Revenue Cycle

RAC vulnerabilities highlighted in CMS release

HCPRO Website, July 14, 2010

On July 12, CMS released a special edition MLN Matters article that is “the first in a series of articles that will disseminate information on RAC high-dollar improper payment vulnerabilities.”

The purpose of the article is to provide education regarding RAC demonstration-identified vulnerabilities in an effort to prevent these same problems from happening in the future, according to CMS.

While providers should know much of the information contained in this release, according to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., providers should still take notice.

“These processes are still needed to prevent unnecessary denials and [to keep providers from] potentially entering into the costly appeals process,” she says. “This article should get providers’ attention to check their current procedures and make sure they are meeting their obligations to comply with the requests, according to the requirements of the permanent RAC program.”

Two high-risk vulnerabilities identified during the RAC demonstration were: provider non-compliance with timely submission of requested medical documentation; and insufficient documentation that did not justify that the services billed were covered, medically necessary, or correctly coded, according to CMS.

CMS states that due to the implementation of the permanent RAC program and the initiation of complex medical review (coding and medical necessity), that it is currently more important than ever for providers to understand the lessons learned from the demonstration and implement appropriate corrective actions. According to Kimberly Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc., this could be a sign of things to come.

“This special edition MLN Matters article mentions the initiation of complex medical review, both coding and medical necessity,” she says. “So this may suggest that medical necessity reviews are imminent.”

All inpatient hospital and skilled nursing facility providers that submit fee-for-service claims to Medicare fiscal intermediaries (FIs) or Part A/B Medicare administrative contractors (A/B MACs) are urged to review the article and take steps, if necessary, to meet Medicare’s documentation requirements to avoid unnecessary denial of claims, according to CMS.

CMS has provided a list of requirements to assist providers in ensuring the timely submission of sufficient documentation to justify the services billed, which Hoy says is a useful listing of what the provider can expect of the RAC. One particular statement though, “RACs must clearly indicate in ADR letters suggested documentation that will assist them in adjudicating the claim,” stood out to Hoy.

“It’s interesting that CMS calls the information requested by the RAC ‘suggested documentation,’ because there’s been an issue of whether or not coding queries have to be submitted,” she says. “CMS stated on an implementation call that these queries only have to be submitted if they supported a claim, and this seems to be in line with that.”

To view Special Edition MLN Matters article SE1024, click here:


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