Preparing for Medicare’s
p
g
Recovery Audit Contractor (RAC)
Presentation topics
• Premier Consulting Solutions (PCS) Background • RevenueConnect™
• RAC Overview
• The Demonstration Project • RAC Permanent Program
• Our Approach to RAC Preparation and Implementation • Our Approach to RAC Preparation and Implementation • Conclusion
Why Premier Consulting Solutions?
Accelerated Performance Accelerated Performance
PCS offers deep expertise and
consulting capabilities in the areas of revenue cycle improvement, including RAC readiness and charge capture, strategic planning and ser ice line
Connect with End-to-End Solutions
strategic planning and service line analysis, which align with
transformational consulting and service line solutions offerings. PCS offers the skills and expertise to
assist its alliance members in all areas of performance improvement:
Why Premier Consulting Solutions?
Core Benefits include:
Access to Premier’s Perspective™ database, the industry’s largest clinical, operational and financial data resource including millions of patient records and comparative benchmarks
Proven blueprint for Recovery Audit Contractor (RAC) preparedness
Expertise in assessing RAC-related risk and managing RAC review and appeals process Long-term productive relationship with Centers for Medicare & Medicaid Services (CMS) with
continuous feedback loop
Extensive, specialized consulting personnel with an average of 20 years experience in management and clinical expertise
RevenueConnect: Harnessing revenue
expertise
P h b t ith
p
Pressure on revenue has never been greater with
ongoing changes in reimbursement from pay-for-performance, value-based purchasing, payment bundling, and payment recovery audits.
PCS combines expertise in Medicare RAC preparation
RevenueConnect: Harnessing revenue
expertise
p
Sustaining improvement across your organization requires more than short-term temporary reactions term, temporary reactions. High-performing cultures require a framework of standard data tools and proven processes. Premier’s Connect programs provide a
Are you ready for RAC?
This is how the RAC program will become part of
your reality: This is what you’ll need to do to prepare:
D l i t l dit t id tif i k b f th Medicare identified as one of the top 3 Federal
programs with improper payments totaling $10.8 billion in 2007 alone.*
The RAC program was created through the Medicare Modernization Act of 2003 to identify
Develop an internal audit process to identify risk before the RACs arrive and manage it after they leave.
Avoid submitting claims that do not comply with Medicare rules by tracking denied claims.
Medicare Modernization Act of 2003 to identify these improper Medicare payments.
In March 2005, Congress authorized the RAC Demonstration project for the purpose of identifying underpayments and overpayments and recouping overpayments
Proactively identify cases that may be at risk in a RAC audit. Manage the appeal process for any cases in which you do
not agree with the RAC's determination. overpayments .
As of March 2008, RACs succeeded in correcting more than $1.03 billion in improper Medicare payments.
The Ta Relief and Health Care Act of 2006
Address improper payments by reviewing online reports of those discovered at other hospitals by RAC as well as in Office of Inspector General and Comprehensive Error Rate Testing reports.
D fi t li b d d
The Tax Relief and Health Care Act of 2006
authorized the expansion of the RAC program to all 50 states by 2010.
Define ways to encourage compliance based on over- and underpayment errors found.
Create a RAC prevention program.
Are you ready for RAC?
• Have you completed the following steps in order to prepare for your upcoming RAC audits and ongoing RAC
RAC demonstration findings
• As of March 2008, the RAC Demonstration Project succeeded in correcting more than $1 03 billion in Medicare improper payments
more than $1.03 billion in Medicare improper payments.
– Approximately 96% ($992.7 million) of the improper payments were overpayments collected from providers.
– The remaining 4% ($37 8 million) were underpayments repaid to providers – The remaining 4% ($37.8 million) were underpayments repaid to providers.
Source: “The Medicare Recovery Audit Contractor (RAC) Program: An
RAC demonstration findings – overpayments
• Overpayments collected by provider type:
– 85% from inpatient hospital providers – 6% from inpatient rehabilitation facilities
5% from skilled nursing facilities physician or other – 5% from skilled nursing facilities, physician or other – 4% from outpatient hospital providers
• Overpayments collected by error type:Overpayments collected by error type:
– 40% medically unnecessary – 35% incorrectly coded
RAC demonstration – financial impact
• RACs reported that, on average, about 65% of hospital providers’ Medicare revenues were not affected by the RAC Demonstration and 25% of hospital revenues were not affected by the RAC Demonstration, and 25% of hospital providers only had up to 2.5% revenue impact.
