Updated on: June 22, 2012

MACs: Unintended Consequences Order of the Day

By
Original story posted on: May 16, 2012

As I previously related in a March 14 article on RACMonitor.com, on Jan. 3, 2012, the Centers for Medicare & Medicaid Services (CMS) shifted the responsibility of issuing Recovery Audit Contractor (RAC) demand letters from the RACs to the Medicare Administrative Carriers (MACs).

 

The reasons for this change were twofold. First, more than a year into the permanent RAC process, there remained discrepancies between the dollar amounts indicated on the RAC-generated demand letters and the amounts identified by the MAC as overpaid. The second and more subtle reason for the change was the belief that financial matters were better handled by one entity, rather than splitting them between the two.

Since the new MAC-driven demand letter process has come into play, unintended consequences have been the order of the day. To begin, all correspondence sent from MACs to providers is based on address and contact information entered into the Healthcare Integrated General Ledger Accounting System (HIGLAS). Unfortunately, HIGLAS does not have the ability to hold more than one address per provider number. RAC coordinators nationwide, many of whom had spent months attempting to bring all RAC-related correspondence directly to their attention within their hospital or group of facilities, have seen their documentation now go to individual payment addresses based on the provider number.

 

Four months later, other problems have risen to the surface. Preliminary RAC timelines for disputing results have been compromised. Given that a discussion period must commence within 40 days of the date of either the demand letter or the review results letter, larger facilities are being forced to forego this dispute method given that those same 40 days now are being spent chasing demand letters from multiple locations.

 

In the past, when RACs were tasked with issuing demand letters, the issue being addressed in the review was included in the demand. Now, the MAC-issued demand letters only offer vague language that states, "this finding was a result of a Recovery Audit Program review." The incomplete nature of the demand letter forces providers to cross-reference the demand letter with the review results letter to determine the reason for audit.

 

Recoupment based on RAC findings begins on the 41st day from the date of the demand letter. Based on the notion that correspondence possibly is being sent to several unique places, a situation more than likely to arise is that a recoupment will occur without a demand letter finding a qualified recipient within a healthcare organization. This leaves providers and facilities with few other options save for tracking RAC recoupments by use of Medicare remittance advice. Because providers have 120 days to submit a first-level redetermination to the MAC, the submission of an initial appeal should not be adversely affected, but it does require constant attention.

 

Hospitals are now faced with yet another RAC hurdle, with the result being increased administrative costs due to the handling of RAC issues. With what was once seen as a small change causing such a seismic shift in the workflow, the job of a RAC coordinator continues to evolve into unexpected areas.

 

About the Author

 

J. Paul Spencer is the Compliance Officer for Fi-Med Management, Inc., a national physician practice financial management company based in Wauwatosa, WI. Paul has over 20 years of experience across all facets of healthcare billing, including six years spent with insurance carriers. In his current role with Fi-Med, he acts as a physician educator on issues related to E/M level of service and documentation audits by CMS and other outside entities. Paul has carried the CPC and CPC-H credentials from the American Academy of Professional Coders since 1998

 

Contact the Author

 

pspencer@fimed.com

 

To comment on this article please go to editor@racmonitor.com

 

Doctor, Home Health Agency Owner Plead Guilty in Fraud Scheme

This email address is being protected from spambots. You need JavaScript enabled to view it.