It comes as no surprise to hospitals and cardiovascular service providers that the Recovery Auditors (RACs) are focused on cardiology.

Let’s consider the big picture: According to the American Hospital Association (AHA) RACTrac survey results from the fourth quarter of 2013, approximately 93 percent of reporting hospitals reported some RAC activity, and half of those indicated that denials for medically unnecessary short stays were the most costly complex denials they faced. Of the $2.6 billion recouped from participating hospitals through the fourth quarter of 2013, a total of 97 percent, or about $2.5 billion, was associated with complex reviews.

On average, for reporting hospitals, a complex review represented a takeback of $5,659, while an automated review average takeback was $882. With that said, how does this relate to cardiovascular services? Well, a third of RACTrac participating hospitals reported that the largest financial impact for medical necessity denials was for drug-eluting stents and syncope and collapse (MD-DRG 247 and 312). Another 14 percent of hospitals reported that their most costly medical necessity denials were from chest pain or transient ischemia (MS-DRGs 313 and 69). 

In addition, in the PEPPER (Program for Evaluating Payment Patterns Electronic Report) report from the same period (under the section on percutaneous cardiovascular procedures at risk), high-volume DRGs 246, 247, 248 and 249 are identified as being at risk for improper payments by all Centers for Medicare & Medicaid (CMS) auditors. The PEPPER report also identified the top 20 medical and surgical DRGs by volume for one-day stays, which we know are focus areas for the RACs. By volume, eight of the top 20 medical DRGs that are listed as exhibiting high risk for denial for one-day stays are cardiovascular-related (310, 313, 312, 69, 287, 309, 292, and 293). Nine of the top 20 surgical DRGs are cardiovascular-related, with MS-DRG 247 at the top of the list (along with 247, 238, 254, 251, 227, 244, 249, 253, and 36). This shines a spotlight on how important it is for catheter labs and cardiovascular services providers to participate in the prevention of denials.

Armed with this knowledge, action should be taken at the department or service line level, even if your hospital has a RAC coordinator or committee. In fact, it may be wise to start a series of best practices at the administrative level of your organization that hopefully will spread to other clinical areas. The checklist below represents a great place to start to help evaluate the audit readiness of the cardiovascular services department.

Once you complete the checklist, you will know who in your organization is responsible for RAC matters and then be able to coordinate with this point person to form a cardiac RAC committee that includes your physicians.

We suggest engaging the cardiac committee to ensure that physicians are informed, because their documentation is crucial to compliance. Use the checklist below to guide you and begin the process of achieving proactive, front-end compliance in order to avoid takebacks after the final bills are dropped. Your compliance and departmental margins should improve, because remember, at an average of $5,659 per complex denial, the impact of reduced risk can add up quickly. Hold on to your hard-earned dollars for more important things like equipment and salary costs.

The following checklist is designed to help catheter lab leadership identify areas of weakness in their departmental RAC readiness programs.

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Do you know who is responsible for coordinating RAC activities in your facility?







Do you view the American Hospital Association RACTrac website to stay current with RAC trends?







Do you have a representative on your state hospital association related to RACs? Do you receive information on RACs from a state hospital association?







Have you received education on the governing board (GB) compliance plan?







Are directors and other leaders educated on RACs?







Do you have an education plan about RACs for your staff that clearly identifies each person’s functional role and how he or she can impact the process?







Do you or physician relations personnel educate the physicians and their office staff on RAC matters and on physician charting compliance?







Do you have medical staff compliance with medical necessity documentation?







Do you have an active catheter lab chart audit process related to appropriate documentation?







Do you involve staff in chart audits and provide feedback?







Do you report catheter lab bill holds and claim denials to the cardiac committee?







Do you have a key performance indicator (KPI) related to billing compliance that you report to quality?







Does the finance team meet at least annually with the hospital department directors responsible for billing accuracy in their “span of control”?







Do you have a case manager or other staff that advises physicians on bed status 24 hours a day/7 days a week?







Do you have a step in registration to check for medical necessity for services ordered?







Do you understand the criteria for an outpatient stay versus inpatient admission?







Does case management advise admission bed status and medical necessity when admitting from the cardiac catheter lab?







Do you have a facility RAC committee?







Do you have a representative from the cardiac catheter lab on the RAC or utilization committee?







Do you assist your facility with appeals of denied catheter lab claims?







Do you have a qualified physician advisor (PA)?







Does your department have someone responsible for staying current on audit issues for RAC Medicare and Medicaid?







Do you regularly review RAC cardiac approved issues for your region and state?







Do you utilize your vendors to provide current information on the RAC program?







Are admission processes diagrammed and supported by policies and procedures to ensure uniformity of application in your department?







Are cardiac bill holds and denials tracked and reported back to the cardiac departments?







Are cardiac bill holds and denials tracked and reported back to the cardiologists?







Do you understand the criteria for an outpatient stay verses inpatient admission?







Do you have a copy of the CMS inpatient-only list?







Have the cardiologists been educated on appropriate and compliant documentation?







Is your chargemaster accurate?







Do you have annual review policy for your chargemaster?







Have you identified specific codes (e.g. CPT, HCPCS) that often require bill holds or corrections? 







If so, do you have a plan of action regarding these codes?







Have you corrected all issues and self-audited to ensure that the corrective action was taken?







Do you stay current with the CMS fee schedule for your procedures?







Do you let finance know when fees change?







Is your facility utilizing a software system to audit and identify vulnerabilities and quantify risk?







By knowing the problem areas, you can begin to identify the right people to create the right processes and structures to achieve lasting improvement.

About the Authors 

Elizabeth Lamkin, MHA, is CEO of PACE Healthcare Consulting, LLC in Hilton Head S.C. After 20 years as a highly innovative hospital CEO, she now brings effective solutions to all types of hospitals and healthcare providers. She is a nationally known speaker and author on billing compliance including CMS Recovery Auditors.

Amanda Berglund, MS, MBA, is a partner in PACE Healthcare Consulting. Prior to joining PHCC, Amanda was Associate Administrator and Chief Business Development Officer at North Fulton Regional Hospital near Atlanta, GA.  She is a former Manager of Business Development for Tenet Healthcare Corporation. Amanda received a BS from Columbia University and an MS from Georgia Institute of Technology. She also has an MBA in entrepreneurial leadership from Nova Southeastern University.

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