By: Ernie de los Santos

A means by which to halt a RAC denial and a restriction on the use of InterQual or Milliman screening criteria for denials are two major changes from CMS.

The changes were discussed in during a Special Open Door Forum for Part A providers conducted by CMS as an audio conference call. It was held on April 8, 2009.

This is the first such call conducted by CMS since the permanent RAC Program was allowed to go forward after a legal challenge by prospective contractors delayed the program start, from November 2008 to February 2009. The transcript of the call, which was held on April 8, 2009, has been posted to the CMS Web site, with a link to an MP3 audio file, a recording of the call. (Links are available at the end of this article.)

News in Several Major Topics

Several items surfaced during the call to which we want to call your attention. Some of these items appear to be new, or at least there are new details we have not seen before in any RAC documents or outreach sessions. These topics are of high importance for all providers:

• A special code will be used on Remittance Advice documents to help providers track RAC denials;
  
  
• A Discussion Period exists, providing an opportunity to avoid a denial and appeal;
  
  
• Records Request Limits have changed, will continue to change, and the rules for applying the limits are still confusing;
  
  
• A "limited number" of Complex Reviews can begin without CMS approval;
  
  
• Providers are being encouraged to directly contact CMS project officers;
  
  
• RAC websites are beginning to appear, (2 of 4 anyway);
  
  
• Medical Necessity guidelines, such as InterQual and Milliman, will only be guidelines for the RACs.

This last topic is one of the scariest topics for all providers.

Special Code for RACs

All Medicare providers are reimbursed by a carrier, Fiscal Intermediary (FI) or Medicare Administrative Contractor (MAC), assigned by CMS to their area. When the carrier/FI/MAC makes reimbursements, they issue a Remittance Advice to the provider, listing each reimbursement along with a code, signifying the reason behind the credit or debit.

CMS confirmed that RAC denials will also appear on these statements, and to make it easier to track these RAC adjustments, there is a special code assigned to them: the code is N432, which stands for "adjustment based on recovery audit."

Discussion Period Noted

During the RAC Demonstration, there was a time period between the date a RAC notified a provider that they had identified an overpayment, and the date of the actual demand letter sent to the provider. This was called, at that time, the Rebuttal Period. It was simply a time meant to give the provider an opportunity to respond to the RAC and perhaps offer additional records or documentation that might explain why the claim looked like an overpayment.

During the Rebuttal Period, if the overpayment could be explained to the RAC's satisfaction, then the demand letter would not be generated, and the claim denial would be eradicated, thereby eliminating any need to begin the lengthy and costly appeals process.

In the conference call, CMS emphasized that providers should definitely take advantage of this period, now being called the Discussion Period. It has the same purpose as before - it gives the provider a window of opportunity to provide evidence that a claim was properly paid, not overpaid, thereby avoiding the entire denial/appeal process.

CMS did admit, that there is, unfortunately, no set length of time for this period, and it is different for automated reviews, versus for complex reviews. This is what was said in the conference call, but this is different from what we have previously been told about the discussion period.

At a recent summit in Washington, DC, we heard that the discussion period would allow 40 days from the date of the Demand Letter. If a provider begins a discussion with the RAC, then the recoupment would be delayed. If an appeal is filed within 120 days of the date of the Demand Letter, recoupment would be suspended pending the outcome of the appeal. If no appeal is filed in time, then the recoupment would happen by offset or by payment from the provider. We are trying to clarify this with CMS and will report on it further in Part Two of this article.