Updated on: June 22, 2012

RAC FAQ Update: Will RAC “Identified Issues” Identify HCPCS/CPT Codes?

Original story posted on: November 20, 2009

dennisjonesThey say a synonym is a word you use when you can’t spell the word you’re thinking of.


That may be true, but you certainly can run into trouble that way. The use of a word that is subtly different from another that is more accurate can be important. In the case of a recent CMS response to a question on HCPCS/CPT codes, the distinction between two very similar words could mean the difference between keeping or losing thousands of dollars in Medicare revenues.

CMS updated its FAQ page on Nov. 17 to include the following question:


“Will CMS require Recovery Audit Contractors (RAC) to post all HCPCS/CPT Codes included in their audit that are posted on their websites?”


The CMS response reads:



“The Statement of Work for the Recovery Audit Contractors (RAC) requires CMS approval on all new issues prior to widespread review. As a condition of approval, all RACs are required to post the new issue to the RAC website prior to releasing demand letters and/or additional documentation requests … At this time, CMS requires a description of the issue, dates of service, a link to the applicable policy and the provider type impacted. CMS encourages all RACs to post affected codes when less than 5 codes are present for the issue. When not present, CMS recommends that providers use the applicable policy to locate the affected codes.”


So we see that although CMS requires a description of the issue, dates of service, a link to the applicable policy and the provider type impacted, they encourage the four RACs to post pertinent codes related to those issues.


How will the RACs respond to this encouragement? We only have a small sample to work with at this point (thankfully, the RACs are implementing their programs at roughly the same pace that Harry Reid’s health care reform legislation is moving through Congress), but what we see is informative.


Connolly Healthcare, the RAC for Region C, lists Blood Transfusions as one of its initial “Approved Issues.” Their description of the issue begins “CPT codes 36430, 36440, 36450 and 36455 (excluding claims with any modifiers) should be billed as one (1) per session.”


Meanwhile, over on the HDI website, under “New Issues,” HDI lists the following description for Excessive Units – Blood Transfusions: “Blood Transfusions should be billed with a maximum of (1) unit per patient per date of service.” Of course, link for source materials brings the reader to a program memorandum for intermediaries that states that Revenue Code 391for “Blood Administration” links to HCPCS codes 36430 through 36460. The information is there, but you have to dig for it, and it’s still not as specific as Connolly’s description. And what about CMS’s encouragement for RACs to list HCPCS/CPT codes as long as they don’t exceed the unwieldy level of five separate codes? HDI seemingly is not taking this encouragement thing to heart.



For a hospital attempting to evaluate its own compliance in regard to these issues, it’s nice to know what you should be looking for. After all, isn’t that the idea of posting the “Approved Issues” in the first place? Sure, it doesn’t seem so bad now, when just a little extra detective work will identify a range of codes for which the RACs probably are looking. But what about in 2010 when a flood of issues submitted for approval by the RACs to CMS through the validation process (over 100 issues as of 2 months ago according to Commander Marie Casey of CMS) begin to be implemented?


It will be no easy task for hospitals with thin resources to keep up with the self-evaluation that will help them prepare for the RAC audits and to address the root causes of their compliance issues. And early evidence shows us that hospitals in different RAC regions could face different challenges on an issue-by-issue basis, regardless of CMS’ encouragement for RACs to make this whole thing easier for providers.


The question seemed so simple: “Will CMS require Recovery Audit Contractors (RAC) to post all HCPCS/CPT Codes included in their audit that are posted on their websites?”


CMS could have just said “The answer is no.”


However, as we all know, that would depend on what the meaning of the word “is” is.


About the Author


Dennis Jones is Director, Compliance Services for CBIZ. While Dennis is recognized as a leading RAC issues expert, his expertise covers a wide variety of topics including Managed Care, Uncompensated Care, Medicare and Medicaid Compliance, HIPAA, and Process Improvement. As a result he has spoken previously for NJHA, World Research Group, and various state chapters of HFMA, AAHAM, and AHIMA. Dennis is a past-president of the New Jersey Chapter of AAHAM and has held senior management positions in provider, IT vendor and reimbursement consultant arenas. He is a graduate of the Pennsylvania State University with a degree in Health Planning and Administration and hopes to be able to afford season football tickets some day.


Contact the Author









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