Health Information Management

Include specific departments when forming a RAC team

JustCoding News: Inpatient, January 20, 2010

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by Kimberly Anderwood Hoy, JD, CPC

The Recovery Audit Contractor (RAC) Program has caused a great deal of apprehension in the provider community. In response, many providers have elected to develop RAC teams to assess the risk to their organization prior to the beginning of the program and to handle requests once the program is under way. However, if not done carefully, a RAC team can end up pulling resources from other needed areas of the hospital in a disproportionate level to the threat posed by RAC recoupments. A carefully designed RAC team can minimize the effect on the hospital from both RAC recoupments and inefficient use of resources, including valuable staff and physician time.

HCPro’s RAC Preparedness Benchmarking Report surveyed providers on their preparations for the RAC Program. There were more than 700 respondents from demonstration and non-demonstration states, as well as from each of the four RAC jurisdictions. This information will assist providers in their preparations by giving them benchmark information about how hospitals are preparing for RACs.

Strategy for building a RAC team
When building a RAC team, consider whether you expect the team to be a management group providing direction or a work group handling RAC responses. It is important to clarify the purpose of the group early on to ensure the correct composition of the team. Some larger providers may need both. However, there is no hard-and-fast rule that certain types or sizes of facilities need one or the other type of model. The culture and resources of the facility will dictate how to respond effectively to the RAC Program.

A management group will consist of directors or managers who can provide direction to the staff in their departments as the team develops strategies, adopts policies, or establishes budgets. This type of group will generally have the ability to approve or move forward new positions as needed within the organization, as well as divide and assign work to current department staff members. Usually, it also has the ability to move forward budget allocation to RAC preparation efforts.

The RAC Benchmarking Report indicates that a management group is the most popular type of team providers are forming. When asked which level of staff members were on their RAC team, more than 50% of providers indicated that they had a director-level individual from seven out of nine of the most common departments included in RAC teams. In fact, coding was the only department in which providers indicated using another level more than the director level, with 49% answering that they had an individual from the managerial level. Staff-level involvement ranged from 7% to 25%, with the highest percentage representing staff physicians, which could be considered quasi-managerial/directorial. Additionally, at least 68% of respondents indicated that their RAC coordinator was at a managerial level or above.

RAC coordinator
Some providers have chosen to assign a RAC coordinator for purposes of assisting with RAC preparations and ongoing handling of RAC requests. In the RAC Benchmarking Report, roughly half of facilities reported having a RAC coordinator in either a full- or part-time capacity, with 40% reporting they had a full-time RAC coordinator. However, the decision to designate a RAC coordinator will be influenced by individual provider budgetary constraints and should take into account the provider’s experience with RAC requests.

Some providers may be unable to designate a RAC coordinator, whose duties are solely RAC-oriented, because of budgetary constraints. This does not necessarily inhibit the provider’s RAC preparations, but it does mean that other departments will initially need to set aside more time to devote to the tasks of risk assessment and policy development. When forming a RAC team, staff members from the following departments play key roles.

Compliance department
If the hospital has a robust compliance department, the RAC team may naturally fit within its structure. Recall that the purpose of the RAC Program is simply to detect improper payments, and, in general, one of the compliance department’s functions is prevention of improper payments; therefore, the RAC team’s goals will align closely with those of the compliance department’s and could even be considered a subset of the compliance department’s function.

Additionally, the compliance department is very familiar with making risk assessments for claims. Risk assessment is a routine part of compliance department functions, and claims submission has been an identified risk area in both the Compliance Program Guidance for Hospitals and the updated Supplemental Compliance Program Guidance for Hospitals.

Health information management, including coding
Another key department to be included in the RAC team is the HIM and coding department. The HIM department staff will have key tasks once the hospital starts receiving RAC requests. It will be tasked with timely submission of medical records for all requests received from the RAC and have the potential to be heavily affected in its day-to-day operations. Its input regarding available staffing resources and the need for additional internal or external resources will be invaluable. In the RAC Benchmarking Report, providers with RAC teams identified HIM and coding as the most common backgrounds for coordinating their team because their participation is so important.

