Reading the Flags

Clay Spencer builds custom rifles that win benchrest shooting matches all over the world, where the winner puts five shots into one hole less than a tenth of an inch over bullet diameter at a distance of 100 yards.   After competing for 35 years, he knows the sport and the big names in it.  Speaking of an upcoming match in Ohio, he said there are nearly 500 competitors, but only about 75 capable of winning – meaning they have both the rifle and the skill needed to win.

He explained that shooters judge wind direction and velocity by observing flags along the side of the shooting range.   It’s called “reading the flags”, and you simply won’t win if you’re not extremely good at it.  In fact, he said the winner of the Ohio match would be the one person who did the best job of reading the flags when it came his turn to shoot.

How does “reading the flags” apply to us?

As our readers know, RACGURU is devoted to physicians, not hospitals.  Recovery Audit Contractors are presently focusing most of their efforts on hospitals, and thus there’s no shortage of hospital-oriented RAC sites.   We have maintained all along that the time is coming when physicians will feel the RAC bite, and when that time comes there will be a panic among doctors who thought RAC was a hospital thing.   We will be here to provide information and assistance when this happens.

Astute physicians are reading the flags, observing the changes taking place in their profession, government, and healthcare – and making corrections accordingly.   We are seeing more and more doctors awakening to the dangers posed by RAC, and our AAPC certified coders who perform Baseline Audits are doing more of them every month.

What can we learn from reading the flags?

Several things come to mind.  For one, have you noticed government getting a lot more aggressive toward recoupment?  Take the implementation of the RAC program itself for instance – turning loose private contractors paid a commission for every dollar they collect.   This is an unprecedented move, yet that’s exactly how RACs are paid.  Very aggressive indeed!   The trend in government is toward aggressive recoupment.  Just read the flags.

The leading edge of 76 million baby boomers starts turning 65 in 2011.  What does this mean?  Are we reading the flags?  Demographics will work against us – less people paying while more people use benefits.  What choice will government have but to tighten the purse strings even more?  Again, read the flags.

Reading the flags also tells us that insurance companies see the effectiveness of government Bounty Hunters, and will invent their own versions.   The rationale is that if providers are miscoding and over-billing Medicare, it’s probably happening to them as well.   We can look for insurance companies to step up their recovery efforts in the future.

How reading the flags should affect our actions

Just as reading the flags tells a shooter how to adjust for wind conditions, physicians who recognize the trend in recovery efforts – especially as related to RAC Audits – will want to arrange for an independent RAC Baseline Audit.  Click HERE for more information or shoot me an e-mail.

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 for questions or comments.

Red Flag Rules Delayed

Congress has once again delayed implementation of the Red Flag rules.

Now the Red Flag rules do not go into effect until Dec 31, 2010.

For many this is a big sign of relief…one more regulation we can delay worrying about.

Here are the realities:

  • Red Flag Rules parallel HIPAA Regulations – that is, it is about privacy and preventing identity theft
  • Red Flag Rules make business sense – OK, maybe as Congress write them they don’t make business sense, but the big picture makes sense.

I’m sure you’ve heard of some of these big companies having their credit card processing systems hacked into…you don’t want this to be you.

In our area, a local restaurant recently had to go on the news and announce their credit card processing system had accidentally transmitted card info and all patrons over a certain period should go get new credit cards.

This is BAD PR.

We understand that the acceptance of credit cards, is  not in and of itself, make a business subject to Red Flag rules, but it all falls under the similar philosophy – protect your customer’s information!

Will Red Flag rules help prevent this?

In theory they should, but Congress could blow this effectiveness out of the water.

We’ll follow this up with some “common sense” steps to help you move toward Red Flag compliance without the pain.

Uncle Sam Wants His Money Now!

Just when you may have thought you were getting a handle on this RAC thing, here comes a new regulation that may get some people excited.  I am referring to the 60 day deadline recently imposed by the new healthcare reform law entitled the Patient Protection and Affordable Care Act of 2010 (PPACA).

Cutting through the mumbo-jumbo, this act imposes a requirement that providers must report and refund any overpayment within 60 days from the date it is identified.   Failure to comply is a violation of the False Claims Act (FCA), and exposes the provider to severe consequences.

A Useful Legal Opinion

The 60 day deadline was addressed recently by attorneys David Glaser and Katherine Burkhart from the Fredrickson & Byron law firm (   In an online article entitled New Medicare/Medicaid Refunding Requirement: Report and Return Within 60 Days of “Identification”, they rendered the following legal opinion:

“The new law features two key words: “overpayment” and “identified.” Many legal commentators suggest that under the new law [providers] must report and return an overpayment with 60 days of the first indication that an overpayment exists. We strongly disagree. We believe that until you have (1) absolutely concluded that there is an overpayment and (2) ascertained the amount of the overpayment, the overpayment has not been “identified.” As long as you move expeditiously toward quantifying the overpayment, the 60-day time period applies AFTER the size of the overpayment is determined.”


Their conclusion is that until Health and Human Services (HHS) issues clarification, this will remain “one of those proverbial gray areas” that providers must deal with.  Speaking for myself, if I were a provider, I’d give myself the benefit of the doubt on this one!

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 for questions or comments.