Simplifying RAC audit issues

Dec. 26, 2014
Bob Zimmerman, Solutions Analyst, Hyland

Advancing RAC audits

The Centers for Medicare & Medicaid Services (CMS) revised Statement of Work for Recovery Audit Contractor (RAC) audit(s) came at the end of 2014 with contract renewal of the regional intermediaries. CMS states they are “confident that the changes will result in a more effective and efficient program, with improved accuracy, less provider burden and more program transparency.”

But are these changes really addressing the concerns of providers? According to the American Hospital Association’s (AHA) January 2014 RACTrac Survey results, almost 50 percent of the respondents indicate on-going communication problems with CMS RAC auditors:

While the changes CMS has planned will offer some level of relief for providers, additional benefits could be obtained through the automation and standardization of not only RAC audits, but all audit requests, in the true spirit of advancement and automation.

Simplifying RAC audits

The first step in simplifying RAC audits is to eliminate the manual correspondence notifications. This item ranks at the top of the list of reported RAC process-related issues and can be easily rectified through identification of accounts similar to the automated appeals, through a unique denial remark code. An alternative would be to have RAC auditors provide this information electronically through their websites instead of through paper-based correspondence.  With either of these options, providers can automate the appeals process in a fashion that focuses on the root cause of the denial and not on the antiquated means of how we communicate with RAC auditors.

* Includes participating hospitals with and without RAC activity

Secondly, many software applications today are capable of automating much of the work associated with a corresponding denial code. For instance, upon receiving an electronically identified denial, a simple workflow can be used to capture and record the release of information and other data necessary to complete the claim appeal. 

Risk assessment dashboards, email notifications and email time-sensitive escalations, along with historical follow-up communication and activity reporting and cost tracking, are all features that a complete audit management solution should provide. This content enables organizations to monitor and predict processing bottlenecks, allowing them to determine trends and weaknesses in their ability to respond to audit requests and requirements.

Lastly, organizations could also exchange information with the audit contractor by allowing online viewing access to the chart. Since over 80 percent of RAC audits are due to one of three primary reasons in the table above, system automation can be simplified to help identify and eliminate these issues on the front end of the billing process to eliminate these problems from occurring.

It is mission critical to effectively and efficiently manage content critical to supporting claims. Leverage a content management system to streamline the denial process by providing quick and easy access to supporting documents while also automating appeals.

References

  1. http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Downloads/RAC-Program-Improvements.pdf

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