the wreck of the rac: lessons learned for all
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THE WRECK OF THE RAC: LESSONS LEARNED FOR ALL. THE WRECK OF THE RAC: LESSONS LEARNED FOR ALL. Moderator : Fay A. Rozovsky , JD, MPH, DFASHRM, President, The Rozovsky Group Panelists : Elizabeth Baskett , MPA, Senior Associate Director for Policy, American Hospital Association - PowerPoint PPT PresentationTRANSCRIPT
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2011 Medical Professional 2011 Medical Professional Liability SymposiumLiability Symposium
Chicago, IL ~ March 24 & 25, 2011
THE WRECK OF THE RAC: THE WRECK OF THE RAC: LESSONS LEARNED FOR ALLLESSONS LEARNED FOR ALL
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THE WRECK OF THE RAC: THE WRECK OF THE RAC: LESSONS LEARNED LESSONS LEARNED
FOR ALLFOR ALLModerator:Fay A. Rozovsky, JD, MPH, DFASHRM, President, The Rozovsky Group
Panelists:Elizabeth Baskett, MPA, Senior Associate Director for Policy,
American Hospital Association
Patrick J. Hurd, Esq., Senior Counsel, LeClair Ryan
Alice Johansson, Senior Vice President, Product Manager, Managed Care, IronShore
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RAC 101RAC 101
• The Centers for Medicare & Medicaid Services (CMS) Recovery Audit Contractor (RAC) permanent program was implemented for Medicare parts A & B nationwide on January 1, 2010.
• RACs conduct post-payment audits of Medicare Parts A & B claims.
• There are four RAC regions nationwide, with four separate RACs operating in each region of the country.
• The Affordable Care Act of 2010 expanded the RAC program to Medicare Parts C & D and to Medicaid.
• Implementation of Medicare Parts C & D and Medicaid RACs has been delayed until later this year.
• Although extremely similar, RACs are not to be confused with other payment integrity auditing programs such as the MACs, ZPICs, CERT, DOJ, etc.
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RACs Identify Hospital RACs Identify Hospital Billing Billing MistakesMistakes
• RACs are not fraud busters, they audit hospitals to find billing mistakes
• Improper payments include: incorrect payment amounts; incorrectly coded services (including Medicare Severity diagnosis-
related group (MS-DRG) miscoding; non-covered services (including services that are not reasonable
and necessary); and duplicate services.
• RACs conduct two types of audits:
Automated reviews—using computer software to detect improper payments.
Complex reviews—using human review of medical records and other medical documentation.
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Hospitals Nationwide Are Hospitals Nationwide Are Experiencing RAC AuditsExperiencing RAC Audits
Percent Reporting RAC Activity vs. No RAC Activity by Type of Participating Hospital, through 4th Quarter 2010
Source: AHA. (February 2011). RACTrac Survey. AHA analysis of survey data collected from 1,852 hospitals reporting RAC activity. 1,454 reporting activity, 398 reporting no activity through December 2010. Full report accessible at: www.aha.org/aha/issues/RAC/ractrac.html
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Hospitals Nationwide Are Hospitals Nationwide Are Experiencing RAC DenialsExperiencing RAC Denials
Dollar Value of Automated and Complex Denials by RAC Region for Reporting Hospitals, through 4th Quarter 2010, Millions
Source: AHA. (February 2011). RACTrac Survey. AHA analysis of survey data collected from 1,852 hospitals reporting RAC activity. 1,454 reporting activity, 398 reporting no activity through December 2010. Full report accessible at: www.aha.org/aha/issues/RAC/ractrac.html
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RAC Process for Complex RAC Process for Complex ReviewReview
• Hospitals are required to send RACs medical records upon request.
• RACs have 60 days to review the record and send a review results letter to hospitals.
• If a RAC determines an improper payment was made, the RAC will send a demand letter to the hospital indicating the amount of Medicare payment they intend to recoup.
• The hospital can either allow the recoupment or appeal the RAC decision using the regular Medicare appeals process.
• The appeals process is lengthy and administratively burdensome. Not all inappropriate RAC decisions are appealed.
• AHA RACTrac survey of 1,854 hospitals indicates that 23% of hospitals appealed at least one RAC decision and the RAC decision was overturned 86% of the time.
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The Wreck of RACsThe Wreck of RACsUnderwriter’s erspectiveUnderwriter’s erspective
• Regulatory Coverage
Back in the day
vs.
Today
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The Wreck of RACsThe Wreck of RACsUnderwriter’s PerspectiveUnderwriter’s Perspective
• Is a RAC audit an underwriting ‘red flag’?
Does it necessarily mean that the organization has done something wrong/bad?
• Geography• Type of organizations/patients• Types of errors• Changing landscape
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The Wreck of RACsThe Wreck of RACsUnderwriter’s PerspectiveUnderwriter’s Perspective
• Questions your underwriter may ask
What is your organization doing to minimize the likelihood of a RAC audit?
What sorts of plans does your organization have in place to respond to a RAC audit?
What financial resources does your organization have should a RAC audit result in a significant settlement?
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The Wreck of RACsThe Wreck of RACsUnderwriter’s PerspectiveUnderwriter’s Perspective
• Is there insurance available for RAC audits?
D&O policy regulatory sublimits
Defense policies for small organizations
Option Agreement
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Strategies to ReduceStrategies to ReduceRACs Risks - IRACs Risks - I
Education For All
Education For All
Implement SoundBusiness PracticesImplement Sound
Business Practices
Clinical PersonnelMedical StaffCoding BillingComplianceInternal AuditExternal Audit
Coding & BillingThe “answer” person“It is better to ask than be sorry”Verification processSolid documentation
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Strategies to ReduceStrategies to ReduceRACs Risks - IIRACs Risks - II
• Homage to the Internal Audit Team!• …and The RACs/PI Rounding Team.
Analyzing
Counseling
Improving Documentation
Practices
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Strategies to Reduce RACs Strategies to Reduce RACs Risks - IIIRisks - III
Identify High Risk (Cost) ProceduresIdentify High Risk (Cost) Procedures
Loss Prevention(Education)
Loss Prevention(Education)
Surveillance & Monitoring
Surveillance & Monitoring
ERM Style DataCorrelation
ERM Style DataCorrelation
EvaluateEvaluate
Prompt ActionPrompt Action
Take a systems approach to RACs Risks
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Strategies to Reduce RACs Strategies to Reduce RACs Risks - IVRisks - IV
• Documentation• Substantiate billing/coding• Correlation to Med Mal• Correlation to Compliance Issues• Defensible?• Preempt Adverse Publicity• Lessons Learned
Use Good Risk Management SkillsUse Good Risk Management Skills
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QUESTIONS?
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THE WRECK OF THE RAC: THE WRECK OF THE RAC: LESSONS LEARNED LESSONS LEARNED
FOR ALLFOR ALLModerator:Fay A. Rozovsky, JD, MPH, DFASHRM, President, The Rozovsky Group
Panelists:Elizabeth Baskett, MPA, Senior Associate Director for Policy,
American Hospital Association
Patrick J. Hurd, Esq., Senior Counsel, LeClair Ryan
Alice Johansson, Senior Vice President, Product Manager, Managed Care, IronShore