Updated on: June 22, 2012

Lack of Documentation May Bankrupt Community Healthcare

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Original story posted on: May 11, 2009
ernie

By: Ernie De Los Santos


There is a common fear among rural providers that communities will wind up losing their local hospitals because CMS will bankrupt them, not based upon fraud and abuse, but rather based upon what the physicians do or do not put into their documentation, which the facilities have no way to control.


Many believe this to be completely unfair, and some are quite mad about it.


I came to Miami this week to attend the National Rural Health Association's (NRHA) 32nd Annual Rural Health Conference. The conference included speakers for various topics, including a keynote speech by former Speaker of the House, Newt Gingrich. At this conference, like my previously reported visit to the (TORCH) Annual Conference in Dallas last month, there was not a single session devoted to the RAC program or how to defend against it.


CMS had a single table set up at the conference's exhibitor area, with a single person there to man the table. There were no handouts about the RAC program, and while the nice young woman manning the table was familiar with the program's existence, she knew little about it.

 

Nothing for Rurals


I spoke to several people from other federal agencies, such as the USDA and HRSA, and while most were familiar with the RAC program, they, too, had little information about it. All of them, however, seemed to have a common impression about what the program will do to rural health providers in general: nothing good. Perhaps the most poignant comment actually came from an HHS official, when I asked if there was anything being done to help Rural and Critical Access Hospitals (CAHs) to survive RAC audits, which could quickly devastate a small facility. The official told me plainly, "CMS is not doing anything for the rurals."


At his keynote address, Mr. Gingrich made a big point of suggesting that the rurals need to go to Washington with, not simply their concerns, but with solutions. He suggested that lawmakers hear so many problems that they have little time to come up with the many solutions that are dearly needed. So, it behooves the constituents to come up with solutions, and to propose them to the powers that be.


I spoke to other people about this idea later, but few were hopeful. They felt that CMS seems to side most often with physicians, not facilities. Many were of the opinion that the American Medical Association, representing physicians, is far more influential in Washington than the American Hospital Association, representing facilities. This also came up in other conversations when I mentioned the fact that all associated physician claims could be denied if an inpatient claim is denied for a lack of documentation of medical necessity. It was pointed out to me that the key word in that statement is "could."


A RAC can choose to deny all associated claims in such a case, but this does not happen automatically. So, the physicians might be at risk, but they might not. One person recently heard a RAC representative speak about this at one of the CMS Provider Outreach Sessions. When asked directly if physicians would be held responsible for the poor documentation, not just the facilities, the RAC representative would only say that that might happen. Of course, that was not a very reassuring answer.


Some attendees I spoke to seemed more interested in discussing the "fairness issue" or the whole raison d'être of the RAC program. One State Rural Health Office director put it this way: "Is it fair that CMS should now, after the fact - after letting this go on for so long - be going back and penalizing hospitals for behavior that has for years been accepted and tolerated?"


We discussed this for quite some time, and it became clear that the fear he was expressing was more about the fear that communities will wind up losing their local hospitals because CMS will bankrupt them, not based upon fraud and abuse, but rather based upon what the physicians do or do not put into their documentation, which the facilities have no way to control.


As I've found at other conferences I've attended recently, there seems to be a pervasive hope that the RACs will be going after the "big guys" first. Unfortunately, as I've also said before, this will not necessarily be the case. RACs will not select providers to audit based upon their respective "size." In fact, they don't even know who a provider is until after they have decided to audit them.


 

RAC to Select Issue for Auditing


RACs themselves select issues to audit depending upon the overall potential for error, not based upon the size of any specific provider. Complex Reviews, where medical records must be reviewed by a human, will probably net the largest fees for the RACs. These types of issues must be preapproved by CMS, but a RAC can then search for these issues in claims data for all the providers in that RAC's jurisdiction. Once a RAC finds a pattern of claims from a specific provider that fits the potential issue, they can then select that provider for an audit and send the provider a request for medical records. Therefore, the size and identity of the provider in question is not known to the RAC before selection.


Of course, since the RACs are paid a contingency fee based upon the dollar amounts of the corrections they identify, one would expect them to go after the largest potential fees at the outset. That is the only hope a "small" provider has, at this time - they will probably not attract the largest fees to begin with, and so might go unnoticed for a while.


On the other hand, consider this: by the time the RAC gets around to the "little guy," the RAC might have considerable experience fighting appeals to their findings, and that experience would include fights against providers with deep pockets and larger legal departments. The point is, even the little guy needs to get over the shock they feel about the RACs and prepare their facility or office for RAC defense.


Rural Evolution


An attendee from Georgia asked Mr. Gingrich this question, at the end of his keynote address: "Given the way that Washington is headed, with all the cutbacks and more and more auditors, is part of the strategy in Washington to change healthcare by actually closing hospitals?"


Mr. Gingrich, who is from Georgia, is well aware that there is a large number of Rural and CAH hospitals throughout Georgia, and that they are directly threatened by recent programs and changes in Medicare and Medicaid reimbursements. His answer was that no one knows what healthcare will look like in the future, but that it will probably evolve to be something new, something different. That wasn't exactly a "No" answer.

 

Preparing for RAC Audits


Once again, we highly encourage providers to concentrate on education and training, especially concerning Medical Necessity and its documentation. Sign up for the courses at RAC University, particularly the Special Offer, covering the main topics needed for correctly coding and documenting to support optimum reimbursements.


Upcoming LIVE Webinar


Also, see the upcoming LIVE webinar on Protecting Reimbursements of 1-Day Stays for Cardiac Services. Seating is limited, so register soon. A facility or office can register for the live session for $195, or purchase a CD (with a 1-year site license) for $195, or both for just $295.


Watch for news about more LIVE webinar and new courses posted to RAC University, powered by eduTrax, to help prepare you and your staff for the coming storms that are the RACs.

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