Health Information Management

RAC posts dozens of new issues for under- and overpayment DRG-validation complex review

HIM-HIPAA Insider, January 19, 2010

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In recent weeks, HealthDataInsights (HDI) has added dozens of new issues to its CMS-approved list for review. Of the many topics HDI approved, perhaps most interesting is the influx of approved underpayment issues.
Prior to the three-year RAC demonstration, the Comprehensive Error Rate Testing (CERT) program and the Hospital Payment Monitoring Program (HPMP) determined the national error rate for underpayments to be at 9%. During the demonstration, however, the RACs found only a 4% underpayment rate, showing that overpayments were clearly the main target during the demonstration, according to Kimberly Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc.
“We may start to see a tip in underpayment appeals,” says Hoy. “This could be to try to get us to look a little more carefully and closer at the national measurement.”
With HDI looking specifically at underpayments now, providers may wish to bring these issues to their RAC’s attention. By being aware of these underpayment issues—such as DRG validation-amputations and DRG validation-burns—and preparing for the audits, providers will be in a better situation going forward.
“Region D states are definitely keeping an acute eye toward the underpayment situation and plan on appealing any necessary claim,” said William Malm, ND, RN, a healthcare consultant for Craneware, Inc. “Several large and small hospitals in the region were expecting this or something like it, and have been preparing since the demonstration.”
Underpayment issues for review came recently as part of a list of nearly 70 new issues HDI released for complex RAC review. The addition of these new issues brings the total number of DRG validation issues to 530 out of a possible 747 DRGs.
“One thing that concerns me a little bit, is that it really leaves providers susceptible,” said Hoy. “Having all of these issues approved means they could in effect go after a provider for all of these issues and hit them hard.”

Editor’s note: This article is adapted from the Revenue Cycle Institute Web site.

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