Updated on: June 22, 2012

Learning How to Fly in RAC Space

By
Original story posted on: September 16, 2009

pdear120ds"The bad news is time flies. The good news is you're the pilot."-Michael Althsuler


Do we need flying lessons to pilot our way through the new RAC world? Are we using time to our advantage?


The national RAC initiative is underway. Some providers already may have begun to see adjusted ‘automatic' takebacks, and many of us have begun to take note of the new issues approved by CMS for each of the four RACs (see the RAC Web sites for details).


You should be aware that review of potentially the most contentious and lucrative RAC issue (lucrative for RACs and CMS, that is), related to ‘medical necessity' of inpatient hospital services, has been delayed until 2010...which is now only three months away!


Want a new flight plan? How's this:

  1. Stop waiting, procrastinating, worrying. START TODAY (like right now.)
  2. Review your UM or UR policies, plans and implementation. (How? See below.)
  3. Consider adopting a Case Management Assessment Protocol (CMAP) similar to what CMS already has used in a highly publicized case. (See farther below.)


Time to Prepare

"The future belongs to those who prepare for it today." -- Malcolm X


How will your organization use these last three months of 2009 to prepare for the eventual ‘medical necessity' RAC reviews? And if you are not sure where to start... well, where should you start?


UR: Federally Required


As a CMS-required "condition of participation," hospitals must have utilization management (also called utilization review, or ‘UR') plans/committees that focus on appropriateness of services and have identified steps to take when hospitals and physicians face a difference of opinion regarding services, length of stay, discharge, etc. Before I go further, let's emphasize that having such plans/committees is a "must have" for hospitals. In other words, they are federally required: not a "good suggestion" to have, not a "have one if you think you should," but rather a "must have."


During past years, many hospitals have "rolled" their UR functions into quality improvement or quality assurance initiatives, as it seemed to be a natural fit. However, the intended regulatory functions of the UR plan and committee have become diluted or "gone by the wayside," in many cases, as a result of such reorganization. Good intentions and budgetary considerations aside, this could cause problems for a provider, from point of view of CMS.


The delay of RAC review of medical necessity denials presents us all with a breather, but only in that it gives us a little extra time to prepare. So NOW is the time to resurrect, revise or reinstate the UR plan and/or committee at your site or system. NOW is the time to endow UR efforts with authority to support UR activities carried out by the responsible hospital department and/or staff.


Ordinarily, the area charged with this task is the case management department.  Case managers bear a variety of responsibilities, not the least of which is corresponding with physicians about patient discharge goals, timelines, payer limitations and appropriateness of service locations. As noted above, these are not mere "niceties," but rather federally mandated necessities.


Ask yourself: does your clinical and non-clinical staffs alike understand that? Are there any roadblocks at your site that prevent your case managers from carrying out their federally mandated responsibilities?


Perhaps you think there are no roadblocks at your site. After all, you say, the UR challenge of evaluating ‘medical necessity' on a patient-by-patient basis has been a staple activity for years, right? It's nothing new. Nevertheless, during the RAC demonstration project, this area provided a HUGE windfall for the RACs and CMS: greater than $106 million, or 32 percent of the improper overpayments identified, were related to "medically unnecessary service or service setting." Are you SURE you will be exempt from such issues?


The time is NOW to take a good look at case management functions, the physician advisor role, and whatever obstacles that may exist at your site and need to be identified and removed BEFORE a RAC comes calling in 2010.


And don't forget, that's just when they can start auditing records - records, incidentally, that includes every Medicare case you've filed since Oct. 1, 2007.


Time for Action


"
Do not wait; the time will never be 'just right.' Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along." --Napoleon Hill


Start NOW. Begin by reviewing your organization's utilization management (UM) review policy and ‘purpose' statement. Does it read something like this?


    "The purpose of the utilization management plan is to promote a program providing appropriate allocation of the hospital's resources, striving to provide high-quality care to each patient in a cost-effective, timely manner."


    "The utilization management plan is intended to establish methods for addressing the appropriateness and medical necessity of admissions and continued stays; whether or not the level of care or service needed by a patient should be provided by the organization; and the appropriateness, medical necessity and timeliness of support services provided."


