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RAC Project, Essay Example

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Words: 2332

Essay

Within the United States Medicaid and Medicare programs there have been a rising number in cases where there is fraud committed when providers submit claims to the program. In the recent years, contractors from the federal government have been sent out to raid, arrest, and shut down organizations that have abused the system, while making a profit in the process. In order to counteract these criminal acts, the government and the Center for Medicare & Medicaid Services has developed a program that contracts agents implemented in Medicare programs across the United States in fee-for-service Medicare programs in order to audit their claims in aims of finding improper handling of claims to Medicare. As a new highly Recovery Audit Contractor within the community hospital, my responsibility is defining what the program entails, providing an audit plan, forms, and developing an education system in order to aid the hospital on the dealings of the program.

RAC: The Basics

The RAC program was initiated in 2003, when the Federal government began the program as a demonstration project. The RAC program was first executed in just six states. The RAC program was enacted to help identify and recover funds that were overpaid to the Medicaid and Medicare federal healthcare programs. Legislation passed the Tax Relief and Health Care Act in 2006, which made the Medicare RAC program a permanent program which was then expanded to include all states within the United States. The Patient Protection and Affordable Care Act (ACA) in 2010 was added provision that required each in handling their Medicaid program to establish a Medicaid RAC program in conjunction. Currently they RAC program was divided into four regions which are covered with the Medicare RAC program. The regions are referenced as Region A, Region B, Region C, and Region D.   Each region has its own contractor RAC and headquarters division. The goal of the RAC program is to identify improper payments made for claims for health care services of Medicare beneficiaries, identify and prevent fraud, abuse and waste of Medicare payments paid to health care providers under fee-for-service Medicare plans.(Georgia Medicaid RAC)   In order to identify these issues RAC does a review process (audit) to detect these underlying issues.

In order for CMS program to retain its integrity in prevent fraud, improper payment, and abuse from Medicaid and Medicare programs, CMS contracts several agencies and entities that provide oversight for RACs. They contract to several including, “Program Safeguard Contractors (PSC), Medicare Drug Integrity Contractors (MEDIC), Zone Program Integrity Contractors (ZPIC), and Recovery Audit Contractors (RAC), to perform many Medicare integrity functions. For Medicaid integrity, CMS relies largely on State-based programs but also contracts with Medicaid Integrity Contractors.”(OIG, n.d) The contracted oversights duties include, providing and reviewing the Medicare/Medicaid Contractor’s annual medical review strategies. They are able to facilitate compliance with the current regulations, and the Medicare/Medicaid contractor’s implementation based on the current enacted legislation. The role includes ensuring the contractors follow and review the performance of the CMS operating instructions. In addition to, conducting a continuous evaluation and monitoring of the RAC’s strategies and goals, and provide ongoing feedback and consultation to the RAC’s in regard to the programs and medical review issues.

The most common types of findings are that made to health care services such as improper payments claims provided to Medicare recipients. For RAC, the improper payments that they review can either be underpayments or overpayments. In overpayments, they can transpire when health care providers submit claims that do not meet the Medicare’s medical necessity or coding policies. In underpayments, they can transpire when health care providers submit claims for a straightforward procedure but the medical record reveals that a more complicated procedure was actually performed.

The Demonstration Program identified key RAC coding errors in health organizations. The first finding being the excisional debridement coding, “the leading ICD-9-CM procedure coding error.”(Wilson, 2010) This coding error can be detrimental in not providing the correct information on the components of depth, size, the removal of devitalized tissue, and the tools used. The second finding was Lysis of Adhesions. “Minor adhesions may exist without being organized, causing any symptoms or additional difficulty performing the procedure. Coding lysis of adhesions in these cases is inappropriate, as it is the approach for a larger procedure.”(Wilson, 2010) The third finding being wrong principal diagnosis. The diagnosis on claims did not match the medical records on file. Wrong principal diagnosis leads to over or underpayment of medical claims. Another mis-coding was, “RACs identified improper payments due to the coding of DRGs with complications or comorbidities (CC) or major complications or comorbidities (MCC) with only one secondary diagnosis.” (Wilson, 2010) These misdiagnosis led to incorrect pathology and patient reports that have led to improper payment claims.

RAC’s scope of work includes the Good Cause Review. Within this review, RACs must use a targeted approach in selecting claims to be reviewed. In other words, no random sampling or selection of claims and RACs are required to show “good cause” for their claim review selections. The scope of work includes identifying improper payments. These improper payments include, incorrect payment amounts, non-covered services (including services that are not reasonable and necessary), incorrectly coded services, and duplicate services. Each of these improper payments would be seen as either an overpayment or underpayment.

