What you Need to Know about MAC Audits to Lessen Revenue Impact

By Dawn Crump, MA, SSBB, CHC
Original story posted on: March 5, 2014

Although providers typically don’t encounter them as often as audits from Recovery Audit Contractors (RACs), Medicare Administrative Contractor (MAC) audits can represent a more serious revenue risk. This is because MACs can hold back payments before reimbursement—depending on the type of review. Diligent focus on the timely submission of medical record documentation is required in order to mitigate takebacks. 

In the not-too-distant past, MAC audits were few and far between, and handled in piecemeal fashion. Now, they’re becoming much more prevalent. Provider diligence has increased with the realization that MAC audits can impact not only the claim in question, but future related claims as well. Additionally, the U.S Department of Health and Human Services (HHS) Office of the Inspector General (OIG) recently conducted a study on MAC performance. Findings revealed deficiencies in one quarter of the standard reviews, and two of the MACs consistently underperformed. 

Certainly, dealing with MACs is a complex challenge for healthcare providers. This article provides four practical keys to make the job easier. 

Stay Alert – Monitor the Request File

It is imperative that providers watch for MAC requests on a daily basis, and it’s the people in the billing office who typically will see them first. Requests hidden within the DC-FISS (Fiscal Intermediary Shared System) request file can be easy to miss. This is the standard Medicare Part A system used to process Medicare claims related to medical care provided by hospitals and hospital-based providers. Within the request, details may be spread over three to four pages, and the codes used are often hard to understand. 

In addition, while similar RAC requests may be dealt with in batches, this it is not possible with MAC requests. Each will be presented by the MAC individually, and providers must respond to each in turn. 

Tighter Time Frames and No Discovery Period

Although those dealing with RAC audits enjoy an informal discussion period, there is no such luxury with MAC audits. In fact, there’s no discussion period at all; MAC audits lead directly to a formal appeals process. And with MACs, you only have 30 days to respond from the date of a request – a shorter timeframe than the 45 days RACs allow.

For these reasons, it is necessary to set up an internal communications process with your billing office in order to stay ahead of any and all MAC requests.

Vigilance is the key. 

One large, Midwest provider lists three points to keep mind when dealing with the MAC prepayment review process:

  1. Again, hospitals have only 30 calendar days to submit medical records (including mail time) under this scenario. There is not a process to request an extension to the due date, as there is with RAC record requests. The MAC will deny payment for non-receipt of documentation if the records are not received in a timely fashion.
  2. Often, requests are for records on patients recently discharged, and in such cases, the charts may be incomplete. The discharge summary and all physician signatures should be obtained prior to submission of the record to avoid a denial for an incomplete medical record.
  3. For several hospital services, such as total joint replacements, pertinent documentation from the physician’s office records must be included in the hospital records to substantiate services provided. Ideally, these records should be obtained prior to surgery. Attempts to obtain the documentation once the record has been requested for prepay review delays record submission.

Watch for Probe Audits

Due to the fact that there are higher rates of error on certain types of claims, MACs sometimes will conduct probe audits – targeted, more focused reviews. These may start with 40 records for which claims have already been paid. If there is a high error rate based on a focused review, MACs will allow 30 days for corrections to be made. If issues are not corrected, MACs may begin to audit randomly, and on a prepayment basis.

Five Ways to Keep MAC Costs Contained

With MACs, providers should follow the same blueprint they follow for other forms of audits in order to mitigate compliance cost. Focus should be concentrated in five areas in order to effectively reduce these costs over time:

  • Prevent audits before they occur through strong clinical documentation improvement (CDI), coding, and revenue integrity programs.
  • Centralize audit management to make the most of focused resources, and identify duplicate audits.
  • Implement technology to track, monitor, and manage audits as they occur.
  • Take advantage of electronic requests and electronic delivery when available.
  • Learn from your experiences, creating a feedback loop for future audit-centric initiatives.

Time-and-motion studies demonstrate that there are formidable costs associated with audit compliance, regardless of audit type. Both revenue-threatening and non-revenue threatening audits demand full-time equivalents (FTEs), paper production, postage, shipping, tracking, monitoring, and appeal management.

Final Thoughts 

On the surface, providers can follow the same basic process they follow for other audits when navigating challenges presented by MACs. But the audit software utilized must be flexible enough to deal with the unique logistical challenges presented by MACs. And the devil is in the details.

So stay alert and exercise due diligence, and you’ll be well on your way to successfully dealing with the finer nuances of MAC audits.

About the Author

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

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