rac audits what you need to know
DESCRIPTION
If you are a Healthcare Provider or Office Manager in a healthcare setting, and bill fee for service, such as Medicare, you will be affected by the mandatory RAC audits. The audits are moving into full swing now.Will you be ready? This presentation will answer your questions and help you to prepare.TRANSCRIPT
Recovery Audit Contractors (RACs)
Medicare, Medicaid and Commercial Insurance Investigations.
What you Need to KnowBrought to you by:
Agenda What is a RAC & the Recovery Audit Contract? Mission of the government Contractors? What does the RAC do? How does the RAC affect providers? How do Providers Prepare? When the RAC arrives The Collection Process Providers Options What the other entities are saying
What is a RAC?Recovery Audit Contractor-
“RAC”
Government awarded March 5, 2009:4 (Four) Private firms were awarded to perform medical records and billing
audits on providers in all 50 states and Puerto Rico.
Why RACs & Who Has The Authority?
CMS was authorized to perform audits on all physicians, hospitals and allied health providers with the purpose of identifying:
Documentation and coding inconsistencies. Overpayments (& Underpayments) made to the providers based on the findings. Clear documentation to support the medical necessity of the services being provided or dispensed.
Medicare (CMS) was authorized by Congress with the following legislation:
• Medicare Modernization Act, Section 306: Required the three year RAC demonstration
&
• Tax Relief and Healthcare Act of 2006, Section 302: Requires a permanent and nationwide RAC program by no later than 2010.
Both Statutes gave CMS the authority to pay the RACs on a contingency fee basis.
The RAC demonstration identified $1.3 billion in overpayments in 3 states in ONE year
(California, New York and Florida Hospitals only)
The RAC Program Mission
• The RACs detect and correct past improper
payments so that CMS and Carriers, FIs, and
MACs can implement actions that will prevent
future improper payments:
• Providers can avoid submitting claims that do
not comply with Medicare rules.
• CMS can lower its error rate.
• Taxpayers and future Medicare beneficiaries
are protected.
What does the RAC do?
RACs review claims and medical records on a post payment basis.
RACs use the same Medicare policies as Carriers, FIs and MACs: NCDs, LCDs and CMS Manuals.
RACs are required to employ a staff consisting of nurses, therapists, certified coders, and a physician CMD.
Collect overpaid claims. RACs will not be able to review claims paid prior to
October 1, 2007.
RACs will be able to review medical records three years from the date the claim was paid.
Will the RACs affect me?
Yes, If the providers bill Fee-for-Service programs, such as Medicare, Medicaid or Commercial Insurance programs, your claims will be subject to review by the RACs.
If so, when? The expansion schedule can be viewed at :
www.cms.hhs.gov/rac
Regions and timelines
D
C
B
A
March 1, 2009 March 1, 2009 March 1, 2009
March 1, 2009 March 1, 2009 March 1, 2009
August 1, 2009 August 1, 2009 August 1, 2009
Provider Outreach Claims Available for Analysis Earliest Correspondence
*RACs are required to perform outreach programs for all providers in their region
From CMS
CMS RAC Review Phase–in Strategyas of 6/24/09
Earliest Possible Dates for reviews in Yellow/Green states:
Automated Review-
Black & White Issues- ( June 2009 )
DRG Validation- complex review
( Aug/Sept 2009)
Complex Review for Coding Errors- ( Aug/Sept 2009)
DME Medical Necessity Reviews-
complex review (Fiscal year 2010)
Medical Necessity Reviews-
complex review (calendar year 2010)
Earliest Possible Dates for reviews in Blue states:
Automated Review-
Black & White Issues- ( Aug 2009 )
DRG Validation- complex review
( Oct/Nov 2009)
Complex Review for Coding Errors- ( Oct/Nov2009)
DME Medical Necessity Reviews-
complex review (Fiscal year 2010)
Medical Necessity Reviews-
complex review (calendar year 2010)
Fiscal Year 09
Medical Record Limits
Physicians Sole Practitioner: 10 medical records per 45 days per NPI. Partnerships: (2-5 individuals): 20 medical records per 45 days
per NPI. Groups (6-15 individuals): 30 medical records per 45 days per
NPI. Large Group Practices (16+ individuals): 50 medical records per
45 days per NPI.Other Part B Billers (DME, Lab Outpatient Hospital.)
1% of the average monthly Medicare claims (max 200) per NPI per 45 days.
Inpatient Hospital, IRF, SNF, Hospice 10% of the average monthly Medicare claims (max 200) per 45 days
per NPI.Other Part A Billers (HH)
1% of the average monthly Medicare episodes of care (max 200) per 45 days per NPI.
How We Prepare Providers
Perform a baseline audit to:
• Identify improper coding and billing that is based on documentation in the patients medical record
• Assist the providers with training programs that can ensure they are meeting documentation compliance
• Available to assist the office in the event that the RAC communicates an audit
How Providers Get Prepared
• Perform an independent assessment to identify areas of non-compliance with Medicare/Medicaid rules.
