Rac Audits What You Need To Know

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If you are a Healthcare Provider or Office Manager in a healthcare setting, and bill fee for service, such as Medicare, you will be affected by the mandatory RAC audits. The audits are moving into full swing now.Will you be ready?
This presentation will answer your questions and help you to prepare.

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  • This chart was taken directly from page 37 of the RAC EVALUATION REPORT of June 2008.Of the total $1.03 billion in improper payments corrected by the Claim RACs from the inception of the demonstration through March 27, 2008, approximately 4 percent occurred in FY 2006, 34 percent in FY 2007, and 62 percent in the first half of FY 2008.
  • CMS can use this information to implement more provider education and outreach activities or establishing new system edits, with the goal of preventing future improper payments. Hospitals and other health care providers can use the information to help ensure that they are submitting correctly coded claims for services that meet Medicare’s coding and medical necessity policies.*
  • The RAC program will begin with claims paid on or after October 1, 2007. This begin date will be for all states. The actual start date for a RAC in a state will not change this date. As time passes, the RAC may look back 3 years but the claim paid date may never be earlier than October 1, 2007. In other words the RAC will only look at FY 2008 claims and forward. The RAC will not review claims prior to FY 2008 claim paid dates. Any overpayment or underpayment inadvertently identified by the RAC after this timeframe shall be set aside. The RAC shall take no further action on these claims except to indicate the appropriate status code on the RAC Data Warehouse. The look back period is counted starting from the date of the initial determination (claim paid date) and ending with the date the RAC issues the medical record request letter (for complex reviews) or the date of the overpayment notification letter (for automated reviews).
  • Claim RACs use a review process similar to that of Medicare claims processing contractors. Automated reviews occur when the RACs have identified improper payments because the provider clearly billed in violation of Medicare policy. For complex reviews, the RACs have identified a likely improper payment and request the medicalrecords from the provider to conduct a more in-depth review.*
  • The existing withhold procedures can be found in the Medicare Financial Management Manual, Chapter 4, section 40.1.
  • Although you may stop the recoupment, the aging doesn’t stop and interest continues to accrue. If you paid the overcharge in full before day 30, and you appeal before day 31, no more interest will accrue because you will have stopped the aging process. If you win on appeal, you will be reimbursed. Interest begins accruing from the date the demand letter is sent out.
  • Thank You!
  • Rac Audits What You Need To Know

    1. 1. Recovery Audit Contractors (RACs)<br />Medicare, Medicaid and Commercial Insurance Investigations. <br />What you Need to Know<br />Brought to you by:<br />
    2. 2. Agenda<br /><ul><li>What is a RAC & the Recovery Audit Contract?
    3. 3. Mission of the government Contractors?
    4. 4. What does the RAC do?
    5. 5. How does the RAC affect providers?
    6. 6. How do Providers Prepare?
    7. 7. When the RAC arrives
    8. 8. The Collection Process
    9. 9. Providers Options
    10. 10. What the other entities are saying</li></li></ul><li>What is a RAC?Recovery Audit Contractor-“RAC”<br />Government awarded March 5, 2009:<br />4 (Four) Private firms were awarded to perform medical records and billing audits on providers in all 50 states and Puerto Rico. <br />
    11. 11. Why RACs & Who Has The Authority?<br />CMS was authorized to perform audits on all physicians, hospitals and allied health providers with the purpose of identifying:<br /><ul><li>Documentation and coding inconsistencies.
    12. 12. Overpayments (& Underpayments) made to the providers based on the findings.
    13. 13. Clear documentation to support the medical necessity of the services being provided or dispensed.</li></ul>Medicare (CMS) was authorized by Congress with the following legislation:<br />• Medicare Modernization Act, Section 306: Required the three year RAC demonstration <br />&<br />• Tax Relief and Healthcare Act of 2006, Section 302: Requires a permanent and nationwide RAC program by no later than 2010.<br />Both Statutes gave CMS the authority to pay the RACs on a contingency fee basis.<br /> The RAC demonstration identified $1.3 billion in overpayments<br /> in 3 states in ONE year<br />(California, New York and Florida Hospitals only)<br />
    14. 14.
    15. 15. The RAC Program Mission<br />• The RACs detect and correct past improper<br />payments so that CMS and Carriers, FIs, and<br />MACs can implement actions that will prevent<br />future improper payments:<br />• Providers can avoid submitting claims that do<br />not comply with Medicare rules.<br />• CMS can lower its error rate.<br />• Taxpayers and future Medicare beneficiaries<br />are protected.<br />
    16. 16. What does the RAC do?<br /><ul><li>RACs review claims and medical records on a post payment basis.
    17. 17. RACs use the same Medicare policies as Carriers, FIs and MACs: NCDs, LCDs and CMS Manuals.
    18. 18. RACs are required to employ a staff consisting of nurses, therapists, certified coders, and a physician CMD.
    19. 19. Collect overpaid claims.
    20. 20. RACs will not be able to review claims paid prior to October 1, 2007.</li></ul>RACs will be able to review medical records three years from the date the claim was paid.<br />
    21. 21. Will the RACs affect me?<br /><ul><li>Yes, If the providers bill Fee-for-Service programs, such as Medicare, Medicaid or Commercial Insurance programs, your claims will be subject to review by the RACs.
