December 9, 2009

The RAC Recoupment Rollout: It Already Started, Before the Letters Were Sent


sdonio120dsThis time last year, in the first RACMonitor edition, I discussed the potential rollout of the RAC recoupment process on a regional and state-specific basis. As we all are well aware, the original rollout plans never came to fruition, but I would venture to say that maybe the RAC recoupment rollout already started, and in a way that would be most devastating to a provider.

Why, you may ask, would I make that statement? Well, let's look at certain facts regarding the RAC process.

Fact: The three-year look-back period has not changed.

Fact: Many providers have used this delay as justification to avoid preparing for the impending storm (this changes denial management to in-denial management).

Fact: By taking a delay or defer position, providers have allowed poor documentation and coding processes to continue. If the RACs already had begun performing complex reviews, these issues would have come to light and corrective actions would have been taken.

Fact: Not only are problems piling up due to increased numbers of records accumulating during the delay, the ability of providers to find documentation deteriorates with the advance of time. Most providers do not have the on-site storage capacity to maintain two-plus (maybe almost three, by the time complex reviews start) years' worth of records, notes and tests. Even those providers with "electronic" records rarely have complete records; instead they have parts that are electronic and parts that are paper. Basically, they are in the middle of the road: a very bad place to be.

Thus, by delaying the start of recoupments, the RACs have stacked the deck against providers. They have set up a process that now:


  • Allows for problems to go undetected
  • Extends the initial look-back period
  • Provides for a larger population of accounts to mine for problems
  • Puts greater hurdles in front of providers to comply with information request timelines

Now what can a provider do? Prepare, Prepare, Prepare.

First, do a complete and comprehensive computerized data-mining review of all of the individual claims that are now subject to RAC review. Sampling does not work; looking at all cases in a RAC-targeted area does not work. One relies on luck and one requires too much wasted effort trying those strategies. Look at the cases like the RAC will; they only will be choosing those that are at risk. Why? Because it is in their best economic interests, and they are required to do so under the rules.

Second, once you identify specific cases, look at the information. What you will find is that most of the time the information is there, it just is not readily available - so dig, dig and dig some more.

Third, get your high-risk cases ready, make the copies, and summarize the records now. If you think that the RAC will knock the case down, then perform your appeal prep now.

Fourth, do the automated denial review ASAP and fix the problems - this is the easiest step to do and represents the biggest mistake most providers make. For every month you delay, you increase the recoupment, because there is no appeal and no recourse except to fix the issue if one exists.

As I stated in the beginning, while many may say the RAC process has been deferred, the reality is that it already has started - but in a very below-the-radar way. Unfortunately for those providers who have not prepared, when it does reach their radar screens, it will be a significantly stickier issue than if the reviews had started last year as planned.

About the Author

Samuel A. Donio, Jr. is the President of CBIZ KA Consulting Services, LLC. Mr. Donio is an authority on sound and compliant healthcare financial management and he has developed numerous products and services to meet the ever-changing needs of healthcare providers.

Contact the Author

Samuel A. Donio, Jr., MBA

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