Health Information Management

PPV: Don't take RAC medical necessity denials laying down

HIM Connection, May 20, 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 three-state 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. 42% 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.
 
Editor’s note: For more information or to purchase a copy of this article for $10, visit www.hcpro.com/content/209919.cfm. Note that subscribers to Briefings on Coding Compliance Strategies have access to this article in the May issue.



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