RAC Audit

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Detailed explanation about the RAC audits that the CMS will be performing nationwide

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RAC Audit

  1. 1. Recovery Audit Contractors (RACs) Medicare. Medicaid and Commercial Insurance Investigations What you Need to Know
  2. 2. Agenda <ul><li>What is the Recovery Audit Contract? </li></ul><ul><li>How does the RACs affect providers? </li></ul><ul><li>Goals of the government Contractors? </li></ul><ul><li>How do Providers Prepare? </li></ul><ul><li>What Commercial Insurance Companies are doing </li></ul><ul><li>Call in the Marines! </li></ul>
  3. 3. Recovery Audit Contract-”RAC” <ul><li>Government awarded March 5, 2009: </li></ul><ul><li>4 (Four) Private firms to perform medical records and billing audits on providers in all 50 states and Puerto Rico </li></ul><ul><ul><ul><li>Inpatient </li></ul></ul></ul><ul><ul><ul><li>Outpatient (clinics and Ambulatory Surgery) </li></ul></ul></ul><ul><ul><ul><li>Home Health </li></ul></ul></ul><ul><ul><ul><li>Nursing Home </li></ul></ul></ul>
  4. 4. Regions and timelines *RACs are required to perform outreach programs for all providers in their region From CMS D C B A March 1, 2009 March 1, 2009 March 1, 2009 March 1, 2009 March 1, 2009 March 1, 2009 August 1, 2009 August 1, 2009 August 1, 2009 Provider Outreach Claims Available for Analysis Earliest Correspondence
  5. 5. How the RAC affect the Provider If the providers bill Fee-for-Service Medicare, Medicaid or Commercial Insurance programs, their claims will be subject to review by the investigators and auditors
  6. 6. Who has the Authority <ul><li>Medicare (CMS) was authorized by Congress to perform audits on all physicians, hospitals and allied health providers with the purpose of identifying: </li></ul><ul><ul><ul><li>Documentation and coding inconsistencies </li></ul></ul></ul><ul><ul><ul><li>Overpayments (& Underpayments) made to the providers based on the findings </li></ul></ul></ul><ul><ul><ul><li>Clear documentation to support the medical necessity of the services being provided or dispensed </li></ul></ul></ul><ul><ul><li>$1 billion identified overpayments in 3 states in ONE year </li></ul></ul><ul><ul><li>(California, New York and Florida Hospitals only ) </li></ul></ul>
  7. 7. What about the other entities <ul><li>Medicaid ( partially funded by the federal government and managed by each state ) </li></ul><ul><ul><li>They are hiring firms like Healthnet Federal Services to mimic the identical issues as the federal government </li></ul></ul><ul><li>United, Aetna and All others- </li></ul><ul><li>because they have implied authority to review all providers claims </li></ul>codeXpress. Providers Coding Resource
  8. 8. What does the RAC do? <ul><li>Review claims and medical records on a post payment basis </li></ul><ul><li>Review claims paid prior to October 1, 2007 </li></ul><ul><li>RACs will be able to review medical records three years from the date the claim were paid </li></ul><ul><li>Collect overpaid claims paid </li></ul>
  9. 9. Fiscal Year 09 Medical Record Limits <ul><li>Physicians </li></ul><ul><ul><ul><li>Single Practitioner : 10 medical records per 45 days per NPI </li></ul></ul></ul><ul><ul><ul><li>Partnerships 2-5 individuals: 20 medical records per 45 days per NPI </li></ul></ul></ul><ul><ul><ul><li>Groups 6-15 individuals: 30 medical records per 45 days per NPI </li></ul></ul></ul><ul><ul><ul><li>Large Group Practices 16+ individuals: 50 medical records per 45 days per NPI </li></ul></ul></ul><ul><li>Other Part B Billers (DME, Labs) </li></ul><ul><ul><ul><li>1% of the average monthly Medicare claims (max 200) per NPI per 45 days </li></ul></ul></ul>
  10. 10. How to Prepare Your Providers <ul><li>Identify improper coding and billing that is based on documentation in the patients medical record </li></ul><ul><li>Assist the providers with training programs that can ensure they are meeting documentation compliance </li></ul><ul><li>Be available to assist the office in the event that the RAC communicates an audit </li></ul>
  11. 11. How Providers Get Prepared <ul><li>Perform an independent assessment to identify areas of non-compliance with Medicare/Medicaid rules </li></ul><ul><li>Identify any corrective actions required for compliance </li></ul><ul><li>Implement any required changes to stay in compliance </li></ul>
