January 20, 2011

RAC Audits: How Effective Are They? Take the Survey

By

fcohen100ED. NOTE: RACmonitor, in association with The Frank Cohen Group, LLC, is conducting a survey of providers to understand the cost effectiveness of the RAC process and to examine the success of provider appeals. Please click on the link in this article and take a moment to complete this confidential survey. Results will be published in the next edition of RACmonitor.enews and on Monitor Monday.

The government has made it quite clear that the new healthcare bill will be paid for at least in part by recovering what CMS defines as inappropriate payments made to healthcare providers.

Here come the RACs!

This is an onerous commission due to the overwhelming complexity of payment rules and regulations within the Medicare and Medicaid programs. Add to this the fact that diagnostic and procedural coding is based on guidelines and not technical specifications, and all of a sudden determining what constitutes an improper payment is completely up in the air.

Consider, for example, what happened during the first six months of 2010: there were six or seven (no one is really sure) modifications made to the RBRVS and Medicare Physician Fee Schedule Database, each with its own set of rules on how and when payment amounts would be effective.

As a result, nearly every healthcare provider in America was both overpaid and underpaid during that period, and it now is all but impossible to determine precise dollar amounts or time frames. The final fee schedule for the year wasn't released officially until three days before it was to become effective, crippling the ability of healthcare providers and vendors to submit accurate claims in a timely manner. One final fly in the ointment is the fact that RAC auditors are paid on commission, hardly a way to create an impartial and unbiased view of the medical record.

To try to get a handle on just how effective the RAC audits are with respect to the overall cost and effectiveness of the process, we have created a survey. We are looking to see whether statistical techniques are involved, what overpayment demands look like and how often providers appeal RAC results - and, more importantly, to examine the success of those appeals.

Data from this survey will be passed along to organizations that are in a position to act as advocates for the healthcare community, shedding light on problems or issues that might be uncovered.

About the Author

Frank Cohen is the senior analyst for The Frank Cohen Group, LLC. He is a healthcare consultant who specializes in data mining, applied statistics, practice analytics, decision support and process improvement.

Contact the Author

frank@frankcohengroup.com

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

Frank D. Cohen, MPA, MBB

Frank Cohen is the director of analytics and business intelligence for DoctorsManagement, a Knoxville, Tenn.-based consulting firm. Mr. Cohen specializes in data mining, applied statistics, practice analytics, decision support, and process improvement.

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