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Medicare - CMS RAC Audit Presentation
 

Medicare - CMS RAC Audit Presentation

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Learn who RAC is and how it may affect you and your organization. Includes answers to most often asked questions.

Learn who RAC is and how it may affect you and your organization. Includes answers to most often asked questions.

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    Medicare - CMS RAC Audit Presentation Medicare - CMS RAC Audit Presentation Document Transcript

    • Welcome  to  a  “Medical  Billing  Errors  &  Omissions:  Exposures  and  Solu;ons”.    My   name  is  Sco?  Fikes,  Vice  President  of  Physician  Services  for  InLight  Risk  Management,   a  specialty  insurance  firm  exclusively  serving  the  healthcare  industry.    During  this   Webinar,  we  will  review  Who  RAC  is,  its  objec;ves  and  solu;ons  designed  to  protect   your  healthcare  organiza;on  from  the  unexpected  financial  loss  of  a  government  or   commercial  payor  audit.   1  
    • In  the  Tax  Relief  and  Health  Care  Act  of  2006,  Congress  required  a  permanent  and   na;onal  RAC  program  to  be  in  place  by  January  1,  2010.  The  na;onal  RAC  program  is   the  outgrowth  of  a  successful  demonstra;on  program  that  used  RACs  to  iden;fy   Medicare  overpayments  and  underpayments  to  health  care  providers  and  supplier.     RAC  is  the  acronym  for  Recovery  Audit  Contractors.   2  
    • The  demonstra;on  was  limited  to  only  a  few  select  states  mostly  located  in  the  west   and  east  coast.    The  demonstra;on  resulted  in  over  $900  million  in  overpayments   being  returned  to  the  Medicare  Trust  Fund  between  2005  and  2008  and  nearly  $38   million  in  underpayments  returned  to  health  care  providers.   3  
    • The  goal  of  the  recovery  audit  program  is  to  iden;fy  improper  payments  made  on   claims  of  health  care  services  provided  to  Medicare  beneficiaries.       Improper  payments  may  be  overpayments  or  underpayments.  Overpayments  can   occur  when  health  care  providers  submit  claims  that  do  not  meet  Medicare’s  coding   or  medical  necessity  policies.  Underpayments  can  occur  when  health  care  providers   submit  claims  for  a  simple  procedure  but  the  medical  record  reveals  that  a  more   complicated  procedure  was  actually  performed.     4  
    • RAC  audits  include  Medicare  Parts  A  &  B.       5  
    • This  illustra;on  provides  the  proposed  jurisdic;ons.    Focusing  on  jurisdic;on  “C”,   Oklahoma,  Texas,,  Florida,  New  Mexico  and  Colorado  will  begin  March  2009  with  the   remaining  states  to  follow  in  August  2009  or  later.   6  
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    • Medicare  delayed  the  contract  award  due  to  a  dispute  in  the  bidding  process  by  two   unsuccessful  bidders  for  the  RAC  program.    Under  the  GAO  (General  Accoun;ng   Office),  a  deadline  of  100  days  was  given  to  make  a  determina;on.   8  
    • On  February  4,  2009  the  par;es  involved  in  the  protest  of  the  award  of  the  Recovery   Audit  Contractor  (RAC)  contracts  se?led  the  protests.    The  se?lement  means  that  the   stop  work  order  has  been  liied  and  CMS  will  now  con;nue  with  the  implementa;on   of  the  RAC  program.       9  
    • In  jurisdic;on  “C”,  Connolly  Consul;ng,  Inc.  received  the  RAC  award.  All   correspondence,  websites  and  call  centers  will  be  in  the  name  of  the  RAC’s.   10  
    • Connelly  Consul;ng  Associates,  Inc.  is  located  in  Wilton,  Connec;cut.     About  Connolly  Healthcare  Connolly  Healthcare,  a  division  of  Connolly  Consul;ng,  is   the  recovery  audit  expert  that  uses  advanced  data  mining  techniques  to  iden;fy  and   recover  a  broad  range  of  erroneous  medical  claim  payments,  all  with  a  high  sensi;vity   to  important  provider  rela;onships.  In  2007,  Connolly  reviewed  more  than  $150   billion  dollars  in  paid  medical  claims  working  with  some  of  the  largest  health  plans  in   the  United  States.  Recovery  audi;ng  is  recognized  as  a  best  prac;ce  and  Connolly's   exper;se  places  it  in  a  posi;on  to  propose  vital  process  improvement   recommenda;ons  to  reduce  or  eliminate  future  improper  payments.  Informa;on  on   Connolly  Healthcare  and  its  services  can  be  obtained  at:   www.connollyhealthcare.com  or  by  contac;ng  Connolly's  Press  Release  Contact:   PRContact@connollyhealthcare.com  SOURCE  Connolly  Healthcare  William  Pisani,   +1-­‐203-­‐529-­‐2000,  of  Connolly  Healthcare     11  
