Recovery Audit Pre-payment Review
CMS is now expanding its Medicare Recovery Audit program (RAC) to allow auditors to review claims before being paid to ensure compliance with Medicare payment rules.
This demonstration program is in addition to the RAC program of the past several years where auditors review claims after payment. That program is remaining unchanged. In this demonstration program, CMS is focusing on seven states, including California, where past retrospective audits have resulted in high rates of payment recoveries. Four other states, excluding California, are set for audits of short impatient stay claims.
Demonstration Program Begins Aug. 27
CMS claims that this demonstration project will also lower what it calls error rates by focusing on claims prior to payment instead of what is called the traditional “pay and chase” method. This program will include Medicare inpatient claims for all general acute care hospitals. This demonstration begins on August 27, 2012 and lasts until August 26, 2015.
Which MS-DRGs Are Being Reviewed?
The California RAC auditor, Health Data Insights (HDI), will review the following MS-DRGs claims for the next six months beginning on August 27, 2012:
- 312 Syncope & Collapse
- 069 Transient Ischemia
- 377 GI Hemorrhage w/MCC
- 378 GI Hemorrhage w/CC
- 379 GI Hemorrhage w/o CC/MCC
- 637 Diabetes w/MCC
- 638 Diabetes w/CC
- 639 Diabetes w/o CC/MCC
After the six months, CMS has the option to increase the number of MS-DRG’s to be reviewed. This review will be in addition to any other RAC reviews the hospital is currently experiencing as well as any other pre-payment MAC reviews. Additionally, all short stays will have the possibility of being reviewed for medical necessity. Hospitals receiving an Additional Document Request will have 30 days to submit documents. The RAC ( HDI.) will have 45 days in which to make a determination from the submitted data.
Help with Medical Documentation From HFS Experts
HFS believes that this new RAC effort will place a further burden on hospitals. In addition to potential payment denial, the pre-payment audit will impact cash flow by delaying payment for valid claims during the RAC audit process for up to 75 days. We believe that a proactive internal review of specific claims can benefit a hospital by helping to assure that Medicare rules are being followed and provide a basis for potential appeals of RAC denials. The Health Information Management group at HFS has extensive experience in assisting clients with medical documentation issues.
Call Gwynn Smith, HFS’s Director of Revenue Cycle Management, for an in-depth briefing and find out ways to minimize the impact of this new RAC effort on your hospital. Gwynn can be reached at 510-867-1309 or by email at firstname.lastname@example.org.