By: Kathleen J. Young
Worried about an upcoming audit? Fortunately, there are a number of steps you can take to prepare for an audit, and protect your practice against findings that could end up costing you.
RAC Auditors Are Incentivized
Recovery Audit Contractors (RACs) have existed since 2005 and were originally established in Florida, New York and California, with South Carolina, Arizona and Massachusetts following soon after, to help deflect fraud and abuse in Medicare claims. As of 2009, the recovery rate for claims has been a staggering $992 million, with inpatient hospitals representing the largest segment of funds recovered, including $19.9 million from physicians. Only 4.6 percent of RAC determinations have been fully or partially overturned on an appeal.
RAC auditors are incentivized by the errors they discover. For this reason, systems have been put in place by the Centers for Medicare and Medicaid Services (CMS) to validate their findings, including appointment of AdvancedMed as the validation contractor for RAC claims. They perform accuracy audits and confirm valid reasoning or “good cause” for CMS to review a claim or a series of claims.
A Compliance Plan Is Imperative
Through educating providers about the presence of RACs and other entities, the goal of CMS is to help providers establish efficient coding and documentation guidelines, which will ultimately avoid future overpayments. Development of a compliance plan within the practice is also important, to address all of the laws and rules that apply to the healthcare environment: the Stark Law, Anti-kickback law, HIPAA, CMS and local laws. A compliance plan also guides the provider in making the correct tactical decisions each day. The Federal Register provides an outline of what a compliance plan should address, as well as guidance for your employees to address violations they observe.
Document and Code Properly
The best way for a provider to prepare for the arrival of a RAC auditor is to document and code properly. There are many consultants and private auditors who are capable of assisting you in this process. You may ask them to perform a pre-payment audit and document their findings. This will provide valuable insights in terms of how you can improve. Consider the cost associated with this service as an investment. The resulting possible savings for your practice could be very significant. Can you endure a take-back of $90K or more? Very few practices can; therefore, many consider paying a consultant or auditor an excellent use of resources.
When you contract with a company to perform the audit, consider choosing the claims randomly. Perhaps you will focus on new patient codes or level 4 services. You may request an audit on the use of Modifier 25 or Modifier 59, as these are what the RACs are most often reviewing. Also, ask your consultant to review your procedure documentation to assure you are compliant according to American Medical Association (AMA) and CMS rules.
Local Coverage Determinations (LCDs) offer another way to defend your practice and assure proper documentation or coding. The LCD will confirm the documentation requirement for a procedure. They can provide insights on the level of history or exam that would be expected in the encounter prior to the procedure and will tell you how often a procedure can be performed in a designated period of time, as well as what diagnoses are payable.
A Good Defense
Another defense from the RACs is to hire an auditor or coding specialist under attorney/client privilege. This is recommended if you are receiving a significant number of coding requests for medical records from Medicare. In many cases, this is a sign that auditors are “fishing” and it is possible that you are being reviewed for an audit. If time will allow, hire an attorney/client privilege auditor to review all of the encounters you are sending to the payer. This will confirm if your coding procedures are accurate or require change in order to achieve ideal results, in the event that a RAC auditor is assigned to your practice.
The current environment in healthcare is volatile for facilities and providers alike. Be proactive. Don’t wait to take the steps necessary to protect yourself and your practice, and assure that the results of an audit from an outside payer will be positive.
Kathleen J. Young, CPC CMA is the CEO of Resolutions Billing & Consulting, Inc. She can be reached at firstname.lastname@example.org