The Medicare Recovery Auditor (RAC) program has been a key topic of discussions regarding audits and denials for the past few years now. We initially dealt with the demonstration and openly expressed our concerns about how that program impacted our day-to-day operations – and, at times, our ability to get a good night’s rest. 

Long before the RAC demonstration, we knew we needed to be extra careful with how we billed for services and processed claims, any claim. At the same time, the bulk of the talk from regulators has focused on Medicare claims. However, based on government initiatives to detect and prevent improper payments, we all knew it would only be a matter of time before Medicaid became an additional focal point – and that time is now. 

Regulators have locked on Medicaid, and we should be prepared or getting prepared for another mission. Keep in mind that RACs are paid on contingency, based on what they find, creating incentive to find errors in what we bill with the expectation that fees are returned if denials are overturned. With the Medicare RAC program, the hunt for denials has been aggressive and persistent, and the Medicaid program should at least be comparable. 

What We Know:

As outlined by the Centers for Medicare & Medicaid Services (CMS), each state’s audit processes are dictated by state governments – with a few exceptions. We have seen significant differences in what is occurring from state to state, and the jury is still out regarding whether the recommendation of “transparency” referenced in the FR Doc. 2011-23695 was fully embraced.

Some states are performing reviews of both automated and complex denials, with others reviewing only complex denials.

Some states are sharing somewhat specific audit issues, for example items within a DRG, such as a tracheostomy.

There are some targets such as neulasta, neupogen, and short stays, each of which has been scrutinized before, still in the mix. 

What Actions We Should Be Taking:

  • Follow and participate in outreach sessions.

Sign up for portal access as soon as possible following such sessions. 

Update your contact information in the portal and

monitor it regularly for activity – you may not get your letter in the manner in which you have delineated.

Providers have missed deadlines to respond to additional documentation requests (ADRs). ADRs are circulating, and some providers have completed one request and are submitting others. Many of the charts requested have DRGs we have seen before: syncope, chest pain, dehydration, gastrointestinal, etc. There also has been notification that coding and medical necessity were being reviewed, so some RACs are looking for both. Be aware.

  • Increase our knowledge of Medicaid.

New terminology is being used, such as a denial being referenced as a “tentative notice of no findings.”

As this differs from state to state, and considering that audits span many areas, from billing to coding to cost reports, coordinators and/or RAC contacts may be venturing into new territory. Remember to keep communications open between all key departments.

  • Know your state’s appeal process. Outside of your state process, look at your Medicare volume by state plan, especially if you are a border community. Data analysis can be very beneficial. With this list of plans, sorted by state, you can map out processes so you are prepared.
  • Ask yourself a few key questions. How are you tracking this process? Have you in the past had Medicaid tracked and trended for process improvement?
  • Know your strategy for the decision to appeal. Potential problems are everywhere, and turnaround times and hearings are other factors to consider. What will be your process? Will you manage it internally?
  • Do you have the right review team on board? Medicaid rules and guidelines can be very different from state to state, such as the definition of an “inpatient,” for example, or codes that support the need for certain tests or procedures.
  • What does your documentation look like? Many hospitals still do not have clinical documentation improvement (CDI) programs. Have a conversation about where you stand, and perform a cost/benefit analysis on implementing a new program or strengthening an existing one. You may be surprised at the success it will bring you in the form of improving your charts. Also, reevaluate your focus. Medicaid should be in the mix as well, as ultimately, this is about reflecting accurate severity among all patient populations.
  • Transparency in guidelines will be required for process improvement and better defense. Work with your state so they come to share information,

A Few Medicaid Target Areas 

  • Authorizations/precertfications
  • CCI edits
  • Congenital conditions
  • Newborn billing issues
  • Evaluation and management
  • Ventilator support of 96 hours or greater
  • Extracorporeal membrane oxygenation
  • Tracheostomy
  • Operating room procedures unrelated to principal diagnoses
  • Excision debridement
  • Stroke and/or intracranial hemorrhage
  • Patient liability reporting
  • Claims overpayment review
  • Neupogen
  • Neulasta
  • Reclast
  • Anesthesia services – Direction/supervision w/ CRNA
  • Inpatient medical necessity
  • Readmissions
  • Transfers

More to come. But first, a few resources:

Medicaid RACs info: (site possibly being updated)

About the Author

Sharon Easterling is president and CEO of Recovery Analytics.

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