"Be Prepared." More than just a Boy Scout catchphrase, it is a key mantra in dealing with RAC audits. You know they are coming, if they have not already arrived. And setting up processes and procedures to deal with them up-front, vs. retrospectively, greatly increases your organization's probability of success in meeting deadlines, monitoring timelines and in researching appeals. This is precisely what OhioHealth did.

OhioHealth is a network of eight not-for-profit hospitals and numerous healthcare and outpatient centers and physician practices serving patients in central Ohio. The organization "prepared" for RACs by creating a new, multi-disciplinary department prior to the onset of RAC audits. The multi-disciplinary group established policies and procedures to deal with all audit inquiries.

Woven into their process was the need for an overlay of change management; the ability to evolve audit management. Doing the preparation early on in the RAC rollout laid the foundation for a successful process implementation, but as new audits emerged it became essential that policies, procedures and the multi-disciplinary team remain fluid and able to change. Feedback loops were established to keep all involved parties up to date on denials, appeals and requests for further information. And these became essential as the floodgates of audits began to open. The first change: centralizing the audit function.

The Hub and Spoke Approach

OhioHealth quickly realized a central audit coordinator was needed for incoming audit requests, processing and tracking of outcomes. All governmental audit inquiries come into a central hub: the RAC department. The RAC team enters all of the data into RAC tracking software, conducts the initial research and then enlists the involved department, committee or medical staff resources necessary to either appeal the denial, or make referrals to the appropriate level of the organization for further assessment and follow-up as necessary.

The spokes of the wheel include RAC physician advisers, utilization and case management departments, the utilization committees at the campus and corporate levels, and the HIM department -- specifically coding. Other important "spokes" include compliance, the central business office (CBO) and finance. The most important spoke in the wheel is the RAC physician advisers, and by extension, the OhioHealth medical staff.  OhioHealth capitalizes on their good relationships with physicians, and physician participation is critical in the appeal process.   

While the rest of this article highlights a RAC audit scenario, the hub and spoke methodology is applicable to all types of audits.

Technology Turns the Wheel

The top tip is to remember: "what gets measured, gets managed." OhioHealth implemented an automated technology to track denials and appeals. Technology is essential in a centralized methodology to understand, monitor, forecast and stay on top of the process. The manager for the RAC department is the system owner and every stakeholder has access to the web-based application.

OhioHealth used the system to implement a multi-layer process, which is workflow specific and case driven. This arrangement ensures that all applicable information flows to the right people for review and evaluation. They have a closed loop process. If it is a justifiable denial, they have a feedback process to take it back to the involved staff, department or committee, for recommendations and solutions that prevent future occurrences. They are used as a source of learning to build preventative actions into system workflow.  This might be as simple as building in a computer "pop-up" message or working one-on-one with a coder. More complex problems require physician engagement and may become part of the clinical documentation improvement (CDI) process.

If the denial is not merited, an appeal is developed based on coding or medical necessity guidelines, physician judgment and medical specialty information.

Audit Coordinator Also Monitors the RAC

Not only are hospitals relatively new at dealing with RAC audits, but also the recovery audit contractors are new at their mission. They continue to ramp up, evolve and change. Both groups have growing pains and OhioHealth realized that working together could benefit both of them. Establishing open communication lines and relationships benefits both parties.

According to AHA's RacTrac statistics, RACs are recouping 5.5 percent of the dollars they audit based on 2010 data. This relatively low percentage suggests providers are doing a great job at tracking, managing and appealing audits. OhioHealth's hub and spoke methodology for centralized audit management is an industry best practice and is certainly helping them to monitor and track RAC activity, and respond on a timely and relevant basis.

Lori Brocato is audit and RCM product manager for HealthPort.