Updated on: April 2, 2015

RAC Revisions and How They will Impact the Provider World

By Dawn Crump, MA, SSBB, CHC
Original story posted on: April 1, 2015


With goals to lessen provider burden, increase transparency, and enhance oversight, Recovery Audit Contractors (RACs) are changing. And even bigger changes are around the corner. The most important advice for healthcare providers is to get ready.

To help reduce provider burden, the Centers for Medicare & Medicaid Services (CMS) will begin implementing modifications to the RAC program. These include: 

  • Placing limits on additional documentation requests (ADRs)
  • Delaying auditor contingency fees until the second level of appeal is exhausted
  • Restricting RACs’ patient status reviews to six months, if the provider submits its claim within three months of date of service
  • Instructing RACs to allow 30 days for each discussion period, and to confirm receipt within three days of providers’ discussion requests

These changes and others intended to enhance program oversight and transparency will be effective with each new contract awarded under the program. These changes are proceeding despite the ongoing saga of delays (full establishment of the new RAC regions remains delayed due to multiple contractual disputes) as outlined below and previously discussed in RACmonitor.

Three Ways to Make the Most of Discussion Period

In an attempt to reduce its backlog of appeals cases, CMS is encouraging providers to make full use of audit discussion periods. To this end, here are three steps for providers to take:

  • Centralize your audit team. Every effort should be made to ensure that these teams are lean and organized, with excellent internal and external communication skills.
  • Reduce the denial rate, which could in turn impact ADR volume and reduce the number of long, drawn-out appeals. Audit volume could be affected by denial rate and could be changed based on use of the discussion period.
  • Send out complete medical records and all the required data necessary to support each case. For example: If a doctor orders an EKG, be sure the EKG tracings, interpretation, and order are included along with the medical record’s supporting data.

Spring Remains Important Season for CMS News

Audit managers and compliance offices working in healthcare seldom take vacations during the winter holidays in December or January. We’ve learned that holiday time is famous for CMS news and annual changes. So far, this pattern has repeated itself in 2015:

  • CMS awarded the RAC Region 5 contract to Connolly on Dec. 30, 2014.

  • Performant Recovery, Inc., which currently holds the Region A contract, filed a protest with the Government Accountability Office (GAO) on Jan. 6, 2015, and CMS announced the protest a week later.

  • CMS confirmed in November 2014 that contracts for Regions 1, 2 and 4 are still in their "pre-award protest" phase, which will likely last through August 2015, while the Region 3 contract could be finalized in the near future. “However, the procurement process continues for Region 3 (Part A / Part B claim reviews), which includes Florida, Tennessee, Alabama, Georgia, West Virginia, Virginia, North Carolina and South Carolina,” the agency noted.

With timelines that are either vague or nonexistent, it is a gross understatement to say these delays are frustrating for providers and contractors alike. Granted, from a provider perspective, it’s hard to be too sympathetic to the RACs, but there is no doubt that auditors are being negatively affected as well.

What to Do this Month

While CMS continues working to get its RACs in a row, providers should act now to improve response time and efficiency. Focus on Medicare Administrative Contractors (MACs) and commercial audits, as they will be picking up slack for the RACs. Most importantly, educate teams on the various types of audits. 

Although CMS hasn’t released a timetable, we know that RACs will eventually return with a vengeance. Don’t scrap your RAC programs; use the extra time to improve them.

About the Author 

Dawn Crump, MA, SSBB, CHC, has been in the healthcare compliance industry for more than 18 years and joined HealthPort in 2013 as vice president of audit management solutions. Prior to joining HealthPort, Ms. Crump was the network director of compliance for SSM. She has healthcare experience in education, organization development, quality improvement, and corporate compliance. 

Contact the Author

Dawn.crump@healthport.com

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