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CMS RAC Review Phase-in Strategy

(as of 6/24/09)

Earliest possible dates for reviews in yellow/green states Earliest possible dates for reviews in blue states
•Automated Review-Black & White Issues (June 2009) •Automated Review-Black & White Issues (August 2009)
•DRG Validation-complex review (Aug/Sept 2009) •DRG Validation-complex review (Oct/Nov 2009)
•Complex Review for coding errors (Aug/Sept 2009) •Complex Review for coding errors (Oct/Nov 2009)
•DME Medical Necessity Reviews-complex review (Fiscal year 2010) •DME Medical Necessity Reviews-complex review (Fiscal year 2010)
•Medical Necessity Reviews-complex review (calendar year 2010) •Medical Necessity Reviews-complex review (calendar year 2010)

CMS states on its RAC home page “Any reviews completed by the RAC must have been first approved by CMS and posted to the RAC websites. The RAC websites can be found in the RAC contact information document in the downloads section below. CMS expects the first approved new issues to be posted in July 2009.”

What is the process for automated reviews?

According to CMS, automated review occurs when a RAC makes a claim determination at the system level without a human review of the medical record.

The RAC may use automated review when making coverage and coding determinations only when BOTH of the following conditions apply:

  1. There is certainty that the service is not covered or is incorrectly coded, AND

  1. A written Medicare policy, Medicare article or Medicare-sanctioned coding guideline (e.g., CPT statement, CPT Assistant statement, Coding Clinic statement, etc.) exists.

    When making coverage and coding determinations, if no certainty exists as to whether the service is covered or correctly coded, the RAC shall not use automated review. When making coverage and coding determinations, if no written Medicare policy, Medicare article, or Medicare-sanctioned coding guideline exists, the RAC shall not use automated review. Examples of Medicare-sanctioned coding guidelines include CPT statements, CPT Assistant statements, and Coding Clinic statements.

The RAC may use automated review when making other determinations (e.g. duplicate claims, pricing mistakes) when there is certainty that an overpayment or underpayment exists. Written policies/articles/guidelines often don’t exist for these situations.

What types of edits will the RAC use to make these “automatic”  determinations about the appropriateness of reimbursement?

National Correct Coding Initiative (NCCI) edits
– These are combinations of Current Procedural Terminology (CPT) codes that cannot be used together due to rules defined by the AMA in the CPT Coding Manual. If one of the prohibited combinations appears within a claim, it would be an automatic reason to deny reimbursement associated with the second code of the pair, unless an appropriate modifier was appended to that code. The CCI Edits Manual can be purchased from the National Technical Information Service (NTIS) Web site at www.ntis.gov/products/cci.aspx.

Medically Unlikely Edits (MUEs)
– these edits look for units of service that are in excess of what would be the maximum expected for a particular CPT code for a beneficiary on the same day of service. To establish MUEs, CMS created unit restrictions based on anatomy, CPT code descriptions, CPT Manual instructions, CMS frequency/billing policies, nature of service/procedure and clinical judgment.

These edits do not preclude any reviews for medical necessity of any service or procedure for which a provider submits a claim. MUEs were implemented on Jan. 1, 2007 and continue to be updated quarterly. Not all MUEs are posted, but the ones that are available may be found at www.cms.hhs.gov/NationalCorrectCodInitEd/08_MUE.asp#TopOfPage

If a provider feels that he/she performed the units under medically reasonable and necessary circumstances, the provider may re-bill using the appropriate CPT modifiers (e.g. -76, -77, RT, LT, F1, F2, -91, -59)

How will a provider learn the results of an automated review?

The RAC shall communicate to the provider the results of each automated review that results in an overpayment determination. The RAC shall inform the provider which coverage/coding/payment policy or article was violated. The RAC need not communicate to providers the results of automated reviews that do not result in overpayment determinations.

Given these “rules,” is there anything a provider can do?

There is no way to “prepare”  for the automated reviews, as RACs will be looking at claims data from FY 2008 and early FY 2009 (current data tapes include claims paid through the end of June 2009).

If a demand letter is received, check the claims files to determine if the claim already has been corrected and re-billed. Determine if there is an explanation for the unusual billing pattern. For example, a service very well might have been performed twice in the same day, or the Local Coverage Determination (LCD) in effect at the time with the local FI or carrier might have included a particular code that justified the service even though a subsequent LCD did not include that code.

There might be instances in which the service was billed incorrectly, but partial payment still is appropriate in lieu of a full denial. If any of these or other circumstances are found to exist, the provider should notify the RAC of these circumstances and/or file an appeal with the MAC, FI or Carrier.

Use this opportunity to reduce the risk of similar findings by your RAC in any future reviews. The RAC targets and findings published in demand letters should form the basis for internal audit of current and future claims. In addition, the provider should look at whether billing practices need to change or if education of staff is more appropriate.

By implementing appropriate follow-up measures to any demand letters resulting from automated reviews, providers can avoid “automatic” reimbursement reductions.

About the Author

Cheryl Servais has more than 25 years of experience in health information management. In her position at Precyse Solutions, Ms. Servais’ responsibilities include planning, designing, implementing and maintaining corporate-wide compliance programs, policies and procedures, along with updating them to accommodate changes in federal and other regulations. In addition, she oversees training and development programs related to ethics, compliance and patient privacy; develops and chairs compliance and privacy advisory committees at the executive and board levels; and takes an active role in professional organizations. Contact the author: cservais@precysesolutions.com


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