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Don’t Kick Back and Wait


With all of this preparation activity underway, healthcare providers may feel ready to kick back and wait for the RACs.


Not so fast. The RAC program is all about the accuracy of healthcare claims – specifically, Medicare Fee-For-Service claims – and is testing the effectiveness of compliance programs around the country in an unprecedented manner. For providers that have been relying on denials to test the accuracy of their claims, the RAC program may be a wake-up call. We know that RACs are paid contingency fees and thus can add staff as deemed necessary, as opposed to claims processing contractors who  must operate within a defined budget, leaving little funding for extensive medical record reviews. Most hospitals have not experienced the level of scrutiny about to be rendered  nationwide by the RAC program.


Protecting Your Facility


The number one protection option for healthcare providers under review by the RAC program is a robust, active and effective compliance program. Compliance is not just what the department of that title  does, but what each person working at  a provider’s site does as a matter of  practice. Organizing a RAC committee should not be just about responding to what the RAC sends your way, but also about preventing improper payments in the future. Tying your RAC preparation activities to your compliance program routines is essential to achieving that goal.


Preparation must be ongoing, not a one-time process. If you think  you’re well-prepared because you’ve looked at the issues targeted  during the RAC demonstration program and taken steps to prevent similar errors at your facility, what about the next set of issues?  Although it is likely that the RACs will begin auditing on the known issues, they can turn to a new issue quickly upon gaining  CMS approval. Notice of new issues to be investigated won’t be communicated until they’re posted on your RAC’s Web site. Is that enough time for you to prepare?


Proactive Steps


Treating your RAC preparation activities as part of your compliance program creates an ongoing monitoring, auditing and correction process with a focus on proactive prevention, not just response. Steps to incorporate RAC activities into your compliance program could include the following:


1.    Add a compliance professional to your RAC committee. If you do not have a representative from the compliance department on your team already, add one. An experienced compliance professional will be able to guide the team on monitoring, auditing and correction processes.


2.    Be vigilant about looking for the next review targets. Don’t stop with audits of known targets from the demonstration program – look for new issues surfacing in the public record. Whether this becomes a function of your compliance department or your RAC committee, have someone assigned to review Comprehensive Error Rate Testing (CERT) reports as they are issued in order to identify the most key  errors being discovered. Staff should review Office of Inspector General (OIG) reports such as those published about high-cost claims and errors.


3.    Pay attention to your own vulnerabilities. Providers will discover their own potential risk areas as RAC requests for medical records are received. Quickly assessing these records and associated admissions and/or services for errors will be essential to preventing future improper payments. Depending on the abilities of your RAC committee, conducting this review upon receipt of a record request  will allow you to determine any vulnerability up to 60 days before a potential denial occurs, thus preventing future incorrect claims should errors be found.


4.    Don’t limit your findings to Medicare. Although your RAC committee may be tasked with ensuring the accuracy of claims and processes for Medicare fee-for-service, practice patterns likely transcend payer sources. Stipulate that the RAC committee refers any issues to the compliance department for review of other payers. This also will help ensure Medicaid and commercial compliance.


5.    View this activity as essential to the health of your organization. Serving on the RAC committee or assisting in ensuring claims accuracy may not be seen as a vital role within your organization. These activities, however, lead to appropriate patient assignment, improve the quality of medical record documentation, reduce the amount of time spent on denials or appeals and limit recoupment collected by the RACs. Supporting compliance efforts most certainly assists an  organization and should be viewed as time well spent.


6.    Find assistance to maintain prevention activities. If your RAC committee or compliance department is unable to keep up with necessary auditing and monitoring or appeals management, consider outsourcing as an option.


The Centers for Medicare and Medicaid Services (CMS) expects that healthcare providers will take measures to ensure the accuracy of their claims. In a special Open-Door Forum on RACs held for Part A providers last November, CMS shared its  recommendations for providers preparing  for RAC audits. They recommended that providers…


  • Conduct internal audits and determine areas of noncompliance; and
  • Identify corrective actions that could be taken to reduce further improper payments.


Essentially, CMS is encouraging the industry to shore up compliance programs, and this can be done most effectively by connecting your RAC preparation activities with your compliance program.



About the Author


Camille D. Cohen, MBA, CHC, is the Compliance Manager for 3M Health Information Systems, a provider of healthcare software and consulting services. With more than  25 years of experience in healthcare, Ms. Cohen has served as a chief compliance officer for a publicly traded healthcare company and as a consultant on healthcare compliance issues. She has presented to hundreds of hospitals about the Recovery Audit Contractors and outlined preparation activities both at 3M customer meetings and  the 2008 American Health Information Management Association (AHIMA) annual convention. She holds certification in healthcare compliance.


Contact the author: ccohen@mmm.com


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