RACs have recovered over 96% of all audited claims resulting in take-backs of over 2 billion dollars. Is it any wonder that the home health industry is concerned about their new focus in our industry? The RACs have been identified. The MACs, who will work with the RACs are all now in place.

RACs are contingency based, so, they are motivated to seek out variances.  They can audit 1% of the average monthly Medicare episodes of care (maximum 200) every 45 days per NPI.

Home Health agencies should anticipate to see audits of outlier payments for insulin injections. They should expect, based on coding algorithms to see records reviewed. Are you monitoring your coding and documentation closely? Expect audits.  Fiscal Intermediaries have identified reasons for claim denials and identified high risk areas for non-compliance. Those targeted areas include areas involving coding, homebound status, the documentation of the skilled services delivered, and the overall medical necessity of care administered.

Agencies should be cautious that the codes affixed are well supported by the documentation of the clinician. Too frequently, there has been partial denial of therapy resulting in medical review down-code. Too often and easily, FIs have found clinical documentation incongruent with OASIS M items. Too many times, the reviewers have found that the documentation does not support the focus of care, the sequence for coding, or the medical necessity of the skilled services billed.

In the RAC demonstration project, 35% of the findings pertained to coding. Expect Home Health coding to become one of the chief areas of focus. Remember, the RACs will be looking at variance which will allow them to view consistency of a client’s OASIS, coding, clinical documentation, and the plan of care.

The RAC attack: how to prepare and manage the audits

The Centers for Medicare and Medicaid  (CMS) has implemented, in home health, the  audit process that has proven successful in other areas of the health care industry.  The RAC auditors have been authorized to recover “improper payments “of preapproved areas of risk.  In the demonstration project, high areas of risk included incorrectly coded records, therapy appropriateness, and medically unnecessary services. The RACS use public information from the Office of Inspector General (OIG) and the General Accounting Office (GAO) to focus improper payment audits.

RACs have recovered over 96% of all audited claims resulting in high take-back dollars. Is it any wonder that the home health industry is concerned about their new focus?

RACs are contingency based, so, they are motivated to seek out variances.  They can audit 1% of the average monthly Medicare episodes of care (maximum 200) every 45 days per NPI.  The question is: what action should the home health agency consider now?

Choose a RAC Leader and RAC Response Team

First of all, agencies should appoint a RAC Team Leader who will identify the single point of contact and establish a RAC Response Team. This dynamic team should represent the components of the clinically driven revenue cycle management (RCM) process. Specifically, 1) physicians and clinicians;, nurses, therapists, social workers, 2) quality improvement and documentation specialists, 3) casemanagers, 4) coders, 5) HIM, 6) chargemaster/billing/RCM specialists, 7)  data analysts, 8) Education/Training Specialists, 9) corporate compliance, 10) legal, 11) department heads, 12) mitigation sub-committee that will actually analyze and track each RAC record , and others will be called as needed.  This team will need to address both past and present tactical and oversight issues while prioritizing areas of risk. Additionally, they will review the agency’s ability to complete processes, including audits, and tracking the appeal response.

RAC audits represent significant risk to revenues, profit margins, and workflow stability.  The education of the RAC Response Team is vital in developing the most thorough, yet, efficient approach to establishing RAC risk review and protocol preparedness. Have the team ready.

Identify Vulnerabilities

RAC Response Team education should include lessons learned from the home health industry past: Operation Restore Trust (ORT), May 1995, a two year project in five states resulting in $187.5 million in fines, recoveries, and civil money penalties.  After four years, ORT was credited with a 45% decrease in improper payments, recovery of over $524 million in judgments and settlements and prevention of nearly $11 billion paid in inappropriate claims.

In general, ORT found issues with medical necessity, lack of homebound status, and lack of documentation to support care provided.  Sound familiar? ORT targeted agencies by volume of claims, frequency of medical review issues, LUPA episodes, outliers, therapy thresholds, as well as medical necessity determinations and coding errors.

The recent RAC demonstration results reflected similar focus areas. Agencies should heed those trends identified.

The RAC Response Team should become familiar with regulatory requirements and timeliness. Inservices as well as FAQ sheets with key regulatory highlights and a list of appropriate links to review could be provided. The leader should become familiar with the RAC website as well as monitor the CMS website, alerts, and transmittals.

The RAC Demonstration project showed a 7% payment recovery because of inadequate response to medical record requests so, a process will be needed, to mitigate information flow and manage RAC audit activities thus, create the RAC mitigation sub-committee. This committee or team should function as a subsection of the RAC Response Team, aiding the RAC Team Leader in tracking claims under review.

