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ADVANCE questioned a panel of vendors working in the recovery audit contractor (RAC) realm to get the insider view on the best way to choose a quality vendor or service provider for your RAC needs. This article is a complement to our print feature story, "What's Out There?"
Our experts include Lori Brocato, revenue cycle management product consultant, HealthPort; Rose Devadas, vice president, sales support, EDCO; Loretta Herfel, RN, CCS, CPHQ, utilization management consultant, Amphion Medical Solutions; Nancy Hirschl, BS, CCS, president, Nancy Hirschl and Associates; Marina McDonough, product manager, audit management, Caremedic; and Terry Myers, president, YPRO Corp.
What advice would you give to facilities on selecting vendors or service providers?
Herfel: "They should look at the knowledge base of the company and what kind of services they can actually provide. Are they able to provid
Medical Necessity Audits Won't Kick Off Until 2010
According to an American Hospital Association (AHA) news item posted May 28, the Centers for Medicare and Medicaid Services (CMS) told the AHA it's not likely medical necessity audits of hospital services will take place until next year. This type of audit is more complex than others performed by the RACs, and looks at whether or not services rendered were appropriate according to Medicare guidelines.
Nearly a third of all denied claims throughout the 3-year RAC demonstration project were due to medical necessity issues. According to the AHA, CMS sponsored a study of those types of denials by RACs and spotted a 40 percent error rate.
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e just limited, just maybe tracking, or can they also support tracking, coding and utilization? Can they put forth the data analysis? Those are some of the things they'll want to look at [and] record, as far as how long they've been performing reviews."
Hirschl: "I would certainly suggest, if at all possible, that hospitals carefully review vendor experience, exposure to RAC experience. If the vendor has any experience in any of the demonstration states, I would look at that as important.
"If I were a client seeking services, I would like to see sample reports. I would want to see samples of data analysis and approaches to risk assessment and audit criteria. If you're looking for appeals services, obtain samples of appeal letters. I would want to know up front what the vendor can deliver, and if there's no data mining or no data analysis reports, what is their risk assessment strategy? Are you just going to do an audit? What are you going to tell us? How are you going to forecast our financial risk? How are you going to let us know we have a 20 percent denial rate in case management issues and that quantifies out to $1 million? They have to be able to show that."
McDonough: "Look at the customers they have, their experience in the Medicare arena, references, what is the time and cost of implementation, how much data do you have to provide, how much work do you have to do on your end of things, and . the No. 1 issue is, how are they bringing together all those disparate departments [involved in RAC audits]? Now that there's a RAC committee and all parties need to be represented, that tool needs to represent something to every one of those people."
Are facilities typically going through a formal request for proposal (RFP) process, or are they skipping it due to the time constraints?
Devadas: "I have not seen any RFP process. It is because it is such an immediate need. Decisions are being made probably without a thorough evaluation of all the offerings in the market, and it's kind of a moving target because nobody is quite sure of when the audits will begin. But they feel that they're going to be beginning soon, within the next month or two. They feel the need to have something in place, and I get the feeling that some who make a selection are not 100 percent sure this is all they will need or the best they can find, but they just want to get something in place."
Brocato: "Some of them are ... taking a very comprehensive approach, but then we're seeing other sites that are really accelerating the process and skipping over a lot of the procedures they would normally go through, and it's probably because they waited too long to do a complete analysis."
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