Revenue Cycle

Recovery auditor prepayment reviews: CAH impact and more

Medicare Update for CAHs, July 11, 2012

Last November, CMS unveiled three demonstration projects aimed at reducing improper payments in the Medicare program. A few months later on February 3, 2012, CMS announced that it would be delaying two of the three of these demonstrations, one of which is the Recovery Auditor prepayment review demonstration.

Though the CMS website lists the start date as “Summer of 2012,” the delay—which came as a result of comments and concerns from providers— originally pushed the official launch to June 1, 2012. If we are, in fact, in the midst of the Recovery Auditor prepayment review demonstration, there has been no official announcement. Despite this fact, if providers have not already begun doing so, they should take action, according to Sharon Easterling, MHA, RHIA, CCS, CDIP, CEO of Recovery Analytics in Charlotte, N.C.

“With the shift of the RAC to up-front documentation review, providers should implement concurrent processes in their case management and utilization review areas,” she says. “From there, you should have second level review done by a physician for these particular DRGs.”

She continued, “Facilities may also want to consider educating their physicians on these particular DRGs to identify key documentation points that help to meet medical necessity.”

When it comes to physician education, all doctors are different, and some are more receptive than others. In situations where it requires a bit more effort, Easterling suggests using a physician advisor.

“Having a physician that speaks with the other physicians about the required documentation for medical necessity—and the translation of that information—is very important.”

Though it may surprise no one to hear it, providers need to make sure that medical records are as complete as possible before they go out the door. Make sure that the records do not have any signature issues, make sure that they have been pre-reviewed, and make sure that they contain all the necessary documentation; as these are the most important aspects of the record, explains Easterling.

In addition, she mentions, if providers see denials come into their facility as a result of these prepayment reviews, they should look into appealing that determination.

“Appeal, appeal, appeal; when you read that [the recent CMS update that came out on appeals], you tend to think that providers aren’t appealing enough,” she says. “Continue to appeal and work on documentation efforts.”

CAH impact

Critical access hospitals (CAHs) may feel inclined to disregard this demo project; however, all acute care hospitals should sit up and take notice. There are very specific DRGs that will be reviewed in only 11 states to start but remember that a demo project is to “test the water” regarding the possibility of improper claims. This is really no different than how we transitioned from the demo project in specific states for the RACs to a permanent one nationwide, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

“One area of focus will be for short stays and CAHs have statistically demonstrated high rates of short stays which puts them on the radar,” she says. “Also, just because CMS is listing the specific stays by DRG does not exclude CAHs from this review.”

DRGs are not only a payment methodology but also a way to categorize data, so when looking at these selected DRGs, it is apparent that these are common types of acute care medical patients typically treated in CAHs and not specialized or complex surgical patients, says Mackaman.

“If CAHs have not been using DRG classifications for reporting and auditing purposes they should begin to do so,” she says. “Proactively reviewing short stays can help CAHs identify documentation deficiencies and possible operational concerns regarding proper utilization of observation services and staffing patterns.”

She continues, “Many CAHs thought that they would not be under RAC scrutiny because they would be going after the ‘big fish’ but in the world of short stays, CAHs may just be part of that catch.”

For more information on the prepayment review demonstration program, click here:


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