RAC Presentation May 2015.pptx

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Recovery Audit Contractors

(RAC)

Recovery Audit Contractors

(RAC)

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

VM is a private, nonprofit organization offering

integrated health services.



A multispecialty group practice of more than 460

physicians.



An acute-care hospital licensed for 336 beds



852,000 physician visits last year



16,400 inpatient hospital visits last year



18,000 surgical procedures last year

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Virginia Mason Medical Center

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Recovery Audit Contractors (RAC)

• RAC demonstration project was between 2005 – 2008 in 6 states.

• Congress required the Secretary of the CMS to institute

(under Section 302 of the Tax Relief and Health Care Act of 2006) a permanent nationwide Recovery Audit program to recoup overpayments associated with services for which

payment is made under Part A or B of Title XVIII of the Social Security Act.

• Contracts are based on a contingency basis • Four Regions

• Region D = Washington State

• RAC Region D Contract = HealthData Insights, Inc.

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Four RAC Regions

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RAC Requests

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• Automated: These reviews use claims data analysis to identify improper payments. No limit to how many claims reviewed.

• Semi-Automated: Similar to automated, these reviews are initiated with data analysis; however, providers may submit supporting documentation to substantiate the claim.

• Complex: These reviews require a review of the

supporting medical records to determine whether there is an improper payment. The reviewer must be a qualified health care coder or clinician, based on the type of

review being undertaken. Limited number of records pulled.

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RAC Audit History

RAC Complex Requests

• Number of records requested increased

• 400 records every 45 days

• Reviews for either coding validation and

medical necessity

• Medical necessity reviews revealed

confusion behind what is an “inpatient”

– Extremely subjective

– Inappropriate denials caused HUGE appeal backlogs

– Findings caused MAC to probe(s) and educate – Caused CMS to redefine “inpatient”

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RAC Affects…

• Facilities disagreed a lot with the RACs

findings. Causing a massive increase in

quantity of appeals being submitted

causing a backlog.

• CMS’ also realized (thanks in part to the

RACs findings) that there was ambiguity

behind what was defined an “inpatient”

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RAC Denials Caused Back Log…

• _{Administrative Law Judge (ALJ)}

• ₃

rd

Level of Medicare Appeals

• _{RACs have caused a}

_HUGE

_increase

in volume of work and caused severe

backlogs

Fiscal Year Number of _Days

FY09 94.9 FY10 109.6 FY11 121.3 FY12 134.5 FY13 220.7 FY14 414.8 FY15 Average 547.1

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“Inpatient” Finally Defined…

CMS’ finally defined what is considered an “inpatient”… Per CMS IPPS Final Rule 1599R issued 8/19/2013;

effective 10/1/2013:

– “The order is required for payment of hospital inpatient services under Medicare Part A. We are specifying that for those hospital stays in

which the physician expects the beneficiary to require care that crosses 2 midnights and admits the beneficiary based upon that expectation, Medicare Part A payment is generally appropriate. Conversely, we are specifying that hospital stays in which the physician expects the patient to require care less than 2 midnights, payment under Medicare Part A is generally inappropriate. This will revise our guidance to hospitals and physicians relating to when hospital inpatient admissions are

determined reasonable and necessary for payment under Part A.”

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CMS’ “Olive Branch”

In October 2014 CMS offered “eligible” facilities

(i.e., IPPS, CAH) an administrative agreement

opportunity to help with ALJ back log

• 68% of the net allowable amount

• Admissions prior to October 1st, 2013

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RAC FY 2013

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• CMS’ Recovery Auditing in Medicare for Fiscal

Year 2013 Report to Congress

• RAC identified & corrected 1.5 million claims

•

$3.75 billion dollars in improper payments

•

$3.65 billion in overpayments collected

•

$102.4 million in underpayments repaid to providers

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RAC Contracts Extended…

• Procurement and Contract Modifications

• Requests for Quotes (RFQ) started in February

2013…and so it continues…

• Multiple protests filed with the GAO

•

100 days after the protest is filed the GAO must issue their decision

•

Pre-award protests

•

Post award protests

•

Protests filed on 1/6/2015 and 2/17/2015

•

Both dismissed 2/23/2015

• Current RAC contract extended

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RAC 2015

• Currently in a “holding” pattern…

• Though RACs can perform complex

audits, currently aren’t…

• Some automated audits occurring but not

many…

• Waiting for new contracts…

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Questions?

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References

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CMS’ RAC

• http://www.cms.gov/Research-Statistics-Data-and

-Systems/Monitoring-Programs/Medicare-FFS-Compl iance-Programs/Recovery-Audit-Program/

Recovery Auditing in Medicare for Fiscal Year 2013

• http://

www.cms.gov/Research-Statistics-Data-and-Systems/Monit oring-Programs/Medicare-FFS-Compliance-Programs/Recove ry-Audit-Program/Downloads/FY-2013-Report-To-Congress. pdf

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References Continued…

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Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care; Hospital

Prospective

Payment System and Fiscal Year 2014 Rates; Quality Reporting Requirements for Specific Providers; Hospital Conditions of

Participation; Payment Policies Related to Patient Status; Final Rule 1599

• http://www.gpo.gov/fdsys/pkg/FR-2013-08-19/pdf/2013-18956.pdf

CMS Inpatient Hospital Reviews

• http://

www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/M edicare-FFS-Compliance-Programs/Medical-Review/InpatientHospitalReview s.html

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RAC “Support” Groups

RAC Google Group—Free!!

Local Regional RAC Coordinator(s) Group—Free!!

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CMS’ RAC Contact

Latesha Walker, CMS Provider Relations Coordinator

• [email protected] (for Recovery Auditor review process concerns/suggestions)

• [email protected] (for MAC review process concerns/suggestions)

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