Recovery Audit Contractors Payment Error Program

The Recovery Audit Contractors (RAC) Payment Error Program is a concern to healthcare executives across the country, and PPS provides two sets of RAC services to address these concerns. The first of these is the Proactive Set, which prepares facilities for RAC reviews by examining the most prominent historical and client specific areas of RAC investigation for both inpatient and outpatient cases. PPS understands that preparing for RAC is among the most important issues facing revenue integrity professionals, and offers its assistance to facilities by providing information and advice to focus the preparation process. The objective of these services is to identify potential payment issues pursuant to RAC audits in advance, so that any issues can be uncovered and managed before the review begins.

The second is the Appeals Set, whereby PPS assists healthcare facilities with RAC appeals. In this set of services, PPS is engaged to provide technical and documented opinions that dispute the RAC findings. This second set of services is custom-designed based on individual appeals. PPS stands ready to provide assistance with RAC appeals to your facility, and we will address each one as they occur.

Proactive RAC Services

As we observe RAC findings, we have noticed that there is no one pattern that fits all facilities. Our RAC appeals services provide us with an ongoing development of the areas in which RAC auditors are concentrating their efforts. With that said, we can work with you to identify those areas which RAC may audit in your facility, based on your case mix. With that said, we strongly suggest that as you prepare for a RAC audit, you consider PPS’s standard RAC Preparatory Review described below, as a starting point, as these areas have been clearly identified through the RAC process to date.

Standard RAC Preparatory Review

The proactive RAC billing/compliance review for Inpatient Medicare Part A is based upon those areas with the highest RAC potential for each specific client. Normally it is comprised of the following three key components:

1. 1. Comprehensive DRG review
   • Identify and review inpatient cases with the highest probability of DRG change
   • Target 12 key DRGs based on current RAC audit methodology
   • Perform inpatient coding audits to validate DRGs
   • Review single CC DRGs

1. 2. Verification that surgeries performed on an inpatient basis necessitated an inpatient admission versus provided on an outpatient basis
   • Identify and review a random sampling of inpatient surgical cases with length of stay (LOS) less than geometric length of stay (GLOS) by DRG to determine if inpatient criteria was met
2. 3. Review of Medicare 1 day length of stays for targeted diagnosis
   • Chest Pain
   • Back Pain
   • Gastroenteritis

The pro-active RAC billing /compliance review for Outpatient Medicare Part B is comprised of the following two key components:

1. 1. Charge assignment validation
   • Health Information Management code assignment review
   • Chargemaster review of CPT-4/HCPCS/Revenue codes to identify coding errors
   • Charge protocols
2. 2. OPPS service review
   • Observation medical necessity review
   • Non covered services
   • Coding errors
   • Chargemaster code errors
   • Point of Service
   • Medically unlikely edit review (OCE edits)
   • Review of items eligible for Pass Through payments, i.e. drugs and pharmaceuticals, supplies, DME, prosthetic and orthotics
     • Verify correct units of services are billed, i.e. blood transfusions, therapy services, drugs and pharmaceuticals

RAC Appeals Assistance

PPS will work with your facility, as it has done for others, to aid in the RAC appeals process. We do this on an individual basis and can work in concert with your legal team to provide the necessary expertise and documentation to support your appeals position(s).