Revenue Cycle

Recovery auditor hot topic: Medicaid RACs

Medicare Update for CAHs, April 4, 2012

Since Medicaid RACs officially launched on the first day of 2012, there hasn?t been much news surrounding the program. That said, the actual ?rollout? of audits and documentation requests are still to come, so providers should start familiarizing themselves with Medicaid?s version of the Recovery Auditor Program.

State-by-state differences

While many of the administrative and organizational efficiencies that providers currently use to protect against other government auditors will help; there are a number of marked differences between the two programs, first and foremost of that each state will be set up differently. This is going to be interesting to say the least, so providers will need to pay particular attention to any guidance released on this program, says Elizabeth Lamkin, CEO, Pace Healthcare Consulting, LLC, in Hilton Head, SC.

?Providers will need to be especially proactive when it comes to the Medicaid RAC process because the statement of work is so much more vague that the Medicare [Recovery Auditor Program] statement of work,? she says. ?Though it says that it?s modeled after the Medicare statement of work; every state really has the freedom to customize its own program, including the appeals process, different timelines, and the amount of issues they will look at, and so on.?

She continues, ?One hard and fast rule is that RACs have to notify providers of overpayment findings within 60 calendar days. But when it comes to the provider?s timeline for returning documentation, each state is going to be different. Providers will definitely need to utilize RAC educational resources for their state?s Medicaid.?

Potential problem and focus areas

One of the main points of contention when it comes to Medicaid RACs is how hospital systems that serve multiple states will be handled. Since Medicaid programs are going to be state-administered, many hospitals may find themselves pulled in different directions when it comes to handling this process. For those organizations that fall into this category, the facility should work with their hospital association, state and federal legislators, and the American Hospital Association (AHA) to lobby for uniformity across the country, in terms of rules and regulations. In addition, providers can also go directly to an auditor that serves multiple states to attempt to make it standardized, according to Lamkin.

Concerning some of the actual issues that the RACs will be auditing, it?s a bit early to offer trends or hot topic areas, but it?s rather likely that some of the same CMS-identified issues for Medicare recovery auditors will be approved for Medicaid RACs. These include medical necessity claims, DME claims, units of therapy claims, as well as other high-dollar issues like cardiac claims, which are already highly-targeted in the Medicare program, suggests Lamkin.

What can providers do now?

In terms of anticipatory planning and preparation, there are a number of different things for providers to consider, says Lamkin.

?First, providers should stay on top of the general Medicaid billing rules, not just RACs and appeals, and they should also conduct real-time, open chart audits to ensure accurate and compliant documentation,? she says. ?In addition, it may be beneficial for a provider to have someone on the front end at registration that is qualifying and screening potential Medicaid recipients.?

She continues, ?While real time management of the bed placement and appropriate documentation are crucial to getting the rules right on the front end, measurement of accuracy and exchange of information are equally important for long-term success and accountability.?

There must be some type of structure that brings together the finance, clinical, and utilization review functions. All roles related to billing compliance should serve on the billing/compliance RAC committee or any other type of centralized committee. It will be important for everyone to see the big picture when as the hospital determines how to handling the Medicaid auditing process. This is where enterprise-wide performance improvement of the process is housed, according to Lamkin.

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