RAC Audits: What to Expect

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RAC Audits What to Expect

• 11th Annual I/T/U Partnership Conference
• Reno, NV
• April 22, 2009

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About the Presenters

• Angela Kihega
• Health Information Management Consultant
• Oklahoma Area Office
• Sue Rollice
• Deputy Business Office Manager
• Oklahoma Area Office
• Sandra Lahi
• IT Specialist Business Office
• Oklahoma Area Office

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Agenda

• Background of Recovery Audit Contractors
• Process of Audits
• Record Requests
• Determinations
• Appeals
• Findings of Demonstration States
• Preparing for RAC Oklahoma Area

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What is RAC

• Recovery Audit Contractors
• CMS is overseeing the RAC implementation to
  identify improper payments and fight fraud, waste
  and abuse in the Medicare program

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Authority

• Medicare Modernization Act 306 3 year
  demonstration project to detect and correct past
  improper payments
• Demonstration project reviewed health care
  providers in CA, FL, NY, MA, SC and AZ for
  services between 2005 and 2008

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Demonstration Project

• Overpayments When HC providers submit claims
  that do not meet Medicares coding and medical
  necessity policies
• Resulted in overpayments of 900 million returned
  to Medicare
• Underpayments When HC providers submit claims
  for a simple procedure but medical record reveals
  a more complicated procedure was actually
  performed.
• Nearly 38 million in underpayments to health
  care providers

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Authority

• Tax Relief and Health Care Act of 2006. Congress
  required national RAC program to be in permanent
  status by January 1, 2010
• CMS awarded contracts to four permanent Recovery
  Audit Contractors (RACs) designed to guard the
  Medicare trust fund.

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Who will be audited?

• Hospitals
• Physician practices
• Nursing homes
• Home health agencies
• DME suppliers
• Any other provider or supplier that bills
  Medicare Part A and B

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Process of Audits

• Claim Selection Process
• Automated Review Focus. RAC analyzed claim data
  using proprietary techniques to identify claims
  that contained errors
• Complex Review Focus. RAC requests medical
  records
• Determinations
• Appeal process at all levels

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Criteria for Audits

• Uses same Medicare policies and rules as Medicare
  FIs
• Look back period is 3 years but can review
  current year
• Inpatient claims are the initial focus.
• 10 of average monthly Medicare claims
• Cannot request more than 200 records in a 45 day
  period

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Understanding the RAC

• States are assigned by Region
• RACs must schedule meetings with providers to go
  over the entire process
• RACs must set up web-based applications by Jan 1,
  2010 for sites to customize addresses/POCs and
  review statuses of cases

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Process of Record Requests
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Step 1. Process of Record Requests

• Site must identify a primary Point of Contact
  (POC) BOM or HIM
• Per RAC you can change this contact person at any
  point by going on their website
• POC logs receipt of letter with date, audit by
  account , MR and DOS
• POC notifies HIM immediately when letter is
  received and logged

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Process of Record Requests

• HIM should assign high-performing clerk (RAC
  Clerk) to process record requests quickly (Must
  submit 45 days from the date of the letter)
• Records could be retrieved from file room, EHR,
  archives
• RAC clerk is responsible for boxing up records
  and mailing certified mail return receipt

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Process of Record Requests

• RAC clerk logs what pertinent parts of the
  medical record were mailed (ie. D/C summary)
• RAC verifies all records are complete before
  mailing
• Medical Records may be sent via CDs or DVDs.
  Check with RAC first

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Step 2. Determinations from RAC

• POC receives letters
• Logs receipt of letter and notifies case mgmt or
  coding to review determinations
• Automated denial
• Complex denial
• Approved determinations are logged as well

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Step 3. Appeals

• Respond immediately
• Enlist outside consultants
• Pending appeals may take up to two years for
  final determinations

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Appeal letters

• Responsible department writes the appeal letter
• Advice from physician advisors or outside
  consulting agencies were sought
• Cover letter and entire medical record was mailed
  with each appeal
• Copies of Interqual and AHA Coding Clinics
  accompanied the appeals
• Flag medical records to provide easier review for
  the auditor

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Review of Demonstration Site findings
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Findings of Demonstration States

• Demonstration project reviewed health care
  providers in CA, FL, NY, MA, SC and AZ for
  services between 2005 and 2008
• Information received from SC and FL via recent
  AHIMA conference
• Presentation provided by Donna D. Wilson, RHIA,
  CCS, Sr Director of Compliance Concepts Inc.

