RAC Recoveries Accelerating, Look Out

Take a look at this summary report from the CMS.
It will open in a new window.

Basically from Oct 2009 to Mar 2011 the RACs have recovered $365.8M.

Of that over half was collected from Jan 2011 to Mar 2011.

Things are speeding up.

There has been, and still is, a learning curve going on at the RACs.

Once they get fully spun up…look out.

It is interesting to see, yet not surprising at all, that both Region C & Region D RAC top issue are identical.

Really, why not?

I would expect each RAC to share their results among each other to ensure each operates as efficiently as possible.

It is not like they are competing for the same “customers”.

What I don’t understand is how the 3 year demonstration period resulted in $1.03B in recoveries while now, about a year-and-a-half into the full blown program, the recovery is not on track to meet the same goal.

Granted, with the acceleration that is occurring, this exponential increase may take the actual recoveries well past the demo program.

Wake up and smell the coffee Docs…this is going to become a huge headache for you.

Reading the Enemy’s Mail

Regular readers know by now that RACGuru.com is a physician oriented website.   Hospitals already have plenty of help to address RAC issues – we focus on doctors.   So if you’re  a physician, here is something you may find interesting.

On April 16th, Connolly Healthcare (Region C) posted 20 new DRGs to their CMS approved list.   Nothing new here – RACs are posting new issues all the time – right?   Well, yes and no – it’s the kinds of issues here that’s important.

The various DRGs can be classified according to Relative Weight, a number assigned to each procedure which indicates its relative monetary value.  Without getting technical, a low number means lower value.   Many procedures are ones, twos or threes.   A high Relative Weight carries a high dollar value, and if you’re being paid on commission (the more politically correct term would be “contingency fee”) as the RACs are, high Relative Weights mean bigger paychecks!

So What’s Connolly Up To?

Who knows?  They’re not saying, but maybe we can learn something about the enemy’s tactics by reading their mail.

Eight out of Connolly’s 20 new issues carry very high Relative Weights.  Some carry extremely high Relative Weights – at or over 10.0 – such as heart transplants (24.85), Liver or Intestinal Transplants (10.4), Extensive Burns or Full Thickness Burns with Mechanical Ventilation 96+ Hours with Skin Graft (13.74), Lung Transplants (9.45), ECMO or Tracheotomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R.  (18.27).

Six of the new postings are in the top 25% discharge rates, meaning that Connolly is not only going after high dollar items – they’re also stepping up the volume.

So . . . .  How Does This Affect Me?

As we have said before, it’s only a matter of time before the RACs hit physicians.   Bottom line – if they’re hammering the hospitals (and they are)  and already have the medical records in their possession (and they do), is it reasonable to think they won’t be coming after the surgeons who did the operations and the physicians who admitted the patients?

We can’t emphasize too strongly – the smart thing to do is get compliant now!   If you haven’t arranged to get an outside audit (the first step) you need to.  Once the bleeding starts, you will need help and we will be here for you – but you’ll wish then that you had done something now.

Winston Creath is an independent healthcare consultant working in the compliance and revenue cycle management arenas on behalf of physicians and clinics.  He serves as President of National Business Solutions of GA, LLC.  He can be reached at winston@nbsoga.com for questions or comments.

Your Recovery Audit Contractors

To clarify we’re listing who your local RAC (recovery audit contractor) is and their contingency fee.  As listed on FedBizOps.gov

Note: that contingency fee is their commission on everything they collect from YOU.

Region A:
Diversified Collection Services, Inc. (DCS)
333 North Canyons Parkway, Suite 100
Livermore, CA 94551-7661
Contingency fee:  12.45%

Region B:
CGI Technologies and Solutions, Inc. (CGI)
11325 Random Hills Road
Fairfax, VA 22030-6051
Contingency fee: 12.5%

Region C:
Connolly Consulting Associates, Inc. (Connolly)
50 Danbury Road
Wilton, CT 06897
Contingency fee: 9%

Region D:
HealthDataInsights, Inc. (HDI)
7501 Trinity Peak Street, Suite 120
Las Vegas, NV 89128-6896
Congtingency fee: 9.49%