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RAC Audits to begin in Region C: Connolly posts issues eligible for RAC review

HCPRO Website, August 4, 2009

Heads up, healthcare providers: Connolly Healthcare, the RAC for Region C, has posted the first set of issues eligible for RAC review on its Web site.

The issues are approved for outpatient hospital and physician providers in South Carolina. But even if you aren’t located in South Carolina, if Connolly is your RAC, prepare for these issues in your state as well, says Nancy Beckley, MS, MBA, CHC, of the Bloomingdale Consulting Group, Inc.

Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, Inc., agrees that providers outside Connolly’s jurisdiction may want to review the issues as a clue to what RACs might audit in their area. However, she notes that providers should anticipate that RACs will audit for different issues for different jurisdictions although there certainly could be some overlap.

Connolly’s Web site indicates the CMS-approved issues for South Carolina are:

  • Blood transfusions. Providers should bill CPT codes 36430, 36440, 36450, and 36455 (excluding claims with any modifiers) as one per session, regardless of the number of units transfused on that date of service. 
  • Untimed codes. Providers should enter a one in the units billed column per date of service for CPT codes, excluding modifiers -KX and -59, where the procedure is not defined by a specific time frame (i.e., untimed codes). 
  • IV hydration therapy. Based on the definition of CPT code 90760, the maximum number of units should be one per patient per date of service (excluding claims with modifier -59). Note: Beginning January 1, 2009, code 96360 replaced code 90760. 
  • Bronchoscopy services. Providers should bill for CPT codes 31625, 31628, and 31629 with a maximum number of units of one per patient per date of service (excluding claims with modifier -59). 
  •  Once-in-a-lifetime procedures. By virtue of the description of the CPT code, providers may only perform these codes once per patient lifetime. 
  •  Pediatric codes exceeding age parameters. Newborn and pediatric CPT codes billed or applied to patients who exceed the age limit defined by the CPT code. 
  •  J2505 (Injection, Pegfilgrastim, 6 mg). By definition, HCPCS code J2505 represents 6 mg per unit. Providers should bill the code at one unit per patient per date of service.
“It appears the issues are all based on units of service with the exception of some pediatric codes which are age-related,” says Hoy. “They are also all pretty straightforward, which was expected of the automated reviews that the RACs were slated to start with.”

RACs are targeting untimed codes because of what they learned during the demonstration project, says Beckley. For example, RACs found $3.2 million in speech therapy evaluation errors during the demonstration project, and considering these are $200-$400 items, the RACs must have found a lot of errors. Extrapolate this to include physical and occupational therapy services as well, and it’s like shooting fish in a barrel, says Beckley.

Mistakes often occur when a therapist enters time codes (for example, one hour in four 15-minute increments) into a hospital billing system, but the system doesn’t’ have the right edit table in place and it incorrectly bills for four time codes instead, explains Beckley.

If your facility uses outpatient therapy codes (e.g., physical and occupational therapy or speech evaluation codes), consider conducting your own internal review. “That way you can correct this issue before RACs get to you,” says Beckley. Making voluntary refunds may be your best bet, she says.

Connolly has provided additional information about each of the approved issues on its Web site for providers wanting to learn more about them. For example, for additional information on IV hydration therapy, providers should review the following:

  • CMS Pub 100-4, chapter 12, p. 31-32
  • CMS Pub 100-20, Transmittal 419, p. 7 
  • MLN Matters article MM6349, released December 19, 2008, p. 4
Editor’s note: For more on RACs, visit the CMS RAC Web site. In addition, RAC outreach and informational events are still going on in many areas. View the latest schedule of events here. Finally, click here for more information from CMS regarding when various types of RAC audits may arrive in your area.

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