RAC prepayment reviews to start this summer

Providers still are waiting for official word on when they should brace themselves for recovery audit prepayment reviews. The demonstration start date is the "summer of 2012," according to the Centers for Medicare & Medicaid Services website.

The Recovery Audit Prepayment Review Demonstration is part of Medicare's fight against fraud, waste and abuse to more than double the number of reviews to 2.7 million claims a year, up from 1.2 million claims. When CMS first announced the project in November, the demonstration was slated for a Jan. 1 start date. However, due to provider pushback regarding the Medicare reimbursements at stake, CMS in February delayed the project until June 1. The CMS website now more loosely states it will start during the "summer of 2012."

However, that doesn't mean providers should sit idle while they wait for a firm deadline, Sharon Easterling, CEO of Recovery Analytics in Charlotte, N.C., told HealthLeaders Media.

"With the shift of the RAC to up-front documentation review, providers should implement concurrent processes in their case management and utilization review areas," Easterling said. "Facilities may also want to consider educating their physicians on these particular DRGs to identify key documentation points that help to meet medical necessity."

Shifting away from the pay-and-chase method, Medicare Recovery Auditors (RAC) will review claims before payment to ensure that providers comply with all Medicare payment rules. The reviews will take place in historically fraud- and error-prone states (California, Florida, Illinois, Louisiana, Michigan, New York and Texas) and areas with high volumes of claims for short inpatient stays (Missouri, North Carolina, Ohio and Pennsylvania).

Providers should prepare themselves with resources to ensure correct DRGs on claims--particularly for diabetes and hemorrhage, among others DRGs--conduct concurrent review and billing education, and stay on top of updated medical records, Easterling noted.

And lastly, even as providers face down the barrel of prepayment reviews, there's always the option to appeal.  

RACs targeted $1.1 billion in Medicare payments during the first quarter of 2012, compared to $876 million during the fourth quarter of 2011. As the American Hospital Association noted in its 2011 report, though, hospitals that appeal have good chances for success. Hospitals appealed nearly one-third of RAC denials and saw 77 percent overturned.

For more information:
- read the HealthLeaders Media article
- see the CMS website and the presentation (.pdf) on DRGs for review
- check out the CMS June appeals update (.pdf)