December 20, 2012

RACs Expand into Physician Practices, Adding Pressure to Existing Audit Burden

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Generally speaking, hospitals nationwide are pushing for stronger relationships with physician practices and medical groups. Some practices once merely affiliated are now fully owned. In fact, Accenture predicts that by 2013, fewer than 30 percent of physician practices in the U.S. will be independent. Yet as hospitals have ventured further into physician practices, so too have the recovery auditors.  

Hospitals that own or manage physician practices or groups must be keenly aware and deeply involved in all practice and/or group audit activity. This column offers insight into RAC and other regional audit activity meant to help your organization get up to speed and in control.  

HDI and Connolly Make First Strides  

Two RACs recently mentioned upcoming reviews of physician practices and medical groups.  One is taking a generic approach, while the other will hone in on specific issues sorted by provider type. Regardless of the methodology used, however, we predict that other RACs will follow suit.

Region C recently posted a list of approved review issues involving evaluation and management (E/M) coding. The RAC in this region hopes to ensure that physician practices and medical groups are not double-billing their services. For example, this region will review cases for which there is risk of services being bundled into an office procedure and also billed as a separate E/M code. Yet Region D is taking a different tact.

RAC Region D has listed specific issues separated by provider type within their overall listing of new issues, available online here: https://racinfo.healthdatainsights.com/Public1/NewIssues.aspx. Organizations should review this listing for “professional services” service types as well as “Medicare Part A: outpatient providers.”   

Taking Aim at Family Practices

The American Academy of Family Physicians (AAFP) in a September announcement also confirmed that Region C states will be audited for E/M coding – and that E/M code auditing will expand to the other three RAC regions. Hospitals that own practices must ensure that offices are not billing for services beyond those actually delivered (for example, the E/M coding of new versus established patients).

Additionally, several HealthPort customers have reported that RAC Region C reviews of E/M coding for CPT codes 99214 and 99215. These codes cover routine office visits, which are commonly billed by family medicine physicians and groups. In cases reviewed thus far, Region C is reviewing records to ensure that higher E/M levels justified during initial office visits are not duplicated in subsequent, repeat or routine visits – or where lower E/M levels are expected.

Records Being Requested from Practices 

RACs also are starting to request copies of medical records from physician practices, whereas in the past only automated reviews were conducted in this field. As communication and reporting among practices and hospitals has always been an issue, providers must take additional steps in order to ensure that practices are sharing any and all RAC requests. Centralized audit management also must involve all owned practices and medical groups to ensure that all audit activity is logged, processed and tracked correctly.

Other Regional Audits to Know

Finally, remember that RACs aren’t the only auditors chasing down physician practice records. Regional health plan auditors also actively are requesting and reviewing records. As a result, some practices are seeing medical request volumes grow at an alarming rate. Some of the auditors involved in reviews of physician practices and medical groups include:

  • The Centers for Medicare & Medicaid Services (CMS) Medicare Advantage (Risk Adjustment and RADV)
  • National Committee for Quality Assurance (NCQA) and HEDIS
  • State Medicaid programs
  • Payment Integrity Contractors

Audit Management Relief Solutions in Practice

As with hospital settings, centralizing the audit management process for physician practices or groups will aid in relieving staff burdens and reducing production costs. Here are five more tips for ensuring effective audit management:

  • Interview each practice’s administrator to identify and track all activity and record requests by RACs or other auditors.
  • Incorporate practice and group audits into your organization’s centralized audit program. 
  • Keep abreast of all RAC announcements and issue postings; educate practices accordingly.
  • Open lines of communication with practice administrators to ensure that all RAC requests are properly communicated, logged and processed.
  • Assign a health plan advocate to ensure that non-RAC audits are being managed properly, that record retrieval is being performed safely and efficiently, and that due-date extensions are pursued when necessary.

The trend toward stronger relationships between hospitals and physicians is not predicted to reverse itself any time soon. Providers would be wise to incorporate RAC and other audit management matters into their discussions about long-term partnerships.

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, HFMA, and AHIMA.

Contact the Author

Lori.Brocato@healthport.com

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Lori Brocato

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