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RACs have begun auditing at this point, and providers in some states may have received their first denial letters this week. But many providers seem to still be waiting, holding their breath, and worrying whether the mail carrier might deliver their first RAC demand letter(s) that day.
However tempting it may be to simply wait, providers can still use this time effectively. Consider the following tips from several RAC experts: Read More→
At this point, thanks to a three-year demonstration project and a plethora of available information available for providers, the healthcare industry generally knows what providers are up against in terms of RAC audits. Not that they’ll be easy to handle, but there’s a lot of information out there for providers to help them manage the process.
Unfortunately, comparatively few providers seem to know what to expect with Medicaid Integrity Program audits—which have already begun in many areas across the nation—and in many cases, information that could help them is lacking.
Do not get a technical denial.
Do not get a technical denial.
Do not get a technical denial.
This was the advice provided by Stacey Levitt, RN, MSN, CPC, director of patient care management at Lenox Hill Hospital in New York City who spoke during the July 21 HCPro audio conference “Medicare Appeals: Overturn RAC Denials Using the Medicare Appeal Process.”
Hospitals will see that RAC technical denials can have a large impact on their bottom line, said Levitt. And many times they are completely avoidable.
Technical denials can result when a RAC denies a claim for insufficient documentation-for instance, if the RAC never receives requested medical records from a provider.
CMS considers technical denials to be payment errors, because it has paid for care that cannot be substantiated, Levitt said.
“Documentation to support a service is required to meet medical necessity, and technical denials are similar to that,” said Levitt. “If you don’t have the documentation written down and available, it doesn’t support the care that has been done and you’ll get a denial.”
Pay attention to the remark codes on your remittance advice to know whether your denial was a technical one, Levitt advised. N102 indicates requested medical records were not received (or not received on time), whereas N432 is for the adjustment based on a Recovery Audit.
If you do find an N102, you may be able to speak to your RAC during the discussion period about turning in additional documentation in certain circumstances. Some RACs have indicated during outreach sessions that they will accept missing documentation after the initial submission deadline. RACs may choose to accept relevant information that providers originally neglected to file.
While providers should do their very best to avoid technical denials, Levitt knows first hand that any hospital can slip up. At her former hospital, Levitt discovered they submitted incomplete documentation to a RAC after a copy service didn’t realize the hospital charted on both sides of its paper medical records. The service copied the records as if there was only information on one side.
“When I would get 150 pages of a chart, I’d assume everything was there,” said Levitt. But when she looked more closely she discovered the error. “I can’t tell you the amount of work that created, plus the costs added up. And it can delay your appeals.”
But whenever possible, limit the possibility of a technical denial by meticulously tracking all deadlines for record submissions and by being careful and thorough when submitting records to ensure documentation is complete. Few hospitals can afford unnecessary loss.
Editor’s note: Levitt will also be speaking at the upcoming HCPro seminar, “Medicare Compliance Forum: A Strategic Approach to RACs, Observation Status and the Role of Physician Advisors,” which will be held in Atlanta this October.
For many providers, self-auditing has become an important RAC preparation tool. Certainly, internal audit results can show where additional education is necessary to ensure appropriate coding, billing, and documentation practices. And this will result in fewer RAC denials, because if practices are correct, the RACs will find fewer errors to deny.
But many providers also assume that reporting errors (and refunding identified overpayments) discovered while self-auditing will protect those claims from RAC review.
Not so, says CMS.
In a recently released FAQ on the CMS Web site, CMS clarified that only one type of self-audit will ensure RACs may not later review the claims, and it probably isn’t the kind of self-auditing that most providers are doing, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.
The FAQ states:
There are two types of self audits. One is commonly called a voluntary refund and is claim based. If the required claim information is included along with the amount of the improper payment, the claim will be adjusted by the claim processing contractor. The RAC will be aware of the adjustment, but the refund does not preclude future review. The second type of self audit may involve the use of extrapolation. If extrapolation is used the claim processing contractor will review the case file to determine if it is acceptable. The claim processing contractor will accept or deny the extrapolation for the issue identified by the provider. If the claim processing contractor accepts the extrapolation, those claims in the universe will be excluded from RAC review.
In other words, if a provider uses an extrapolation that is accepted by its MAC or FI, the claims are off limits for RACs. Otherwise, individual claims corrected after a self-audit are fair game.
“This will come as a surprise to a lot of providers,” says Mackaman. “Providers assume if they do a self-audit and correct and report errors, that [the claims] are excluded from future RAC audits. But they’re not.”
