CMS recently published RAC changes as they prepare to have the RAC program get back into full swing. The final determination for the fifth RAC has been confirmed as Connolly. Here are some of the changes based on provider concerns:

ADR limits will now be established based on the providers denial rates and hopefully level the playing field where high offenders get a high number of record reviews and low offenders have a lower number of record reviews.

Providers were concerned with timely filing rules that unfairly allowed CMS to look back three years this has been changed so that the RAC may only look back six months from the date of service in cases where the hospital submits the claim within three months of the date of service.

ADRs and their limits were based on the entire facility without regard to the differences in departments within those facilities. CMS has now leveled the playing field by diversifying claim types so that one area of a facility is not adversely impacted.

In concern for new facilities that may be unfamiliar with RAC, CMS has established a staged approach to incrementally apply ADRs to new facilities in order to allow them time to understand the extremely complicated RAC process. This has been huge as it represents an area of tremendous loss in the past for facilities

There was concern among facilities that the ADR limits for physicians may be increased with the new contracts. At the beginning of the new contracts CMS will not increase the ADR limits for physicians.

Of great concern for facilities has been that RAC audits should be conducted by physicians of the same specialty or sub-specialty. While CMS purports to have made changes to this rule, the changes outlined appear somewhat ambiguous. However, there are opportunities for physicians to discuss improper payment identification with the contractor medical director who is a physician. Facilities should be encouraged to flood this process with requests for discussion. It will educate you and certainly test CMS is resolve to truly allow peer to peer review.

Providers were concerned about stopping the discussion period once the decision was made to file an appeal. CMS now allows the discussion. To continue despite an appeal.

Communication between the RAC and facilities has been and likely will remain a point of great frustration. It seems as though this is a one-way conversation. In order to stem this CMS will now require the RAC to acknowledge by receipt that the facility and the RAC have opened a discussion and or begun correspondence. This receipt must be received within three days of the opening of a discussion.

The for now five RAC online portals all appear different and some have different information than others. CMS will work with the RAC to enhance their provider portals and provide uniformity to the entire process.

Purse providers receiving periodic interim payments PIP have had their entire payment offset due to improper payment adjustments. CMS has revised ADR limits that will help ensure PIP providers are not negatively impacted with improper payment adjustments.

Facilities wanting to stem the flow of RAC take backs in light of some very gray areas, a national appeal win rate in the mid-70 percentile, and an ever changing target of what it is that needs to be done in order to satisfy CMS documentation and proper admission, facilities want to see payments to the RAC Limited when the facility decides to appeal. CMS has addressed this by limiting payments to the RAC until the second level of appeal has been exhausted. This will ensure to some degree that the RAC is being properly reimbursed at the proper time.

CMS has come under heavy fire for not properly providing enough public information and certainly enough clarity on the RAC program. This to the frustration of many in the healthcare community has been a big win for CMS in terms of dollars. In retrospect many facilities have suffered losses that were unnecessary because of this lack of information at the outset. CMS will increase its educational and informational opportunities so that facilities and individuals can completely understand the process.

Of great concern to facilities over the first few years of RAC reviews was the high level focus on inpatient hospital claims. The concern of course was that the RAC’s motivated by fees focused all their attention on the high dollar claims with the low hanging fruit. CMS will require recovery auditor contractors to broaden the review topics to include all claim provider types and will be required to review certain topics based on a referral such as an OIG report. What remains in question is how the medical community will be able to actively monitor whether or not the RAC’s understand and follow this ruling.

Another concern by facilities was that the RAC’s were not penalized for having high appeal overturn rates. There are facilities that have had appeal win rates in the 90 percentile and yet their RAC continued to overturn the same claim type  again and again. RAC’s will now be required to maintain and overturn rate of less than 10% on the first level of appeal excluding claims that were denied due to know or insufficient documentation or claims that were corrected during the appeal process. Failure to do so may put this RAC on a corrective action plan with CMS.

Providers are also concerned with the accuracy of automated reviews and RAC’s have not been penalized for this as well. Recovery auditors will now be required to maintain an accuracy rate of at least 95%. Failure to do so again could put that RAC on a corrective action plan with CMS.

Surprisingly another area of concern has been the difficulty of communicating with the RAC’s when providers had complaints or concerns. CMS established a provider relations coordinator to offer more opportunities for facilities to easily communicate complaints and concerns. This allows the provider to have another source to go to when they cannot get resolution through their RAC auditor.

Providers have also been asking for more information on how to prevent improper payments and bill correctly. CMS has begun adding tips to the CMS website. These compliance tips in addition to education and MLN matters articles are meant to provide providers with the information for proper payment and billing.

Providers of been unclear when reviewing their region RAC website on the issue of website postings and new issues to be reviewed. CMS is requiring the RAC’s to provide consistent and more detailed information regarding new issues to their websites. This is supposed to allow a cleaner communication process between the RAC and the provider.

Providers, the AHA, and many others in the community have expressed great concerns over the RAC program itself, the ethics involved in reviews that result in such high turn around rate under appeal and finally the inability to score their individual RAC. CMS is considering developing a provider satisfaction survey. This survey would allow providers to speak to the many issues that they have regarding the rack. Whether not this will occur remains to be seen but we can be assured if this survey does get made and delivered there will be much discussion over the fairness of this process.

Here is a link to this CMS publication; http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Downloads/RAC-Program-Improvements.pdf

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