South Carolina was the first RAC Demonstration State to receive the new RAC training. Diane Paschal, Director of Corporate Compliance for the South Carolina Hospital Association (SCHA) helped organize the CMS presentation at the SCHA on Friday, March 20.


The RAC Outreach Education presentation was conducted by Commander Marie Casey, Amy Reese of CMS, and Christine Castelli, a Principal at Connolly Consulting.


The Hospital RAC Education exceeded the two hours that had been allotted, mostly because of numerous questions from the providers. With a presentation that emphasizes the basics, CMS and the RACs are severely challenged to present information that best serves the needs of all of the audiences that they will face in 2009.


“It is very difficult to have a canned presentation for the various levels of experience with RAC that the agency is trying to educate,” stated Ms. Paschal. “The presentation in Florida this a.m. (March 25) received the same complaint, too basic for RAC seasoned hospitals.”


The strength of the Hospital RAC Education may have been the ready access to important CMS and Connolly Consulting contact information. Hospitals called for increased transparency in the RAC process and it is evident that they were heard. CMS listed the direct phone numbers of the CMS contact persons for each RAC region, as well as important web links for additional RAC information and updates.


Connolly Consulting provided the contact information for Ms. Castelli, along with the Connolly Consulting Medical Director and Operations Principal. Ms. Castelli distributed provider contact forms, Provider Medical Record (MR) Submission Requirements for CD/DVD file formats, and the toll free number for RAC inquiries. “Communicate, communicate, communicate”, she urged, a sentiment that was echoed by CMS.


On this point, both CMS and Connolly emphasized the importance of verifying the successful receipt of medical records requested by the RAC by sending hard copy and electronic records “via trackable carriers” and checking on the receipt and status of medical records by contacting Connolly regularly. This will be necessary at least until the RACs establish the capability to complete this record status on their websites, no later than 1/1/10.

In general, CMS dominated the RAC Outreach Education presentation; in the shared PowerPoint presentation that was the session’s foundation, CMS covered almost 30 of the 40 slides. Many of these slides included information on RAC fundamentals and RAC history in which South Carolina’s experienced providers were well versed.


During their presentation CMS outlined their three keys to a successful RAC


Minimize provider Burden
Ensure RAC Accuracy through oversight, validation, and return of contingency fees, and Maximize Transparency through communicating new issues, vulnerabilities & claim status

CMS recommended to providers that they should prepare for RAC audits by knowing where previous improper payments have been found. This can be done by reviewing the RAC Demonstration project findings and looking to see what improper payments have been found in OIG and CERT reports. CMS further suggests that providers conduct an internal assessment to identify and correct any Medicare compliance issues.


Regarding providers obligations during the RAC audits, CMS stated that providers should keep track of denied/recouped claims and look for patterns. Providers are obligated to determine what corrective actions you need to take to avoid future improper payments.
And, finally, providers should only “appeal when necessary.”


Hospitals will have to wait for clarifications and specifics regarding some of the finer points of the RAC implementation, however. “There was some frustration at the lack of knowledge that was displayed on the details of the program unrelated to the RAC Statement of Work (SOW).”


An issue that seemed to concern providers was the continued uncertainty regarding how record request limits will be applied. “Nothing was written in stone,” said Ms Paschal. “If a provider had distinct provider ID numbers for an acute hospital, and a behavioral health unit, and a skilled nursing facility, no one could tell us what the actual medical record request limits would be.” As a result, Connolly will present a spreadsheet of what it considers to be distinct NPI’s. Hospitals will have to verify which, if any, provider numbers are nested within a health system or independent facility. And then? “It’s uncertain,” said Ms. Paschal, “but CMS stated they are still working on the details of the record request limits” and we are hopeful of resolution prior to receipt of live record requests.


When asked by provider’s which clinical guidelines would be used by Connolly Consulting and their subcontractor Viant, “we were told that they were undecided. Ms. Castelli said that they were still evaluating the screening criteria and were considering Milliman and InterQual,” recalls Ms. Paschal.


There was ambiguity regarding Viant’s role as a subcontractor. “They will conduct complex reviews but their presence will be transparent to the providers,” per Ms. Castelli.


“They really didn’t emphasize how Connolly’s approach would be different, other than a promise not to put providers out of business When asked about the new “Black and White” approach to recoupment discussed at the recent RAC Summit, “There was no mention of this term by Connolly,” related Ms Paschal.

There was certainty on a couple of topics important to the provider audience. “Connolly was pretty clear on the fact that we could expect RAC requests in late May or early June,” stated Ms. Paschal, “both for automated and complex reviews.”

And on the topic of “linking” physician recoupment to hospital recoupment on cases where the RAC determines that services were presented in an improper setting, “Connolly said that it was ‘Highly possible’ that they would link to physicians involved in medically unnecessary cases”, recounted Ms. Paschal.

Readers can view the CMS/Connolly handouts available on the SCHA website under Medicare at: . Additional information provided by Connolly Consulting will be posted as it becomes available, so providers should check this site periodically for updates


Undoubtedly there are areas where CMS and Connolly Consulting can, and hopefully will, improve their presentation. They are locked into a tight time-frame for implementation and may still be developing policy and systems as they go. More detailed information will be available as they advance down their implementation time-line. At each consecutive RAC Outreach Education session (the next one for CMS and Connolly Consulting is scheduled for March 26 in Orlando), CMS and the RACs will have the benefit of learning from issues that were raised at previous sessions.


Although some changes are apparent, most notably in access and transparency, the mission for the RACs is still going to aggressively pursue improper Medicare payments.

To paraphrase Peter Townshend, “Meet the new RAC. Same as the old RAC.”


For more information on the RAC, including contact information of the RAC participants, please contact the author, Dennis Jones, at .


About the Author

Dennis Jones is the Director, Revenue Cycle Clinical Support Services with CBIZ KA Consulting Svcs, LLC. His expertise covers a wide variety of topics including managed care, uncompensated care, Medicare compliance, HIPAA, and process improvement. He is a recognized speaker having previously addressed the New Jersey Hospital Association, World Research Group, and various state chapters of HFMA, AAHAM, and AHIMA. His expertise in Medicare compliance has been an integral component of the CBIZ RAC solution. For more information on the RAC, including contact information of the RAC participants, please contact the author, Dennis Jones, at


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