Revenue Cycle Institute » RACs

Revenue Cycle Institute releases free RAC Preparedness Benchmarking Report

Andrea Kraynak, CPC-A — Wed, 18 Nov 2009 13:47:44 +0000

Budgets are tight, but it seems that many healthcare providers are aware that setting aside resources to prepare for RAC audits is non-negotiable. HCPro’s Revenue Cycle Institute examined this concept as a part of its recent nationwide survey of RAC readiness. The study, which was released recently, garnered more than 700 participants from all four RAC [...]

Region D RAC approved to audit modifiers -TC and -26

Andrea Kraynak, CPC-A — Tue, 17 Nov 2009 14:12:46 +0000

HealthDataInsights has been approved by CMS to audit for inappropriate billing related to the use of modifiers -TC and -26 on Part B claims in all RAC Region D states. The new issue is as follows: Global vs TC/PC. An overpayment exists when providers are reimbursed for global procedures and then receive additional reimbursement for technical (modifier [...]

Region D RAC adds new DME issue

Andrea Kraynak, CPC-A — Fri, 13 Nov 2009 15:35:35 +0000

HealthDataInsights (HDI) added another new issue approved for RAC audits in all region D states to its Web site. The new issue is as follows: DMEPOS while patient is in a covered Part A inpatient hospital stay. The Web site provides the following explanation of the new issue: For a beneficiary in a Part A inpatient stay, an [...]

Providers report first RAC denials in Florida, South Carolina

Andrea Kraynak, CPC-A — Thu, 12 Nov 2009 19:30:42 +0000

Healthcare providers in several states received their first RAC denials. Connolly Healthcare, the Region C RAC for Florida, South Carolina and several other states, has been behind many of them. One hospital in South Carolina reports having three claims denied. However, learning of those denials did not go smoothly. The hospital received a call in late October [...]

RAC vs. CERT audits: Do you know the difference?

The RAC Report — Thu, 12 Nov 2009 06:00:00 +0000

The Comprehensive Error Rate Testing (CERT) Hospital Payment Monitoring Program is one of the ways CMS is trying to improve the quality and accuracy of Medicare claim submission and payment of those claims. Is that so different from what the RAC program is designed to do?

While the end-goal may be the same, the methodology is very different. Stacey Levitt, RN, MSN, CPC, director of patient care management at Lenox Hill Hospital in New York City, outlines some of the important differences between the two types of Medicare audits:

Who is being audited. RACs look for errors made by providers, but the CERT is looking for errors in payments made by carriers. Hospitals and other providers are affected because when the CERT looks into a claim, the provider must submit the medical records, and if the CERT uncovers an error, the CERT will take back money from the hospital. But the CERT is really looking for errors made by fiscal intermediaries, Medicare administrative contractors, or other carriers when paying providers’ Medicare claims.
Education. “CERTs want to make sure everything is on the up and up for the claims,” Levitt explains. When the patterns of incorrectly paid claims appear on its radar, the CERT steps in and educates providers. RACs don’t provide such education.
Payment. RACs are paid through contingency fees. The more under- or over-payments they uncover, the more money they receive. The payment for CERTs is different; they receive a set amount outlined in their contract, regardless of the percentage of payment errors they find.
Size of the program. The RAC program has gotten much more attention than the CERT program, but it may be because the RAC program has the potential to be a much bigger headache for providers. The CERTs examine random claim samples—often only looking at a very small percentage of a carrier’s claims. So the CERT would likely request only a small number of medical records from providers paid by that carrier. And the potential takeback, if any, would likely be smaller as well.

However, there are some similarities between the two programs. Both auditors report to CMS. And both will recoup money from hospitals and other providers who received overpayments.

Providers can also appeal any claims they believe were wrongly denied by a RAC or CERT. The process for RAC appeals has been widely discussed, but providers can also go through the appeal process for a CERT denial. “It’s not just a de facto takeback,” Levitt says.

In addition, CERTs will still use OIG statistical methodology. “They’re still bound to that just like the RAC is—for example if a RAC wants to extrapolate,” she notes. “Everybody is held to the same statistical standard such as the OIG statistic program, RATSTATS.”

Could RAC mass adjustment changes mean increase in automatic audits?

The RAC Report — Thu, 12 Nov 2009 05:00:00 +0000

Providers who believe their RAC denials will be limited to 200 every 45 days (corresponding with the medical record request limits) may be in for a surprise. Those limits apply only to complex audits, but no such limits exist for the number of automatic reviews RACs can perform.

“RACs can do as many [automated reviews] as they want. I think it is in people’s heads that they can look at only 200 at any one time, but that’s really not true,” says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc.