However, in their review process the RAC’s have certain limitations that they cannot claim as improper payments. In their review period RACs are only permitted to review claims paid after October 1 and will only have a look back period of 3-years. The excluded claims that may not be reviewed by the RACs are services provided under a program other than Medicare Part A or Medicare Part B (Fee-for-Service). Claims where the provider is without fault (e.g., the beneficiary signed an ABN) and cost report settlement process (e.g., IME and GME payments). Claims with specific processing rules (e.g., Demonstration projects), claims to be reviewed as part of a fraud investigation (suppressed claims), claims previously evaluated by an affiliated contractor, such as a fiscal intermediary, carrier or Medicare Administrative Contractor (MAC) (excluded claims), and finally claims identified during a pre-payment review. (Ahima, n, d)

In the RAC program, there are currently two types of review processes that the RAC program utilizes are the automated review and the complex review. The automated review requires no medical record. The errors found during the automated review must be specifically incorrect application of coding rules, or noncovered services that must be supported by Medicare policy, or approved by coding guidance. (Ahima, n, d) The complex review requires a medical record, and may require a physician to submit medical documentation. In addition, records necessitating a complex review are those with a high likelihood of noncovered service or when on absolute Medicare policy, article, or when a Medicare sanctioned coding guideline exists. (Ahima, n.d) RAC audits can review each facets of the medical record including but not limited to, evaluation and management (E/M) services as pertaining to those that need to be reimbursed, and also those on duplicate claims. By CMS regulations, “RACs are generally permitted to request 10 medical records every 45 days from a private practice physician and up to 50 medical records every 45 days from a large physician group.”(MedFocus, 2010)  Although RAC auditors can subject a review of a medical claim at any time, Recovery Auditors can look back only three years from the date the claim was paid. The RAC audits aim to find and identify the claims that are over not correctly handled and paid, either by under or paying on the medical claims.

In order to prepare for a possible RAC audit in the hospital, a toolkit is needed to inform the employees and staff of their options. In the following passages, a RAC Toolkit will be provided.

Audit Plan

In order to adequately prepare, the hospital must know who is in charge in the process of auditing. In the hierarchy of command in the hospital and RAC team is needed. “Organizations can get started by establishing a multidisciplinary RAC readiness and response team.”(Ahima, n.d) The RAC team will have the responsibility and duties of creating goals within the structured organization, and the organizations operating process for the RAC management process. The team will assess the available RAC results to aid in training and planning process. The RAC team would include the team lead members from the departments of finance, health information, patient financial services, the compliance department, and other essential departments. The team of the hospital will need to appoint the leader that is neutral and respected by the organization. They will have to think strategically, and have a clear understanding of the internal review process of RAC, Medicare, and Medicaid. The RAC team will need to have developmental skills to garner cooperation, collaboration, and create a sense of urgency within the departments and individuals. As a member of the team, they need to educated on the rules and regulations of RAC, and know the proper protocol in handling situations.

Policies and Procedures

The next step in preparation is outlining the policy and procedures. “As soon as possible, the readiness and response team should assess the organization’s risk, educate senior leaders on the potential financial impacts, and alert those affected by the RAC program that their world is about to change.”(Johnson, Bloom, Morris, Madamba, 2009) This procedures include getting the correct medical records requests and supporting documentation. Point of contact and numbers of senior staff and RAC. If the hospital is being audited, knowing what the improper payments the report from the RAC has filed. Which improper payments are being audited in order to find this out, the hospital must go to both the CERT (Comprehensive Error Rate Testing) and OIG websites to look up the hospital reports. The hospital needs to develop appropriate policies and procedures, and implement educational initiative to support the RAC review process program. In order to avoid the uncertainty, the hospital will conduct an internal assessment to identify if they are in compliance with Medicare/Medicaid rules. Promote compliance to these rules, track activities, and appeal when necessary. Other documents that may need to be prepared include copies of payments, extension request letters, and appeal letters. This is an example of the extension request letters from Ahima.org:

RAC Medical Record Extension Request Sample

[Date]

[Contractor Name]

Attn: [Contractor Contact]

[Contractor Address]

[Contractor City, State, Zip]

Subject: Extension for submission of medical record

Healthcare Entity Name: [Facility/Practice/Center Name on record with CMS]

NPI#: [National Provider Identifier]

Patient Name: [Patient Name]

Account #: [Account Number]

Medical Record #: [Med Rec Number]

HIC #: [HIC Number]

Date of Service: [Admit Date] – [Discharge Date]

As a follow-up from our [phone call or e-mail] with [contact name] on [date], this letter serves to document that you have agreed to grant us an extension for the submission of medical records on the above referenced account through [date]. We expect to have the records delivered to you on or before this timeframe. Thank you for granting the extension. Please contact me at [phone number] if you have any questions.