• Identify any corrective actions required for compliance.
• Implement any required changes to stay in compliance.
Provider Self Disclosures
If a provider does a self-audit and identifies improper payments, the provider should report the improper payments to their claim processing contractor.
If the claim processing contractor agrees that they are improper, the claims will be adjusted and no longer available for RAC review (for that issue).
Importance of Documentation Compliance
The medical record or chart notes must be complete & legible and must match the codes you submit- Evaluation & Management (office visit) Diagnosis Injections Supplies
Medical Necessity must clearly state the need for all services provided or prescribed. The documentation of each patient encounter should include: Reason for the encounter and relevant history, physical examination findings
and prior diagnostic test results; Assessment, Clinical Impression or Diagnosis; Plan for care; and Date and Legible identity of the observer
Beyond the BaseLine Review
• Billing team must track all denied claims
• Identify all the issues• Look for patterns• Deploy any corrective actions
to avoid improper payments
We Can Be Your Solution
When the RAC arrives Must provide a clear response to the letter within 45 days. Retain a certified coder to review the records prior to submission. Send copies of the charts to the RAC- signature required notification
of receipt. Digitized/electronic file of your charts and supporting documentation.
› RACs will accept imaged medical record on CD/DVD (CMS requirements coming soon).
Follow Up!› When necessary, check on the status of your medical record (Did
the RAC receive it?)› Call RAC› Use RAC Claim Status Website- no later than 01/01/2010.› Watch your mail for Detailed Review Results Letter following all
complex reviews.
RAC Contact Information Website - E-mail - Telephone Number
Region A: Diversified Collection
Services www.dcsrac.com [email protected]
Region C: Connolly Consulting
www.connollyhealthcare.com/RAC
1-866-360-2507
Region B: CGI
http://[email protected] 1-877-316-7222
Region D: Health Data Insights
http://racinfo.healthdatainsights.com [email protected] Part A: 866-590-5598 Part B: 866-376-2319
Next Steps from the RAC
Part B Adjustment Process: RAC send files to the Carrier/MAC/DME MAC or associated data center.
Data center does their research & processing & makes their adjustments on overpaid claims .
Data center then creates an accounts receivable for the adjusted claim & sends it back to the RAC
Upon receiving, RAC sends written notification to the provider of the overpayment , known as the “Demand Letter”, and researches any additional files that the data center notated other errors on.
• RAC will offer a discussion period- an opportunity to discuss the improper payment determination with the RAC. (This is outside of the normal appeals process.)
Part A Adjustment Process:
• Basically same procedure except RAC sends written notification to the provider of the identification of an overpayment first .
• RAC sends an electronic file to the FI/MAC or associated data center.• FI/MAC or associated data center:
Does their research & processing & makes their adjustments on overpaid claims .
Send files back to RAC. Upon receiving, RAC researches any additional files when
necessary.
The Collection Process Recoupment of overpayments
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Demand letter comes from the (RAC)– Issue Remittance Advice
• Remark Code N432: “Adjustment Based on Recovery Audit”
– Recoups by offset unless provider has submitted a check or a valid appeal.
– Interest will accrue from the date of the final determination.
– Recoupment/payments are applied first to interest then to principle.
THEY TAKE THE $$$$ DIRECTLY FROM YOUR MEDICARE CHECK
What Are Providers Options?
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If you agree with the RAC
Send check on or before Day 30 - do not appeal.
Recoupment by Medicare (overpayment + interest) on Day 41 and do not appeal.
Extended Payment Plan- Request or apply for extended payment plan
(overpayment + interest) and do not appeal .
Appeal When Necessary
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If you disagree with the RAC The appeal process for RAC denials is the same as for
Carrier/FI/MAC denials Do not confuse the “RAC Discussion Period” with the Appeals
Process. Don’t stop with sending a discussion letter.
Pay by check on or before day 30 (interest is not assessed) AND file an appeal before the 120th day after the Demand Letter.
Allow recoupment (overpayment + interest) on Day 41 and file an appeal by Day 120
Request or apply for extended payment plan (overpayment + interest) and appeal by Day 120
Stop the recoupment by filing an appeal before day 31.
What to Expect Next
Repeat the exact same process every 45 days
until they find no more overpayments
Where do you turn?
Let Precision Billing & Cash Flow Solutions become your team of RAC Service Advisors. Have us …
• Get the Base Line Audit done as soon as possible.
• Determine where your practice will stand with the RAC team.
• Become the “go to” team for your practice when the RAC arrives.
Other Payers Are Interested Too Medicaid (partially funded by the federal government and
managed by each state) They are hiring firms like Healthnet Federal Services
to mimic the identical issues as the federal government.
United Health, Aetna and other commercial payers Because they have implied authority to review all
providers claims
What they are saying...“If the providers are miscoding for Medicare they
are miscoding our claims also.”
REVIEWThe RAC is serious- Providers need to know and
understand the implications.
Determine where the practice will stand.
Understand that you may need to call for help to manage the process.
Medicare is likely NOT the only payer going to take a peek.
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