Even though coding often is a part of the HIM department, the coders’ role will be a bit different. Coders are important in risk assessment and ongoing evaluation of appeals viability because the second most identified area for improper payments in the demonstration project was coding. The coders are essential in evaluating new coding issues posted by the RAC to determine whether the facility has a vulnerability related to those issues. If the provider begins to receive denials based on coding, it will be important to have the expertise of the coders to determine appeal strategies. Coders may be aware of nuances in coding guidance that make appealing a category of claims more or less practical.

Denials management or appeals department
Departments devoted to denials management or appeals are ideally suited to the RAC team. In fact, as the team matures beyond the preparation phase and begins to receive RAC requests, these departments may take on a lead role on the team. Members of such departments have the day-to-day knowledge of how to investigate denials and construct appeals that will be important once the provider begins to receive RAC requests.

The RAC Benchmarking Report did not mention them frequently; however, this may be because most pro¬viders in the survey appeared to have a management group RAC team, and the denials management staff lends itself more to a work-group type team. Nevertheless, its input on necessary staffing and the evaluation of appeals viability will be essential to the team as it moves forward.

Business services, including Medicare billing staff
Again, although mentioned less commonly in the RAC Benchmarking Report, the busi¬ness services department will be an important part of the ongoing management of the RAC process. Although requests will initially come in through HIM or a RAC coordinator, the business services and Medicare billers will be an integral part of tracking recoupments and any offsets, as well as notices on remittance advices. They also may be in a better position to assess risks and errors detected in automated reviews of claims because they are more familiar with the individual claims processing systems of the provider and any areas of vulnerability in the systems.

Business services departments also are often aware of situations in which they have received less than the expected payment based on the claim submitted. These underpayments are considered improper payments that are within the scope of RACs and can be referred to the RAC for follow-up.

Case management/utilization review
A major focus of improper payments during the demonstration project was inappropriate settings or lack of medical necessity for inpatient admissions. Case management or utilization review (UR) nurses will be vital to the team, not only for risk assessment and minimizing that risk going forward, but also for appeals evaluation and preparation. Their clinical expertise, as well as familiarity with inpatient and outpatient admission criteria, will be an invaluable resource to the team.

Additionally, although many of the non-clinical departments have been dealing with audits of claims, denials, and claims error detection for some time because of other CMS initiatives, this is the first initiative that has really targeted and denied inpatient admissions for medical necessity on a broad scale. Their presence on the team will assist in developing meaningful education for the clinical departments on what to expect and how to minimize risk. The information they will take back to their department and other clinical departments will be an invaluable line of communication related to medical necessity issues.

Physicians
Physician involvement will be important for reasons very similar to those for case managers or UR nurses. Approximately two-thirds of respondents to the RAC Benchmarking Report indicated they would have a physician involved in some capacity with their team. It was troubling, however, that many facilities had yet to determine specific roles for the physician involved with RAC preparations.

It will be important to have a physician who regularly attends and acts as a physician champion for initiatives and information coming from the RAC team. Such a physician can take real-time trends for inpatient denials back to medical staff in specialties identified for RAC review. They also can assist on medical staff committees when medical staff policy changes are needed in conjunction with changes to hospital policy.

Most teams, however, also require physicians for more active tasks related to handling RAC requests. Case managers or UR staff members may need a physician to assist in evaluating cases that are denied for inpatient medical necessity, especially if the cases do not fit standard screening criteria. Additionally, for cases singled out for appeal, physicians can assist in formulating the basis for appeal based on hospital medical staff policies and local standards of practice reflective of evidence-based studies applicable to their environment.

Departments that may be optional
Other departments to consider for inclusion on the RAC team include the following:

  • Patient access or registration
  • Chargemaster coordinator
  • Information services
  • Finance
  • Other clinical departments

Whether they are included may depend on the nature of the team, the culture of the organization, and even the issues eventually identified for review by the permanent RAC Program.

Editor’s note: This article was adapted from The RAC Survival Guide: Successful Management of Recovery Audit Contractors by Kimberly Anderwood Hoy, JD, CPC, director for Medicare and compliance at HCPro, Inc.



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