HFMA ANI 2008: Advice on preparing for a Medicare audit

Today, it's a virtual certainty that you'll come under the watchful eye of Medicare's Recovery Audit Contractors, who have been tasked with investigating providers in all 50 states. The question is, will you be prepared for their arrival--and ready to prove that you're doing things right when they do show up? Too few companies have gotten together the resources they need to take on the RACs, according to Dr. Robert Corrato, MD, MA, president and CEO of Executive Health Resources.

At minimum, organizations should follow the OIG's guidance from a few months ago. In its recent letter, the OIG advises people to work with their accounting firms to decide whether to set aside reserves, examine their records to see whether there are any errors or fraud, and if there are, consult external counsel to see whether they need to self-disclose such errors. (Such disclosures might spare a provider from needing to sign a Corporate Integrity Agreement, Corrato notes.)

However, hospitals in particular should take more steps, including establishing a strong Utilization Review plan and committee which meets the standards of Medicare's Conditions of Participation. The UR plan should address, at minimum, admission review, continued stays and outlier evaluations. Hospitals should also make sure case and UR managers are using the most updated inpatient screening criteria, and use those criteria to see if the facility's patterns fit. Admissions should be screened for medical necessity by such criteria. Cases that don't fall within the criteria should be reviewed by an expert Physician Advisor knowledgeable about Medicare and Medicaid rules, evidence-based care guidelines and medical necessity determinations.

Another important step is to educate treating physicians on the importance of creating complete documentation and working closely with case management and Physician Advisors--and generally speaking, to stress that their cooperation is critical in meeting compliance goals. Also, it's important to make sure the treating physicians communicate well with case managers and Physician Advisors, Corrato suggests.

Ultimately, the process should result in the creation of an "enduring and auditable" document for each Medicare case that proves that your facility has a compliant Medicare admission claim status certification process. Over time, meanwhile, providers will need to keep an eye out for problem cases that fall outside guidelines, and which DRGs pose potential problems. Outliers should be examined and addressed, Corrato notes.

To learn more about the RAC program:
- read this AHA summary

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