The RAC program and your agency software

The official 50-state rollout date for the Recovery Audit Contractor (RAC) Program is January 1, 2010—right around the corner. If your agency is not fully prepared, here are some last-minute suggestions to help you get ready.

Recovery Audit Contractors initially focused their efforts on hospitals, giving home health agencies a bit of breathing room and more time to prepare. However, Robert Markette, an attorney at Gilliland & Markette who specializes in healthcare, warns agency owners not to become complacent.

“It doesn’t surprise me that the RAC contractors are focusing on hospitals,” he says. “Hospitals claims are easy to review with data mining, especially for one-time conditions such as appendectomies. The vast majority of audit recoveries so far have been in hospitals, so RACS can get up to speed quickly. This doesn’t mean, however, that they’re not going to touch home health agencies.

“Take advantage of this additional break time to take steps to protect yourself. The amount of data is huge and the auditors’ ability to sift through it and identify claims is great. Computers are now seeing mistakes that auditors wouldn’t have caught in the past and auditors are asking for money back. Better to identify mistakes on your end before you have to pay it back. CMS reimburses RACs a percentage of the claims denials they find, so they have an incentive to find claims.”

Issues Currently, RACs are posting issues on their website as they identify them.

“Keep an eye on common areas in home health, such as billing and therapy visits,” Markette says. “It’s easy for RACs to look at discharges from hospitals. If there is an overlap in stay—if the patient shows up in home health and the hospital at the same time—it will be easy to spot.

“Anything related to therapy visits under a particular episode may be reviewed. Does this mean it will result in a recovery? Not necessarily. CMS is holding off on medical necessity reviews and took it off the table until 2010. We expect CMS to revise the process. Next year we should get the green light.

“I still don’t see home health issues on the RAC sites,” he adds.”

To get an idea of the types of improper payments RACs might pursue, look to see what the Office of the Inspector General and Comprehensive Error Rate Testing (CERT) program are finding in their audits.

Reconciling variances Jeanene Brian, chief clinical office at Allscripts, a software company that provides solutions for the healthcare industry, encourages agencies to look at their variances and justify those that don’t match up with regional norms.

“If you can’t justify the variance,” she says, “you may want to pay attention. Allscripts provides agencies with a report that shows how they are doing and how they compare to regional and national agencies of a similar size to see if they fall in the middle or on one of the extremes.

“If your home health agency is affiliated with a hospital that does a lot of high-acuity procedures such as cardiac surgery or bone marrow transplants, for example, your agency would have higher acuity patients and would fall in the upper limits of many measurements on the report. If, on the other hand, your home health agency is in a community that doesn’t have these services, you’re less likely to have patients who are that sick. If you do have very sick patients, you may have a coding problem. The sooner you can assemble your data and prepare your reports ready to justify your variance, the sooner you’ll get your money.”

Technology behind the scenes supports agencies Software development and consulting firms such as Allscripts have been busy behind the scenes developing tools to help home health agencies prevent, prepare for, and manage RAC audits.

Brian says most agencies don’t typically have a process in place to deal with RAC audits.

“Currently, the typical audit process is lead by someone in the financial department,” Brian says. “RAC is more clinically focused. Agencies must create a new process that’s lead by clinical, with input from finance.”

Allscripts is taking a two-pronged approach to helping home health agencies: providing benchmarking data to alert agencies of potential audit areas, and deploying software that helps agencies manage all the rules around the audit process.

Allscripts Homecare has a three-pronged strategy. The first step is a review of agency metrics to determine if, and where, an agency might be vulnerable to an audit. The second step is Allscripts Homecare assistance to evaluate agency processes to assure all claims are representative of patient care and requirements. Allscripts Homecare fully supports an agency’s review and process optimization, if needed. Finally, the Allscripts Homecare Audit + application assists agencies to monitor and manage records undergoing an audit process. Homecare audits can be expensive, labor-intensive endeavors. With proper technology and support, agencies can proactively prevent audits, or easily manage them after-the-fact.

“The process with RAC is different than a Medicare Additional Documentation Audit (ADR),” Brian explains.” You must know the rules around the audit process. For example, if a claim is denied, you have to know how many days your agency has to provide feedback. Our software handles all of the rules, such as where a requested record is, who is handling it and how many days the record is outstanding.”

3M’s RAC Ready Program, a partnership of 3M’s Health Information Systems, McKesson and Executive Health Resources, takes a similar approach. Their three-step program includes assessing potential audit risks and compliance exposure; identifying gaps and recommending an action plan for addressing high-risk areas; and establishing processes to prevent future compliance issues. The RAC Management Tool software improves an organization’s ability to identify areas of risk, respond quickly and efficiently to RAC requests and defend claims.

Final words The Medicare Recovery Audit Contractor Program is, at its core, a data-driven auditing program. Therefore, the software you use for billing and clinical data management should become a focus for both preventive monitoring and building a documentation defense. When auditors identify a possible overpayment and notify an agency of a documentation request, there are specific time limits in which the agency must respond. If you are unclear about how the features of your system can best be used for preparation and response to RAC requests, you may want to discuss this with your software vendor as part of your RAC preparation plan.

Markette reminds agencies not to let the delay in home health audits lull them into a false sense of security. RACS will identify issues that directly affect home health and hospice agencies. And, he says, if you receive a letter regarding an audit respond quickly.

“In the pilot rollout, 10 percent of the recoveries were due to a lack of documentation,” Markette says. “Providers lost money because they didn’t provide the documentation in time. You will have limited time to reply. Have a process in place and someone tasked with the responsibility. Be aware of the time frame so you aren’t paying pack the government money because you weren’t ready. You can get an extension if you ask for it. “

In response to feedback from the RACs, providers, suppliers and their associations, on December 1, CMS modified the additional documentation request limits for the RAC program in FY 2010 for DRG Validation.

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