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    • 1.  Is  RAC  a  new  issue  facing  the  healthcare  industry?          No.    Medical  facili;es  have   had  RAC-­‐related  issues  since  the  1980s.     2.   What  were  the  biggest  challenges  confron;ng  medical  facilitates  par;cipa;ng  in   the  3-­‐year  RAC  demonstra;on  program?  Managing  data  such  as  the  number  of   requests  coming  in  and  the  paperwork  going  out  of  the  facility.    Another  challenge   was  managing  the  review  process  and  remi?ances,  which  included  keeping  track   of  monetary  flows  and  differen;a;ng  RAC  requests  from  other  requests.  It  is   important  to  be  prepared  from  a  ROI  standpoint.    You  must  make  sure  you  have   adequate  staff  to  handle  requests  and  be  able  to  handle  DRG  coding  issues,  which   may  lead  to  RAC  denials  which  is  a  result  of  uneducated  staff.    Tracking  RAC   ac;vi;es  is  also  cri;cal.    Medical  facili;es  started  out  tracking  data  on  Excel   spreadsheets  but  later  had  to  move  the  informa;on  to  a  database  because  of  the   large  amounts  of  informa;on.         3.   What  was  the  biggest  obstacle  that  confronted  RAC  providers  during  the   demonstra;on  program?  Last  minute  requests  from  par;cipa;ng  medical  facili;es   asking  for  extensions  on  delivering  RAC  medical  requests.     4.  What  was  the  most  difficult  area  to  target  for  par;cipa;ng  medical  facili;es?   Separa;ng  simple  versus  complex  pneumonia  cases,  sepsis  versus  neuro-­‐  sepsis,   CHS,  wound  debridements,  chest  pains,  syncope,,  medical  necessity,  and  denial  of   inpa;ent  rehab  encounters  were  all  difficult.   13  
    • 5.   Does  CMS  offer  documenta;on  that  pinpoints  what  caused  the  worst  RAC  issues   for  organiza;ons  par;cipa;ng  in  the  demonstra;on  program?  Yes.    CMS  offers   two  reports  posted  on  their  web  site  outlining  the  various  issues  encountered,   including  challenges  with  coding,  medical  necessity,  etc.  To  see  these  reports,  go   to  h?p://www.cms.hhs.gov/rac.   6.  Was  the  RAC  demonstra;on  ini;a;ve  random?  No.    The  CMS  was  not   commissioned  to  use  a  random  approach.    RACs  are  not  only  looking  at  DRGs  but   are  also  reviewing  ICD9  diagnosis  codes,  charges,  and  length  of  stays  for   inpa;ents.    A  DRG  payment  that  is  significantly  higher  than  the  charges  is  a  red   flag  to  RAC  and  will  probably  be  inves;gated.       7.  On  average,  how  may  RAC  reviews  uncover  an  improper  payment  finding?  Three   out  of  10  reviews  reveal  an  improper  payment.  HealthPort  ::  RAC  Preparedness   8.  How  important  is  day-­‐to-­‐day  coding  when  it  comes  to  the  RAC  demonstra;on?   Very  important.    RAC’s  methodology  is  based  on  ICD9  and  CPT4  coded  data   because  payment  is  based  on  coding.    RAC  will  easily  recognize  a  sepsis  that  is  a   two-­‐day  stay  and  a  secondary  UTI  diagnosis.   14  
    • 9.  Did  facili;es  par;cipa;ng  in  the  RAC  demonstra;on  follow  CMS’s  instruc;ons  on   extrapola;on  methodology  for  internal  findings?  No.    None  of  the  par;cipa;ng   facili;es  did  extrapola;on.    For  extrapola;on  a  provider  must  have  a  high  level  of   error  that  can  be  demonstrated  by  a  sta;s;cian  and  other  similar  professionals.     For  more  details  on  extrapola;on,  go  to  www.cms.hhs.gov/manuals.   10. Will  extrapola;on  eliminate  the  RAC  process  for  organiza;ons?    No,  because  it  is   targeted  to  limited  areas.    HealthPort  ::  RAC  Preparedness  ::  RAC  FAQs  h?p:// www.healthport.com/RAC_FAQs.aspx       11. Did  RAC  focus  on  one  type  of  medical  facility  over  another  (i.e.  profit  or  not-­‐for-­‐ profit,  teaching  or  non-­‐teaching  hospital,  urban  or  suburban  facility,  acute  care  or   long-­‐term  cri;cal  access?  No.    They  included  all  types  of  medical  facili;es.   15  
