December 7, 2010

RAC History Part I — The Early Days: The More Things Change, the More They Seem the Same

By
cbuck100

 

The beat goes on, the beat goes on
Drums keep pounding a rhythm to the brain
La de da de de, la de da de da
--Sonny & Cher, 1967



And so it does. Two years ago, on Thursday, Dec. 4, 2008, RACmonitor was launched under a looming cloud of uncertainty.

Just 30 days earlier, on Nov. 4, Barack Obama was elected the 44th president of the United States and the Recovery Audit Contractor program had skidded to a stop. The nascent agency’s gamboling gait had been brought to an abrupt halt by a lawsuit filed by two unsuccessful bidders themselves wanting to become RACs. The president would be sworn in on a clear, cold Tuesday, January 20, 2009. One hundred days would pass before the RACs would re-launch.

Viant, Inc. and PRG Schultz, USA. protested the awarding of bids to Diversified Collection Services for RAC Region A, CGI Technologies and Solutions for RAC Region B, Connolly Healthcare for RAC Region C and HealthDataInsights for Region D. 

As it would turn out in the settlement, PRG-Schultz would work with Diversified, CGI and HealthDataInsights while Viant would subcontract with Connolly. But that would be a hundred days down the road.

In the meantime, as it would also turn out, even though the RACs weren’t making news, RACmonitor did. The company’s announcement of its launch, transmitted over a news wire service, was picked up by a leading healthcare IT publication, incorrectly linking RACmonitor with The Centers for Medicare & Medicaid Services. Wrote Healthcare Informatics on Dec. 8, 2008:

In an effort to help hospitals with Recovery Audit Contractors (RACs), La Jolla, Calif.- headquartered RACMonitor.com has developed a new Internet portal.  According to Centers for Medicare and Medicaid Services<http://www.cms.hhs.gov/> (Baltimore), through a portal at www.racmonitor.com, hospitals and health systems can find the latest news and information. CMS says a special feature of the site is the publication of a bi-weekly e-newsletter, RACMonitor.Enews. An editorial board composed of leading authorities on RAC-related issues including compliance, reimbursement, coding and documentation will provide the content, it says. In addition, racmonitor.com plans to offer monthly Webcasts and will create opportunities for online discussions with the community so they can field questions.

Without RAC activity to report our editorial board members wrote presciently on preparedness, data mining, billing training and education, and documentation.

Early Reporting

They also reported on the Demonstration Project — case in point: Leo D’Orazio, one of our original editorial board members, wrote one of the first articles, “What the RACs Saw That Providers Missed.”

Reported D’Orazio in the Dec. 4 edition:

“Assessing the progress made by Recovery Audit Contractors from March 2005 through March 2008, CMS says that most of the improper payments occurred because providers submitted claims to Medicare for services that were not medically necessary or were incorrectly coded.”

The RACs?

Drumming up provider interest was a recurring theme among a number of our editorial board members. Patricia Dear, RN, founder and CEO of eduTrax®, seemed aghast in reporting her experience before a group of physicians. Her article also appeared in our inaugural edition:

“Recently, I was in a large metropolitan hospital speaking to a room full of medical professionals, internists, cardiologists and surgeons. After speaking for a few minutes about the advent of the RACs, it was clear that I was facing a sea of blank stares. It turned out that not a single physician in the room had heard anything before about the CMS initiative and national RAC program. They had no idea what I was talking about, and were further shocked to learn that all hospitals and MD practices (along with other healthcare providers) would soon be at the center of the program focus and potentially at significant financial risk.”

Sigh of Relief

Another recurring theme upon which our contributing editors reported was a sense of provider procrastination. Wrote Nancy Hirschl, keying off the presidential election on the very same day that the RACs came to a halt:

“While many healthcare providers are taking a deep sigh of relief, rest assured that the recently announced delay of the Recovery Audit Contractor (RAC) program is not a permanent one. Based on RAC demonstration program outcomes of improper payments identified in excess of $1.03 billion, CMS is certain to get this program jump started as soon as possible.



As was been reported on November 4, 2008, CMS delayed the program’s implementation due to a protest filed by two vendors (PRG Schultz USA, Inc. and Viant, Inc.) who were not selected as part of the national, permanent RAC program. The Bid Protest Hearing Dates are scheduled for February 9, 2009 and February 11, 2009.

In the meantime, healthcare providers have the opportunity to prepare for RAC’s arrival. We know that the RAC process impacts all aspects of daily operations including but not limited to release of information, remittance advice reconciliation, and account auditing and appeals.


Even though the prep is painful (as it is with most invasive procedures) Hirschl and Associates strongly recommends that providers use this time to deploy the organization, assess and mitigate risk, and develop strategic plans for performance improvements. Demonstration program results can guide us in our strategic RAC readiness plans.”

They’re Back

We would continue publishing these kinds of articles all with the intent to help providers prepare for inevitability of the RACs. These weren’t hard news stories we wanted to report but that opportunity would come on Friday, February 6, 2009. For on that date, RACmonitor would be the first to break the news on settlement that CMS had reached with the protesting RACs:

“According to the Government Accountability Office (GAO): Protests were filed by Viant, Inc., B-400443.2, and PRG-Schultz USA, Inc., B-400443.2 challenging the award by CMS of contracts under the RAC program.  The RAC program provides for the award of four regional contracts to detect and recover Medicare overpayments and also to identify underpayments. The 100-day due-dates for these protests under the Competition in Contracting Act were February 9 and February 11, 2009, respectively. Viant and PRG each withdrew its protest, and by letters today and the GAO closed the files for each protest without further action. No further information is available” at this time.”

The Beat Goes On

More news and information would continue. Up ahead, in part two, the Three-day payment rule issue, the first lawsuit filed against the RACs and the messy medical necessity issue.







Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the executive producer and program host of Monitor Mondays.

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