Revenue Cycle

Setting up for success in handling RAC and MIC audits

Recovery Auditor Report, January 21, 2010

During RAC and MIC audits, healthcare providers face an important task: Making the decision to assemble and internal audit staff or to outsource the work. In light of a struggling economy, this can be a challenging assignment.

Many providers say the starting point for audits is deciding how best to handle the workload. Nurses and clerical staff that are familiar with the RAC audit process may be able to handle the audits, but it could potentially stretch a staff thin, so outsourcing the workload could be the right decision, according to Stacey Levitt, RN, MSN, CPC, director of patient care management at Lenox Hill Hospital in New York City.

“We do not have staff dedicated to these audit issues, they have other work as well,” said Levitt. “We have already discussed outsourcing should we get a large hit that my staff can’t handle.

“We have also discussed outsourcing at level 3 ALJ once we have performed both level 1 and 2 of appeals in house,” Levitt continued. “Vendors with experience at the ALJ level of the appeal are very valuable resources that know when appeal would be worthwhile pursuing.”

Outsourcing is not just an option for short-staffed providers. A facility that has yet to undergo the RAC process may not have the familiarity or expertise to accurately handle the audits, resulting in outsourcing by default.

“We have yet to experience RAC audits,” said Yvonne Focke, RN, BSN, MBA, director of revenue cycle and integrated care services at St. Elizabeth Healthcare, a system based in Northern Kentucky. “We plan to outsource until we can assess the impact of the audit volumes and the reasons for denials. In the meantime, we continue to review all patients for the appropriate level of care.”

For a facility that has both the RAC experience as well as the resources to avoid outsourcing, putting a plan into place can be complicated, but bring you closer to the ultimate goal of becoming RAC proof. Elizabeth Lamkin, associateat Axcel Healthcare Group in Tampa, FL, is the former CEO of Hilton Head Regional Healthcare. Her former facility was part of the RAC demonstration project and developed a successful strategy to manage the audits.

According to Lamkin, there are a number of steps to take to ensure compliance:

  • Assign a physician advisor (PA) to conduct concurrent reviews. The PA can be more flexible in hours, and can help perform chart review along with case managers.
  • Use existing case management staff, but develop an admissions case manager role to review all admissions within 24 hours.
  • Use an outside firm for nights and weekends to advise on bed status. The PA will work with the medical staff on compliant documentation for bed status and continued stays.
  • Develop an interdisciplinary chart review committee and strong utilization review committee to perform concurrent chart audits and train staff through this process. 
  • Use additional staff for the short run to respond to audit requests, if needed, but work with your full-time employees on the ultimate goal of becoming RAC proof by getting it right on the front end.
  • Change your committee structure to support this new world. The goal is 100% compliance and eventually RAC and other post-billing audits will slow down because the standard RAC audit screens will not find errors. Develop your system based on this premise and make it permanent; this will help in the end.

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