Rafael Gonzalez No Comments

3054488331_4cc712f620_bAs we’ve come to expect, the policies and procedures surrounding Medicare compliance and working with the Centers for Medicare and Medicaid Services (CMS) are constantly changing.

One of the areas that a lot of healthcare providers, insurance companies, and others are eager to see updated is the work of the Recovery Audit Contractors (RACs) who are tasked with auditing Medicare-related billing and Section 111 reports (among other documents) to determine any discrepancies where Medicare is owed additional monies or – more rarely – where Medicare owes anyone additional funds.

Since January of 2010, when the RAC program first began, Medicare has been collecting feedback from stakeholders and has done a pretty consistent job of responding to that feedback and making adjustments to the program to enhance its functionality and transparency.

Effective December 30, 2014, the following changes have been put into place to effect the RAC program for 2015:

Reducing Provider Burden

Under the RAC program in place during 2014, many providers found themselves overwhelmed with the number of Additional Documentation Requests (ADRs) the RACs sent them. In many cases these requests involved claims that were years old, and the disproportionate number of certain types of inpatient hospital claims meant some departments were being swamped.

In an effort to assist Medicare providers in working with the RACs to facilitate efficient and effective audits, and to respond to some specific provider concerns with the previous program, CMS is making the following adjustments in 2015:

  • Additional Documentation Request (ADR) limits will now be determined based on compliance to Medicare rules. (Low denial rates = lower ADR limits.)
  • ADRs will now be diversified based on type of claim rather than just type of facility
  • New providers will be ramped up in the number of ADRs they receive so they are not inundated immediately upon opening.
  • There will be no increase in the number of ADRs allowed
  • The RACs are now only able to look back as far as six months to the date of service, as opposed to the previous three-year window.
  • RACs will have 30 days (rather than the previous 60) to complete complex reviews
  • RACs are now required to have a Contractor Medical Director, a physician, on staff to assist with audits and to answer questions providers may have.
  • RACs are now required to respond to a provider’s discussion request within 3 business days, and must allow 30 days to elapse to allow a provider time to initiate one.
  • CMS will be working with the RACs to make their web portals more uniform and consistent.
  • The RAC will now receive payment of their contingency fees only after the second level of appeal is exhausted (rather than immediately, which some providers saw as encouraging inaccurate audits)

Enhancing CMS’s oversight

Some providers have felt that the CMS’s oversight of the RAC program was inconsistent or needed some tightening up in order to provide a uniform, efficient experience. Some of these concerns were procedurally based, and some were based on communication. To address some of these concerns, the following changes have taken effect:

  • CMS will be making more information available this year, including RAC data that all providers will be able to access.
  • CMS will require the RACs to focus on a broader array of topics rather than the 80%+ they have previously focused on inpatient hospital stays.
  • RACs will be required to maintain a 10% or lower overturn rate at the first appeal level or they run the risk of the CMS taking corrective action.
  • RACs will also be required to maintain a 95% or better accuracy rate, including on automated reviews, or face corrective action.

Increasing program transparency

Finally, some of the changes address a call for more transparency overall in the RAC program, allowing providers to be more aware of policies and procedures, time lines, and other aspects of the program that will have a direct impact on their practices.

For example:

  • CMS has established a Provider Relations Coordinator to serve as a point of contact for providers.
  • CMS will be posting Provider Compliance Tips on their website to assist providers in handling documentation and billing correctly to avoid processing errors.
  • CMS will require RACs to provide consistent and detailed information regarding review information via their websites so providers are always up to date on what is being reviewed.
  • CMS will consider developing a Provider Satisfaction Survey to allow feedback about specific RACs (although this is not promised to occur in 2015.)

Stay tuned to Flagship’s blog for more exciting updates, tips, and recommendations regarding the RAC program. Subscribe today, and every post will go straight to your inbox to read at your convenience!

Photo credit: Ashley Sturgis via Flickr

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