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| Nancy Hirschl, CCS |
Lori Brocato |
Fear is defined as something important plus something unknown combined with a perceived inability to cope. Of these three, something unknown is the easiest to control. You simply ask questions and learn more. This month we'll explore the second most important step in recovery audit contractor (RAC) preparedness-a financial risk assessment.
Common Areas for Risk
Throughout the 3-year demonstration project providers reported the financial impact of RAC was plain and simple-it was costly! Not only in dollars paid back to Medicare but also in additional resources to manage the process.
As RAC implementation moves forward we are better prepared to understand the financial impact and forecast risk. The second step in preparing for RAC-a financial risk assessment-will set expectations, provide a baseline for financial planning and minimize fear. A financial risk assessment can be done internally or through a third-party consultant. Either way, there are four important steps to take as part of risk assessment and financial forecasting for RAC:
- Step One: Take clues from the RAC demonstration project. What did they review?
- Step Two: Know your weaknesses in coding and clinical documentation. What do you already know?
- Step Three: Data mine your existing information. What can you easily find out?
- Step Four: Conduct internal audits before the RAC arrives. What will they uncover?
What Did They Review?
The 3-year demonstration project gave us some insight into which DRGs and dollars will be "at risk." While there is no guarantee that the permanent RAC program will investigate the same types of cases, it is highly probable and a good place to start.
The RACs conducted two types of targeted reviews: automated and complex. Automated reviews were focused on outpatient cases where the RACs felt overpayments were "probable" based on review of billing data. Automated reviews were commonly conducted for:
- units of services as they pertain to blood transfusion services,
- dosage of Neulasta,
- duplicate claims,
- same procedure billed multiple times on 1 day,
- non-covered services, and
- medically unlikely or impossible services.
Complex reviews were conducted mostly for inpatient cases and 1-day stays. For complex reviews, cases were reviewed for DRG accuracy and medical necessity.
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Common DRGs Reviewed for Accuracy
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Description
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Common DRGs Reviewed for Medical Necessity
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Description
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870/871/872
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Sepsis
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313
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Chest Pain
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207/208
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Mechanical ventilation with respiratory system diagnoses
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641
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Electrolyte imbalance without MCC
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463/464/465
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Excisional debridement
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312
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Syncope
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291/292/293
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Heart failure / shock
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552
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Back pain
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189
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Respiratory failure
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392
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Gastroenteritis
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981
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Extensive OR procedure unrelated to principal diagnosis
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287/286
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Cardiac catheterization
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690
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UTI without MCC
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249
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Percutaneous cardiovascular procedures with non-drug eluting stents
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Latest RAC News
While the next 17 states wait to receive a revised RAC implementation schedule, the permanent RAC program has announced which claims will be excluded from review. These include:
• Physician E/M codes levels (but includes outpatient E/M code levels)
• Hospice and Home Health Services
• Claims previously reviewed by another Medicare contractor
• Claims involved in potential fraud investigation
• Claims from a demonstration project.
• Medicare managed care services
• Medicare drug program
• Cost report issues
• Beneficiary payment responsibility
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What Do You Already Know?
For most HIM directors and coding managers, specific areas of weakness in coding and clinical documentation are already well-too familiar. These same areas could be problematic when RAC arrives at your door. Now is a good time to revisit the final results of any coding reviews conducted within the past 12 months. Check-up on any process improvements and educational programs put into place following the review and measure progress. Any improvements made now may avoid losses later. Furthermore, if you haven't had an outside agency complete a coding review within the past year now is a good time to do so.
What Can You Easily Find Out?
Data mining tools are your strongest ally when preparing for RAC. When it comes to RAC ignorance is NOT bliss! Organizations should data mine on specific points of risk-including historical RAC targets, charges and length of stay.
What Will They Find?
The second easiest factor to address in the "fear" equation is your perceived inability to cope. While perceptions are hard to change, they can be easily calmed. Conduct your own internal RAC audit. By conducting internal audits in advance of RAC implementation your entire team will gain confidence and control.
In a recent survey, 77 percent of HIM directors interviewed said they had already conducted an internal audit ("Hospital HIM Director's Survey Sheds Important Outlook on RAC Program." Benson, Sean. ADVANCE for Health Information Executives. Available online at: http://health-care-it.advanceweb.com/). Many of you are already one step ahead of the RAC! Practice makes perfect. So in addition to conducting internal audits to identify financial risk, use mock audits to assess what new processes, human resources and technology tools you will need to survive RAC.
Our next several columns will help you better understand the ins and outs of the RAC process from the HIM point of view. Stay tuned!
Lori Brocato is currently the revenue cycle management product manager for HealthPort. Nancy Hirschl is president and CEO of Hirschl and Associates, Laguna Niguel, CA.
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