There are two misconceptions that many home healthcare providers have about the Recovery Audit Contractors (RACs). The first is that home health agencies don’t need to be concerned about the RACs at this time. The second is that the RACs are the reviewers to be feared most.

The only approved home health RAC issue at this time is an automated review related to partial episode payment (PEP) adjustments, so some providers think they can check the RACs off their lists of worries. However, providers need to remember that RACs have been testing other issues with an eye on seeking approval from the Centers for Medicare & Medicaid Services (CMS). The issues being tested include long lengths of stay (high recertification rates), low utilization of payment adjustment (LUPA) cases and high rates of therapy utilization. Once Medicare approves a new issue, the RACs will begin to investigate providers that exhibit suspicious patterns by conducting medical reviews of the episodes in question. Providers should keep in mind that the RACs will be reviewing not only records of past patients (they have a three-year lookback period), but also the records of your current patients, meaning agencies preparations need to be happening now.

Providers can assess their risks by seeking to answer three questions: Do we have a higher number of re-certifications per patient than other agencies in our service area? Do we have an exceptionally low number of LUPAs, which potentially could indicate that we are “upcoding” to receive full episode payments while providing medically unnecessary services? And do we have a significant number of high-therapy episodes (14 to 20 or more)? If the answer to any of these questions is yes, providers must conduct a review of their records to ensure that the documentation supports the medical necessity of the care being given – and that there are specific orders for the care provided. Now is the time to evaluate whether your organization is at risk and to take the corrective action as necessary. This may mean making improvements in documentation, improvements in the specificity of orders obtained, and/or improvements in resource management – or it may mean evaluating your  practices.

The second aforementioned misconception, that the RAC reviewers are to be feared most, probably exists due to a couple different reasons. The RACs are independent contractors that have additional incentives to find problems because they receive a percentage of the funds recouped from or paid back to the providers. It also could be because of the challenges (or perhaps more accurately, the chaos) the RACs have created for hospital providers. At this point in time the issues for which the RACs are seeking approval are being reviewed by other Medicare contractors, resulting in thousands of dollars in paybacks. The significant increase in pre- and post-payment ADRs has caught many providers off guard, revealing them to be ill-prepared to handle the preparation and tracking demands of medical reviews, denials, redeterminations and appeals. Preparing records for ADRs and performing the follow-up on denials are time-consuming and expensive endeavors. This has resulted in a significant financial drain on providers during a time of continuing cuts in reimbursement. Providers need to be concerned about how their records look to the outside world of reviewers. They need to be proactive and invest the resources needed to limit their risks. Providers should evaluate whether they have the time or the expertise to conduct internal chart reviews, and if not,  invest in a review conducted by an outside resource, ensuring that there are specific protocols in place to be used to respond to documentation  requests. Providers also should develop a tracking sheet for each step of the process.

If providers are using paper documentation, they should ensure that they have the capability of scanning records and saving them to a disc (CD or hard drive). This will eliminate the risk of being forced to stand at the copy machine a second, third or fourth time to obtain a copy of information submitted with the ADR for future action regarding denials.

Every time a record is copied increases the risks of missing information that’s needed to support the services provided. Create an index template that will detail each part of the enclosed records, including page numbers, sections for each discipline, the attestation/signature logs for any handwritten signatures as well as any supporting documentation (such as history and physicals, lab results, consulting notes, etc.).

Above all else, do not assume that everything is OK – begin preparing now!

About the Author

Bonny Kohr, RN, CHCE, HCS-D, is the manager of clinical services for FR &R Healthcare Consulting, Inc. She is a Registered Nurse, Certified Homecare Coding Specialist and a Certified Homecare and Hospice Executive. Bonny worked 23 years in home health care.  She began her career in home care as a field staff nurse, then as a clinical director, and finally as the chief operating officer.

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