    22. 22. If so, when? The expansion schedule can be viewed at :</li></ul>www.cms.hhs.gov/rac<br />
    23. 23. Regions and timelines<br />A<br />B<br />D<br />C<br />Provider Outreach<br />Earliest Correspondence<br /> Claims Available for Analysis<br /> March 1, 2009 March 1, 2009 March 1, 2009<br /> March 1, 2009 March 1, 2009 March 1, 2009 <br /> August 1, 2009 August 1, 2009 August 1, 2009<br />*RACs are required to perform outreach programs for all providers in their region<br />From CMS<br />
    24. 24. CMS RAC Review Phase–in Strategyas of 6/24/09<br />Earliest Possible Dates for reviews in Yellow/Green states:<br />Automated Review-<br />Black & White Issues- ( June 2009 )<br />DRG Validation- complex review<br /> ( Aug/Sept 2009)<br />Complex Review for Coding Errors- ( Aug/Sept 2009)<br />DME Medical Necessity Reviews-<br />complex review (Fiscal year 2010)<br />Medical Necessity Reviews-<br />complex review (calendar year 2010)<br />Earliest Possible Dates for reviews in Blue states:<br />Automated Review-<br />Black & White Issues- ( Aug 2009 )<br />DRG Validation- complex review<br /> ( Oct/Nov 2009)<br />Complex Review for Coding Errors- ( Oct/Nov2009)<br />DME Medical Necessity Reviews-<br />complex review (Fiscal year 2010)<br />Medical Necessity Reviews-<br />complex review (calendar year 2010)<br />
    25. 25. Fiscal Year 09Medical Record Limits <br />Inpatient Hospital, IRF, SNF, Hospice<br /><ul><li>10% of the average monthly Medicare claims (max 200) per 45 days per NPI.</li></ul>Other Part A Billers (HH)<br /><ul><li>1% of the average monthly Medicare episodes of care (max 200) per 45 days per NPI.</li></ul>Physicians<br /><ul><li>Sole Practitioner: 10 medical records per 45 days per NPI.
    26. 26. Partnerships: (2-5 individuals): 20 medical records per 45 daysper NPI.
    27. 27. Groups (6-15 individuals): 30 medical records per 45 days per NPI.
    28. 28. Large Group Practices(16+ individuals): 50 medical records per 45 days per NPI.</li></ul>Other Part B Billers (DME, Lab Outpatient Hospital.) <br /><ul><li>1% of the average monthly Medicare claims (max 200) per NPI per 45 days.</li></li></ul><li>How We Prepare Providers<br />Perform a baseline audit to:<br /><ul><li>Identify improper coding and billing that is based on documentation in the patients medical record
    29. 29. Assist the providers with training programs that can ensure they are meeting documentation compliance
    30. 30. Available to assist the office in the event that the RAC communicates an audit </li></li></ul><li>How Providers Get Prepared<br /><ul><li>Perform an independent assessment to identify areas of non-compliance with Medicare/Medicaid rules.
    31. 31. Identify any corrective actions required for compliance.
    32. 32. Implement any required changes to stay in compliance.</li></li></ul><li>Provider Self Disclosures<br /><ul><li>If a provider does a self-audit and identifies improper payments, the provider should report the improper payments to their claim processing contractor.
    33. 33. If the claim processing contractor agrees that they are improper, the claims will be adjusted and no longer available for RAC review (for that issue).</li></li></ul><li>Importance of Documentation Compliance<br /><ul><li>The medical record or chart notes must be complete & legible and mustmatch the codes you submit-
    34. 34. Evaluation & Management (office visit)
    35. 35. Diagnosis
    36. 36. Injections
    37. 37. Supplies
    38. 38. Medical Necessity must clearly state the need for all services provided or prescribed. The documentation of each patient encounter should include:
    39. 39. Reason for the encounter and relevant history, physical examination findings and prior diagnostic test results;
    40. 40. Assessment, Clinical Impression or Diagnosis;
    41. 41. Plan for care; and
    42. 42. Date and Legible identity of the observer</li></li></ul><li>Beyond the BaseLine Review<br /><ul><li>Billing team must track all denied claims
    43. 43. Identify all the issues
    44. 44. Look for patterns
    45. 45. Deploy any corrective actions to avoid improper payments</li></ul>We Can Be Your Solution<br />
    46. 46. When the RAC arrives<br /><ul><li>Must provide a clear response to the letter within 45 days.
    47. 47. Retain a certified coder to review the records prior to submission.
    48. 48. Send copies of the charts to the RAC- signature required notification of receipt.