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Findings of Demonstration states

• Floridas RAC found a of physicians
  inappropriately charging new visits
• Review coding issues such as debridement, single
  CCs/MCCs and lysis of adhesions
• Review current medical staff bylaws to ensure
  they coincide with Medicare Conditions of
  Participation
• SC was denied large amount for incorrect
  discharge disposition codes

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Automated Review Focus - SC

• FINDINGS
• Discharge disposition code (SNF ICF)
• Units of service error-blood transfusions
• Duplicate services as 2 colonoscopies in one day
  (-59 modifier missing)

• RECOMMENDATION
• Improve internal communication after discharge to
  determine correct pt status
• Review LCD to determine if CM has correct units
  of service
• Analyze cases of multiple colonoscopies billed
  for the same patient on the same day

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Complex Review Focus - SC

• FINDINGS
• Incorrect patient status (Inpt/Outpt or
  observation)
• Did not meet Interqual criteria
• Should have been billed as observation
• Placement issues with family
• Weekend admits

• RECOMMENDATION
• Implement system with initial order set
• Attend Med staff, nursing leadership, case mgmt
  meetings to discuss UR process
• Work with clinics and physician offices to
  explain admitting procedures

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DRGs reviewed in SC

• 076 transbronchial lung biopsies
• 088 COPD
• 120 Declots
• 125 Heart cats
• 150 Lysis of adhesions

• 127 CHF
• 182 GI Disorders
• 416 Sepsis
• 468 Unrelated procedures
• Excisional debridement

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Coding Focused Reviews - SC

• Debridement Excisional vs nonexcisional
• Size, depth, Removal of devitalized tissue
• Instrument used

• RAC focuses on DRG payments that are five times
  the charge amount (ex. Debridements)
• If bedside incisional debridement, should not
  charge for anesthesia, or OR charge

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Coding Focused Reviews - SC

• Reviewed records that contain a single CC
  (complication or comorbidity) or an MCC (major
  complication or comorbidity)

• Lysis of adhesions cannot be coded if used as an
  approach (unless documented as extensive in the
  operative note)

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In General Types of Improper Payments Noted

• Did not meet Medicare medical necessity criteria
• Services were incorrectly coded
• Provider failure to submit documentation when
  requested
• Claim paid with outdated fee schedule
• Provider paid twice for the same claim

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Preparing for RAC
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Setting up a RAC Steering Committee

• Compliance Officers
• HIM Director and Managers
• Coding Quality Supervisor
• Reimbursement Director
• Case Management Director
• Patient Financial Services/Bus Office
• Chief Financial Officer
• Information Services
• Physician Advisor
• HIM RAC clerk

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Get informed

• Find out what region your state is assigned
• Regions A, B, C, D
• Find out when your State will be audited
• Oklahoma is in Region C and is scheduled for May
  2009

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Oklahoma Hospital Association announced.

• Connolly Healthcare is the RAC for OK and
  southeast region
• Outreach Meeting for hospitals scheduled for
  May 11, 2009
• CMS Project Officer will be present
• Trailblazers also will be present
• Separate meeting set for physicians

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Get informed

• Access Websites
• www.cms.gov. Search for RAC
• Identify website for your RAC
• Sign up to email notification lists to receive up
  to date information
• CMS RAC listserve
• State Hospital Association listserve
• Inform RAC Committee of updates

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Lessons Learned and Educating

• Learn from those who have been racked!!

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Lessons Learned and Educating

• Improve processes based on findings
• Educate providers with actual records submitted
  for individual providers with findings
• RAC Steering Committee should meet monthly
• Schedule conference calls with RAC as needed

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Final recommendations.

• Protect your Medicare reimbursement!
• Set up a system to respond timely to record
  requests and track actions
• If no response, Medicare will recoup
  reimbursements automatically.

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Questions