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RAC: When You Need a Consultant

Many health care facilities have either not prepared for the inevitable demand letters and record requests,or they have prepared for the audits but still have some loose ends to tie up. Some of these outstanding issues are related to the question, issues are related to the question, "When do I need to use a consultant?"  The single, biggest difference with the RAC audits relative to other healthcare payment audits is that everyone will be subject to scrutiny at some level.

Hospitals and even physician offices are being inundated with flyers and e-mails from consultants with marketing materials on RAC consulting services. Because there is so much uncertainty with the RAC process, many facilities either ignore the preparation for RAC-waiting until they have to accept its certainty-or they spend money on consultants at the wrong time.

What needs to be emphasized is that third-party payers have scrutinized hospitals, physician practices and health care institutions for years. Although RAC is not the typical type of organization that has audited the health care community for decades, they are still reviewing the records based on the same coding and documentation rules that were instituted years ago.

Admittedly, some of these issues seem new. Issues change over the years, as do the payment systems from which these overpayments arise. But virtually all of the areas addressed by the RAC audits have been identified in some shape or form over the last 20 years.

Federal Register entries from the OIG, fraud alerts, DOJ investigations and other directives entries facilities have been duly alerted to most, if not all, of the issues have been identified. Thus, the best course of action is to accept the RACs certainty, bite the bullet, and get prepared. To alleviate some of the anxiety, healthcare entities need to remember they are not going into this blind. They do have some experience on how to handle audits.

There is not a black and white answer to the question on when to reach out to a consultant, because the needs for each facility varies based on staffing, the type of health care services provided, and the knowledge of the staff. Each facility should focus on the necessary steps to consider and then determine if they have the staff and knowlege to do some of these tasks in-house. The following needs to be considered:

1.  Getting Prepared - It is imperative that the health care institution is ready for RAC. Well-organized and defined roles and processes are the keys to success in dealing with RACs. Whether the organization is small or large, it takes a team effort to oversee the RACs from the time the first request arrives at the organization until the last appeal is decided. All entities need to implement a proactive program to address any requests issued from the RAC. All facilities should know exactly what step to take the minute they get their first medical record request or demand letter.

The question that the facility needs to ask themselves is whether they have a person who is organized enough to take on the task of coordinating a team. Will this individual be equipped in determining what positions should be established on the team and what tasks to assign each team member? If not, this would be the time to contact a consultant. A consultant will have the experience and knowledge of determining who will be on the team. The consultant would interview each staff member who would potentially be on the team. The consultant would make recommendations and then assign the tasks for each team member and then would give guidance on how to follow and perform the required duties.

2.  Pre-RAC Review - All health care organizations should look at identifying current and future issues that might affect them during a RAC review. The audit should be conducted in the same manner as a RAC audit. The facility should determine what areas that could potentially be reviewed by the RAC and their level of exposure.

Many of the issues over which there will be contention involve subjective judgments. With that said, this is the one area that you probably want to use a consultant. It would not be productive to have the same staff who coded the records also conduct the review. A consultant would use their prior experience in determining the audit areas that could prove problematic for the organization.

3.  Compliance Plan - The facility should consider their current coding, billing and reimbursement compliance program. This assessment needs to be brutally honest. This should be a zero-based assessment.

This is another area that most facilities would need to rely on the services of an outside source. The simple fact is that the RAC audits will necessitate that a proper compliance program be in place and that it is being followed correctly. Consultants have a vast knowledge on how to organize this plan and use it appropriately.

4.  Appeals - Assuming that the RAC auditors are demanding repayment based upon any number of findings, hospitals can undergo an extensive appeal process. However, pursuing the entire appeals process will require significant effort, research, consulting support and possible legal support. Thus, this will be an expensive and laborious process.

The facility should consider the capability and knowledge of their own staff. If possible, the facility should utilize their own billing and coding personnel for the low level appeals and then rely on outside support for your level three, four and five appeals.

RACs are here and it does not look as if they are going anywhere. The worst thing a health care organization can do is write an unnecessary check to a RAC. Seek guidance when needed, but facilities need to take a close look at their own resources. Preparation and knowledge will be the key to surviving this storm and this can be done with the organization's own resources along with utilizing outside assistance.

About the author: Lori S. Baker, CPC, RHIA

Lori Baker is a manager in health care services at HORNE LLP. Her primary responsibilities include inpatient and outpatient billing and coding, performing coding reviews and conducting billing and coding seminars for physicians, clinical staff, administrative support staff, acute care facilities, inpatient psychiatric facilities and inpatient rehabilitation facilities. She also has experience in physician practices where she analyzes and reengineers work processes.

More information about HORNE LLP can be found at www.horne-llp.com.