  12. 12. Importance of Documentation Compliance <ul><li>The medical record or chart notes must match the codes you submit </li></ul><ul><ul><li>Evaluation & Management (office visit) </li></ul></ul><ul><ul><li>Diagnosis </li></ul></ul><ul><ul><li>Injections </li></ul></ul><ul><ul><li>Supplies </li></ul></ul><ul><li>Medical Necessity must clearly state the need for all services provided or prescribed. </li></ul>
  13. 13. Beyond the BaseLine Review <ul><li>Billing team must track all denied claims </li></ul><ul><li>Identify all the issues </li></ul><ul><li>Look for patterns </li></ul><ul><li>Deploy any corrective actions to avoid improper payments </li></ul>Be the solution
  14. 14. When the RAC arrives <ul><li>Must provide a clear respond to the letter within 45 days </li></ul><ul><li>Retain a certified coder review the records prior to submission </li></ul><ul><li>Send copies of the charts to the RAC- signature required notification of receipt. </li></ul><ul><li>Digitized/electronic file of your charts and supporting documentation. </li></ul><ul><li>WATCH THE MAIL FOR A RESPONSE </li></ul>
  15. 15. Next Steps from the RAC <ul><li>RAC will issue a Demand letter </li></ul><ul><li>RAC will offer an opportunity for the provider to appeal the decision </li></ul>
  16. 16. The Collection Process <ul><li>Demand letter comes from the (RAC) </li></ul><ul><ul><li>Issue Remittance Advice </li></ul></ul><ul><ul><ul><li>Remark Code N432: “Adjustment Based on Recovery Audit” </li></ul></ul></ul><ul><ul><li>Recoups by offset unless provider has submitted a check or a valid appeal </li></ul></ul><ul><li>Providers HAVE NO CHOICE… </li></ul><ul><li>THEY TAKE THE $$ DIRECTLY FROM YOUR MEDICARE CHECK </li></ul>
  17. 17. Disagreement –No Appeal <ul><li>Send check on or before Day 30 -if do not appeal </li></ul><ul><li>Recoupment by Medicare (overpayment + interest) on Day 41 and do not appeal </li></ul><ul><li>Extended Payment Plan-Request or apply for extended payment plan (overpayment + interest) and do not appeal </li></ul>
  18. 18. Appeals <ul><li>Pay by check on or before Day 30 (interest is not assessed) and file an appeal by Day 120 </li></ul><ul><li>Allow recoupment (overpayment + interest) on Day 41 and file an appeal by Day 120 </li></ul><ul><li>Stop the recoupment by filing an appeal before Day 31 </li></ul><ul><li>Request or apply for extended payment plan (overpayment + interest) and appeal by Day 120 </li></ul>
  19. 19. What to Expect Next <ul><li>Repeat the exact same process every 45 days until they find no more overpayments </li></ul>
  20. 20. Where do they turn- YOU <ul><li>YOU become their team of RAC Service Advisors </li></ul><ul><ul><li>Get the Base Line Audit as soon as possible </li></ul></ul><ul><ul><li>Determine where the Practice will stand with the RAC team </li></ul></ul><ul><ul><li>Become the “go to” team for the Practice when the RAC arrives </li></ul></ul>
  21. 21. RAC Preparation Support Medicare Documentation & Coding Benchmark Audit <ul><li>Random selection of 50 office notes </li></ul><ul><li>Release of Information </li></ul>Fax to HIPAA secure site (iDocumentNow) for certified coders to review Documentation and coding Compliance audit performed by certified coders Web-based Training Audit Report <ul><li>Eliminates copying </li></ul><ul><li>No space for auditor required </li></ul><ul><li>RAC Audit Management </li></ul><ul><li>RAC Findings Review </li></ul><ul><li>RAC Appeal </li></ul><ul><li>All Medical Specialties </li></ul><ul><ul><li>Designed for Physician </li></ul></ul><ul><li>Training for your coding team </li></ul>Sample report to follow
  22. 22. Guess who’s coming to the Audit Table <ul><li>Medicaid </li></ul><ul><li>United Health, Aetna </li></ul><ul><li>And other commercial payers </li></ul><ul><li>What they are saying.. </li></ul><ul><li>“ if the providers are miscoding for Medicare they are miscoding our claims also” </li></ul>
  23. 23. Review <ul><li>The RAC is serious- Providers need to know and understand the implications </li></ul><ul><li>Determine where the practice will stand </li></ul><ul><li>Understand that you may need to call for help to manage the process </li></ul><ul><li>Medicare is likely NOT the only payer going to take a peek. </li></ul>

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