Transcript Medicare Recovery Audit Contractors (RACs)

Medicare Recovery
Audit Contractors
(RACs)
Preparing for RAC Audits
Presentation Outline
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I. Background
A. What are the RACs?
B. When are the RACs coming to Georgia?
C.
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RAC Focus Areas
II. Case Studies
III. How to Prepare for RACs
IV. GHA Initiatives to Assist Member
Hospitals with RACs
What are RACs?
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Medicare Modernization Act of 2003 created a
3-year demonstration project in NY, FL, CA
Recover Medicare overpayments and identify
underpayments—payment mistakes
RACs are paid on a contingency fee basis
During FY 2007, RACs identified and corrected
$371 Million dollars of Medicare improper
payements in the demonstration states
Over 96% were overpayments
Why Congress Believes RACs are
Necessary…
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The Improper Medicare FFS Payments Report
for November 2007 estimates that 3.9% of the
Medicare dollars paid did not comply with one
or more Medicare coverage, coding, billing, or
payment rules.
This equates to $10.8 billion in Medicare FFS
overpayments and underpayments annually.
Overpayments by Error Type in
Demonstration Project
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42% Incorrectly coded
32% Medically unnecessary service or setting
9% No/Insufficient Documentation
17% Other
Source: CMS RAC Status Document FY 2007, February 2008
Average Overpayment Amounts FY
2007
Per Claim
Per Provider
Inpatient
Hospital/SNF
Outpatient
Hospital
Physician
$10,618
$549,447
$273
$38,136
$160
$834
DME
$85
$1,511
Total
$11,136
$589,928
Source: CMS RAC Status Document FY 2007, February 2008
Permanent RAC Program
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CMS will announce the 4 permanent regional
RACs by July 31, 2008
RACS can review claims for:
Inpatient hospital
 Outpatient hospital
 Skilled nursing facilities
 Physician, ambulance, and lab services
 Durable medical equipment
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Permanent RAC Program
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RACs cannot look for any improper payments
on claims paid before October 1, 2007
RACs can review claims during the current fiscal
year
Each RAC must use certified coders
RACs must pay back contingency fee if their
decision is reversed on any level appeal
Types of RAC Reviews
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Automated Review
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Proprietary software algorithms used to identify
clear errors that resulted in improper payments
Complex Review
Medical records requested to further review the
claim
RACs must use Medicare coverage, coding or billing
policies in effect at the time when the claim was
adjudicated
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RAC Focus Areas in Demonstration
States
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Excisional Debridement
Back Pain
Outpatient vs. Inpatient Surgeries
Transfer Patients
Inpatient Rehab, especially knee and hip replacements
Joint replacement patients and patients in inpatient
rehabilitation facilities that should have been treated in
a lower intensity setting such as a SNF
Wrong diagnosis or principal procedure codes
Outpatient Hospital Areas of RAC
Focus
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Colonoscopy
Speech Language Pathology Services
Infusion Services
Neulasta (boosts white blood cell counts to
reduce chance of infection in patients
undergoing chemotherapy)
Short Stay Claims
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Validate whether the admissions met Medicare’s
medical necessity criteria
One-day stays by chest pain patients were
targeted by RACs in demonstration states
Many three-day stays were denied because they
were inappropriately extended in order to qualify
for Medicare Part A coverage of post-acute
skilled nursing care
Some Case Examples from the
Demonstration States
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(Note: These slides are optional depending on
how the CEO wants to present this information
to the board members)
Excisional Debridements
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Hospital coder assigned a procedure code of
86.22 (excisional debridement of wound,
infection, or burn)
In the medical record, the physician writes
“debridement was performed”
Excisional Debridements
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Coding Clinic 1991 Q3 states “unless the attending
physician documents in the medical record that an
excisional debridement was performed (definite cutting
away of tissue, not the minor scissors removal of loose
fragments), debridement of the skin that does not meet
the criteria noted above or is described in the medical
record as debridement and no other information is
available should be coded as 82.26 (ligation of dermal
appendage).”
Excisional Debridements
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The RAC determines that the claim was
incorrectly coded and issues repayment request
letter for the difference between the payment
amount for the incorrectly coded procedure and
the payment amount for the correctly coded
procedure.
Wrong Principal Diagnosis
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Principal diagnosis on claim did not match the
principal diagnosis in the medical record
Example: Respiratory failure (code 518.81) was
listed as the principal diagnosis but the medical
record indicates that sepis (code 038-038.9) was
the principal diagnosis
Wrong Principal Diagnosis
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The RAC issued overpayment request letter for
the difference between the amount for the
incorrectly coded services and the amount for
the correctly coded services
Most common DRGs with this problem:
DRG 475 Respiratory System Diagnoses
 DRG 468 Extensive OR Procedure Unrelated to
Principal Diagnosis
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Wrong Diagnosis Code
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Hospital reported a principal diagnosis of 03.89
(septicemia)
Medical record shows diagnosis of urosepsis,
not septicemia or sepsis; Blood cultures were
negative
Did not meet the coding guidelines for
“septicemia”. Urinary tract infection causes the
claim to group to a lower payment DRG
Wrong Diagnosis Code
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RAC issued a repayment request letter for the
difference between the payment amount for the
incorrectly coded procedure and the correctly
coded procedure
Colonoscopy
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The hospital billed for multiple colonoscopies
for the same beneficiary the same day
Beneficiaries never need more than one
colonoscopy per day. The excessive services are
not medically necessary.
The RAC issued overpayment request letters for
the difference between the billed number of
services and 1.
Outpatient Hospital Speech Therapy
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The outpatient hospital billed for each 15
minutes of speech therapy
The code definition specifies that the code is per
session, not per 15 minutes
The units billed exceeded the approved number
of sessions per day. The excessive services
billed are medically unnecessary
RAC issued overpayment request letters
Coping with the RACs
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Comply with RAC medical record requests. If
you don’t submit them on time, the RAC
automatically classifies the claim as an
overpayment and makes a recovery.
Develop an internal tracking system for medical
records requested for review by the RAC
Review Your PEPPER Reports
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Program for Evaluating Payment Patterns
Report (PEPPER)
Prepared by gmcf
Identifies claims patterns that are outliers
relative to other hospitals in the state
“Top 20” list of DRGs that are prone to certain
billing areas
Other problem areas which vary by state
Hospital Next Steps
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Look at potential areas of risk
Establish single point of contact for RAC
Establish RAC committee—include key hospital
stakeholders (finance, UR, Case Management,
compliance, legal, medical records, etc.)
Review records before sending to RAC
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Support your claim
Understand the parameters
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For Providers
For the RAC
Hospital Next Steps
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Plan to participate in the AHA’s RACTrac to
report your hospitals experience with the RAC
www.AHARACTrac.org
Data will provide both the AHA and GHA the
data they need to advocate on behalf of the
hospitals and to identify trends in reasons for
denials
Implement a system for charging RACs for
copying costs of medical records (.12/page)
GHA Next Steps
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Establish RAC Task Force
Establish relationship with RAC—once RAC is
announced for our region
Facilitate information exchange between CMS,
RAC, and hospitals
Monitor RAC activities with Georgia providers
GHA RAC Task Force
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A multi-disciplinary cross-section of GHA
members including CEOs, CFOs, legal counsel,
compliance officers, case/utilization managers,
medical records, and others
Task Force will provide guidance and feedback
to GHA as we develop strategies and tools to
assist members in dealing with RACs
Questions or Comments?
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Feel Free to Contact GHA Staff for assistance
Robert E. Bolden—[email protected], (770)
249-4505
Liz Schoen, [email protected], (770) 249-4564
www.gha.org