Comments on: RAC Audits; A Commentary

By: Mitch

Mitch — Thu, 30 Oct 2008 00:03:48 +0000

Thanks for your contribution Ernie, and you’re absolutely right on documentation. When I’m consulting with hospitals, I’m always amazed as the reaction of staff when I tell them just how much they have to document what’s going on, especially times. If it’s not in the record, it didn’t happen.

By: Ernie de los Santos

Ernie de los Santos — Wed, 29 Oct 2008 23:53:16 +0000

Hi Mitch,

Nice thread going! We have a blog going that our clients asked for, concerning our experiences with RACs. Our auditors (who are certified coders & coding trainers) are often hired by the DOJ to do audits and have been directly involved some famous cases. Hospital systems now hire us to help them prepare for the coming RAC attacks. Our blog offers information in “bite-size” posts, which seems to be popular.

The reason I’m writing is to add something to what was said above — RACs almost exclusively look for documentation errors. They tend to look for these first, and any fraud cases will fall out of that. But the big thing is the documentation by the MD.

The oft-quoted guideline for coders/billers is this: “Not Documented = Not Done.” There are no exceptions. Take a look at a recent post we did: “Excising Debridements” and you’ll see what I mean.

Hope your blog keeps this going!

Ernie de los Santos´s last blog post..Losing FTEs

By: Mitch

Mitch — Thu, 16 Oct 2008 15:09:39 +0000

@Tory Smith, Hi Tory, thanks for your comments. At the time the article was written, CMS hadn’t settled on who would be contracted for doing the audits; I don’t think that news came out until the middle of September or so, from what I remember. And yes, there will be differences based on region, but the truth is that it’s still going to amount to a big chunk of money, and at this juncture there’s a lot more supposition that drives rewards rather than plain, hard facts. Still, I guess it’s that way for a lot of audits in many areas of business; just seems to be more punitive to hospitals in these economic times.

By: Tory Smith

Tory Smith — Thu, 16 Oct 2008 14:03:09 +0000

Mitch,

I am a first time responder to your blog… My company provides RAC-Risk Assessments to help minimize and curtail RAC audits for all providers.

These assessments provide an in-depth analysis of the high vulnerabilities identified through the RAC Initiative.

There were some great comments, however, I just wanted to clarify a couple of the comments on the contingency fees of CMS’ RAC auditors and the actual number of RACs.

First of all, four (4) RACs were selected by CMS, not three (3)…

Secondly, the RACs receive the following contingency fees. Each RAC receives a different amount based on their assigned region.

We surmise that the differential of rates are based on the anticipated overpayment amounts based on previous collections during the initiative phase of the program.

Although CMS states that they were selected based on their RAC Inititive results and their low-bid during the RFP process.

The following list identifies the RAC, their region of responsibility and the agreed upon collection percentages:

Diversified Collection Services, Inc. (Region A) - 12.45%

CGI Technologies and Solutions, Inc. (Region B) - 12.50%

Connolly Consulting Associates, Inc. (Region C) - 9%

HealthDataInsights, Inc. (Region D) - 9.49%

According to the CMS, the RACs will be paid a contingency fee based on the amount of improper payments they correct for both overpayments and underpayments.

I hope that this helps. Please contact me for any additional questions.

By: Mitch

Mitch — Sat, 30 Aug 2008 01:40:00 +0000

Hi Renae,

In Pennsylvania, hospitals have started receiving all sorts of literature from their state insurance authority about upcoming RAC audits, but hospitals are either ignoring it or panicking because they’re unsure what to do. That’s pretty much what the original hospitals did before those same types of audits came. It’s hard to prepare for something when one is unsure just how much authority these people have, or what they might be looking for. But I also know there are companies who are now saying they can offer protection and assistance to hospitals before RAC audits occur. I’m not sure how valid those claims are, but I figure any help can’t hurt.

By: Mitch

Mitch — Sat, 30 Aug 2008 01:37:18 +0000

Thanks for sharing this information, Thomas. I could see if they reviewed the records and found that they weren’t as meticulous as Medicare wishes them to be, but to arbitrarily toss out everything based on what they believe you should do is unacceptable, and I’m glad you’ve been able to recover some of the damages.

By: renae

renae — Thu, 28 Aug 2008 07:05:46 +0000

There is a small error in the reports of contingency fees in regard to the RAC audits.
The auditors are (usually) not being paid on contingency…..but the company that HIRES the RAC audits is paid contingency. Currently, there are 3 firms doing the RACS. Only ONE pays the nurses on contingency.

As for appeals, this is why the hospitals and facilities need to at least contract a nurse to handle them and make the recommendations for how to avoid the problems. Many times, it is not the CARE that was given, but the DOCUMENTATION in the record does not reflect the level of care for a specific DRG. THAT is where RAC is finding the dollars.

By: Thomas Peer

Thomas Peer — Thu, 28 Aug 2008 02:14:03 +0000

I am medical director of rehabilitation at a large community hospital in California. We were hit with 400 RAC audits starting about 2 years ago representing 6 million dollars in payments. The RAC auditor denied 99% of the cases even though we had been providing rehabilitation to elderly patients with lower extremity joint replacements for over 20 years without objection from Medicare. The patients received excellent care and with uniformly excellent results. The RAC audits do not dispute the necessity of the care, they just feel that all these patients should be shipped out to nursing homes instead. It turns out that the RAC auditors did not even look at the charts (and do not even claim to have done so!)
They received a kickback of 25% ofall recovered funds, even if the denial is overturned on appeal. We received a virtually identical form letter on all 396 denials. Nice work if you can get it! So far we have gotten over half the cases overturned after review by a genuinely impartial third party or administrative law judge and are still working our way through the remainder. And it turns out that there is very strong evidence that the audits were illegal.

By: Thomas Peer

Thomas Peer — Thu, 28 Aug 2008 01:52:11 +0000

hey

By: Mitch

Mitch — Sun, 15 Jun 2008 00:21:38 +0000

Unfortunately Renae, more often than not in the healthcare industry administrators tend to be more reactive than proactive to almost everything. One can look at how they all missed just how important outpatient services were going to be when they were living high off the hog on inpatient money back in the 80’s. Many were also behind the 8-ball when HIPAA came, and there are still many hospitals that don’t have compliance as a part of their operation. I’m not sure how you’re advertising your services, but if you’re anything like me, you’re mostly banging against walls that will only fall when it’s too late for them.