• The remaining 10% of hospital providers had more than 2.5% revenue impact, meaning the $1 03 billion in improper payments came from only 10% of
meaning the $1.03 billion in improper payments came from only 10% of hospitals.
Potential financial impact
• Based on the assumption that 25% of the Medicare payment amounts were affected at a 2.5% rate:
– Estimate of financial impact to be calculated here for each
Recovery Audit Contractors
• On October 6, 2008, CMS announced the names of the new national RACs as follows:
RACs as follows:
– Region A: Diversified Collection Services, Inc. of Livermore, California.
– Region B: CGI Technologies and Solutions, Inc. of Fairfax, Virginia. – Region C: Connolly Consulting Associates, Inc. of Wilton,
Connecticut.
– Region D: Health Data Insights, Inc. of Las Vegas, Nevada.
RAC permanent program
• CMS plans to implement the RAC permanent program gradually
d tl fi d l i d ti li
and recently confirmed a newly revised timeline:
See the following
page for original color coded phase-in
How hospitals should prepare
• To minimize the risk of RAC audit, hospitals should take steps now to ensure the highest level of admission and claim accuracy.
Many of these steps are not anything new Typical areas of • Many of these steps are not anything new. Typical areas of
risk include Medical Necessity screening, Case
Management, Denials and Appeals management, and accurate Coding and Documentation.
• Hospitals may already have some or all of these systems
d t l i l b t i h t i it th ith
The Premier approach
F M ltidi i li RAC T k F t RAC ti t d i
We recommend the following seven steps to prepare for your upcoming RAC Audits:
Form a Multidisciplinary RAC Task Force to oversee RAC preparation, management, and ongoing process improvement.
Perform a high-level assessment of existing tools and processes (including the use of Premier’s proprietary RAC risk assessment tool) to identify current RAC exposure for errors and payment recoveries
recoveries.
Conduct an internal coding and documentation audit to assess current RAC risk for accounts dating back to October 1, 2007, based on key risk areas identified during the RAC Demonstration Project.
Develop a formal process to educate staff and physicians about the RAC permanent program Develop a formal process to educate staff and physicians about the RAC permanent program,
findings from the ongoing audit process, and process changes required to reduce the risk of future denials or payment recoveries.
Develop a formal strategy to prepare for and manage the RAC process (notifications, chart requests staffing requirements tracking etc ) and determine whether outside assistance is requests, staffing requirements, tracking, etc.) and determine whether outside assistance is needed.
Identify a formal tool/system to track the RAC Audit Process (notifications, chart requests, recoveries, appeals, etc.).
Develop a formal RAC specific appeals management process with case management legal and Develop a formal RAC-specific appeals management process with case management, legal and
RAC analysis report from ClinicalAdvisor™
• As part of our RAC risk assessment, we may also utilize Premier’s proprietary ClinicalAdvisor RAC risk analysis tool to highlight those inpatient areas at risk for
t t CMS b d id tifi d i th d t ti j t overpayment to CMS based on common errors identified in the demonstration project. • The ClinicalAdvisor RAC tool can then drill down to the specific inpatient areas at risk for
Conclusion
• A valuable opportunity exists to proactively assess the status of your organization’s current processes and
determine requirements to minimize the risk of RAC errors and Medicare payment recoveries.
and Medicare payment recoveries.
• Benefit and learn from the outcomes of the demonstration project by utilizing that information to prepare for your own RAC audits and assess your current RAC risk.
• It is essential to have an organized strategy and work plan
t d t i t t f ll t RAC T k
to determine next steps, formally create a RAC Task
Next steps
• In preparation for RAC, perform an assessment of
processes that are already in place versus what should be in place to begin to identify any gaps or risk exposures.
Once a comprehensive assessment has been completed • Once a comprehensive assessment has been completed,
you should begin to develop a strategy and work plan to create a RAC Task Force and determine how to best
Contact information
FOR MORE INFORMATION, CONTACT US:
TODD HALPIN | Principal, Premier Consulting Solutions | Premier, Inc. 2320 Cascade Pointe Blvd. | Charlotte, NC 28208
Phone: 801.243.9387 | E-Mail: todd_halpin@premierinc.com
MARLOWE DAZLEY | Vice President, Premier Consulting Solutions | Premier, Inc. 2320 Cascade Pointe Blvd. | Charlotte, NC 28208
Phone: 801.243.3202 | E-Mail: marlowe_dazley@premierinc.com
Or contact Premier Consulting Solutions at
