Health Information Management

Healthcare News: CMS issues special MLN Matters article addressing provider vulnerabilities identified in RAC demonstration

JustCoding News: Inpatient, July 21, 2010

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Editor’s note: The following article was adapted from HCPro’s e-mail alert about this news.

by James Carroll

On July 12, CMS released Special Edition MLN Matters article SE0124 that is “the first in a series of articles that will disseminate information on Recovery Audit Contractor (RAC) high-dollar improper payment vulnerabilities.”

The purpose of the article is to provide education regarding RAC demonstration-identified vulnerabilities in an effort to prevent these same problems from happening in the future, according to CMS.

While some providers may already know much of the information contained in this article, according to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., providers should still take notice.

“These processes are still needed to prevent unnecessary denials and [to keep providers from] potentially entering into the costly appeals process,” she says. “This article should get providers’ attention to check their current procedures and make sure they are meeting their obligations to comply with the requests, according to the requirements of the permanent RAC program.”

Two high-risk vulnerabilities identified during the RAC demonstration were: provider non-compliance with timely submission of requested medical documentation; and insufficient documentation that did not justify that the services billed were covered, medically necessary, or correctly coded, according to CMS.

Now that the permanent RAC program and complex medical reviews (coding and medical necessity) are under way, CMS has stated that it is critical for providers to recognize the lessons learned from the demonstration and implement necessary corrective actions. According to Kimberly Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc., this could be a sign of changes to come.

“This special edition MLN Matters article mentions the initiation of complex medical review, both coding and medical necessity,” she says. “So this may suggest that medical necessity reviews are imminent.”

CMS is urging all inpatient hospital and skilled nursing facility providers that submit fee-for-service claims to Medicare fiscal intermediaries (FI) or Part A/B Medicare administrative contractors (A/B MAC) to review the article and take any necessary steps to meet Medicare’s documentation requirements to avoid unnecessary denial of claims.

In the special edition MLN Matters article, CMS outlined requirements to assist providers in ensuring the timely submission of sufficient documentation to justify billed services, which Hoy says is a useful listing of what the provider can expect of the RAC. One statement in the article particularly stood out to Hoy: “RACs must clearly indicate in [Additional Documentation Request] letters suggested documentation that will assist them in adjudicating the claim.”

“It’s interesting that CMS calls the information requested by the RAC ‘suggested documentation,’ because there’s been an issue of whether or not coding queries have to be submitted,” she says. “CMS stated on an implementation call that these queries only have to be submitted if they supported a claim, and this seems to be in line with that.”

Editor’s note: View this article in its entirety on HCPro’s Revenue Cycle Institute.

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