At the 18th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 29, Elizabeth Lamkin and Bill Behrens, partners at PACE Healthcare Consulting, discussed how Medicare recovery audit contractors are entering into the ASC sector and what ASCs need to know in case a RAC auditor shows up at their door.
1. ASCs are now named in the statement of work. As outpatient clinics and ASCs are increasing their Medicare revenues away from hospitals, RACs are now "sharpening their knives on ASCs," Ms. Lamkin said. The most recent RAC statement of work actually names ASCs as future targets, and Ms. Lamkin says ASCs need to look at their fellow hospitals to see what they've done to prepare for RAC audits.
2. CMS is ramping up complex reviews. Roughly 80 percent of RAC recoveries were through automated reviews, but RACs are beginning to put more emphasis on complex reviews, which involve requests for medical records. Ms. Lamkin said the average cost of an automated denial is $401, while the average complex denial is nearly $5,500, and she said it is becoming imperative for ASCs to take all RAC reviews, especially complex reviews, seriously.
3. Most RAC appeals are won at the administrative law judge level. Ms. Lamkin said that ASCs must be diligent when it comes to fighting RAC auditors and requesting appeals. Most healthcare organizations do not win at the first or second level of appeals, which are only conducted through mail. If an ASC believes its appeal is worth fighting for, the best opportunity to win is at the third level involving an administrative law judge, but ASCs must remain focused to get to that point.
4. RAC auditors are paid between 9 percent and 12.5 percent of recovered funds. Mr. Behrens said RAC auditors are the "ultimate head hunters," as they collect between 9 percent and 12.5 percent of recovered payments. They clearly have a stake, but he suggested that ASCs be proactive about their billing and coding compliance. "If RACs have difficulty finding trends in your practice, you'll have less problems going forward," Mr. Behrens said. Defending clinical and fiscal integrity will only make an ASC's revenue cycle stronger, he added.
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1. ASCs are now named in the statement of work. As outpatient clinics and ASCs are increasing their Medicare revenues away from hospitals, RACs are now "sharpening their knives on ASCs," Ms. Lamkin said. The most recent RAC statement of work actually names ASCs as future targets, and Ms. Lamkin says ASCs need to look at their fellow hospitals to see what they've done to prepare for RAC audits.
2. CMS is ramping up complex reviews. Roughly 80 percent of RAC recoveries were through automated reviews, but RACs are beginning to put more emphasis on complex reviews, which involve requests for medical records. Ms. Lamkin said the average cost of an automated denial is $401, while the average complex denial is nearly $5,500, and she said it is becoming imperative for ASCs to take all RAC reviews, especially complex reviews, seriously.
3. Most RAC appeals are won at the administrative law judge level. Ms. Lamkin said that ASCs must be diligent when it comes to fighting RAC auditors and requesting appeals. Most healthcare organizations do not win at the first or second level of appeals, which are only conducted through mail. If an ASC believes its appeal is worth fighting for, the best opportunity to win is at the third level involving an administrative law judge, but ASCs must remain focused to get to that point.
4. RAC auditors are paid between 9 percent and 12.5 percent of recovered funds. Mr. Behrens said RAC auditors are the "ultimate head hunters," as they collect between 9 percent and 12.5 percent of recovered payments. They clearly have a stake, but he suggested that ASCs be proactive about their billing and coding compliance. "If RACs have difficulty finding trends in your practice, you'll have less problems going forward," Mr. Behrens said. Defending clinical and fiscal integrity will only make an ASC's revenue cycle stronger, he added.
Related Articles on RACs:
Surgery Centers Continue to Push Back RAC Informational RequestsMedicare RACs Identify, Correct $75.4M in Overpayments in FY 2010
Coding Inaccuracies That May Put Orthopedic, Spine and Pain Management-Driven ASCs at Risk With the OIG and RACs