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Reducing RAC Audits

Comparative analytics can help healthcare providers minimize the risk for audit and better understand market demands.

The threat of a RAC audit strikes fear in most provider organizations.

Although there was a temporary lull in RAC activity during 2014 and 2015 while the Centers for Medicare & Medicaid (CMS) procured new contractors, the program restarted in November 2015, making now the ideal time for provider organizations to take proactive steps to help reduce their audit risks.

Minimizing Risk: Begin with Research

While there are numerous factors that can trigger RAC audits, organizations can mitigate their risks by conducting research to determine what may trigger an audit.

Research your internal data and identify ways to increase the transparency of your historical claims data through the use of comparative analytics.

Comparative analytics help healthcare organizations analyze large amounts of data to pinpoint potential problems so corrective action and preventative action (CAPA) can be prioritized based on risk.

SEE ALSO: Increasing Importance of Data Analytics

Provider organizations can use comparative analytics to determine if they are consistently coding for higher-levels of reimbursement than their peers.

For example, in the use of existing patient E&M codes, are your physicians coding more 99214 and 99215 than their peers in the same specialty?

Do you know how your specialty compares?

Procedure Code Utilization for Q4 2015

Procedure Code

All Specialties

National Average

Internal Medicine

National Average

99211

1.8%

3.4%

99212

5.7%

2.7%

99213

48.6%

41.3%

99214

40.9%

48.9%

99215

3.0%

3.7%

Another area to keep an eye on is the use of modifiers 25, 50 and 59. These codes improve reimbursement on a given claim.

However, high use of these codes compared to your peers can increase your risk of an audit. A few examples are:

  • Modifier 25: "Significant, separately identifiable evaluation and management (E/M) service by the same physician on the day of a procedure."
  • Modifier 59: "Distinct procedural service identifies procedures/service not normally reported together, but appropriately billable under the circumstances."
  • Facet joint injections and the use of modifier 50

Modifier Utilization for Q4 2015

Modifier

Variance between Internal Medicine and All Specialties

25

13%

50

1%

59

8%

Some denial types and errors are more prone to trigger audits, so using comparative analytics to identify these denials and implement CAPA can help reduce your risk. A few areas to monitor are:

  • Duplicate claims and payments
  • Medical necessity mistakes
  • Place of service coding errors - The OIG has indicated that the Medicare program will be taking a closer look at Part B claims that can be performed in multiple locations, since physicians earn higher reimbursement when the service is performed in their office versus a hospital.

If you are unsure about which areas you need to monitor, the following sources produced by government entities provide insight into areas in which auditors are actively looking for outliers and errors. These sources include:

  • The Office of the Inspector General (OIG) Work Plan, which is published annually and lists the agency's focus areas that will trigger audits.
  • The Medicare Learning Network Quarterly Provider Compliance Newsletter, which lists findings from RAC audits.

Additionally, access the RAC website for your region and gather any information it lists about RAC findings and areas of focus

Summed up, to minimize risk for for audit, know what the market is looking for, and compare your data to your peers to see if you are an outlier. Taking a proactive approach gives provider organizations greater control over their revenue cycle, compliance efforts, and their futures.

Amber Civitarese is Director, Product Management, and Tara Williams is Senior Product Owner, both at RemitDATA, Dallas/Ft. Worth, Texas.

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