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EDITOR’S NOTE: This is the first of a two-part series on the Medicaid RACs

A review of the final rule implementing the Medicaid recovery audit contractor (RAC) program shows that there are several proactive steps that hospitals may take to keep on top of this implementation, yet another, claims review of Medicaid claims to identify improper payments. Since the program officially takes effect on January 1, 2012, the timing is perfect to investigate options.

As grueling as it may seem, the first step is to actually review the final rule, which can be found at http://www.gpo.gov/fdsys/pkg/FR-2011-09-16/html/2011-23695.htm. Read it not just to see what the Medicaid RACs will be doing but what you need to do to keep one step ahead of them.

Dig Up Your State Coverage Guidelines

Although not required, CMS believes that states should make the relevant Medicaid coverage guidelines and coding criteria available as part of the procurement process. The agency also encourages states to promote transparency by making available, to the extent possible, the screening guidelines that are used for making medical-necessity determinations.

To get on the same page as your Medicaid RAC, obtain a copy of the state’s Medicaid coverage guidelines, screening guidelines, and coding criteria. The hospital’s utilization management staff should review the guidelines, and the hospital’s coding specialists should review the coding criteria.

Prepare for the Look-Back Period

The Medicaid RAC program has a three-year maximum claims look-back period. So, hospitals should, if possible—and before the effective date of January 1, 2012—populate their database with all audited Medicaid cases with a discharge or service date of January 1, 2009 to the present.

Note, however, one insight included in the final rule. One state commented that its Medicaid management information system (MMIS) can only retain claims for adjustment for two years. In these instances, states may request an exception to the three-year look-back period through the state plan amendment (SPA) process.

Reconsider Staff Priorities

Even though Medicare RACs have been around for what seems like a long time, many hospitals still don’t have a dedicated RAC coordinator to deal with the issues that arise. Instead, the necessary responsibilities have been piled on top of the to-do list of an existing staff member (often the coding manager). These individuals must “squeeze in” RAC-related activities while performing their other responsibilities.

Financial realities may make the possibility of hiring a dedicated staff person for this position out of the question but must be considered seriously. Management of the RAC processes must be taken more seriously since Medicare and Medicaid claims will be reviewed.

Health systems in particular will need to consider staffing because the Medicaid RAC scope of work (SoW) will vary from state to state. This means that providers with entities in more than one state (such as national healthcare systems) will have to comply with more than one program’s rules. The challenge of multifaceted compliance may even warrant the employment of a corporate RAC coordinator who oversees RAC coordinators in each of the provider’s entities.

In the second and final installment Charland continues with her reporting on the Medicaid RAC and focuses on physician involvement.

About the Author

Kim Charland is vice president of consulting and a health-information management (HIM) thought-leader at Medical Learning, Inc. (MedLearn), a Panacea Healthcare Solutions Company, St. Paul, MN. Her professional experience includes extensive project management as well as 20 plus years in HIM and reimbursement management for hospitals and physician offices.

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Kim T. Charland, BA, RHIT, CCS

Kim Charland has over 30 years of experience in health information and revenue cycle management for hospitals and physicians. Kim has spent most of her career in product development related to healthcare consulting services, education, publishing, and software. She was responsible for the operations of a healthcare audit consulting division for many years and launched an Internet news and information platform, VBPmonitor, that focused on the transition to value-based payments. She was also the co-host of ICD10monitor’s weekly Internet news program, Talk-Ten-Tuesdays, for many years. Kim speaks nationally on topics such as quality and value-based payment initiatives, clinical documentation improvement (CDI), and documentation, coding, revenue cycle, and compliance-related issues. Kim is also the president of the New York Health Information Management Association.

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