DorlandHealth

Richard Scott

The new year promises to bring changes to the health care landscape, and not solely in the guise of health reform. In what will usher in a labyrinthine auditing-and-appeal process for hospitals and other health care facilities, the complete phase-in of Medicare recovery audit contractors, or RACs, will occur on January 1, 2010.

Already RACs are operating in four regions that span the country, each region covered by its own auditing body that will look for errors in medical necessity and documentation in an effort to recoup overspent or misguided Medicare funds. As the December issue of Case In Point details, many facilities are taking steps to align and streamline their workflow, but traditional models, experts warn, will not work.

One hospital system in Texas has emplaced a workflow process to maintain the integrity of internal reports and documentation, in part to circumvent the intrusion of RACs into their facilities. The Seton Family of Hospitals, which operates seven hospitals and a number of health clinics in and around Austin, Texas, has been planning for RACs for the last year, according to Stephen Ricks, the Director of Case Management at Seton Healthcare Network, which employs more than 100 case managers. This preparation has included the use of new software and a collaborative approach among team members from diverse fields within the facilities.

“We’ve had a very strong compliance program for years,” says Ricks. “When we discovered the RAC project, we were able to communicate with our physician consultants and start to get our organization aware of the risks and opportunities.”

Ricks credits the physician consultant organization, Executive Health Resources, with imparting an “acute awareness” of new and evolving Centers for Medicare and Medicaid Services’ guidelines. He also believes in the importance of audit-centric software. “Automation here is very important because it supports accountability and transparency,” he says. “In a very complex system, if you don’t have those two things it’s very difficult to correct issues.”

The software that Seton utilizes, which helps connect different care providers within the facilities, is from Allscripts. According to Janice Gruver, the RAC lead for case management at Seton, the software is essential to the fluid functioning of the hospital and plays an important role in utilization review and discharge planning. “It’s our tool that shows the history of the patient—when they get here, medical necessity, any denial or appeal information,” she says.

That information is crucial for facilities, particularly in light of the expanded RAC endeavors. There are two types of reviews a RAC can conduct. The automated review, which has been in practice since earlier in 2009, is the simpler of the two, and it is based on claims data that shows obvious signs of irregularities, like impossible numbers or duplicate billing. Complex reviews, however, will begin in January and are the more anxiety-provoking and labor-intensive kind, in what will typically involve the unveiling of medical records. Contractors can request up to 200 records per national provider identifier every 45 days.

Two areas that have been and will continue to be prevalent in denials are medical necessity and coding. For case managers, who have a key role in determining medical necessity, it may play a key role in day-to-day activity.

Hospitals that invest in software and processes to document patient information stand to gain more than a safeguard against RACs. According to Ricks, Seton has seen decreased length of stay, a greater ability to manage readmissions, and a stark decrease in denials through its efforts. In facing the threat of poor documentation or processes that RACs will bring to light, Ricks suggests the most basic steps an organization can take to equip itself with the armored protection of documented workflow and proper claims.

1. Achieve a strong compliance program.
2. Have a physician be the one to make judgments about the status of a patient.
3. Ensure the proper documentation according to CMS regulations. Having a physician making judgments in and of itself is not enough.