"On your mark, get set, go!" ... Each of us at some time have heard and responded to this phrase, whether in our personal or professional lives. The phrase anticipates our action, or reaction to a "race" or challenge.

Those of us engaged in some aspect of healthcare services will likely have heard or thought of the phrase many times during the past years, what with; ADA, BBA 1997, HIPAA, Medicare Modernization Act 2005, Quality Core Measures, PQRI - now get ready once again. Recovery Audit Contractors, RACs! The Federal Tax Relief and Health Care Act of 2006 establishes the RAC Program as permanent and requires the HHS Secretary to expand the program to all 50 states no later than 2010!

Since I penned the "inaugural" RACMonitor article below, a few things have been clarified regarding the CMS's RAC program. To name a few:

• The four RAC players are well known, with new "issues" approved by CMS and posted on each entity's Web site:
  
  
  • Region A: DCS Healthcare - www.dcsrac.com
    
    
  • Region B: CGI Federal - http://racb.cgi.com
    
    
  • Region C: Connolly Healthcare - This e-mail address is being protected from spambots. You need JavaScript enabled to view it
    
    
  • Region D: Health Data Insights - This e-mail address is being protected from spambots. You need JavaScript enabled to view it
    
    
    
• RAC provider outreach education has been conducted in all 50 states.
  
  
• Hospital providers are very likely well prepared and informed.
  
  
• Hospitals in each region have begun to see "automatic" recoupments, and a few have begun to receive demand letters, with the volume to date relatively small.
  
  
• Complex medical record reviews focused on medical necessity will begin sometime in 2010 (no date was announced as of this publication), with reviews focused on coding and MS-DRG assignment to commence anytime.
  
  
• Issues of potential "reach through" for denied hospital services connected to other providers, such as physicians, have been clarified.
  
  
• The RAC program will continue to be refined and tweaked during the coming months, with anticipated extraordinary results that will benefit CMS and beneficiaries.
  
  
• Physician providers will be impacted by the RAC program, and appear to be the least aware of implications for their practices and hospitals.

The expression "there is no going back" comes to mind as we approach this New Year. It is both possible and necessary for providers to be successful as this and other new CMS programs and initiatives take root (and flight); however, the key to this success is in the attitude providers bring to their efforts, the appreciation for the goal ("to reduce improper payments") we all support, and the amount of information and education we provide to those who work closest to the issues. So with that, enjoy re-reading the article below, take heed..........On your mark, Get set, GO!!

On Your Mark... Get Set...GO!!

Not Widely Known Yet

Recently, I was in a large metropolitan hospital speaking to a room full of medical professionals, internists, cardiologists and surgeons. After speaking for a few minutes about the advent of the RACs, it was clear that I was facing a sea of blank stares. It turned out that not a single physician in the room had heard anything before about the CMS initiative and national RAC program. They had no idea what I was talking about, and were further shocked to learn that all hospitals and MD practices (along with other healthcare providers) would soon be at the center of the program focus and potentially at significant financial risk!

"On Your Mark"... Brief Background

Let's start with defining RACs, which stands for Recovery Audit Contractors. These are new CMS contractors whose sole focus is to review paid Medicare claims from October 1, 2007 forward, covering all healthcare services, which includes; Inpatient Hospital services, Physician services, Outpatient services, Inpatient Rehabilitation services, Skilled Nursing Facilities, DME, Hospice, et al.

RAC Pilot Program Success

Initially, there were three states in the RAC pilot demonstration -California, Florida and New York, with an additional three added in the summer of 2007, Massachusetts, South Carolina and Arizona.

A significant portion of RAC determinations related to identified ‘absent clinical medical necessity' of prior services as determined to be ‘unnecessary' or demonstrated by insufficient documentation found within the medical records. The old adage of "not documented not done" has rarely been proven truer!

Results of the 3 year demonstration were over whelming for CMS with greater than $1 billion in "improper" payments identified by the RACs, with 96% representing "over payments" and only 4% returned to providers as representing "under payments"!

As of June 30, 2008, providers had appealed only about 14 percent of the above findings, with only 6.8 percent of "RAC determinations" overturned on appeal; dramatic success for the pilot program.