Update on the Recovery Audit Contractor Program
The Heart Rhythm Society recently participated in a joint meeting with the Centers for Medicare and Medicaid Services (CMS) and the American Medical Association (AMA) to discuss the new expanded Recovery Audit Contractor Program (RAC) which will launch nationwide on January 1, 2010.
The RACs are independent entities charged with reviewing Medicare claims to detect and correct past improper payments. The original demonstration, which operated in New York, Massachusetts, Florida, South Carolina and California, ended on March 27, 2008 and Congress has expanded the RAC program from a demonstration to a permanent program in all 50 states. The purpose of the meeting was to allow CMS to provide an update on where the national rollout stands.
Phase-In Strategy
By 2010, CMS plans to have four RACs in place. Each RAC will be responsible for identifying overpayments and underpayments in approximately one-quarter of the country. CMS has implemented a strategy to phase-in the RAC program based on review type. A phase-in strategy for provider type has not been established, since all provider types are available for RAC review once provider outreach has occurred in the state. Provider outreach must occur in the state prior to the beginning of any review. Any reviews completed by the RAC must first be approved by CMS and posted to the RAC websites.
New Issue Review Process
CMS will ensure maximum transparency of RAC issues for audit by posting issues under review and any major findings to their website, and on the RAC claim status websites in 2010. CMS will also mail the results of any complex review to providers.
There are two types of RAC reviews: automated includes review of a claim only and does not require review of medical records. Complex reviews include review of claim(s) as well as review of medical records.
The New Issue Review Process for automated reviews:
- RAC sends a New Issue Review request to CMS.
- CMS reviews the New Issue and makes a decision.
- If CMS approves the issue, it will be posted to the RAC website and the RAC may begin widespread review.
- Demand letters will be forwarded after CMS has approved the New Issue for Review.
The New Issue Review Process for complex reviews:
- RAC issues limited number of additional documentation request to providers.
- Providers send additional documentation.
- RAC reviews additional documentation.
- RAC sends New Issue Review Request to CMS.
- CMS reviews and decides.
- If approved, the issue is posted to the RAC website and the RAC may begin widespread review.
During the RAC demonstration, ICD and CRT-D implantations were targeted. To address this matter, the Society developed Hospitalization Criteria for Pacemaker and ICD Placement and EP/Ablation — download document (PDF, 70K). Society leadership subsequently met with the Recovery Audit Contractor Directors as well as Centers for Medicare & Medicaid Services staff to discuss our concerns with the audit procedures and to seek feedback and support for the hospitalization criteria developed by the Society.
Collection and Review Process
According to CMS, the RAC collection process will be the same as the process used by Carriers, Fiscal Intermediaries (FI), and Medicare Administrative Contractors (MAC) to identify overpayments. All three parties will issue remittance advice (remark code N432: “adjustment based on recovery audit”). In addition, all three parties (Carrier, FI, MAC) will recoup funds by offset unless the provider has submitted payment or a valid appeal within the allotted time.
The differences from the Carrier, FI, and MAC-identified overpayments are as follows:
- RAC issues a demand letter;
- Outside of the normal appeal process, RACs will offer the opportunity for discussion of the improper payment decision;
- CMS will approve issues reviewed by the RAC prior to widespread review; and
- Prior to widespread review, approved issues will be posted to a RAC website.
RACs have been instructed by CMS to employ the same Medicare policies as Carriers, FIs and MACs in their review of claims. In some instances, where a provider has made an obvious error in billing, only an automated review will be required and a review of the medical records is not required. When RACs identify a potential improper payment, a more comprehensive review will be used with scrutiny of medical records. For this purpose, the RACs will hire a Physician Contractor Medical Director (CMD), nurse or therapist, and certified coder. RACs began conducting automated reviews in June and are now starting to initiate complex reviews for coding errors.
The dates for review in yellow and/green states (see the map below) include:
- Automated Review (June 2009)
- DRG Validation-complex review (Aug/Sept 2009)
- Complex Review for coding errors (Aug/Sept 2009)
- DME Medical Necessity Reviews-complex review (Fiscal year 2010)
- Medical Necessity Reviews-complex
The dates for review in blue states (see the map below) include:
- Automated Review (August 2009)
- DRG Validation-complex review (Oct/Nov 2009)
- Complex Review for coding errors (Oct/Nov 2009)
- DME Medical Necessity Reviews-complex review (Fiscal year 2010)
- Medical Necessity Reviews-complex review (calendar year 2010)
Provider outreach must occur in the state prior to the beginning of any review.
