Recovery Audit Contractors (RACs) Medicare, Medicaid and Commercial Insurance

What you Need to Know

Med-Billing Solutions, LLC

Introduction

Med-Billing Solutions, LLC

Stephen St. Gelais, Owner/ Consultant

• Part of a nationwide network of over 1500 independently operated offices; established in 1994

• We specialize in assisting medical providers nationwide with enhancing their cash-flow, profitability and office productivity.

• We accomplish this through a variety of our proprietary state-of-the-art billing solutions services.

Our Core Service Focus

• #1 Responsibility: Insure we're capturing the workload documentation you have performed with your patients

• #1 Goal: Assure that you're receiving the maximum revenue you're entitled by optimizing your "RVU" (Relative Value Unit).

• #1 Priority: "Denial Management“

Medical Billing & Coding

Stephen St. Gelais

Financial Services

Edward Albrecht

Certified Public Acct.

Kristine Vail

Marketing & Advertising

Bob Charney

Banking & Finance

Alice Madrid-Neumann

Information Technology

Terry Schladetzky

Business Brokerage

Robert Fiance

Real Estate

Linda Brown

Joining us soon –

Legal, Medical Waste, Construction and more…

Flagship Charity:

"OwieBowWowie and Friends Foundation”

Gina Gippner-Woods

Introduction

Dedicated to serving the medical community

Med-Billing Solutions, LLCProviders Coding Resource

Agenda

• What is the RAC?

• How does the RAC affect providers?

• What does the RAC do?

• Who oversees the RAC?

• Major RAC findings/ Compliance

• RAC process (what to expect)

• How do Providers Prepare?

What is the RAC?

• Recovery Audit Contractor (RAC)• Independent contractors, hired by CMS, authorized by

Congress• 3 state pilot program in place since 2003 (hospitals only)–

over $1B of overpayments collected• RAC objectives:

• Documentation and coding inconsistencies• Overpayments (& Underpayments) made to the

providers based on the findings• Clear documentation to support the medical

necessity of the services being provided or dispensed

RAC Mission

• “Ensure integrity of Medicare Fee For Service claims through the identification and correction of improper payments. Protect Medicare Trust Fund, prevent fraud, abuse and waste” – CMS

• Tax Relief and Healthcare Act of 2006, Section 302 requires a permanent & nationwide RAC by 1/1/2010 to protect Medicare trust funds.

Recovery Audit Contract-”RAC”

4 (Four) Private firms to perform medical records and billing audits on providers in all 50 states and Puerto Rico

Provider types targeted• Inpatient Rehabilitation

Facilities

• Hospitals

• Physicians (especially high ticket services)

• Skilled nursing facilities

• Durable medical equipment suppliers

• Laboratories, Ambulance, Other

• Home Health Agencies

• Hospices

Regions and timelines

D

C

B

A

March 1, 2009 March 1, 2009 March 1, 2009

March 1, 2009 March 1, 2009 March 1, 2009

August 1, 2009 August 1, 2009 August 1, 2009

Provider Outreach Claims Available for Analysis Earliest Correspondence

*RACs are required to perform outreach programs for all providers in their region

From CMS

HealthDataInsights – RAC Auditor

https://racinfo.healthdatainsights.com/home.aspx

RAC contingency fee %

RACs are paid on a contingency fee payment basis Based on the amount of the improper payments they collect Both overpayments and underpayments. RAC compensation 10-13% (on what they collect)

Source: CMS http://www.cms.hhs.gov/RAC

How the RAC affects the Provider

If the providers bill Fee-for-Service Medicare, Medicaid or Commercial Insurance programs, their claims will be subject to review by the investigators and auditors

Not at risk: practices/ facilities with high % (70%+) Medicare HMO Advantage, Medicare prescription

What about the other entities

• Medicaid/Medi-Cal (partially funded by the federal government and

managed by each state)– They are hiring firms like Healthnet Federal Services to mimic the

identical issues as the federal government

• RAC’s will work/ coordinate with Medicare and Medicaid fraud teams:– PSC: Program Safeguard Contractor– ZPIC: Zone Program Integrity Contractor

Private Insurance

• Aetna and other insurance carriers are pursuing the RAC process as well

WHY?

Because they have implied authority to review all providers claims

What does the RAC do?

• Review claims and medical records on a post payment basis

• Review claims paid after October 1, 2007

• RACs will be able to review medical records three years from the date the claim were paid

• Collect overpaid claims paid

Who Oversees the RAC?

The RVC ( RAC Validation Contractor)

Independent third party review entity to work with CMS to provide additional oversight

Ensure the RACs are making accurate claim determinations in the permanent program.

