Revenue Cycle

Getting prepared

Recovery Auditor Report, October 2, 2008

Editor’s note: In the last edition of The RAC Report, we provided you with a checklist of actions to take to prepare for the arrival of a RAC at your facility. The following is a continuation of that checklist, provided again by The RAC Report advisory board member Tanja M. Twist, director of patient financial services at Methodist Hospital in Arcadia, CA. Twist is the finance chair for the American Association of Healthcare Administrative Management (AAHAM) who has fought Congress on Capitol Hill for better transparency and answers to hospital concerns with RACs.

  • Be aware of RAC trigger points.
  • Monitor past claims history with your MAC/FI. Review results of audits from other entities.
    • Look at PEPPER reports, CERT, MAC, OIG, etc.
  • Review the RAC demonstration status documents to identify the data mining and claim review patterns experienced in demo project.
  • Identify your facilities top DRGs.
  • Search for both volume and money.
  • Identify your top 10-15 diagnoses.
  • Look at outlier claims.
  • Review three-day SNF qualifying stays. Note: If the RAC denies medical necessity on the qualifying stay, you will lose the SNF stay.
  • Determine one-day stays vs. observation.
  • Ensure MSP compliance. Note: This was reviewed in demonstration. While it is not set to roll out immediately in permanent project, it may be added in later.
  • Have a physician documentation improvement program. The physician documentation will make you or break you. Educate your physicians. Implement documentation improvement team as an ad-hoc to your RAC steering committee.
  • Assign a RAC coordinator to oversee entire RAC process.
  • Monitor timely submission of all documentation throughout process.
  • Set up a process to ensure mail received from RAC is delivered to a central person.
  • Name a RAC coordinator.
  • Determine best practices for documentation flow into and out of facility.
  • Scan all incoming/outgoing documentation.
  • Develop a template/database to track all RAC documents – incoming and outgoing.
  • Identify a mechanism to bill for .12 cents per page record copy fees.
  • Educate your staff and physicians on the RAC audits.


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