    "The utilization management committee members will be appointed by the chief of staff on the recommendation of the department chairman and will include two physicians. Other members will serve as physician advisors and will act on behalf of the utilization management committee."


    "The chairman and members will be appointed in accordance with the procedures established under the medical staff bylaws."


Now, the above extrapolation perhaps represents what many hospitals already have in their written policies. The question is not "do you have something like this?" (because you MUST have one), but do you currently, and have you in the past, been following the plan? And I mean, REALLY following the plan?


If your answer is anything other than an emphatic "YES," the time is now for real administrative support to empower your UR effort and establish clear lines of authority and implementation. But even if you do answer with an emphatic "YES," my next question for you would be, "how do you know?"


As previously mentioned, the internal hospital department usually involved with a UM plan is the case management department. Do your case managers have the support and authority to really influence ‘medical necessity' status determinations or resolve length of stay concerns? Are their efforts challenged by physicians who may feel as if their medical judgments related to patient care are being questioned, rather than regulatory, contractual, icky-sticky ‘medical necessity' reimbursement issues?


Does everyone involved understand the difference between clinical ‘medical necessity' versus the contractual ‘medical necessity' language involved?


Clarity regarding case management responsibilities and UM/UR efforts, fully acknowledged and supported by hospitals' senior administration, is absolutely necessary. Anywhere such efforts and support for them is less than complete, the RACs likely will have a ‘field day' as they begin to audit records for medical necessity issues.


Case management efforts should be central to a hospital's actions in any UM/UR management plan and should include something like the paragraph below, clearly providing a base for such actions:


    "The CM staff is responsible for the day-to-day operation of the utilization management program, including performing admission, concurrent and discharge reviews; evaluating denials; referring any cases not meeting medical necessity criteria to the physician advisor for final determination; and evaluating for discharge planning upon admission through evaluating the nursing assessment process. The CM department will screen all admissions, and work with the patient/family, physician, nursing staff, and other hospital departments in a multi-disciplinary approach to identify post-care needs and available resources."


Time for Future Planning


"Time is the scarcest resource, and unless it is managed, nothing else can be managed." --Peter Drucker


How can hospitals plan to move into the future with case managers effectively assisting physicians and meeting UR plan expectations? One possibility is through voluntary adoption of a Case Management Assessment Protocol (CMAP).


The U.S. saw its first mandatory requirement for a hospital to implement an internal case management protocol following the 2007 Department of Justice settlement with St. Joseph's Hospital in Atlanta. As a part of the settlement, included in the corporate integrity agreement with St. Joseph's, the hospital was required to implement the protocol, which inserts case managers in the process of admission status identification to ensure accuracy regarding what ‘meets inpatient, observation, or outpatient' criteria.


A good working definition of the protocol is as follows:


    "Case Management Assessment Protocol (CMAP) is a process
    designed to facilitate efficient and accurate assignment of patient status, i.e. inpatient vs. observation:

     

  • To be in accordance with industry-accepted level-of-care criteria;
  • Decrease unnecessary admissions;
  • Improve accurate billing; and
  • Support appropriate reimbursement in accordance with applicable regulations"

Convincing a hospital system to consider voluntary adoption of a CMAP will take a collaborative effort, one that follows a good look at current processes and obstacles in current UR case management efforts.


Working with the physician staff and community is absolutely necessary in seeking cooperation and bringing all parties to the same understanding of where the risks going forward will exist as RACs ramp up their efforts to "identify and recover improperly paid payments" for inpatient hospital services.


The emphasis should be on how the risks WILL exist - they are no longer simply "likely" to exist, but in fact DO exist, as clearly and undeniably evidenced by the demonstration project. Additionally, remind everyone: CMS did not eliminate or scale back complex reviews for medical necessity - they simply delayed the start date.

"Learn from the past, watch the present and create the future." --Jesse Conrad


A Webinar focused on this subject is scheduled to be held October 2009 through RAC University - powered by eduTrax® , with information targeted at exploring this issue and potential solutions.


About the Author


Patricia Dear has more than 30 years of experience in the healthcare industry, working within corporate healthcare entities, for-profit and non-profit hospital systems, legal defense and plaintiff counsel. She is a recognized national speaker on reimbursement and compliance. She is the president and CEO of eduTrax®.


Contact the Author


pat@edutrax.net


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