Identify the patient and document flow, identifying tasks and tools. Diagram patient care flow from intake > admission> medication profile review> discipline specific careplan development > coding >  plan of care development > RAP drop> discipline visits > outcome achievement> QA process review >to final claim submission and A/R management.

Retrospective chart audits as well as present processes and concurrent chart audits should be completed to identify risk. The RAC Response team may decide to contract with third party specialists for comprehensive consulting services to assist the team. The services can include:

• ICD-9-CM Coding Review (Soon to be ICD-10 CM)
• Documentation adequacy to substantiate the Plan of Care and the Codes
• Billing and Revenue Cycle Management (RCM) Review
• Process and Workflow Analysis
• Clinical and RCM Resource
• Presenting OASIS C and Evidenced-Based Practice correlations
• Conducting RAC training sessions to prepare identified personnel for audits

Comprehensive third party clinical/RCM review of care delivered can assign potential organization susceptibility.  The chart audits can distinguish:

• If the admission was medically necessary and the plan appropriate and covered all disciplines.
• If the clinical visits support the plan and the notes
• If the coding met convention and had adequate documented support
  • Focus on case mix diagnoses
  • Review diagnoses sequencing
• If therapy, treatment and procedures were appropriate
• If the reason qualifying homebound status was documented each visit and used objective measureable language
• Other criteria mutually identified by the RAC Response Team and the outside specialists

The RAC Team should consider reviewing the agency overall compliance process, keeping basic CMS regulations in mind.

There have been no limits placed upon the number of sixty day episodes per beneficiary as long as they remain eligible for the home health benefit.  Payment is adjusted to the patient’s need. It becomes the home health agency’s responsibility to assess the patient accurately. Based upon answers to OASIS items describing the patient’s condition and projected therapy needs, a case-mix adjustment is determined. It is the agency’s responsibility to be certain the assessment is accurate, the care is appropriate, and expected outcomes are achieved. Congruency is a key.

Though no limits have been placed on the number of episodes, the Medicare home health benefit is intended to address short term medical needs designed to be met within 60 days. Ongoing recertification is meant to be the exception, not the norm. That recertification must be signed and dated and have backup support of clinical visit and progress notes, copies of summary reports sent to the physicians, and discharge planning. 42 C.F.R. 484.48.  Sometimes, agencies forget that recertification episodes must be clearly justified and are being reviewed carefully. The RAC Team may wish to call for an audit of patients with two episodes and higher.

Expect recertification assessments to become a focus of review.

Because, the RAC audits have focused on medical necessity, it is vital that the intake process and admission policies be reviewed to ensure compliance.  Involve case managers to discuss how they determine projected visit numbers as well as reconcile their careplan focused visits to the Plan of Care. That Plan of Care is the physician ordered medical certification substantiating the need for home health services. 42 C.F.R. 409.43(c) (3).

The coding processes have historically been one of the highest targeted areas of concern because of inaccurate coding in relation to the assessment and documentation submitted. Improper sequencing of codes with incongruence between assessment and plan of care create chart concerns. Chargemaster functions are to be reviewed to determine how identified problems are corrected. Consider third party coders or third party billing sources who know the rules and assist you to remain compliant.

Billing processes are diverse and should be order centric. A record and process review is necessary to map out areas of high risk, such as physician orders and signatures reconciled prior to final claims dropped. Timeliness requirements should be noted when the process is diagrammed.  Billing can become complex when changes and corrections must be made, so a clear tracking process must be maintained. Personnel must be kept current in billing code changes and CMS requirements.

Anytime adjustments or corrections must be made to the billing, there is a risk for duplicate billing. A strong, consistently reviewed process is needed to track beneficiary eligibility, routine billing requirements, billing adjustments, timeliness, and order centricity.  This review process will go a long way toward preventing automated audits. Remember, the automated audits are intended to locate the simple errors.

The Complex reviews are seeking errors that require more intense review; through medical record reviews.  If a RAC demand letter should arrive, the agency may wish to use that informal discussion period, to discuss the RAC’s reason for the repayment. The agency

You should discuss with the RAC auditor how they can submit supportive documentation. If the RAC agrees to see additional information, they can stop the recoupment process If they do not agree the agency can continue with the appeal process.

Providers/agencies have 120 days (from the date on the demand letter) to file an appeal.  This appeal can halt recoupment but, without a valid appeal, recoupment starts on day 41 per CMS.  Appeal prevention oriented agencies need strong process review and implementation. They need to start their own review now.

Coding and Documentation. Coding and Documentation. Coding and Documentation. They just keep becoming more and more important!