Revenue Cycle

Revised RAC statement of work: Impact on providers

Medicare Update for CAHs, October 5, 2011

CMS released a revised recovery audit contractor (RAC) statement of work (SOW) September 12 that contains several revisions and clarifications as well as new additions that will affect providers in a number of ways.

Among the areas of potential interest for providers, the newly released guidance addressed the RACs’ treatment of the discussion period, according to Michael Taylor, MD, vice president of clinical operations at Executive Health Resources in Newtown Square, PA.

“When the discussion period first rolled out, CMS and the RAC contractors were heavily promoting it. It could be done in a verbal format, but now, it is clear that the discussion period has to be in a written format. If the provider is pursuing discussion, and an appeal is filed during that time period, the RAC is charged—at that point—with ending the discussion period,” says Taylor.

He continues, “So providers are going to have to make the choice of going right into the appeals process or using the discussion period first, because providers could find it fruitless to do this at the same time because of the new policy.”

With this new change, providers will have to take more of a targeted approach. If a provider seeks to appeal early in the process to prevent recoupment, managing timelines becomes crucial. Depending on the timeliness of correspondence with the RACs, providers may opt not to use the discussion period because it may slow their process down and it could put their ability to file that first level appeal in time to prevent recoupment in jeopardy, according to Taylor.

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