In fact, recent changes to the RAC process for handling mass quantities of recoupments from automatic reviews may even make it easier for RACs to increase their auditing capabilities—meaning the potential for even more denials for providers.

In the past few weeks CMS released three transmittals (R561OTN, R571OTN and R573OTN) detailing several technical changes to “enhance” the RAC mass adjustment process. Essentially, the changes improve the process for the RACs by automating what used to be much more labor-intensive process of initiating mass adjustments of similar claim and/or service types.

“CMS is going to allow RACs to now upload entire files to the intermediary to make mass adjustments, and this is going to make automated denials much quicker for RACs,”

Hoy says. “And whenever you go from manual to automated, you’re going to have a huge increase in efficiency. The changes mean a hospital could get literally thousands of claims denied in one day.”

CMS first came out with a RAC-oriented mass adjustment process in 2007, but the changes should make it easier for the RACs. “Basically they can just run reports now,” Hoy explains.

And if the back-end work involved in processing mass quantities of automatic denials decreases for the RACs, does it mean an increase in their ability to further audit healthcare providers?

We may have to wait until April 5, 2010, when the changes take effect, to find out.

New RAC audit issue for Region D providers

Andrea Kraynak, CPC-A — Wed, 04 Nov 2009 20:10:28 +0000

HealthDataInsights (HDI), added a new CMS-approved issue to its list for all RAC region D healthcare providers. Providers in region D should now be ready for RAC audits of DME claims for the following issue: Infusion Pump Denied/Accessories & Drug Codes should be denied. “When the infusion pump is denied, then the infusion accessories and infusion drug codes are also denied,” [...]

Have you been audited by a RAC?

Andrea Kraynak, CPC-A — Tue, 03 Nov 2009 13:00:14 +0000

If you’ve been audited by a RAC–for example, perhaps you’ve received a demand letter in the mail indicating a RAC has denied one of your claims–we want to hear from you. The first three providers to share their stories will receive a free audio conference from HCPro. E-mail editor Andrea Kraynak (akraynak@hcpro.com) if you have a story to share.

HealthDataInsights posts new RAC DME claim issue

Andrea Kraynak, CPC-A — Fri, 30 Oct 2009 14:05:13 +0000

HealthDataInsights (HDI) added one new RAC issue to their CMS-approved list October 29. The new issue approved for RAC audits in Region D is for DME claims. The issue is as follows: PEN supplies more than one time a day. “The description or the billing guidelines state parenteral/enteral nutrition codes are allowed once a day,” according to the HDI Web [...]

AHA RAC Program Update answers provider questions

Andrea Kraynak, CPC-A — Thu, 15 Oct 2009 04:00:36 +0000

As of September 18, all four RACs were conducting automated audits, according to an October 6 American Hospital Association (AHA) RAC program update. But only 16 of the 23 audits underway were on hospital outpatient claims, according to the AHA. (The others were therefore on physician and durable medical equipment claims.) So unless your hospital is [...]

OIG plans to review Medicare, Medicaid auditing programs

Andrea Kraynak, CPC-A — Thu, 15 Oct 2009 04:00:32 +0000

Healthcare providers are finding themselves and their reimbursement claims accountable to more and more auditors as CMS steps up its Medicare and Medicaid auditing activities. And CMS is unlikely to decrease auditing for incorrectly paid claims anytime soon; it too is being held accountable—by the Office of Inspector General (OIG). In 2010, the OIG plans to [...]

Region B RAC posts new issues, all states now approved for audits

Andrea Kraynak, CPC-A — Wed, 14 Oct 2009 20:55:40 +0000

CGI, the RAC for Region B, has posted three new issues for review in Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin. This means CMS has now approved issues for RAC auditing in all states. The new issues approved for physician and outpatient hospital claim review in these states are: Neulasta Once in a Lifetime Procedures Untimed Codes For more [...]

Revenue Cycle Institute unveils RAC preparedness survey results

Andrea Kraynak, CPC-A — Wed, 14 Oct 2009 18:23:18 +0000

The Revenue Cycle Institute has issued a report on a nation-wide survey of hospitals about their efforts to prepare for the permanent RAC program. More than 700 hospitals nationwide participated in the survey. While 71% of hospitals responding said they have a formal RAC preparedness program in place, the majority of programs were still in the early stages of development, focusing [...]

RAC News: New issues for region D, CMS announces Town Hall meeting, and AHA releases program update

Andrea Kraynak, CPC-A — Wed, 07 Oct 2009 13:43:24 +0000

New issues for RAC Region D HealthDataInsights (HDI) has announced two new issues for region D. HDI can now audit DME providers in all region D states for the following two issues: Urological bundling Wheelchair Bundling For more information on these issues, visit the HDI Web site. As always, the latest RAC issues for each state are posted on the Revenue [...]

