ED Coding and Reimbursement Alert

RACS now have a shorter reporting period for findings and have more pressure to get their audits right

After a temporary suspension of activity, CMS recently announced the official restart of their (RAC) reviews with some favorable changes.  Read on for the latest news in ED specific targets and regulatory changes that will impact how your group responds to RAC audits in 2015.

Heed RAC Hit List for EDs 

Wouldn’t you like to know what is going to be on the final exam? Various RACs have targeted these common ED scenarios for audit scrutiny, says Ed Gaines, JD, CCP, Chief Compliance Officer at Zotec Partners in Greensboro, NC., including:

1. Critical care billed on same day as ED E/M by same physician for same patient  
2. Services or procedures billed during the 10 or 90 day global surgical period  
3. Admit and discharge same day Observation Codes (CPT® 99234-236 codes)
4. Improper payments based on improper 59 modifier application

For the Medicaid RACs, the following issues have been cited of note:

1. Services/procedures billed during the 10 or 90 GSP as noted above;
2. Credit balances and refunds in compliance with the ACA mandates.

Look for Changes in Additional Documentation Requests, Notification Timelines

In response to industry feedback, including a joint letter by ED organizations ACEP and EDPMA calling for changes in the RAC program, CMS will ensure that RACs establish additional documentation request (ADR) limits based on provider compliance with Medicare rules. ED practices with low denial rates will have lower ADR limits, and practices with high denial rates will have higher ADR limits, says Ed Gaines, JD, CCP, Chief Compliance Officer at Zotec Partners in Greensboro, NC.

The fix: CMS will now adjust the ADR limits as a practice’s denial rate decreases. That will ensure that providers complying with Medicare rules have fewer RAC reviews. What this means for you is that you get rewarded for prior good audit outcomes. The previously permitted ADR limit amounted to 2 percent of all claims submitted for the prior calendar year, divided by eight. RACs had been allowed to send a maximum of 400 requests per 45 days to a practice RACs can apply ADR limits incrementally to new providers under review.  

But what if you don’t have an audit history? One of the complaints to CMS was that new providers were receiving requests for the maximum number of medical records allowed, causing administrative headaches and possible accounts receivable delays  at their most vulnerable time, says Gaines.

New Thirty Day Notification Period Of Complex Review Findings

You won’t have to wait as long to learn the findings from any RAC complex audits anymore. In the past providers waited up to sixty days before being notified of the findings of RAC complex reviews. The new thirty day deadline requires more immediate feedback to providers about the outcome of reviews, Gaines explains.

No RAC Payment Until After the Second Level Of Appeal And RACs Must Maintain An Overturn Rate of Less Than Ten Percent

RACS now have more incentive to get the audits right the first time. Previously, RACs were paid immediately upon denial and recoupment of claims according to the percentage of recoupment allowed in their contract. This created an unfair delay in provider payment while the appeals process played out, often over many months.  The new rules add performance standards that can delay when the RACs get paid. CMS will require that the RACs have an overturn rate of less than 10 percent at the first level of appeal, excluding claims denied because of insufficient documentation or claims corrected during the appeals process. If a RAC fails to have a low overturn rate, CMS will place it in on a corrective action plan that could include decreasing ADR limits or ceasing certain reviews. Hopefully this new rule creates incentives for RAC audit decisions to be fairly based upon Medicare statutes, coverage determinations, regulations and manuals, says Gaines.