Updated on: June 22, 2012

Avoid RAC Takebacks, Protect Medicare Reimbursement with Pre-bill Coding Quality Audits

Original story posted on: July 6, 2010

jwissler100The benefits of pre-bill coding quality audits, in order to send a cleanly coded claim out the door the first time and avoid payment take-backs due to RAC, MIC or MAC activities, has never been more important than it is in today's compliance environment.


By conducting pre-bill coding quality audits on your governmental inpatient claims (i.e. Medicare and Medicaid) immediately following the coding process, facilities can avoid hitting red flags with the RAC, MIC and MAC data-mining software. If you utilize a pre-bill coding audit process, you will be proactively mitigating your denial risk by billing your claims compliantly, and accurately, the first time. In addition, industry studies have shown that conducting pre-bill coding audits has resulted in higher reimbursement under the MS-DRG system than the legacy DRG reimbursement methodology.

This means that your facility will receive the maximum allotted reimbursement. Even though the facility has received the maximum dollars allowed, additionally, you are free from massive or repetitive takebacks based on findings by the RAC, MIC or MAC. Once the cost-benefit has been realized within your facility's governmental payer accounts, expanding your program to increase pre-bill coding audits for all payers reimbursing under a DRG payment methodology is recommended. The facility will soon realize an increase in the case-mix index with increased coding compliance and improved coding quality.


Operational and Financial Process Improvement

While there is a cost associated with implementing and maintaining a pre-bill coding quality audit process, the return on your investment will be significantly higher than your operating costs. With today's technology advances, conducting pre-bill remote coding audits is an attractive, cost-efficient alternative for facilities that struggle with recruiting and retaining the skilled technical talent required to conduct these reviews.

Making this process a routine part of your facility's practice will result in numerous operational and financial benefits including:


  • Decreasing RAC denials and your HIM department clerical and RAC coordinator's workload.


  • POA validation and facility HAC reporting.


  • Physician clinical documentation queries that may not have been proposed or missed by either the CDI specialist or the coder.


  • A mechanism to evaluate the technical coding proficiency of the coding staff.


  • Proactive approach for providing impactful and meaningful feedback to your coding staff on identified errors to be seen as a continuous, ongoing educational process.


Education with a purpose

Providing education and feedback on an ongoing basis is a critical step; this step is often neglected, resulting in recurring coding errors by the coding staff.

With pre-bill coding auditing, one-on-one educational feedback to the individual coder can occur daily. When supplemented with additional summary education provided bi-weekly or monthly to the entire coding staff, all of the coders will benefit from this knowledge-sharing, resulting in more consistency within the facility's coding staff and improved performance.

This continuous quality process improvement is one of the key success factors that will build a stronger technical foundation for your coding quality.


Bottom Line

Being proactive and implementing an on-going pre-bill coding quality audit process is the first step in mitigating risk of RAC takebacks and loss of revenue within the billing process and revenue cycle. The facility will also find their external audits to be more meaningful in the future and a complementary component to the continuous process improvement initiative. Moreover, coding will become more consistent and the mere mention of the coding department at the facility will bring a smile to the face of the RAC committee members as all parties will be pleasantly surprised with the increased quality of the coded/billed claims data.

About the Author

Janelle I. Wissler, RHIA, CCS, CMT, CCDS, is a Manager of Client Audits for Precyse Solutions. Janelle was previously the Data Quality Manager for a 1,400-bed hospital system in Florida during the RAC demonstration project and has over 25 years in the HIM profession.


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