Be Prepared on West TN Medical News 3.0

Be Prepared

By: SUZANNE BOYD

2010, a new year, a new decade and a new look at Recovery Audit Contracts (RAC). They are not just for hospitals anymore. All Medicare providers are subject to one, and it is important to prepare for an audit. As the age-old advice goes, sometimes the best defense is a good offense.

Since the program began in 2005, RACs have identified nearly $1.03 billion in what was determined to be improper Medicare payments, approximately 96 percent of which were overpayments recovered from providers and suppliers, with physician overpayments comprising only about five percent. The remaining four percent was in the form of underpayments returned to suppliers and providers.

The Department of Health and Human Services and Office of Inspector General provide a model compliance program that will help physicians prepare for the RAC. They list seven elements as a part of that model. These include designating a compliance officer and compliance committee; developing compliance policies and procedures; establishing open lines of communication; appropriate training and education; internal monitoring and auditing claims; response and corrective action to detected deficiencies; and enforcing disciplinary actions when needed. By performing an in-house base line review, you can evaluate your practice’s compliance with the rules and regulations. Performing a coding accuracy and medical necessity review can help identify deficiencies and give providers the opportunity to correct them before an audit.

To ensure that your practice has adopted and implemented appropriate compliance plans, it is important to identify potential areas of focus for the RAC auditors. The RAC Demonstration Evaluation Report and other Centers for Medicare and Medicaid Services (CMS) guidance information, such as the annual OIG Work Plan document, can point out areas of potential RAC scrutiny. CMS has identified areas that will be subject to increased Medicare scrutiny.

Bill Appling, president of Watkins Uiberall Health Care Consultants in Memphis, recently spoke on RACs at an American Hospital Association meeting. In his presentation, he noted that demonstration project results indicated that between 70-75 percent of overpayments were from coding errors and lack of documentation to support medical necessity. Appling’s presentation pointed out that the majority of overpayment errors came from medical necessity issues (40 percent) and incorrect coding (35 percent), providing two excellent areas for physician practices to work on before an audit.

RACs use their own proprietary software and systems, as well as their knowledge of Medicare rules and regulations to determine what areas to review.

Connolly Healthcare, which uses data mining techniques, was awarded the contract to provide RAC services for Region C, which includes the state of Tennessee. Its Web site contains information on the program, as well as online audit targets.

Conducting retrospective and prospective internal audits in issues the CMS is targeting is another way to prepare for an audit. By self-auditing, practices can identify areas of weakness in operations such as billing and coding and revise policies and guidelines as needed to comply with Medicare criteria. Consultants can help with this process.

The Office of Inspector General (OIG) publishes a “work plan” each year that identifies areas that it will be investigating for fraud and abuse. The entire report can be obtained from the Department of Health and Human Services Web site. The plan identifies target areas and top coding issues that RACs will be examining. The CMS also identifies areas that have the highest amount of overpaid claims, and this can provide an excellent starting point for training.

The 2010 OIG Work Plan indicates that they will review CMS’s oversight of the RACs during the three-year demonstration to determine the extent to which the RACs identified and reported potential fraud and abuse to CMS. The Office of Inspector General intends to examine the number of cases referred to CMS; CMS’s processing of those referrals; CMS’s guidance and training to demonstration RACs to identify and report potential fraud; and CMS’s guidance and training to national RACs on appropriately reporting potential fraud.

To prepare for your office audit …

Examine the RAC demonstration and CMS documentation on the RAC program to identify possible target areas.
Check the CMS and RAC Web sites regularly because they are updated frequently. Other good sources of possible audit targets are services found by Comprehensive Error Rate Testing (CERT) contractors to have high error rates, as well as services with very high utilization rates or costs.
Educate your office staff about the RAC process and associated timeframe for responding. Once a request for records is made, you only have 45 days to respond.
If you have not already done so, create and put into operation an internal response plan. This should include key dates for compliance with requests for records, as well as the appeal process.
Identify one person as the contact person between your office and RAC and create a separate P.O. Box for RAC correspondence.
Review all documentation submitted to the RAC to insure that the information is accurate and complete. Make sure you retain copies and get receipts for everything submitted. Log and track everything from the initial requests.

If a physician is unhappy or disputes the findings of a RAC audit, the decision may be appealed using the five-level Medicare Part A and Part B appeals process. The first opportunity is an optional informal 15-day rebuttal. The RAC program allows for five levels of appeals:

Level One — redetermination: Submit a redetermination request to the fiscal intermediary (FI) that processed the claim within 120 days of being notified of the initial determination.
Level Two — reconsideration: Within 180 days of notification of an adverse redetermination decision, the physician may file a request for reconsideration of the FI’s opinion with a qualified independent contractor.
Level Three — Administrative Law Judge: Within 60 days of the independent contractor’s reconsideration decision, the physician may file a request for an Administrative Law Judge hearing.
Level Four — Medicare Appeals Council Review: Within 60 days of the administrative law judge’s decision, the physician may file a request for a Medicare Appeals Council Review. The review is within the Department Appeals Board of the U.S. Department of Health and Human Services.
Level Five — Federal District Court: Within 60 days of the Medicare Appeals Council decision, the physician may file a request for review in federal district court.

Knowing how to navigate the appeals process and the possible arguments and defenses to RAC determinations is important. Appling’s presentation noted that during the demonstration program, providers appealed 24.5 percent, and 34 percent of all appeals were overturned in favor of the providers. For more information about the Medicare appeals process, the Medicare Fee-For-Service Appeals has a Web page on the CMS Web site.

By understanding the issues and educating staff, you can start to build a foundation for a successful plan on how to deal with RAC audits and appeal process. When it comes to RACs, the motto to “be prepared” is not just for the Boy Scouts anymore.

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