Transcript THE RACS ARE COMING, THE RACS ARE COMING!!!!!

THE RACS ARE COMING,
THE RACS ARE
COMING!!!!!
Who they are, what they want, and
how they get it
• RAC= RECOVERY AUDIT CONTRACTOR
• Section 306 of the Medicare Modernization Act directed CMS to
investigate Medicare claims payments using RACs under a three
year demonstration project whereby RACs would be paid on a
contingency basis. Two types of contractors were used:
– Claims RACs
– MSP RACs
• CMS hired contractors and conducted a demonstration project
focusing on services provided from October 1, 2001 - September 31,
2005.
CMS PAYMENTS TO RACs
– RAC’s paid on a contingency basis for all
accurately identified overpayment$
– Paid on a percentage basis for all
underpayments identified and recovered
CMS: “RAC…a very cost effective program.”
“…achieved a respectable return on investment of
373% in 2006”
(2006 RAC Status Report)
RAC contractor
Jurisdiction
Connolly Consulting
New York (3/05)
Mass (7/07)
HealthData Insights (HDI)
Florida (3/05)
South Carolina (7/07)
PRG-Schultz (PRG)
California (3/05)
Arizona (7/07)
Overpayments by Error Type
40%
35%
30%
25%
20%
15%
10%
5%
0%
Incorrect
Coding
Medically
Unnecessary
Insufficient
Documentation
Other
Percentage of
Overpayments Collected
COMING OUR WAY…
Legislation
RAC’s will become a permanent fixture on
our payment auditor/reviewer circuit…
• Section 302 of the Tax Relief and Health Care
Act of 2006 makes the RAC Program
permanent and requires the DHHS Secretary
to expand the program to all 50 states by no
later than 2010.
Permanent program-lessons learned
DEMO
PERMANENT RACs
Look back period
4 years
3 years
Maximum look back
None
10/1/07
Standardized request ltrs
No
Yes
RAC medical director
Not required
Mandatory
Credentialed coders
Not required
Mandatory
RAC must pay back its
contingency fee if claim
overturned
At 1st level of
appeal only
At ANY/ ALL levels of
appeal
External validation
process
None
Mandatory
Web based application for
providers
None
Mandatory by 1/1/10
What to Expect…
RAC Process…
The process in a nutshell1. Initial Communication from RAC
- Letter to designee introducing you to your RAC
- Request to designate a RAC Liaison
- Roles and Responsibilities of RAC Liaison
2. Receiving RAC Requests
- Typically sent to RAC Liaison/HIM Director
- Specific Records Listed
3. Responding to RAC Requests
Timeliness 45 DAYS AND COUNTING…
Providers must respond within 45 days of date of request
letter
You may request an extension any time prior to the 45th day
by contacting the RAC
THE CLAIM IS CONSIDERED AN OVERPAYMENT IF RECORDS
ARE REQUESTED AND NOT RECEIVED!!!
–
Questions when preparing response
Previously evaluated claims?
Do not assume RAC database is accurate
If you conclude a claim has already
been reviewed, notify RAC
4. Notification of Outcome
Who receives the denial
Reasons for denial, including regulatory citations
Rights of appeal
Contact information
Payment refund procedures
Let’s have a round of appeals, please…
• Appeal Processes
– Timeline for appealing denials
– Phone vs. paper appeal
– Resubmission of records
FIVE LEVELS OF APPEAL
Note: Interest accrues throughout the appeals process
• 1st level - 120 days to file
Redetermination with FI
or carrier (60 days)
• 3rd level – 60 days to file
ALJ (Administrative Law
Judge) - 90 days
• 2nd level – 180 days to file
Reconsideration by QIC
(qualified independent
contractor) (60 days)
• 4th level – 60 days to file
Medicare Appeals Council
90 days
• Final Appeal Level – 60
days
U.S.District Court
How are claims selected?
