You’ve even done data mining to establish where your facility is most vulnerable and put mitigation plans in place for those areas where the auditors are most likely to hit.

But are you truly ready?

Will your HIM department be able to hit the ground running for the sheer volume of medical record requests as they start rolling in the door, especially with multiple auditors at the same time?  When the determinations come in after that, is your team prepared to establish which claims should be appealed and can your staff handle that volume?  As well prepared as your team may be, they do have other tasks to handle in their regular workflow and the influx of these audits could very well be too overwhelming for even the most prepared and informed staff.  That’s where being open to outside assistance from competent consultants in several specialized areas of the audit process may prove to be a good strategy for your facility.

What is the upside of outsourcing?


Like other types of revenue cycle outsourcing, looking at adding outside consultants to your internal auditing team can have its advantages if played right and can be more cost effective with a very positive return on your investment.  What are some of the advantages?


More RAC and audit-specific experience – Many external resources already have the expertise in the areas these audits require and can hit the ground running for your facility.  They have been through this experience before and understand the rules of the game, the tight time tables and the intricacies of the appeals process.


Flexibility of staffing and economies of scale – Rather than having the fixed cost of hiring FTEs to sustain the workload, outsourcing can provide the flexibility to increase or decrease staff as the workload waxes and wanes.


Better and more timely turnaround – If it takes your own team a long period of time to get up and running, the learning curve could prove to be harmful to your bottom line.  Delays can be costly, and delay can mean denial if you miss key deadlines resulting in a default judgment that can’t be appealed.


What areas of expertise should I outsource?

Although any area of the workflow can be outsourced, there are a few key areas that your organization may want to consider, given the pivotal nature of that issue or department and where your own facility may have gaps.

IT/data mining

First of all, you need to understand where your potential risks are and looking at historical data is going to be key to that process.  If you have analytical tools and talent already under your roof, you are probably doing this today.  But if you don’t have them readily available, you are definitely missing a critical component of any audit prep to point you to the areas in which the external auditors will be likely focus their attention.  Hiring a consultant that already has the analytic tools, similar to what the auditors have, can buy you valuable time in getting a handle on what has ALREADY happened, then you can concentrate of how to fix it (if that’s possible) or prevent it from happening in the future. The analytic tools can provide insight into revenue opportunities that may have been missed as well.



Assessing how your HIM department can handle the influx of record requests BEFORE they start arriving will be paramount to your pre-determination process.  Although the RACs have a record cap, the other auditing bodies, especially the MICs, do not.  The sheer number of records can overtake an already overwhelmed HIM department.  Many facilities are using a Release of Information vendor to fulfill other types of requests and are planning on utilizing this service to assist with their RAC and MIC audits as well.  The flexibility this outsourcing provides is also valuable to planning for the unpredictable volume that may befall you. 

Legal and Appeals

Once the determinations start rolling in, the attention will shift into your appeal process and whether it is advisable to pursue and appeal.  In the demonstration project, more than 33 percent of RAC overpayment determinations were reversed on appeal and some providers were reporting an 80 to 90 percent success rate on appeal, so the your appeal strategy may prove to be the turning point in your RAC (or other) preparedness.


The complexity of the appeal process for both Medicare and Medicaid may warrant different types of interaction with your legal counsel to navigate through this maze.  Finding a cost-effective solution, whether it is outsourcing the entire process or having your legal counsel draft various appeal letter templates for your staff to use for different types of appeals will look very different for each provider. Having an experienced legal partner and an appeal strategy BEFORE you get determinations in the door will be vital.

Coding compliance and reviews/CDI

Clinical documentation integrity (CDI) programs, also called clinical documentation improvement programs, are not only a way to support coding and case mix, but also a way to enhance quality and compliance. These programs train physicians how to be better documenters, and range from clinician shadowing, to concurrent coding, to documentation report cards that are disseminated among the entire medical staff. This type of service may prove to be helpful in educating your physicians in those high-risk areas.


Once you’ve identified your areas of vulnerability, you will perhaps have to roll out some education and training to the affected areas and do it fast.  Researching the regulations, writing best practices, and drafting educational materials may require more time and effort than your already-stretched staff may have.  There are a number of consultants that do specialized areas of training in this area and have materials off the shelf that can be customized to your own unique needs.  Many of them also provide physician advisory services that could prove to be beneficial to the relationships with your physicians.  Sometimes that information is best delivered from the outside by a professional who has done this before.


Take some time at this early stage of your audit preparation to map out your facility’s responses, including the use of outsourcing.  It will be a constantly evolving process as you evaluate what is working and what needs some re-evaluation and re-tooling but one well worth some thoughtful planning to make the best use of all of your available resources.

About the Author

Carla Engle, MBA, is a product manger for MediRegs, a Wolters Kluwer company. Her background includes more than 20 years in hospital and physician practice operations, particularly in reimbursement and billing functions. Prior to joining Wolters Kluwer recently, she was the vice president of compliance for a national revenue cycle solutions company and prior to that was in the Reimbursement Training Department with HCA.  For several years she headed up the Part A Fraud Investigation Unit for a CMS Program Safeguard Contractor (PSC) where she was successful in the prosecution of several national cases. In her revenue cycle compliance capacity, she worked with a number of clients in California and Florida with Recovery Audit Contractors (RACs) in setting up processes and appeals.


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