RAC Appeals and Reports to Congress

In the previously mentioned article on CMS Manual System changes, I touched on the fact that you need to be organized.

There is a second part to that CMS Manual change, and it deals with Monthly Appeals Reports and the proper method a RAC is to follow when they submit those reports.

About a year ago, I gave a presentation at a regional health meeting about HIPAA.  Prior to my speaking, there was a quick Q & A about a thing called a RAC Audit. I listened in shock as person after person described their method of tracking demand letters and files.   I heard spreadsheets, post-it notes…you name it.

When I got up to speak I couldn’t begin on my subject until I clarified a few items.  The first thing I did was ask: “how much time do you spend tracking this information?”

My answer wasn’t anything specific, but what occured was a low rumble, a murmur of gripes and complaints about how much time they spent.

My next question was: “how much value do these files have to your practice?”

That answer was much more specific as nothing less than “thousands of dollars” was yelled out.

I scribble a few notes to myself…and myRACTracker was born.

Here is the problem: as with almost all government programs, the RAC program is anything but simple.

And just like an insurance company, the last thing the RAC program wants to do is make it easy for a provider to appeal and KEEP their money.

For something as important and valuable as these files to be tracked on a spreadsheet or some other willy-nilly way shook me to my core.

Now we see the CMS want RAC’s to submit spreadsheets of appeals data to be used as reference for reports to Congress…SPREADSHEET!

There is mention in the manual update that this is until the RAC Data Warehouse is capable of tracking appeals, then they’ll “just” have to update that system instead.

These spreadsheets are going to be a confusing disaster.  It will probably take at least 2 full time employee at each RAC to generate these spreadsheets.

This is important stuff, and if you treat it like any other “thing” that needs to be followed, you are going to loose big time.

There are so many time line requirements to keep track of, you will lose your mind.

Nobody on the CMS side is looking to make this easy for you.

We are.

MyRACTracker.com will return sanity to your life, reduce the stress of your staff and let you actually see the value of the files the RAC’s request of you.

Not only will you be able to easily track everything RAC, you’ll be able to look at the system and instantly see how much money you have on the line.

You’ll see:

  • Total value of all files in review
  • Total amount of money recouped by the RAC
  • Total amount you have prevented the RAC from taking
  • There is much more to it, but money is really what this comes down to

Be smart and get on the waiting list to be a myRACTracker.com user.

New Denial Code for RACs

Effective May 24, 2010, the CMS will institute a new denial code (N432) that is specifically a message to you (the physician’s office) that reimbursement has been held back due to a RAC audit.

Specifically, “When possible, the Remittance Advice shall contain an N432 code to let the provider know that the adjustment is the result of a RAC audit.”

This, when accomplished will be a “heads up” to you that a Demand Letter is on its way.

The extra emphasis on “when possible” is in the CMS Manual Transmittal, which tells me this code won’t always be there which will add to confusion.

Speaking of confusion, if it wasn’t clear already that you better be looking out for #1 (YOU), take a look at this direct quote from the transmittal:

The RAC shall notify the AC and MAC that an overpayment has been identified by forwarding an Excel or flat file to the AC and MAC containing the claims with improper payments. The RAC shall upload a separate file into the RAC Data Warehouse that contains information associated with the improper payment finding for each affected claim/line item…the AC and MAC will forward an Excel or flat file to the RACs with information associated with the claim adjustment. This includes the dollar amount of any additional adjustments to the claim that were identified by the system during the adjustment process. These are normally called associated findings. Working in concert with the AC and MAC, the RAC will issue a demand letter to the provider explaining the reason for the overpayment and the amount of the overpayment to be recouped. The AC and MAC shall establish an Accounts Receivable and an electronic or paper Remittance Advice for notification to the provider in the claims processing system.

If you were able to read that paragraph and fully understand it in one reading, you are brilliant.

My point here is, if you are not organized…fully and completely organized when it comes to any demand letters you receive, any files you send to a RAC and any appeals you file, then you are leaving money on the table.

The CMS is setting up a system so complex, not many people will understand it.

The RAC’s will have to contend with tens of thousands of files and letters…they are going to screw things up.

You need to worry about yourself and make sure it is not your business that is on the wrong side of their screw ups.

How do you do this?

Fanatic organization and tracking when it comes to RAC’s.

You need to track every bit of minutia when it comes to your audited files, and more importantly when it comes to your appealed files.

It should be your goal to make the recovery of money from you by the CMS and RAC as difficult as possible…while following their procedures exactly.

If you are an easy target, chances are you’ll get hit again and again.

This whole process can be made easy for you with myRACTracker.com.

Always know the location of a  file.

Always know where a file is in the process.

If you are on top of these things, you’ll come out ahead of the RACs.

How You Can Help the RAC GURU

We appreciate the interest of our readers, and all the comments they send in.  Thank you for your support.

A question we get from time to time concerns attorneys – specifically, do we want more attorneys to add to our list of RAC lawyers?    The answer is – maybe yes and maybe no.

Allow us to explain.

The whole RAC program is new, and consequently few attorneys have experience with it.   Especially when it comes to RAC physician audits, few doctors have experience with RAC up until now.    The focus has been on hospitals, where the largest claims have been paid.

When the RAC sends a Demand Letter – or even a Request Letter – the clock is already ticking.   It’s crucial that physicians take immediate action.   Every doctor has an attorney, but what will be needed is specialized legal help from someone already familiar with the RAC appeal process and time frames.   What they won’t need is an attorney who has to start from scratch.

So if anyone knows an attorney with RAC experience – such as representing a hospital or other provider in the RAC appeal process – send us an e-mail with contact information and we will get in touch with him or her.    Also, we would be open to talking with attorneys experienced in appealing Medicare denials coming from audits other than RAC, as they can be brought up to speed with regard to the RAC differences.

Don’t Forget Accountants!

A physician looks to his or her CPA for financial advice, and certainly one area where a CPA should be knowledgeable is the RAC program.   When RAC starts attacking their earnings, we think a lot of physicians will be disappointed that their CPAs didn’t warn them ahead of time.

If you know an accountant or CPA, point them to RacGuru.com so they can educate themselves quickly and help their doctor clients.  Encourage them to contact us and help get the message out to physicians.

Thank you in advance for your help.

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.