Sincerely,

[RAC coordinator name]

RAC Coordinator

[Healthcare Entity Name and Address]

Develop the Tracking and Appeal Process

In this step, the hospital needs to learn the appeal process, and to identify tracking system, database or file. In doing so, the hospital needs to know the five levels of appeal which include, redetermination, reconsideration, administrative law judge, review, and judicial review. When going through the appeal process, prepare a cover letter for each level of appeal, and identify the authorized person to sign the letter, a member of senior staff and management. The last parts of the process is determine if an appeal needs to be submitted and who should submit the letter. The following is an appeal’s letter from Ahima.org:

FI Sample Appeal Letter

[Date]

[Fiscal Intermediary Contact Name]

[FI Company Name]

[FI Address]

[FI City, State, Zip]

To Whom It May Concern:

Re: Request for Redetermination of [RAC name] denial

We wish to exercise our right to appeal the recent overpayment determination made by [RAC name] for the following account: Facility Name and NPI #: [#111111 Hospital A]

Audit ID #: ___________________

Patient: (HIC#) ___________ DOB: __________________

Name: ______________________________________________

Medical Record #: ____________ Claim #: ______________________

DOS: __________ Service Through Date: ________________

We do not believe an overpayment was made based on the following:

_____________________________________________________________________

Please see attached appeal letter and supporting [Interqual] documentation:

_____________________________________________________________________

Enclosed for your review is a copy of additional supporting documentation. If you have any questions, please me directly at [phone number], or by fax at [fax number].

Sincerely,

Case Management Director

In conclusion, as the Recovery Audit Contractor for the hospital,  the provided information is essential in learning what the RAC program brings to the organization, while maintaining the integrity and trust of the Medicare programs within the United States. The RAC programs is a helping tool that keeps organizations in line in hope of learning from past mistakes in order to prevent future ones. The information provided outlines the basics, history and background, and the process in which the Recovery Audit Contractors program operates. The RAC toolkit provides adequate and factual information in helping to prepare for the RAC in the hospital, but also when they are being audited. The toolkit provides an audit plan that outlines the steps the hospital needs to make detailing the education, the appeal process, and the also samples of the audit forms that need to be submitted. In order for organizations to learn they must educate and comply with Medicare’s coding and policies, which helps to better serve the patients, the organizations, and the process of the RAC program.

References

American Medical Association Fact Sheet Recovery Audit Contractors (RACs). AMA. (n.d) Retrieved from http://www.ama-assn.org/ama1/pub/upload/mm/399/rac-fact-sheet.pdf.

Johnson, Kathy M.; Bloom, Allison; Morris, Denise; Madamba, Rod. “RAC Ready: How to Prepare for the Recovery Audit Contractor Program.” Journal of AHIMA 80. (2009). Retrieved from http://library.ahima.org/xpedio/groups/public/documents/ahima/bok1_042634.hcsp?dDocName=bok1_042634

Management Issue 7: Oversight of CMS Program and Benefit Integrity Contractors. OIG. (n.d). Retrieved from https://oig.hhs.gov/reports-and-publications/top-challenges/2011/issue07.asp

Medicare Recovery Audit Contractors Information Guide and Resource Book. (N.d) Retrieved from http://www.aegis-compliance.com/_literature_59668/RAC_Information_Guide_and_Sourcebook.

Recovery Audit Contractor (RAC) Toolkit. CMS. (n.d). Retrieved from http://library.ahima.org/xpedio/groups/public/documents/ahima/bok1_044065.pdf

Recovery Audit Contractor (RAC) Program. MedFocus. (2010). Retrieved from http://medfocusrcm.com/news/recovery-audit-contractor-rac-program

Wilson, Donna. “Five RAC Coding Targets. Demonstration Program Identified Key Areas of Improper Payment.” Journal of Ahima. (2009). Retrieved from http://library.ahima.org/xpedio/groups/public/documents/ahima/bok1_043474.hcsp?dDocName=bok1_043474

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