September 28-October 5 Issuances: OIG issues 2010 Work Plan, CMS updates lab NCDs and RAC FAQ

Medicare Weekly Update — Tue, 06 Oct 2009 04:00:00 +0000

OIG issues Work Plan

On October 1, the OIG issued its Work Plan for FY 2010.

View the Work Plan.

CMS updates lab NCDs

CMS has posted the October 2009 update to its lab NCDs.

View the lab NCD manual.

New RAC FAQ

CMS released several new/updated FAQs, including the following:

If I am a chain provider whose FI is WPS (serving as the national fiscal intermediary) who will my Recovery Audit Contractor (RAC) be?

Read the answer.

Five Last-Minute Tips to Prepare for RACs

Andrea Kraynak, CPC-A — Fri, 02 Oct 2009 19:03:46 +0000

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 [...]

CMS clarifies RACs’ ‘exception authority’

Medicare Weekly Update — Tue, 22 Sep 2009 12:28:00 +0000

Editor’s note: Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., is the author of this week’s note from the instructor.

On September 11, CMS published Transmittal 302 that updated the Program Integrity Manual on Local Coverage Determination (LCD) exceptions. When specific authorized contractors conduct a complex medical review, they have the authority (in rare and unusual circumstances) to apply an exception to the “reasonable and necessary” requirements described in an LCD to approve or deny a claim. However, they cannot make exceptions to National Coverage Determinations (NCDs). In addition, and unless otherwise directed by CMS, RACs can only use the exceptions process to not deny a claim. This is a good time to review the difference between a national and a local coverage determination policy.

Click over to the MedicareMentor Blog to read more.

Last RAC announces first issues–DCS posts approved issues for Region A

Andrea Kraynak, CPC-A — Mon, 21 Sep 2009 13:40:24 +0000

DCS Healthcare has released its first CMS-approved issues for audits in Region A. The three issues, including one new issue not yet approved in other RAC regions, are applicable to durable medical equipment (DME) suppliers in Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. According to [...]

Providers seek information on Medicaid Integrity Contractors as aggressive auditing rolls out nationwide

Andrea Kraynak, CPC-A — Fri, 18 Sep 2009 13:47:14 +0000

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 [...]

Q&A: Medically Unlikely Edits and Once in a Lifetime codes

The RAC Report — Thu, 17 Sep 2009 04:00:00 +0000

Q: Several RACs are looking for once in a lifetime procedure coding errors. Wouldn’t Medically Unlikely Edits (MUE) help prevent a large number of these errors?

A: According to CMS, an MUE is a unit of service edit for a HCPCS/CPT code for services provided by a single provider to a single beneficiary on the same date of service. The ideal MUE is the maximum unit of service reported for a HCPCS/CPT code on the vast majority of appropriately reported claims. Examples include:

Code 23405 (Tenotomy, shoulder area; single tendon) has an MUE of 2
Code 43600 (Biopsy of stomach; by capsule, tube, peroral (one or more specimens) has an MUE of 1
Code 58260 (Vaginal hysterectomy, for uterus 250g or less) has an MUE of 1

(Click here to see CMS’ published list of MUEs. Note: CMS has not published all MUEs.)

A once in a life time code refers to codes for services or procedures generally performed only once during a patient’s lifetime. Examples include code 87902 (Genotype, hepatitis C), code 90989 (Dialysis training, completed course) or code 47600 (Cholecystectomy).

There are several differences, but one major issue relates to the timing. MUEs refer to services unlikely to occur on the same date of service, whereas once in a lifetime codes are unlikely to occur more than, well, once in a lifetime.

So an MUE may catch a once in a lifetime coding error if, for example, a computer glitch causes a provider to rebill all of the claims for a certain date—one of which contained a once in a lifetime code—a second time. However, if a once in a lifetime code is reported for a patient on different dates of service, the MUE would not catch the error.

Note that there are occasions when it may be appropriate to bill a once in a lifetime code on separate days, in which case a modifier should also be used. For example, a physician may begin a procedure but not be able to finish it due to problems with the patient’s blood pressure. The physician may then perform the same once in a lifetime procedure on a different day, in which case it is correct to bill for both procedures. However, modifier -73 or -74 would need to accompany the code for the uncompleted procedure.

Editor’s note: Thanks to Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro and Stacey Levitt, RN, MSN, CPC, Director of patient care management at Lenox Hill Hospital, for assistance answering the previous question. To hear more from Kimberly and Stacey on RACs and once in a lifetime procedures, consider attending the "Medicare Compliance Forum: A Strategic Approach to RACs, Observation Status, and the Role of Physician Advisors" in Atlanta October 26-27.