Updated on: January 31, 2013

Medicare FFS RAC Prepayment Audits – The Who, What and When, With Additional Clarifications to Come

By Lori Brocato
Original story posted on: March 13, 2012

On Wednesday, Dec. 21, 2011, CMS held an open-door forum on the upcoming RAC Pre-payment Demonstration Audits. Based on the discussion that ensued, CMS delayed the start of the RAC pre-payment reviews to on or after June 1, 2012 - and it's suspected that further clarification on some of the items brought up during the forum will be offered in the meantime.

As it stands today, these are the highlights of what has been outlined and where more clarifications may be made:

  • The following states will be included in the Pre-payment Demonstration: California, Florida, Illinois, Louisiana, Minnesota, New York, Texas, Missouri, North Carolina, Ohio and Pennsylvania.
  • The demonstration will run for three years, from Jan. 1, 2012 through Dec. 31, 2014. This likely will be updated, though, due to the delayed start.
  • Limits will not exceed the limits published for RAC post-payment reviews (so if a hospital has a 500-record request limit for post-payment, they also have a 500-record request limit for pre-payment, or a total of up to 1,000 requests possible every 45 days).
  • There is a 30-day turnaround time allotted for records; it is under discussion to extend this to 45 days to match the existing RAC process.
  • The requests will be made electronically by the Medicare Administrative Contractors (MACs) through the Medicare Direct Data Entry System (DDE), also known as the Common Working File (CWF) or the Florida Shared System (FSS). There will be no paper requests.
  • The requests could specify that records go to either the RACs or the MACs - it depends on the arrangements a RAC has made with the given MAC. The RACs will be doing all of the reviews.
  • It is likely that these requests will be billable to the RACs; for the demonstration CMS will confirm and post an update on this to the new website (http://go.cms.gov/cert-demos).
  • Contractors are starting with a limited number of eight DRGs. It's possible this list could change based on ongoing pre-payment audits being performed by the MACs. Those MS-DRGs include the following:
    • MS-DRG 312 SYNCOPE & COLLAPSE;
    • MS-DRG 069 TRANSIENT ISCHEMIA;
    • MS-DRG 377 G.I. HEMORRHAGE W MCC;
    • MS-DRG 378 G.I. HEMORRHAGE W CC;
    • MS-DRG 379 G.I. HEMORRHAGE W/O CC/MCC;
    • MS-DRG 637 DIABETES W MCC;
    • MS-DRG 638 DIABETES W CC; and
    • MS-DRG 639 DIABETES W/O CC/MCC.
  • These reviews will run parallel to MAC pre-payment reviews - for which there are no limits - and contractors are supposed to coordinate to ensure that they do not review for the same issues.
  • Providers can dispute duplicate requests they receive if for some reason the aforementioned coordination does not take place or does not work 100 percent of the time.
  • These records can be sent to the participating MACs and RACs electronically using esMD.

About the Author

Lori Brocato, HealthPort Audit Product Manager, has over 16 years of experience in the healthcare technology industry creating product lifecycle plans and executing product strategies. Ms. Brocato frequently serves as an audit expert sharing audit management trends and best practice guidelines as a regular presenter for industry events and webinars. She is the author of HealthPort's audit Insights Blog and provides expert input for many trade publication articles each year. Ms.Brocato holds the distinction of being RAC-certified by the Medicare RAC Summit and is a member HIMSS and HFMA.

Contact the Author

Lori.Brocato@healthport.com

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

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