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By Lynn Leoce MSN, RN, CPUR, IQCI, ACM
Corporate Director of Case Management
Adventist Health System
Take it from an Audit Survivor
As CMS expands the Recovery Audit Contractor (RAC) program nationwide, hospitals and other healthcare organizations will be forced to justify payments received under Medicare IPPS and OPPS services. As the demands for medical records come in, many will be caught off guard — unsure of how to respond. But, it doesn't have to be that way. You can profit from the experience of those of us who participated in the initial three-state demonstration program. Being prepared can mean the difference between winning and losing the reimbursement battle.
At Adventist Health System, we learned early on that the secret to success was developing an internal program that could meet the demands of the audits, while also identifying and eliminating problem areas identified during chart audits, including record keeping and billing. As a seasoned veteran of the RAC process, I'd like to share our experience, strategies and lessons learned.
How it Started
With two Florida divisions totaling 17 hospitals, Adventist began receiving requests for medical records during 2005. At the time, our EMR was still under development, which required printing and reviewing of charts from microfilm. In some circumstances, outside vendors were brought in to help. With no limitation on the volume of RAC chart requests, the number varied from 40 in one month to several hundred the next. Managing an inconsistent volume of requests, while under severe time constraints to meet appeal deadlines, placed a heavy burden on staff.
In an effort to improve our process, procedural guidelines were developed to provide greater assistance in managing and processing denied claims through the various stages of appeal.
Provide a Road Map to Ease Handling of RAC Requests
Establishing procedures for handling RAC requests for medical records is a vital first step.
Communication is vital. Develop a team approach throughout revenue cycle management. Players from patient financial services, case management and health information management must be actively engaged in the process of chart reviews, including submitting appeals within specified time frames.
Identify your problem areas. In many cases, you won't know what areas the RAC is data mining for errors. Look for request patterns. Is the auditor reviewing coding errors, medical necessity or some other issue? Stay informed by contacting providers and hospital associations willing to share their experiences.
Stay consistent with your action plan. Establish a well-defined process for conducting primary and secondary medical necessity reviews at all points of entry. Document outcomes in your action plan and re-educate to ensure compliance.
Use technology.
 Technology is your greatest ally in a RAC audit. The EMR
can assist in expediting accessibility, but it must be
supplemented with a universal tracking method. We will
be rolling out a RAC management tracking tool to all AHS
hospitals as well as a data-base system for tracking the
process from one central location.
As tools are developed, hospitals must engage and
educate physicians. Your medical staff should understand
the factors that trigger RAC audits and their role in
ensuring each case is managed properly and provides
sufficient documentation to support medical necessity.
Physicians must be engaged in the process!
As gaps in processes were identified, we took a proactive
approach to identify areas of vulnerability and developed
strategies to seal those gaps. We created a case
management compliance audit tool as a means for
monitoring on-going compliance. Each hospital – depending
on bed capacity – conducts a monthly audit of 10 charts
per 100 beds. Our goal is to monitor our processes to
ensure compliance and to be proactive in identifying
opportunities for improvement.
The key to overcoming denials of payment based on
medical necessity lies in documenting the severity of
illness and intensity of service required for each case.
Using McKesson's InterQual® evidence-based clinical
decision support software, Adventist Health System is able
to employ a single national standard criteria as demanded
by CMS guidelines. This data can be easily integrated in
letters of appeal drafted in response to RAC denials.
Appeal payment denials. As the hospital moves through the RAC audit process, don't forget that as the provider you have the right to appeal any and all denials. If documentation supports medical necessity, then be prepared to defend the care provided through multiple levels of appeal. For the year ending October 31, 2008, Adventist has won more than $7.8 million in denials, with $15.5 million still pending.
Finally, developing a good communication system with your RAC is vitally important. You'll be making a lot of phone calls to discuss issues and concerns when addressing problems. RACs have a job to do, and the better your working relationship is with the RAC staff, the better the outcome for both sides.
Lynn Leoce MSN, RN, CPUR, IQCI, ACM is Corporate Director of Case Management for Adventist Health System and has served in this capacity since March of 2004. Her case management experience includes manager of case management, complex case management and total health care management for Florida Hospital Orlando. In addition, she served as a member of the Optimum Stay Committee, Ethics Committee, and Palliative Care Committee. The largest not-for-profit Protestant healthcare organization in the U.S., Adventist includes 37 hospitals with more than 6300 beds in ten states.
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