Medical Necessity, IRF and DME: Three New Potential RAC Targets

CMS has posted three new issues the RACs have proposed for auditing, pending CMS evaluation and approval.

Last week the Centers for Medicare & Medicaid Services (CMS) created a new page on its Recovery Audit Contractor (RAC) website titled Provider Resources. CMS indicated that it will post on this page any new issues the RACs have proposed to audit and are being evaluated by CMS for approval. 

This first release lists three potential targets in three different areas. In medical necessity for inpatient care, CMS will be evaluating whether to allow the RACs to review inpatient rehabilitation facility (IRF) admissions. In durable medical equipment (DME) they will look at home BiPAP machines, and in pharmacy they will be evaluating chemotherapy and biologic drugs for excessive or insufficient units for 46 different drugs.

It is hard to know what to do with this information, since CMS has never done anything like this before. We have no idea what percentage of issues proposed for RAC audit actually get approved for it, but I would think that CMS would not waste its time performing a review if there was not a good chance of the issues being approved.

But what could you do with this information? If you have an inpatient rehab facility and you’re not already carefully screening admissions and ensuring that you have all the required documentation, you are in real trouble, because the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) has had this on its work plan for a couple of years. If you are a DME provider, you should have a handle on home BiPAP documentation requirements, because everything that DME suppliers do is being heaving scrutinized.

So that leaves the 46 drugs. And because they never make it easy for us, CMS only provided the HCPCS codes and not the full drug names. I looked up a few of them, and aside from having nearly unpronounceable names, they all seem to have exorbitant costs, with many costing over $5,000 per dose. Now, 46 is a lot of drugs to start preemptive auditing, so do you wait to see which ones get approved for RAC audits, or do you alert your pharmacy now?

I would suggest sending the list of HCPCS codes to your pharmacy and having them look at your usage. If any of the drugs are used commonly, you may want to carefully review the way you handle them, including ensuring that there is a valid physician’s order and a recent progress note showing that the patient is being monitored, that the pharmacist is calculating the correct dosage, that the nurse properly documents the drug administration and drug wastage, and finally, that the billing of the drug for proper units is being reviewed. I should point out that these audits, if approved, will include both hospitals and physician offices, so the doctor’s income is at risk too.

From the information provided, it does not appear that CMS will be allowing the RACs to audit for adherence to standards of care for treatment of different cancers. In other words, the RACs will not yet be allowed to review if the right chemotherapeutics were given in the right order and at the right dosage for the patient’s condition – but I expect that at some point CMS will allow such audits.

CMS stated that this Provider Resources page will be updated monthly; it will be interesting to watch and see what issues get approved and which disappear.

Print Friendly, PDF & Email
Facebook
Twitter
LinkedIn

Ronald Hirsch, MD, FACP, ACPA-C, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, and the National Association of Healthcare Revenue Integrity, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

Related Stories

Understanding the Wright Approach

Understanding the Wright Approach

Concern about hospitals sharing space has caused angst for several years. But as reiterated by Centers for Medicare & Medicaid Services (CMS) official David Wright,

Read More

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Frank Cohen shows you how to leverage the Comprehensive Error Rate Testing Program (CERT) to create your own internal coding and billing risk assessment plan, including granular identification of risk areas and prioritizing audit tasks and functions resulting in decreased claim submission errors, reduced risk of audit-related damages, and a smoother, more efficient reimbursement process from Medicare.

April 9, 2024
2024 Observation Services Billing: How to Get It Right

2024 Observation Services Billing: How to Get It Right

Dr. Ronald Hirsch presents an essential “A to Z” review of Observation, including proper use for Medicare, Medicare Advantage, and commercial payers. He addresses the correct use of Observation in medical patients and surgical patients, and how to deal with the billing of unnecessary Observation services, professional fee billing, and more.

March 21, 2024
Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Explore the top-10 federal audit targets for 2024 in our webcast, “Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets,” featuring Certified Compliance Officer Michael G. Calahan, PA, MBA. Gain insights and best practices to proactively address risks, enhance compliance, and ensure financial well-being for your healthcare facility or practice. Join us for a comprehensive guide to successfully navigating the federal audit landscape.

February 22, 2024
Mastering Healthcare Refunds: Navigating Compliance with Confidence

Mastering Healthcare Refunds: Navigating Compliance with Confidence

Join healthcare attorney David Glaser, as he debunks refund myths, clarifies compliance essentials, and empowers healthcare professionals to safeguard facility finances. Uncover the secrets behind when to refund and why it matters. Don’t miss this crucial insight into strategic refund management.

February 29, 2024
2024 ICD-10-CM/PCS Coding Clinic Update Webcast Series

2024 ICD-10-CM/PCS Coding Clinic Update Webcast Series

HIM coding expert, Kay Piper, RHIA, CDIP, CCS, reviews the guidance and updates coders and CDIs on important information in each of the AHA’s 2024 ICD-10-CM/PCS Quarterly Coding Clinics in easy-to-access on-demand webcasts, available shortly after each official publication.

April 15, 2024

Trending News

SPRING INTO SAVINGS! Get 21% OFF during our exclusive two-day sale starting 3/21/2024. Use SPRING24 at checkout to claim this offer. Click here to learn more →