everyone that I talked to said that there is no end in sight when it comes to the various audits. In fact, most were predicting even more audits to come.

I sat down with Dawn Crump, VP of Audit Management Solutions from HealthPort, to find out some suggestions for organizations trying to deal with this wave of audits in healthcare. Check out the video below to hear those suggestions (plus, she throws in a fourth and fifth bonus suggestion):

How is your organization dealing with all of these audits? Have you formalized and streamlined the process in your organization? Do you have an easy way to track all of your audits? Do you know the financial impact of these audits on your organization?