Revenue Cycle

CMS Releases RAC Audit Phase-in Strategy: Complex reviews to arrive as soon as August

Recovery Auditor Report, July 9, 2009

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CMS released further information June 24 on its RAC Web site letting healthcare providers know when they can expect RACs to begin auditing. The new “CMS RAC Review Phase-in Strategy,” details different types of reviews and dates CMS anticipates the reviews will begin in various areas of the country.

The new information is consistent with CMS' previous indications that some providers may begin to undergo automated review this month.

According to the CMS, the earliest possible dates for RAC reviews in yellow and green states are:
  • June 2009—Automated reviews of black and white issues
  • August or September 2009—Complex reviews for DRG validation
  • August or September 2009—Complex review for coding errors
  • Fiscal year 2010, which begins October 1, 2009—Complex reviews for durable medical equipment (DME) medical necessity
  • Calendar year 2010—Complex reviews for medical necessity
The earliest possible dates for reviews in blue states generally fall a bit later:
  • August 2009—Automated reviews of black and white issues
  • October or November 2009—Complex reviews for DRG validation
  • October or November 2009—Complex review for coding errors
  • Fiscal year 2010—Complex reviews for DME medical necessity
  • Calendar year 2010—Complex reviews for medical necessity
CMS also reaffirmed that before RACs actively begin auditing in a particular state, outreach educational sessions must occur in that area.

Although the schedule calls for automated reviews as early as this month, any issue a RAC reviews must be vetted through the CMS’ “Issue Review Board.” In addition, RACs must post the approved issues to their Web sites before the reviews can begin.

“Providers should check their RAC’s Web site often for any newly approved issues for review to anticipate their vulnerability to reviews and take backs,” says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc.
Even though CMS has delayed the rollout of certain types of complex reviews, providers shouldn’t ease off on their RAC preparation activities.

“Use the time wisely to continue performing your own internal vulnerability audits and ensure that all of your policies and procedures are up-to-date. Consider this a little extra time to get your facility ready for those appeals,” says Tanja Twist, MBA/HCM, director of patient financial services at Methodist Hospital of Southern California.

Editor’s note: Twist and Hoy will be speaking at the upcoming HCPro seminar, “Medicare Compliance Forum: A Strategic Approach to RACs, Observation Status and the Role of Physician Advisors,” which will be held in Atlanta this October. Twist will also be featured in the July 21 HCPro audio conference, “Medicare Appeals: Overturn RAC denials using the Medicare appeal process.”



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