Health Information Management

Don't take RAC medical necessity denials lying down

Briefings on Coding Compliance Strategies, May 1, 2008

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by Glenn Krauss, RHIA, CCS, CCS-P, CPUR, PCS, FCS, C-CDIS

By now, almost everyone knows the results of the threestate recovery audit contractor (RAC) demonstration project that ended March 27.

For fiscal year (FY) 2007, RACs identified and corrected $371 million of Medicare improper payments. More than 96% of these improper payments were overpayments, and almost half were the result of incorrect coding.

According to the RAC status document report, most improper payments occurred when providers submitted claims that did not comply with Medicare’s coding or medical necessity policies and rules. In fact, approximately one-third of the improper payments occurred because claims did not meet Medicare’s medical necessity criteria for a particular service or setting. Forty-two percent of the identified overpayments were due to incorrectly coded records. However, the RACs are often guilty of not following medical necessity standards, particularly when it comes to the appropriateness of inpatient admissions.

This is an excerpt from a member only article. To read the article in its entirety, please login or subscribe to Briefings on Coding Compliance Strategies.

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