January 3, 2012

RACs FAQ: More Questions Than Answers

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When contemplating my latest article for RACmonitor.com, I originally planned to perform a review of physician issues being reviewed by the RACs. As part of that process I thought I would take a look at the RAC Frequently Asked Questions (FAQs) on the CMS website to see if there have been any glaring changes to report. I found one omission so notable that my original article must wait for another day.

In the past, the following question and answer appeared under the RAC FAQs on the CMS website:

"Q: I received an additional documentation request (ADR) letter from a Recovery Audit Contractor (RAC) for an issue that is not approved on their website. Do I need to submit the record?

A: RACs may request a small sample of records to assist CMS in determining if an audit concept is consistent with Medicare policy and should be approved for widespread review. Providers must still submit the requested documentation to the RAC within the expected time frame to avoid having that claim denied. The RAC will complete its review of the claim and issue a review results letter within 60 days."

Much like Jimmy Hoffa, Amelia Earhart and the World Series hopes of the Chicago Cubs, this particular FAQ has disappeared.

On the surface, this would appear to be good news. A more reactionary reader might reach the conclusion that the RACs no longer are allowed to perform reviews outside the scope of the approved issues lists on their respective websites. As I discovered with a short investigation, that would be a knee-jerk - and possibly costly - mistake.

For the answer to this mystery, we have to return to the revised RAC Statement of Work released this past September. I direct your attention to Page 11 under bolded item No. 6 (why did I just get a flashback of the classic television show The Prisoner?) entitled "random selection of claims." According to this paragraph, the RACs are statutorily prohibited from selecting claims randomly for review for any purpose "other than to establish an error rate." The RACs must use data analytic techniques to conduct "targeted reviews." I can't speak for the reader, but the longer I look at those two sentences, the less able I am to reach any conclusion other than the fact that the disappearance of the FAQ listed above will have no meaningful effect on RAC operations going forward.

In order to determine that an issue should be added to an approved listing, a RAC has to first perform analytics, followed by establishing a reliable error rate. Truthfully, the only way the contractors can achieve this by their own volition is through the type of small claims sampling used to reach a determination for widespread approval, as was once described in The Incredible Disappearing FAQ.

The provider community, particularly in hospital settings, is doing its level best to keep up with changes and adjustments to government audit programs. In order to keep all of our heads above water, it is in the best interests of CMS to let us know not only when new issues appear under the RAC FAQs on its website, but also to let us know when things have been removed and why. CMS did not bother to do this in this particular case, but providers should know that, as far as RAC review types are concerned, nothing has changed.

For now, anyway...

About the Author

Paul Spencer is the Compliance Officer for Fi-Med Management, Inc., a national physician practice financial management company based in Wauwatosa, WI. Paul has over 20 years of experience across all facets of healthcare billing, including 6 years spent with insurance carriers. In his current role with Fi-Med, he acts as a physician educator on issues related to E/M level of service and documentation audits by CMS and other outside entities. Paul has carried the CPC and CPC-H credentials from the American Academy of Professional Coders since 1998.

Contact the Author

pspencer@fimed.com

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

Addressing Homelessness Through Better Documentation

J. Paul Spencer, CPC, COC

J. Paul Spencer is a senior healthcare consultant for DoctorsManagement. Is the national correspondent for Monitor Mondays, the live Internet radio broadcast produced by RACmonitor.

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