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By Cathy Dougherty, FHFMA
Asst. Vice President, Revenue Cycle
Gwinnett Health System
Getting Ready for the RAC Audit
Learning from the experience of others is so much easier than trying to forge your way through uncharted territory. At Gwinnett Health System in Lawrenceville, Ga., we decided to benefit from the experience of those who've gone before us as we prepare for the Medicare audits being implemented via the Recovery Audit Contractor (RAC) program.
To educate ourselves on the RAC program and its processes, we have been doing our homework for the past several months via conferences, articles and podcasts. Our first discovery? These audits are serious business. RACs identified $992.7 million in overpayments and $37.8 million in underpayments during the demonstration projects. And approximately 95% of the overpayments were attributed to hospitals. Such results have made the issue one that resonates throughout our entire organization — including catching the attention of our C-Suite executives.
Incorporating Lessons Learned
To get knowledge based on firsthand experience, we spoke to organizations that participated in the RAC demonstration projects. Their advice was to ensure we have the right people, processes and technology in place to handle what's coming our way. We learned that the first priority in preparing for our pending RAC audit in Fall 2009 is to make sure we dedicate the appropriate level of human resources.
To that end, we called upon our existing Billing and Coding Compliance Committee to charter a RAC task force, which consists of representatives from HIM, patient accounting, compliance, revenue integrity and case management. In addition, we reconfigured duties in the HIM department so that one of our staff members can act as the dedicated RAC coordinator.
Road Map to Preparing for the RAC
Areas to Review: At Gwinnett, we have continued to emphasize concurrent reviews of clinical documentation, coding, and medical necessity. We have reviewed our Program for Evaluating Payment Patterns Electronic Reports (PEPPER) and known RAC target areas, and conducted internal claims trend analyses. We are carrying out concurrent medical record reviews, whenever possible, on approximately 300 claims involving roughly 50 MS-DRGs. We review the claims to identify specific areas that may require a more in-depth review or further education and staff training. Some of the areas that we are reviewing include:
 Neulasta Units of Service
Excisional Wound Debridement
Observation status versus Inpatient status and the
appropriate use of Condition Code 44
One-day stays (excluding transfers)
Proportion of discharge MS-DRGs with complications or
comorbidity as compared to discharge MS-DRGs with or
without complications or comorbidity.
IT to support coding and documentation: Perhaps most important is our implementation of information technology that supports our case managers. These professionals prepare the coding and clinical documentation submitted to Medicare on a daily basis. An online case management system makes it possible to improve DRG accuracy by guiding case managers to properly document clinical reviews, query physicians and obtain payment authorizations.
The online case management system is connected to McKesson's InterQual®, evidence-based clinical decision support criteria. The criteria helps case managers determine the optimal route of care and use the most appropriate DRG codes for each patient. The automated system, for example, makes it easier to match patients to specific criteria required to classify them as one-day inpatient stays instead of observation patients.
RAC database to manage audit requests: We are planning to invest in a RAC database to help us keep the audit process on track and respond to requests in a time-sensitive manner. Each of these requests comes with a deadline: 45 days to supply medical records and 30 days to file appeals on cases. If hospitals do not reply within the specified times, the RAC can identify the claim as an overpayment.
Future Plans to Ease the RAC Process
As we move toward an enterprise revenue management environment over the next several years, we will eliminate the need for separate case management and RAC tracking technologies. Instead, all of the functionality inherent in these systems will be a part of McKesson's Horizon Enterprise Revenue Management™, a comprehensive financial solution that improves the economics of care. The entire clinical documentation, coding and billing process will be streamlined since documentation and tracking will be part of our natural workflow rather than separate data entry chores. This will enable us to forge a new and easier path for surviving a RAC Audit.
Cathy Dougherty, FHFMA, is the Assistant Vice President of Revenue Management at Gwinnett Health System in Lawrenceville, Ga., where she has been employed since 1990. She is currently responsible for revenue cycle operations, including Patient Access, Health Information Management, the Clinical Documentation Program, Case Management and Discharge Planning, Patient Accounts, and Revenue Integrity, which includes charge master maintenance and charge audit. She has been employed in healthcare revenue cycle management for 25 years. She is a Certified Healthcare Professional (CHFP) and a Fellow in HFMA and a Past President of the Georgia Chapter of HFMA.
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