Health Information Management

Healthcare News: Providers report first RAC denials in Florida, South Carolina, HDI adds new RAC issues for Region D

JustCoding News: Outpatient, November 18, 2009

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by Andrea Kraynak, CPC-A

Healthcare providers in several states received their first Recovery Audit Contractor (RAC) denials last week. Connolly Healthcare, the Region C RAC for Florida, South Carolina and several other states, has been behind many of them.

One hospital in South Carolina reports having three claims denied. However, learning of those denials did not go smoothly. The hospital received a call in late October from Connolly regarding a denial letter the hospital never received. The RAC sent the original denial letter in early August, and although it was addressed to the hospital, it apparently had no specific contact person listed, and the hospital never received it.

The hospital had provided Connolly with the name of the contact person for their facility months prior via the form Connolly provided on its Web site, according to a hospital employee.

“Connolly acknowledged that the absence of a contact person on the letter was their error and they are working to correct it,” she said.

In the meantime, the RAC has faxed a copy of the denial letter to the hospital. The total take back was less than $200, but it has given the hospital a chance to test its RAC tracking system, which is reportedly working well thus far.

Another small rehab company that contracts with facilities across seven states, mainly in the southeast, also reported seeing RAC denials. Three of its facilities, all skilled nursing facilities, averaging 120 beds, have now received demand letters, according to the Florida-based provider.

“A majority of what we are seeing is recoupment of service-based codes billed in error more than once per day, mainly speech therapy (ST) service-based codes,” according to the provider. “We have also received two that included recoupment for the ST codes of 92610 and 92526 billed on the same day, which we have disputed and reported this issue to the American Speech-Language-Hearing Association.”

The provider is appealing the denials where the RAC is seeking recoupment of the ST codes 92610 and 92526 billed on the same day.

“We have a dedicated denials and appeals department, and we have been handling these very efficiently and effectively,” the provider said. The provider has had no problems so far with the appeals they have submitted.

The provider also noticed that the demand letters seem to be taking approximately two weeks to arrive, so timing is of the essence, particularly if the provider is going to respond with appeals.

The provider also notes that it has used the denials as a guide for its internal auditing. Staff members are now going back to look for trends or patterns related to those denials.

In other news, HealthDataInsights (HDI) added another new issue approved for RAC audits in all region D states to its Web site November 13:

  • DMEPOS while patient is in a covered Part A inpatient hospital stay.

The Web site provides the following explanation of the new issue:

For a beneficiary in a Part A inpatient stay, an institutional provider (e.g., hospital) is not defined as a beneficiary’s home for DMEPOS: Medicare does not make separate payment for DMEPOS when a beneficiary is in the institution. The institution is expected to provide all medically necessary DMEPOS during a beneficiary’s covered Part A stay. The overpayment is DMEPOS items provided during a Medicare Part A covered inpatient stay.

Previously, HDI added new CMS-approved issues to its list for all RAC region D healthcare providers on November 4 and October 29. Providers in region D should now be ready for RAC audits of durable medical equipment (DME) claims for the following issues

  • Infusion pump denied/accessories & drug codes should be denied. When the infusion pump is denied, then the infusion accessories and infusion drug codes are also denied.
  • Parenteral/enteral (PEN) supplies more than one time a day. The description or the billing guidelines state parenteral/enteral nutrition codes are allowed once a day.

Region D states include Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, North Dakota, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington, and Wyoming.

Stay on top of the latest RAC-approved issues in your state by visiting the Tools section of the Revenue Cycle Institute Web site and download the updated chart at the top of the page.

Editor’s note: This article was adapted from the Revenue Cycle Institute blog. For more on RACs, visit the CMS RAC Web site. Access a recent article to learn more about other recent RAC developments.

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