By Samuel A. Donio, Jr., MBA, and George L. Kelley, MS, MBA

As the reality of RAC reviews sets in, concern for identifying a tangible dollar impact is beginning to move to the forefront of the minds of the C-Suite.

Up to this point, impacted facilities have used various means of gauging such impacts - ranging from somewhat "scientific" methods to throwing darts at the wall.

Most have not been very effective. As the reviews get closer, now is the time to take a more formal approach to establishing this elusive number. Based on our experiences, a good approach to "dollarizing" your RAC risk should have the following components:

• Establish vulnerabilities: make a solid estimation of the number of at-risk cases for your facility based on known RAC targets

• Ask yourself: how do you stack up when it comes to your facility's performance? Do the cases meet criteria, and will they "pass" RAC review?
  
  
  

• Determine your ability to "harden": for those cases that initially do not meet criteria, do you have the resources to "harden" those records?
  
  
  
  
• Using these guidelines, establish a range of sensitivity upon which to base your dollar amount

Employing these methods can help put you on the right path to establishing a realistic, fact-based financial estimate.

Establish Vulnerabilities

The first step in understanding your financial exposure to the RAC review process is to establish what services, DRGs and cases are at risk for being targeted. Without this important step, any financial analysis amounts to nothing more than a "shot in the dark."  Understanding specific areas of vulnerability enables you to remedy them and begin to better identify and assess risk areas.

How Do You Stack up?

The next step is to evaluate how your areas of vulnerability actually hold up under the scrutiny of review. Even though your facility may have a significant number of problem areas, this does not necessarily indicate that all of the cases identified will require a payback. The only way to determine where your facility truly has a financial vulnerability is to thoroughly review each identified case to establish a level of exposure.

Ability to "Harden"

Once you have established specific problem areas and have a good idea of the number of cases for which your facility may be financially vulnerable, the next question to ask is "How many of those cases can be "hardened?" A review may indicate that a large number of cases, as they currently are presented, do not meet criteria. The process of "hardening" a record enables a facility to collect and present existing documentation in support of the case to demonstrate to an outside reviewer why a course of action was taken for a patient. Often times, some information that would support such actions is not readily available in the patient's record, were never included in the record, or are not an official part of the record -- but the information does exist. The goal in this step of the process is to determine how many of the cases that do not meet criteria can be strengthened to hold up under review.