Revenue Cycle

Q&A: RACs and critical access hospitals

Patient Financial Services Weekly Advisor, April 3, 2009

Q: How will the RAC audits affect critical access hospitals (CAH) seeing as they are paid on a per diem of charges rather than an MS-DRGs? Also, how can CAHs prepare themselves for RAC?
According to a November 12, 2008 conference call with CMS, when the cost report is still open, retractions will be part of the settlement. When the cost report is closed, CMS will offset the retractions.
CAHs should be preparing for RAC just like the larger institutions, going through the same preparation steps but on a smaller scale. They are not exempt from RAC.

Editor’s note: This Q&A was answered by Tanja Twist, MBA/HCM, director of Patient Financial Services for Methodist Hospital in Arcadia, CA.

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