CMS announced it hired Provider Resources, Inc. of Erie, PA as the RVC

Source: CMS http://www.cms.hhs.gov/RAC

Evaluation and Management (E/M)

Major RAC Findings1)Medicare’s global surgery payment rules even in

cases involving E/M services.2)E/M services that are not reasonable &

necessary.3)Duplicate E&M codes (results in overpayment)4)New vs. established (patient) E&M codes5)Units of service (injections)

Importance of Documentation Compliance

• The medical record or chart notes must match the codes you submit

• Evaluation & Management (office visit)• Diagnosis• Injections• Supplies

• Medical Necessity must clearly state the need for all services provided or prescribed.

Claims Audit Process PhasesI. Data Screening & Claim Selection

II. Medical Record Request

III. Record Review and Status Determination

IV. Post Review Notification

V. Overpayment Recoupment

VI. Post Determination

RAC Claims Audit Process Overview

Automated review

Example 1: Use information systems to find two or more identical surgical procedures for the same beneficiary on the same day at the same hospital. (Medicare claims editor systems can identify these prior to billing.)

Detects clearly improper Payments (overpayment or underpayment determination) without evaluating the medical record associated with the claim.

Source: CMS http://www.cms.hhs.gov/RAC

When the RAC arrives

• Physician provides a clear response to the letter within 45 days

• Retain a certified coder - review the records prior to submission

• Send copies of the charts to the RAC- signature required notification of receipt.

• Digitized/electronic file of your charts and supporting documentation.

WATCH THE MAIL FOR A RESPONSE

Fiscal Year 09Medical Record Limits

Physicians• Single Practitioner: 10 medical records per 45 days per NPI• Partnerships 2-5 individuals: 20 medical records per 45 days

per NPI• Groups 6-15 individuals: 30 medical records per 45 days per

NPI• Large Group Practices 16+ individuals: 50 medical records per

45 days per NPI

Other Part B Billers (DME, Labs) • 1% of the average monthly Medicare claims (max 200) per NPI

per 45 days

Collection Process

•RAC will issue a Demand letter

•RAC will offer an opportunity for the provider to appeal the decision

•Recoups by offset unless provider has submitted a check or a valid appeal

Providers HAVE NO CHOICE…

THEY TAKE THE $$ DIRECTLY FROM YOUR MEDICARE CHECK

Key Timeframes (15, 30, 40, 120)

• 15 Days: Rebuttal process (Recoupment challenge)

• 30 Days: Repayment Plans (Interest @12% starts on day 31)

• 40 Days:Recoupment process begins on 41st day

• 120 Days:Appeals must be filed

What to Expect Next

The RAC will repeat the exact same process every 45 days until they find no more

overpayments

How to Prepare Your Practice

• Perform an independent baseline audit assessment to identify areas of non-compliance with Medicare/Medicaid rules

• Identify any corrective actions required for compliance

• Implement any required changes to stay in compliance

• Establish “Go-To-Team” – RAC Consultant & Certified Coders

MBS SupportBase-Line Audit Process

Medicare Documentation &

Coding Benchmark Audit

•Random selection of 50 office notes

Fax to HIPAA secure site

(iDocumentsNow)

for certified coders to

review

Documentation and coding Compliance audit performed

by certified coders

Web-based Training

AuditReport

MBS – Your “go-to” team•RAC Audit Management•RAC Findings Review•RAC Appeal

•All Medical Specialties•Designed for Physician

•Training for your coding team/ staff

Beyond the Base-Line Review

• Billing team must track all denied claims

• Identify all the issues• Look for patterns• Deploy any corrective actions to

avoid improper payments

Review

• The RAC is to be taken seriously• The RAC can have a severe negative impact to an unprepared

Practice – both financially and disruptive• Once started, The RAC repeats the process every 45 days – they

won’t stop until they’re convinced there are no more violations• Medicare is NOT likely to be the only payer going to take a peek (

private insurance, Medicaid/ Medical)• Know where you stand - Have a Base-Line Audit done

When the RAC arrives…..

Let MBS be your “Go-To Team”

Services

Med-Billing Solutions, LLC

Services: • EMR i-Billing : Full Service, State-of-the-Art• EMR i-Solutions : One-stop solution• RAC Base-Line Audit Services• RVU-MAX - Coding Services (24-Hour)• MaxCollect™ Profit Recovery• Cash Flow Solutions

Complimentary Complimentary Practice AnalysisPractice Analysis

Thank You

Med-Billing Solutions, LLC

Stephen St. Gelais

MBS Consultant

805-428-4566

sstgelais@med-billingsolutions.com

www.med-billingsolutions.com

Med-Billing Solutions, LLCProviders Coding Resource

Medical Billing & Coding

Stephen St. Gelais

Financial Services

Edward Albrecht

Certified Public Acct.

Kristine Vail

Marketing & Advertising

Bob Charney

Banking & Finance

Alice Madrid-Neumann

Information Technology

Terry Schladetzky

Business Brokerage

Robert Fiance

Real Estate

Linda Brown

Joining us soon –

Legal, Medical Waste, Construction and more…

Flagship Charity:

"OwieBowWowie and Friends Foundation”

Gina Gippner-Woods

Introduction

Dedicated to serving the medical community