Those providers who review claims individually may feel a little less incentive to report errors and overpayments they discover since the claims aren’t protected from RACs, but not doing so is a compliance problem. Ignoring a false claim is never a good idea, says Mackaman.
Nor should this news discourage providers from self-auditing in the first place. Providers can use audit results to better understand their risks, to change internal processes regarding areas of concern and to appropriately return reimbursements for claims paid in error, according to Mackaman.
It seems that many providers still struggle to understand the RAC discussion period that CMS has helpfully given them-much less take advantage of it when the permanent program rolls out in their area.
The discussion period is new to the permanent program, though it is somewhat akin to the rebuttal period, which was part of the demonstration program. “The rebuttal period was used in the demonstration because it is part of the Medicare appeals process,” says Camille Cohen, MSW, MBA, CHC, compliance manager at 3M Health Information Systems in Salt Lake City.
But CMS found providers had a slightly different need from the rebuttal process during the demonstration project, she says. Originally designed to discuss mathematical errors, providers instead used the rebuttal period for all kinds of discussions. Hence, CMS decided to initiate the discussion period specifically for RACs.
“The RACs and CMS are trying to work with providers, and the discussion period is a huge open door for providers to have a dialogue with their RAC,” Cohen says.
Providers can use this chance to communicate with their RACs to discuss much more than math. Not only can they use it to try to change the RAC’s mind on a denial, but they can use it as a learning opportunity. A RAC may discuss how it came up with the determination. Providers should seek out that information so they don’t keep making the same mistakes, says Cohen.
That information may also be helpful during the appeals process, she says. “But the discussion period doesn’t lengthen in any way shape or form the appeals process and it doesn’t take the place of the appeals process,” she reminds us. “All it does is open up the dialogue with the RAC to hopefully take care of problems such as missing or incomplete documentation before you have to go through the appeal process.”
In addition, some RACs have indicated during outreach sessions that they will accept missing documentation. “CMS emphasized providers shouldn’t go create documentation, but if a provider has documentation, but it is missing from the information received by the RAC, some RACs will accept the missing documentation after the fact,” Cohen says. For example, if a physician discharge summary had been dictated, but never filed-the RAC would likely accept that during the discussion period, she says.
The discussion period has two different start times, depending on whether it is for an automated or complex review. With an automated review, the provider finds out there has been a review and a denial when it receives a demand letter from the RAC. Receipt of that letter kicks off the discussion period. But for complex reviews, the discussion period begins when the provider receives the review results letter, which would arrive prior to the demand letter, giving the provider additional time to discuss the denial with its RAC. The discussion period ends upon recoupment of the money (i.e., day 41) regardless of the type of review.
But providers shouldn’t wait until day 39 or 40 to contact their RAC. “CMS was very careful to say to providers that they should contact their RAC as soon as possible during the discussion period because it doesn’t stop the recoupment,” Cohen says. “But if the provider can quickly convince the RAC that an error was made in denying the claim during the discussion period, and the demand/remittance step isn’t initiated, there may be the opportunity to stop the process.”
To effectively and efficiently take advantage of the RAC discussion period, Cohen recommends providers do the following:
- Group similar denials whenever possible. Use your tracking database to group issues and then talk about them globally. “That way, when you talk to your RAC, instead of having 200 issues to discuss, you have 10. You’ll probably be a lot more successful.”
- Stay organized. Especially when it comes to complex reviews, organization is critical. Use tracking databases or spreadsheets to document and track denials. They will help you keep on top of deadlines and recognize commonalities between denials that may help identify whether a claim is defensible during the discussion period or appeals process, or when you need to correct an error.
- Use strategy. “You’ll only want to go to the RAC during the discussion period for those claims you really feel like you want to defend,” says Cohen. “I’d avoid calling them with 50 claims and asking the RAC to go through each one to explain why they denied it. I’m not sure you want to spend that much time, much less the RAC.”
- Don’t get sidetracked. Providers should use the discussion period, but shouldn’t let it distract them from determining whether they want to appeal the claim, or given the early deadlines they need to meet, if they want to stop recoupment (e.g., they can appeal by day 30). There are many decisions providers need to make, Cohen says. So it is important that they don’t let the discussion period distract them too much from everything else that needs to be done.
Editor’s note: We would like to take a moment to welcome Camille Cohen, MSW, MBA, CHC, compliance manager at 3M Health Information Systems in Salt Lake City, to the RAC Report Advisory Board.
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