Updated on: June 22, 2012

Tumultuous Times in Healthcare, Notwithstanding the RACs

Original story posted on: August 4, 2009
Not since the Clinton administration's 1993 foray into healthcare reform has the country and the general media been quite so immersed in the business of reforming America's healthcare system.

The Senate Finance Committee is expected to hold formal talks this week, an action that will intrude on its August recess. Meanwhile, the House Energy and Commerce Committee seems to have found a way to achieve additional cost savings in their healthcare reform bill that also includes a public option plan.

One of the recurring themes in both Houses is a commitment to reduce costs and eliminate fraud and abuse in Medicare. All of which brings us to Recovery Audit Contractors (RACs) and the plight of America's hospitals and health systems as they grapple with automatic reviews, letters of demand and appeals.

Helping sort through these issues is an insightful article scheduled for this Thursday's RACMonitorEnews. The article, by contributing editor Cheryl Servais, MPH, RHIA, vice president of compliance and privacy officer for Precyse, will take you through the deductive process of writing rebuttal letters for Level 1 appeals and encourage you to look for areas of rebuttal.

"If the RAC applied an incorrect coding or billing standard or regulation to the claim, or if the standard or regulation was not interpreted correctly," writes Servais, "you can then identify the correct standard or regulation or document the correct interpretation."

And just when you think you have your arms around the RACs, Carla Engle, MBA and product manger for MediRegs, a Wolters Kluwer company, gives you even more insight than you probably want on these hot days about Medicaid Integrity Contractors (MICs).

In 2008, writes Engle, Medicaid ranked highest, at $18.6 billion, on a list of federal agencies issuing improper payments -- beating out Medicare, at $10.4 billion, and Medicare Advantage, far behind at $6.8 billion, according to CMS.

Similar to the RACs, the MICs will use a data-driven approach to focus efforts on aberrant billing practices and some of the possible targets include the following:


  • Services provided after the death of a beneficiary
  • Duplicate claims
  • Unbundling of services
  • Outpatient claims with service dates that overlap dates of an inpatient stay

And warns Engle, the same safeguards contained in the RAC program are not present in the other review contractors. You'll read a litany of differences between RACs and MICs, in order to help you prepare your facility - perhaps even changing its culture of compliance in anticipation of an impending MIC visit.

"Chance favors the prepared mind," said Louis Pasteur, who knew a thing or two about cultures.
Chuck Buck

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

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