Revenue Cycle

Q&A: RAC information for long term care facilities

Recovery Auditor Report, January 22, 2009

Q: Most of the RAC information I have seen has been geared to the hospitals, and rightly so. But do you have any details of what items RACs focused on for nursing homes in the demonstration project? Do you know of a place where I can find out more information on this topic?

A:
It appears that long term care facilities will undergo the same type of RAC reviews that the acute care hospitals are undergoing. From what I’ve seen, the focus appears to be medical necessity of the stay, documentation and coding/claim data for reimbursement. RACs haven’t done much work in this area yet, but it appears that they are definitely beginning to fish for an error rate to find out how much money may be out there. Consider the following January 5 article from the American Hospital Association Web site:

CMS recently announced that it has awarded contracts to AdvanceMed and Wisconsin Physician Services (WPS) to perform medical necessity reviews of long-term care hospital (LTCH) admissions, as required by the 2007 Medicare, Medicaid and SCHIP Extension Act. AdvanceMed will perform LTCH sampling and validation while WPS will review claims, using existing inpatient hospital review criteria, to determine a national error rate. CMS indicated that work will begin later this month.

This suggests that long term care facilities need to begin the same type of data mining and gap analysis that the acute care facilities are performing. Long term care facilities should evaluate their admissions to ensure they are meeting medical necessity criteria, evaluate their documentation for completeness and look at their claims data to ensure that the documentation and billing are in sync. CMS will be right behind them.

Editor’s note: RAC Report Advisory Board member, Tanja Twist, MBA/HCM, director of patient financial services for Methodist Hospital in Arcadia, CA, answered this question.

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