p-spencerIn the updated RAC Statement of Work released back in September, we saw the semi-automated review method codified as a legitimate audit tool for the first time. Yet the dangers of this method to the provider community, if we fill in some rather prominent blanks, have been painted over in an attempt to make dogs playing poker somehow appear to be the Mona Lisa.

First there’s the administrative burden and its effects. Physicians and hospitals have found out the hard way that there is a cost to providers with regard to automated review results, as this type of audit usually turns up ironclad overpayments.

With complex reviews, the bulk of the costs come from gathering requested information, and, on the back end of the RAC process, disputing a negative result. There are boundaries to the administrative burdens to providers in the form of limits on the number of documentation requests that can be made and the ability to be reimbursed for copies of medical records.

Because a semi-automated review begins with a fully automated review and evolves into a complex review at a RAC’s discretion, there are no limits to the number of records that can be requested in a given time frame. Additionally, when the review goes from automated to complex, there is no reimbursement for copying records. Anyone of moderate intelligence who can read a map can see where this is going. One easily can picture semi-automated reviews suddenly becoming the preferred method for the recovery auditors. This has the potential to be devastating to providers, in particular to small physician groups, which thus far have dodged a majority of the RAC bullets.

If the story ended there it would be your run-of-the-mill tragedy, but I’m always willing to point out the potentially catastrophic. One needs to remember that according to the FAQs related to RAC issues on the CMS website, recovery auditors can look at any issue at any time as part of a probe into whether it is cost-effective to add the issue in question to their approved lists.

So if a RAC performs an automated review and suddenly feels that it can collect more money through a certain new issue than through any currently approved issue, it can request as many records as it wants for any reason under the cover of a “probe review” – and based on how the RAC rules currently are written, there’s nothing a provider can do about it. The diplomatic among us would refer to this as a “loophole.” Common decency precludes me from telling you how I refer to this away from the bright lights of RACmonitor.

Whenever there is a law written, somewhere there is someone trying to find a way to avoid the consequences. For reasons known only to them, CMS has built a wormhole into the universe of recovery audits based on the open-ended nature of semi-automated reviews.

It is left up to the provider community to monitor the monetary effects of this on their organizations – that is, if there’s any portion of the organizations left to protect after the RACs have a field day abusing this quirk for everything it is worth.

About the Author

Paul Spencer is the Compliance Officer for Fi-Med Management, Inc., a national physician practice analytics company based in Wauwatosa, WI. He has over 20 years of experience across all facets of healthcare billing, including six years spent with insurance carriers. In his current role with Fi-Med, Paul acts as a physician educator on issues related to E/M level of service and documentation audits by CMS and other outside entities. Paul has carried the CPC and CPC-H credentials from the American Academy of Professional Coders since 1998.

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