Health Information Management

News: Demonstration program to expand RAC power

CDI Strategies, December 1, 2011

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Starting in January 2012, facilities could see pre-payment reviews from auditors involved in a new CMS demonstration program, according to a November 15 announcement from the agency. In the demonstration, recovery auditors will be allowed to review claims before they are paid to ensure that the provider complied with all Medicare payment rules. The recovery auditors will conduct prepayment reviews on certain types of claims that historically result in high rates of improper payments.

The reviews will take place in seven states with high populations of fraud- and error-prone providers: Florida, California, Michigan, Texas, New York, Louisiana, and Illinois. The demonstration will also focus on four states with high claims volumes of short inpatient stays: Pennsylvania, Ohio, North Carolina and Missouri. This 11-state demonstration project aims to help lower the error rate by preventing improper payments rather than the traditional “pay and chase” methods of looking for erroneous payments after they’ve been made, according to CMS.
For some, the initial reaction to the announcement of prepayment review may be unfavorable, but it should actually be a positive development for providers, says Kimberly Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc., in Danvers, MA.
“Post-payment reviews are so far after the fact that hospitals aren’t able to resubmit claims with correct information or submit denied inpatient stays for payment on 12X type of bills and they lose payment all together,” she says. “With prepayment reviews, the denials should be [closer] to the submission of the claim, which will help to improve providers’ ability to correct and submit claims within timely filing requirements.
Another beneficial aspect of this announcement is that it should help to identify some potential problem areas for providers going forward. In fact, Amy Yearwood, RN, BSN, RAC coordinator at Huntsville (AL) Hospital, can attest to this firsthand.
“We’ve had numerous prepayment audit requests from our MAC, Cahaba, in the last two months,” she says. “These requests include DRGs 166, 177, 392, 552 and 812. The problem for us is we had to pay close attention when sending records because our physicians have 30 days to complete the discharge summary according to our bylaws, and if the information was sent before the 30 days there may have been a lack of information that can cause a denial.”
She continued, “so now, because of this, we ensure that the record is complete before sending.”
Editor’s Note: This article first appeared on The Revenue Cycle Institute.

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