Timeframes Map
For more information, download CMS RAC Review Phase-in Strategy (PDF, 151K)
Medical Record Request Limits
RACs will review claims on a post-payment basis and will not be able to review claims paid prior to October 1, 2007. RACs will be able to look back three years from the date the claim was paid. RACs will accept imaged medical records on CD and DVD.
The following is a summary of additional documentation request limits for fiscal year 2009:
- Inpatient Hospital, IRF, SNF, Hospice are subject to no more than 10 percent the average monthly Medicare claims (max 200) in a given 45 day period per National Provider Identifier (NPI).
- Other Part A Billers (HH) are responsible for 1 percent of the average monthly Medicare episodes of care (max 200) in a given 45 day period per NPI.
- Physicians (including podiatrists and chiropractors).
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- Sole practitioners: 10 medical records in a 45 day period per group NPI
- Partnerships of 2-5: 20 medical records per 45 day period per group NPI
- 6-15 member groups: 30 medical records per 45 day period per group NPI
- Large groups (16+ members): 50 medical records per 45 day period per group NPI
- Other Part B Billers (DME, Lab, Outpatient hospitals).
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- 1 percent of the average monthly Medicare services (max 200) per NPI per 45 day period.
For further information, download RAC Medical Record Request Limits (PDF, 22K)
Appeals Process
It is imperative that Society members take the time to familiarize themselves with an important feature of the RAC program, which allows providers to appeal any negative determination to their MAC. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 details the statutory requirements for this process in Section 935. View the summary Section 935 (PDF, 97K). We encourage you to thoroughly review this information.
If there is an unfavorable decision, according to Section 935, a provider has several options. These options are to pay the amount due by check allowed for the required fund to be recouped from future payments, request/apply for an extended repayment plan, or appeal the decision.
When necessary, appeal your RAC decision. However, be careful to not confuse the “discussion period” with the appeals process. If you disagree with a RAC determination, you must file an appeal before 120 days from the date of the demand letter.
Along with the employment of certified coders, nurses and/or therapists, and a physician Contractor Medical Director (CMD), CMS will also provide the following elements to ensure accuracy in the RAC program:
- Greater oversight of CMS’ review board
- Accuracy scores provided annually by RAC Validation Coordinator
- The return of the contingent fee, by the RAC, upon its loss at any stage of the appeal process
Also review your past denials and be mindful of patterns in those denials and identify what corrections are necessary to steer clear of future denials due to improper payments. For further information on the appeals process, refer to the following documents:
What Should You Do To Prepare for a RAC Review?
Begin by first looking to see what improper payments were found by the RACs, Office of Inspector General (OIG) and Comprehensive Error Rate Testing (CERT) reports. Conduct an internal audit to determine if you or your office are in full compliance with Medicare rules. In addition, identify any necessary corrective action(s) and implement these changes without delay. Also, ensure that you are prepared to respond to any RAC request for additional documentation. Also, confirm that the RAC has the correct contact information for additional documentation requests, and when necessary, to check the status of your submitted additional requested documentation.
The following links are provided for your reference regarding what improper payments were found by RACs during the demonstration, as well as OIG & CERT reports:
RAC Contact Information:
In addition to the information provided in this fact sheet, providers can obtain further information by contacting their local, regional RAC.
Region A: Diversified Collection Services
1-866-201-0580
www.dcrac.com
info@dcsrac.com
Region B: CGI
1-877-316-7222
http://racb.cgi.com
racb@cgi.com
Region C: Connolly Consulting
1-866-360-2507
www.connllyhealthcare.com
RACinfo@connllyhealthcare.com
Region D: Health Data Insights
Part A: 1-866-590-5598
Part B: 1-866-376-2319
http://racinfo.healthdatainisights.com
racinfo@emailhdi.com
Under the program, the four RACs will contract with subcontractors to supplement their efforts:
- PRG-Schultz, Inc. will serve as a subcontractor to HDI, DCS and CGI in regions A, B and D
- Viant Payment Systems, Inc. will serve as a subcontractor to Connolly Consulting in region C
Each subcontractor has negotiated different responsibilities in each region, including some claims review.