    49. 49. Digitized/electronic file of your charts and supporting documentation.</li></ul>RACs will accept imaged medical record on CD/DVD (CMS requirements coming soon).<br /><ul><li>Follow Up!</li></ul>When necessary, check on the status of your medical record (Did the RAC receive it?)<br />Call RAC<br />Use RAC Claim Status Website- no later than 01/01/2010.<br />Watch your mail for Detailed Review Results Letter following all complex reviews.<br />
    50. 50. RAC Contact Information Website - E-mail - Telephone Number <br /><ul><li>Region A:
    51. 51. Diversified Collection Services
    52. 52. www.dcsrac.com
    53. 53. info@dcsrac.com
    54. 54. 1-866-201-0580
    55. 55. Region C:
    56. 56. Connolly Consulting
    57. 57. www.connollyhealthcare.com/RAC
    58. 58. RACinfo@connollyhealthcare.com
    59. 59. 1-866-360-2507
    60. 60. Region B:
    61. 61. CGI
    62. 62. http://racb.cgi.com
    63. 63. racb@cgi.com
    64. 64. 1-877-316-7222
    65. 65. Region D:
    66. 66. Health Data Insights
    67. 67. http://racinfo.healthdatainsights.com
    68. 68. Racinfo@emailhdi.com
    69. 69. Part A: 866-590-5598
    70. 70. Part B: 866-376-2319 </li></li></ul><li>Next Steps from the RAC<br />Part B Adjustment Process:<br /><ul><li>RAC send files to the Carrier/MAC/DME MAC or associated data center.
    71. 71. Data center does their research & processing & makes their adjustments on overpaid claims .
    72. 72. Data center then creates an accounts receivable for the adjusted claim & sends it back to the RAC
    73. 73. Upon receiving, RAC sends written notification to the provider of the overpayment , known as the “Demand Letter”, and researches any additional files that the data center notated other errors on.
    74. 74. RAC will offer a discussion period- an opportunity to discuss the improper payment determination with the RAC. (This is outside of the normal appeals process.) </li></li></ul><li>
    75. 75. Part A Adjustment Process:<br /><ul><li>Basically same procedure except RAC sends written notification to the provider of the identification of an overpayment first .
    76. 76. RAC sends an electronic file to the FI/MAC or associated data center.
    77. 77. FI/MAC or associated data center:
    78. 78. Does their research & processing & makes their adjustments on overpaid claims .
    79. 79. Send files back to RAC.
    80. 80. Upon receiving, RAC researches any additional files when necessary.</li></li></ul><li>
    81. 81. The Collection Process Recoupment of overpayments<br />Demand letter comes from the (RAC)<br /><ul><li>Issue Remittance Advice
    82. 82. Remark Code N432: “Adjustment Based on Recovery Audit”
    83. 83. Recoups by offset unless provider has submitted a check or a valid appeal.
    84. 84. Interest will accrue from the date of the final determination.
    85. 85. Recoupment/payments are applied first to interest then to principle.</li></ul>THEY TAKE THE $$$$ DIRECTLY FROM YOUR MEDICARE CHECK<br />23<br />
    86. 86. What Are Providers Options?<br /><ul><li>If you agree with the RAC
    87. 87. Send check on or before Day 30 - do not appeal.
    88. 88. Recoupment by Medicare (overpayment + interest) on Day 41 and do not appeal.
    89. 89. Extended Payment Plan-
    90. 90. Request or apply for extended payment plan (overpayment + interest) and do not appeal .</li></ul>24<br />
    91. 91. Appeal When Necessary<br /><ul><li>If you disagree with the RAC
    92. 92. The appeal process for RAC denials is the same as for Carrier/FI/MAC denials
    93. 93. Do not confuse the “RAC Discussion Period” with the Appeals Process.
    94. 94. Don’t stop with sending a discussion letter.
    95. 95. Pay by check on or before day 30 (interest is not assessed) AND file an appeal before the 120th day after the Demand Letter.
    96. 96. Allow recoupment (overpayment + interest) on Day 41 and file an appeal by Day 120
    97. 97. Request or apply for extended payment plan (overpayment + interest) and appeal by Day 120
    98. 98. Stop the recoupment by filing an appeal before day 31.</li></ul>25<br />
    99. 99. What to Expect Next<br />Repeat the exact same process every 45 days <br />until they find no more overpayments<br />
    100. 100. Where do you turn?<br />Let Precision Billing & Cash Flow Solutions <br />become your team of RAC Service Advisors. Have us …<br /><ul><li>Get the Base Line Audit done as soon as possible.
    101. 101. Determine where your practice will stand with the RAC team.
    102. 102. Become the “go to” team for your practice when the RAC arrives.</li></li></ul><li>Other Payers Are Interested Too<br /><ul><li>Medicaid (partially funded by the federal government and managed by each state)
    103. 103. They are hiring firms like Healthnet Federal Services to mimic the identical issues as the federal government.
    104. 104. United Health, Aetna and other commercial payers
    105. 105. Because they have implied authority to review all providers claims</li></ul>What they are saying...<br />“If the providers are miscoding for Medicare they are miscoding our claims also.”<br />
    106. 106. REVIEW<br /><ul><li>The RAC is serious- Providers need to know and understand the implications.
    107. 107. Determine where the practice will stand.
    108. 108. Understand that you may need to call for help to manage the process.
    109. 109. Medicare is likely NOT the only payer going to take a peek.</li></ul>Brought to you by:<br />

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