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The HealthCare Audit Tracker
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The Medical Auditing Tool Source
The Medical Auditing Tool Source

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CMS recently published RAC changes as they prepare to have the RAC program get back into full swing. The final determination for the fifth RAC has been confirmed as Connolly. Here are some of the changes based on provider concerns:

ADR limits will now be established based on the providers denial rates and hopefully level the playing field where high offenders get a high number of record reviews and low offenders have a lower number of record reviews.

Providers were concerned with timely filing rules that unfairly allowed CMS to look back three years this has been changed so that the RAC may only look back six months from the date of service in cases where the hospital submits the claim within three months of the date of service.

ADRs and their limits were based on the entire facility without regard to the differences in departments within those facilities. CMS has now leveled the playing field by diversifying claim types so that one area of a facility is not adversely impacted.

In concern for new facilities that may be unfamiliar with RAC, CMS has established a staged approach to incrementally apply ADRs to new facilities in order to allow them time to understand the extrerac_auditsmely complicated RAC process. This has been huge as it represents an area of tremendous loss in the past for facilities

There was concern among facilities that the ADR limits for physicians may be increased with the new contracts. At the beginning of the new contracts CMS will not increase the ADR limits for physicians.

Of great concern for facilities has been that RAC audits should be conducted by physicians of the same specialty or sub-specialty. While CMS purports to have made changes to this rule, the changes outlined appear somewhat ambiguous. However, there are opportunities for physicians to discuss improper payment identification with the contractor medical director who is a physician. Facilities should be encouraged to flood this process with requests for discussion. It will educate you and certainly test CMS is resolve to truly allow peer to peer review.

Providers were concerned about stopping the discussion period once the decision was made to file an appeal. CMS now allows the discussion. To continue despite an appeal.

Communication between the RAC and facilities has been and likely will remain a point of great frustration. It seems as though this is a one-way conversation. In order to stem this CMS will now require the RAC to acknowledge by receipt that the facility and the RAC have opened a discussion and or begun correspondence. This receipt must be received within three days of the opening of a discussion.

The for now five RAC online portals all appear different and some have different information than others. CMS will work with the RAC to enhance their provider portals and provide uniformity to the entire process.

Purse providers receiving periodic interim payments PIP have had their entire payment offset due to improper payment adjustments. CMS has revised ADR limits that will help ensure PIP providers are not negatively impacted with improper payment adjustments.

Facilities wanting to stem the flow of RAC take backs in light of some very gray areas, a national appeal win rate in the mid-70 percentile, and an ever changing target of what it is that needs to be done in order to satisfy CMS documentation and proper admission, facilities want to see payments to the RAC Limited when the facility decides to appeal. CMS has addressed this by limiting payments to the RAC until the second level of appeal has been exhausted. This will ensure to some degree that the RAC is being properly reimbursed at the proper time.

CMS has come under heavy fire for not properly providing enough public information and certainly enough clarity on the RAC program. This to the frustration of many in the healthcare community has been a big win for CMS in terms of dollars. In retrospect many facilities have suffered losses that were unnecessary because of this lack of information at the outset. CMS will increase its educational and informational opportunities so that facilities and individuals can completely understand the process.

Of great concern to facilities over the first few years of RAC reviews was the high level focus on inpatient hospital claims. The concern of course was that the RAC's motivated by fees focused all their attention on the high dollar claims with the low hanging fruit. CMS will require recovery auditor contractors to broaden the review topics to include all claim provider types and will be required to review certain topics based on a referral such as an OIG report. What remains in question is how the medical community will be able to actively monitor whether or not the RAC's understand and follow this ruling.

Another concern by facilities was that the RAC's were not penalized for having high appeal overturn rates. There are facilities that have had appeal win rates in the 90 percentile and yet their RAC continued to overturn the same claim type  again and again. RAC's will now be required to maintain and overturn rate of less than 10% on the first level of appeal excluding claims that were denied due to know or insufficient documentation or claims that were corrected during the appeal process. Failure to do so may put this RAC on a corrective action plan with CMS.

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Providers are also concerned with the accuracy of automated reviews and RAC's have not been penalized for this as well. Recovery auditors will now be required to maintain an accuracy rate of at least 95%. Failure to do so again could put that RAC on a corrective action plan with CMS.

