Recovery auditors

Just when you thought you had your RAC processes in place, more changes appear on the horizon.

To take a proactive approach to the RAC process, you will need to assess your current level of financial risk. You can do this internally or with the help of external resources. There are many good risk evaluation software tools on the market for hospitals and health systems; there are also consultants who specialize in reviewing hospitals' claims for proper coding and documentation to assess overall compliance risk and make suggestions for corrections. Once you identify and quantify your risk, you can begin to take action to mitigate the impact of a RAC audit of past claims and to improve your systems to avoid being out of compliance in the future.

When Nancy Herr, RN, BSN, CCM, manager of utilization review at Liberty (MO) Hospital, started seeing an uptick in RAC audits late in 2010, she knew she needed a way to track activity and share it with others in her facility.

Signs are pointing to the fact that Medicaid RACs might not be the stuff of unicorns or Santa Claus.

You receive a RAC demand letter for repayment. But wait a minute before you pay up—you might want to take a close look to make sure your facility was really in the wrong. Karen Sagen, managed care leader at Bellin Health System in Green Bay, WI, who has worked in revenue cycle management for the past six years, has developed a step-by-step list of things to consider before pulling out your hospital’s checkbook.

In the past year or so, many hospitals have seen a dramatic rise in external audit activity from a multitude of contractors.

RACs are looking at excisional debridement coding, and it’s no wonder. There are plenty of potential traps for coders reporting these inpatient procedures.

According to a July HCPro survey of approximately 500 healthcare providers, 56% have already received medical record requests and 40% have had money recouped by a RAC.

Medically unnecessary services and incorrectly coded items had the highest amounts of RAC overpayments collected in the demonstration project, according to CMS.

Recovery audit contractor (RAC) activity is picking up, but many healthcare providers are still waiting to see whether their preparations have paid off, according to a January survey of more than 400 healthcare providers conducted by MRB. Eighteen percent of survey respondents had received medical record requests (i.e., additional documentation requests) as of the time of the survey. Only 8% of providers received RAC denials.