Taking on RACs with a rapper's attitude


As the ACHE Congress convened in gray and chilly Chicago last week, about the last musical group I would associate with the crowds of buttoned-down executives and flight surgeons is Public Enemy.

Yet during a session in an obscure hotel meeting room on a Tuesday afternoon, the group's seminal 1989 song "Fight the Power" seemed to be a fitting anthem (for those of unfamiliar with hip hop, it's the song Rosie Perez boxes to at the beginning of the Spike Lee film "Do The Right Thing." For those unfamiliar with Spike Lee films--you're out of luck).

The seminar was called "RAC Attack: How to Prepare and Defend Your Hospital." Its presenters hardly conjure up Chuck D. or Flavor Flav: Stephen Forney is the chief financial officer of the Lovelace Health System in Albuquerque, N.M., and a certified public accountant. Bill Phillips, vice president of Revenue Strategies Inc. in Fort Lauderdale, Fla., and an adjunct professor at George Washington University, brings to mind a scholarly rancher.

Yet the two brought the type of defiance toward governmental authority that is quite familiar to anyone who has listened to even a snippet of rap or hip hop. "The Man" is auditing your hospital. What are you gonna do about it?

Doing nothing will cost you. According to Phillips, the average RAC audit recovered $398 on an outpatient claim and $5,200 on an inpatient claim. "These are serious dollars," he said in a tone that edged toward a growl.

Forney also reminded the audience of a basic fact: "RAC auditors don't get paid if they're wrong," he observed, adding that most of the audits in New Mexico are focused on the smaller rural hospitals rather than the big networks that can defend themselves.

Therefore, the answers seemed clear: Appoint a chief RAC officer (CRO). Conduct pre-RAC audits. Rebill all inpatient denials as outpatient claims. Appeal, appeal and appeal again. You'll probably win.

Phillips also suggested turning the RAC process upside down. "What about underpayments? That light switch is off," he said, adding that this was a good way to recover revenue that might be lost to another RAC audit or litigation. Another suggestion: move against the estates of deceased patients to fortify underpayments from Medicare and other payers.

At that point, an audience member visibly blanched and asked what to do about avoiding the not-too-positive PR that usually accompanies such a business practice.

Phillips and Forney really didn't answer that question. However, they did conclude their presentation with a fitting metaphor: "You can't steal second base with your foot on first."

In retrospect, that makes perfect sense. With RAC audits, as with hip hop, you can have good public relations, or you can cop a 'tude. Making the wrong choice will invariably cost you second base--and a lot of dead presidents. - Ron

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