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What every ED manager needs to know about RACs
[This quarterly column on coding in the ED is written by Caral Edelberg, CPC, CCS-P, CHC, president of Edelberg Compliance Associates, Baton Rouge, LA. If there are coding issues you would like to see addressed in this column, contact Edelberg at phone: (225) 454-0154. E-fax: (225) 612-6904. E-mail: firstname.lastname@example.org.]
Living with payer audits has been a reality of practicing medicine for a long time. Most of us have a plan in place to perform internal audits to identify any risk areas that might present a problem when audited by a payer. But things have been kicked into a new dimension with the implementation of federally mandated audits by Recovery Audit Contractors (RACs) that are sure to put you on the audit radar in the near future.
Simply speaking, RACs are working with Medicare to audit problems and risk areas identified through data mining or several additional initiatives designed to protect the federal government from fraud. The auditors that work for these organizations are incentivized to find problems, as they are paid based on the money they bring back to the Medicare program. To be sure you and your RAC are on the same page, you should be monitoring the web site of your regional RAC contractor, where they list the actual codes and procedures they are auditing, as well as the resources they use to make their recovery determinations.
The RAC is required to examine all evidence used in making individual claim determinations. A RAC's authority for determining the accuracy of your coding depends on written Medicare policy, Medicare articles, or Medicare-sanctioned coding guidelines that are to be used to determine if coding is accurate.
Examples of Medicare-sanctioned coding guidelines that are used include CPT statements, CPT Assistant statements, and AHA Coding Clinic statements. These are resources that you will need to review prior to returning your claims to the auditor to ensure that you can address your code determinations accurately.
The RAC doesn't target a claim solely because it is a high dollar claim, but it might target a claim because it is high dollar AND contains other information that leads the RAC to believe it is likely to contain an overpayment (over-utilization, un-bundling, and so forth). RACs review claims on a post-payment basis and use the same Medicare policies as carriers, fiscal intermediaries, National Coverage Determinations (NCD), Local Coverage Determination (LCD), and Centers for Medicare and Medicaid Services (CMS) manuals. Two types of reviews are used by RACs to identify problems with your claims: automated, with no medical record needed, and complex, with a medical record required.
Timing is everything
RACs will not be able to review claims paid prior to Oct. 1, 2007, and will be able to look back three years from the date your claim was paid. To ensure there is clinical expertise used in determining whether you submitted your claim correctly, RACs are required to employ a staff consisting of nurses, therapists, certified coders, and a physician medical director.
Because timing is everything in a RAC audit, you will have 30 days from the date of the demand letter to notify that you plan to appeal the RAC determination no exceptions. You then have 120 days to file your appeal on each claim that was audited. To ensure the RAC demand letter makes it to you or the individual charged with responding, each RAC provides a contact form that allows you to designate the individual in your practice or hospital who will receive all RAC-related communication. Once notified, you must pay the amount assessed by the RAC or the amount will be RAC deducted from Explanations of Medicare Benefits (OMBs).
Of course, you need to appeal the RAC findings. Many errors can be made by RAC auditors who might not be familiar with the unique rules that apply to emergency medicine. And when you win these appeals, your money will be returned with interest accrued, so it's important to appeal all RAC findings unless you identify a clear billing error. Of those hospitals and providers that appealed, 34% of the appeals were won by Part B providers, and 33% were won by Part A providers. If you don't appeal, you lose! And the success of ED appeals might be higher, as it's more difficult for auditors to review ED claims, particularly evaluation and management (E/M) levels, due to differences rules for the ED setting. (You can determine whether you are a prime target for an audit by collecting comparative data on your coding patterns and comparing them to the patterns for your region. See the story, below.)
The following are the web addresses of the region RACs:
For more information on CPT statements and CPT Assistant statements, go to www.ama-assn.org. Select "bookstore."
AHA Coding Clinic is available at www.hospitalconnect.com. Click on "HospitalConnectSearch Online Store."
Medicare Learning Network (MLN) articles at www.cms.gov/MedlearnMattersArticles often refer to these articles as they relate to Medicare policy.
Check patterns of RAC audits
By Caral Edelberg, CPC, CCS-P, CHC
All audits aren't created equal, but many are the result of "data mining," or comparing your coding patterns to those of your regional peer group.
You can determine whether you are a prime target for audit by collecting comparative data on your coding patterns and comparing them to the patterns for your region. Data on your evaluation and management (E/M) level distribution, codes 99281-99285, and critical care 99291, should be monitored for your facility and professional coding patterns.
If you have payers that represent more than 10% of your revenue, ask for their "coding/audit tool" and request written clarification on how it's used. Many post a general statement about coding guidelines on their web site, but this doesn't guarantee how they are used. NEVER sign a provider contract with a payer that doesn't address these important factors. Payers who audit you with their own special criteria can easily find you lacking in the coding and documentation required to support their audit findings. When this occurs, you are open to significant recoveries, fines, and penalties, so be proactive.
To stay on track with Recovery Audit Contractor (RAC) program hotspots, know where previous improper payments have been found. Look to see what improper payments were found by the RACs by starting with the demonstration findings at www.cms.hhs.gov/rac. Permanent RAC findings will be listed on the individual RACs' web sites. You may also look to see what improper payments have been found in Office of Inspector General (OIG) reports at www.oig.hhs.gov/reports.html and Comprehensive Error Rate Testing (CERT) reports at www.cms.hhs.gov/cert. Currently RACs are not looking at E/M services; however, they soon will. Hospitals are being audited on several procedures including infusions, a common service in the ED.
Take steps to prepare your ED
There are some steps you can take NOW to better prepare. Bring the expertise and strengths of your ED and emergency practice together on a routine basis to discuss differences and commonalities. Be sure you are looking at your ED and practice E/M utilization and ensuring accurate coding of all E/M levels. Keep an eye on nursing and physician documentation to be sure it supports medical necessity thorough entries made by clinical staff documenting the chief complaint, ED course, interventions, differential diagnoses, and disposition. Look closely at how timed procedures and services are billed, as well as those services that are age-related. These services includes critical care, observation, and conscious sedation.
If you haven't done so already, implement an audit program that is supported by written policies and procedures. If you look at only 50 records per calendar quarter, you'll find areas that need attention. Ensure that you have a corrective action plan in place to address any problems or billing errors that are identified.
As with all programs that measure or evaluate clinical or financial performance, ensure that your ED providers participate by including them in discussions and reviews of audit findings and coding or billing performance. Most physicians and ED nurses are well-versed in the responsibilities of coding and billing as they relate to documentation and medical necessity and can help keep documentation of each of these critical audit areas on track. By tracking and documenting improvements, you succeed in minimizing problems and ensure that you are prepared for the audit that is coming your way.