– Must “target” claims through data analysis
• Cannot randomly select claims
• Cannot just focus on high payment claims
• Two Types Reviews
– Automated – No medical records involved in
the review, certainty that overpayment exists
based on claims data review
– Complex – Medical records are involved in
the review, high probability (but not certainty)
that the service is not covered
Providers under Scrutiny
CURRENT TARGETS INCLUDE:
• INPATIENT HOSPITAL CLAIMS
• OUTPATIENT HOSPITAL CLAIMS
• SKILLED NURSING FACILITY CLAIMS
• PHYSICIAN SERVICES
• LAB AND AMBULANCE SERVICES
• DME
So, what can we do?
This is probably not our best option…
Some Familiar Problem Areas Identified
Inpatient (complex reviews)
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Skin graft &/or debridement for skin ulcers and cellulitis
Respiratory system dx w/ ventilator support
DRG with single CC
Coagulation Disorders
Major small and large bowel procedures
Unrelated PDX and Procedure
1-2 day stays
Chest pain as inpatient PDX
Septicemia, bacteremia, urosepsis…sound familiar?
Outpatient
• Neulasta (J2505) (complex review)
• Speech/hearing therapy (92507) (automated)
• Blood transfusion services (36430) (automated)
Other Identified Issues
• Outpatient-approved surgical procedures performed on an inpatient
basis
• Short stay acute patients: should they have been observation
patients?
• 3-day stays shipped to SNF bed –medically necessary admission or
“social admit” to qualify for a skilled bed?
• Discharge Disposition errors on Transfer MS-DRG’s
• PEPPER data outliers
• PEPPERs: Program for Evaluating Payment Pattern Reports
produced by QIO; identify claims patterns for your facility relative to
other hospitals in the state for the “top 20” DRGs that are prone to
billing errors.
Stay current with coding guidelines!
• CMS considers AHA’s Coding Clinic the official
source for coding guidelines
• Many coding errors are due to application of
outdated coding directives
– “This information has been superceded by…”
Coding Clinic notes
Failure to follow basic coding rules
and guidelines
WHAT PROVIDERS ARE DOING
1. Create a team to prepare an effective
RAC response
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HIM, Finance-Patient Accounts, Quality
Assurance, Case Management, Physician
Liaison, and Compliance
Identify facility RAC Liaison – primary hospital
contact and back-up.
Assign tasks to designated depts/staff
Think about what resources you’ll need and their
budget impact
Internal Data Mining
Run Reports, pull charts, perform internal
audits, rebill if necessary. Look at your:
• High Risk MS-DRGs
• High Volume MS-DRGs
• High Volume OP services
• Known/suspected care management/UR
problems
Once RAC requests start coming in…
– Schedule regular team meetings to review new
demands/requests and the status of prior demands.
– Prioritize review of claims by time remaining to
respond; $$ impact; and volume of claims with
common issues.
– If volume of requests is overwhelming, remember you
can formally request extension from RAC before the
45-day response time expires.
Establish a RAC Response Process
– Log each Demand Letter / Request for Medical
Record into Tracking System
– Verify that the claim is open for RAC to review.
•
Classify each demand by type of issue and $$
Impact
•
(e.g., Duplicate Payment, Service Not Covered,
Not Medically Necessary, DRG recode, HCPCS
Error, Units, etc.)
Monitor your appeals
Team should review appeal documentation to
ensure it is complete, accurate and convincing
– What appeals strategies are working, which
ones aren’t?
– Establish a tracking database
– Develop standard templates for specific
denial types
– Identify the processes and practices resulting
in denials
Response Time &
Medical Record Documentation
Assure timelines for medical records
requests are met
– Create central repository for all
communication between your facility and the
RAC
– Consider using a vendor to help organize
copying, scanning, and tracking records sent
in response to RAC requests.
Future Moves…
• Take immediate action when RAC letters
are received
• Educate all impacted departments and
individuals based on RAC findings
• Use RAC targets to improve coding and
documentation