    • 12.  Were  states  that  had  less  CMS  beneficiaries  reviewed  differently?  A  final  decision  has  not   been  made  on  the  limita;on  cap.    During  the  RAC  demonstra;on,  PRG  Connolly  based   medical  record  limits  on  the  number  of  monthly  chart  requests;  however,  HDI  thought  it   was  fairer  to  base  it  on  Medicare  revenue  per  provider.     13.  Whom  should  a  medical  facility  appoint  as  gatekeeper  for  the  RAC  process?  While  it  is   each  facility’s  decision,  based  on  its  par;cular  needs,  an  onslaught  of  coding  and   reimbursement  issues  would  necessitate  that  the  Health  Informa;on  Management  (HIM)   department  should  be  gatekeeper.  HIM  also  holds  the  records.    However,  if  the  biggest   area  of  risk  is  medical  necessity,  than  Case  Management  or  Pa;ent  Financial  Services  may   want  to  handle  this  responsibility.    A  facility  may  also  develop  a  task  force  that  includes   Corporate  Compliance,  Revenue,  and  the  Central  Business  Office,  with  HIM  heading  up   the  task  force.   14.  Will  RAC  use  cer;fied  coders  and  medical  directors  in  the  na;onal  program?  Yes.    RAC’s   statement  of  work  requires  hiring  only  cer;fied  coders.    During  the  early  por;on  of  the   RAC  demonstra;on,  some  non-­‐cer;fied  coders  were  ini;ally  used.    However  going   forward,  RAC  has  s;pulated  that  only  cer;fied  coders  should  be  used.    Likewise,  in  the   na;onal  program,  the  four  RACs  will  be  required  to  use  medical  directors,  as  well.   15.  When  will  CMS  start  distribu;ng  the  RAC  le?ers?  It  is  an;cipated  that  the  RAC  le?ers  will   begin  going  out  in  April  or  May  2009.  HealthPort  ::  RAC  Preparedness  ::  RAC  FAQs  h?p:// www.healthport.com/RAC_FAQs.aspx     16  
    • Selected  under  a  full  and  open  compe;;on.  The  RACs  will  be  paid  on  a  con;ngency   fee  basis  on  both  the  overpayments  and  underpayments  they  find.  The  selec;on  was   based  on  a  best  value  determina;on  for  the  Federal  government  that  included  a   sound  technical  approach  for  the  level  and  quality  of  claim  analysis  and  detail  to   excep;onal  customer  service,  conflict  of  interest  reviews  and  lowest  con;ngency  fee.   17  
    • Medicare  RAC  Appeals  /  Denials  /  Overpayment  Determina7on   The  following  informa;on  MUST  be  included  with  your  request  for  all  appeal  levels:     Beneficiary  name   Medicare  Health  Insurance  Claim  (HIC)  Number     Specific  service(s)  and/or  item(s)  for  which  the  redetermina;on  /  reconsidera;on  is  being  requested   Specific  date(s)  of  the  service;  and     Name  and  signature  of  the  provider  or  the  representa;ve  of  the  provider   First  Level  –  Redetermina7on  (Medicare  Administra7ve  Contractor)   Claim  denials  or  overpayments  must  be  ini;ally  reviewed  (appealed)  to  the  appropriate  Medicare   Administra;ve  Contractor  (MAC)  by  reques;ng  a  redetermina;on  of  the  claim  within  120  days  of  the   RACs  ini;al  decision.    Medicare  Administra;ve  Contractors  are  required  to  respond  to  a  provider’s   request  for  redetermina;on  within  60  days  of  receipt.   Second  Level  –  Reconsidera7on  (Qualified  Independent  Contractor)   If  a  provider  is  dissa;sfied  with  the  outcome  of  the  Level  1  appeal  or  redetermina;on  process,  a   request  for  “reconsidera;on”  may  be  filed  with  the  appropriate  Qualified  Independent  Contractor   (QIC)  within  180  days  of  the  redetermina;on.    Requests  for  reconsidera;on  are  required  to  be   processed  within  60  days  by  the  QIC.     Third  Level  –  Administra7ve  Law  Judge  Hearing   If  a  provider  is  not  sa;sfied  with  Level  2  and  the  result  of  reconsidera;on,  a  hearing  before  an   Administra;ve  Law  Judge  (ALJ)  can  be  requested.    The  amount  in  controversy  must  be  a  minimum  of   $120  and  requests  for  a  hearing  from  an  ALJ  must  be  received  within  60  days  of  the  provider’s  no;ce   of  the  reconsidera;on  outcome.   Fourth  Level  –  Medicare  Appeals  Council  (MAC)   If  the  Level  3  appeal  and  decision  by  the  ALJ  is  considered  unfavorable  by  the  provider,  a  fourth  level   appeal  request  may  be  filed  with  the  Departmental  Appeals  Board  (DAB)  /  Medicare  Appeals  Council   (MAC).    Requests  for  a  MAC  review  must  be  filed  within  60  days  of  receipt  of  the  ALJ’s  decision.    The   MAC  must  subsequently  issue  a  determina;on  within  90  days  of  the  review.     FiIh  Level  –  U.S.  District  Court  Review   If  the  Level  4  decision  of  the  MAC  is  deemed  unfavorable  to  the  provider,  the  final  step  in  the  appeals   process  is  to  file  suit  in  U.S.  District  Court.    Requests  must  be  filed  within  60  days  of  the  MACs  decision   and  the  amount  in  controversy  must  be  at  least  $1,180.   18  
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