Surprisingly another area of concern has been the difficulty of communicating with the RAC's when providers had complaints or concerns. CMS established a provider relations coordinator to offer more opportunities for facilities to easily communicate complaints and concerns. This allows the provider to have another source to go to when they cannot get resolution through their RAC auditor.

Providers have also been asking for more information on how to prevent improper payments and bill correctly. CMS has begun adding tips to the CMS website. These compliance tips in addition to education and MLN matters articles are meant to provide providers with the information for proper payment and billing.

Providers of been unclear when reviewing their region RAC website on the issue of website postings and new issues to be reviewed. CMS is requiring the RAC's to provide consistent and more detailed information regarding new issues to their websites. This is supposed to allow a cleaner communication process between the RAC and the provider.

Providers, the AHA, and many others in the community have expressed great concerns over the RAC program itself, the ethics involved in reviews that result in such high turn around rate under appeal and finally the inability to score their individual RAC. CMS is considering developing a provider satisfaction survey. This survey would allow providers to speak to the many issues that they have regarding the rack. Whether not this will occur remains to be seen but we can be assured if this survey does get made and delivered there will be much discussion over the fairness of this process.

Here is a link to this CMS publication; http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Downloads/RAC-Program-Improvements.pdf

 

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Commercial Payers Already Following in the Footsteps of CMS Audit Practices

With the winds of change in full swing for CMS, commercial payers have taken notice of their billions of dollars in recovery through auditing. As a result commercial payers have adopted many of the practices seen through CMS transmittals. The most recent change seen was in a major commercial payers decision to follow transmittal 541. Transmittal 541 essentially states that CMS, MAC, and ZPIC can deny charges, generally physician charges, associated with pre and post visits of a separetely denied claim.

http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R541PI.pdf

 

So what's the facility to do? In the case of CMS we know that our defense is to improve our own practice. The problem is that the CMS version of improving our own practice is a constantly moving target so many are left to guess as to where to start. Many facilities, in fact most facilities, have no audit plan in place. An audit plan should start with the data collection feed or report that incorporates all the losses and/or gains that may come from an audit. The problem is is that many audit practices are segmented and separated from each other within hospitals. As an example while a nurse auditor may defend a commercial formal audit they may never touch a business office related denial. In turn a coding person may review a DRG validation audit that results in a refund but never share that information with their nurse auditor or anyone who may connect the dots. Your audit losses consist of business office denials, commercial audits, RAC, MAC, ZPIC, DRG validation and any other review that affects the bottom line. Starting with the consolidation of this data a facility now knows critical information.

 

Facilities that know where all their audit losses occur are now equipped to start formulating an audit plan. The audit plan will obviously have goals, and those goals should be first and foremost to reduce the audit losses. The best way to do this of course, is to start with the area of highest risk and the easiest way to correct the errors in that area. This is best and most easily defined by forming an audit committee. At the bottom of this article you can find my email where I'll be happy to send you an audit committee agenda. As you sit down with your committee you'll want to parse out the data from each area of loss and define with managers and directors present how that loss occurred. In the case of commercial reviews and RAC audits you're going to find physician documentation,ordering, and long-standing hospital practices are costing you a lot of losses. In the case of DRG validation you'll find different interpretations or blatant errors. In the case of commercial auditing you'll find differences between documentation and the line item bill. These discoveries can be further made part of an audit plan that addresses what to do about the most obvious situations that cause the highest level of loss.

 

As an example of a CMS related loss the CMS auditor may have deemed an inpatient visit not medically necessary for a variety of reasons. In your ADR requests and other commercial correspondence you'll notice very similar language coming from commercial payers who have begun denying inpatient visits as not medically necessary. With an audit plan that includes administration, contracting, auditing, and department directors you can begin to formulate responses back to the payers. These responses can range from contractual agreements to enforcing an internal audit policy and to creating an environment of change via education and internal cooperation. This is our practice and it has helped us in some locations in some forms of their audit needs to eliminate denials.

For more information feel free to email me at cbaggott@medlinksinc.com

#medical audit

#nurse audit

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Lets make auditing simpler..........
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Just released!! check out the Health Care Industries latest "Cloud-Based" Audit Tracker. Available to providers and payers for their internal or external audit needs. 
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