Home Health & Hospice Week

The Centers for Medicare & Medicaid Services has said RACs are currently reviewing home care data and will commence audits of home care providers by early fall, notes William Dombi with the National Association for Home Care & Hospice.At this point it's unclear exactly how many home care audits will take place, "but it's not none," Dombi tells Eli.

"I cannot help but think it will be bad," financial consultant Bobby Dusek says of RACs' impact. "Any time that a contractor is reimbursed a percentage of the claims denials they find, and it is the only way they are reimbursed, there is a built-in incentive to find claims to deny," worries Abilene, Texas-based Dusek.

The four RACs will receive contingency fees between 9 and 12.5 percent, depending on the contract (see Eli's HCW, Vol. XVIII, No. 16, p. 122).

Home care audits could get very ugly very fast if RACs use extrapolation to take back overpayments over the three-year lookback period they're allowed under the program, Dombi predicts.

If the RAC demonstration project that netted $1 billion in repayments for Medicare is any indication, the contractors may conduct limited audits that find 40 to 50 percent claims error rates, then apply that back three years, he forecasts.

Worst case scenario: "No one can survive that," Dombi worries. The result will mean shuttered home health agencies.

Under the RAC program, "you are guilty until proven innocent," Dombi warns. If a RAC auditor shows up at your door, "it's got to be one of the worst days of your life."

Just how severely RAC reviews impact home care providers will depend on how lucrative the contractors find home care audits, Dombi says. RACs are crunching the numbers now to see how much money they expect to make from reviews.

Industry experts expect RAC reviews to focus on three major areas.

Target #1: Therapy is an easy target because downcoding one visit usually results in an overpayment, notes therapist and consultant Cindy Krafft with Fazzi Associates in Northampton, Mass. "I expect the target areas will be what we see already -- just over the 6, 14, and 20 totals," Krafft tells Eli.

But don't be fooled that these visit numbers are the only risk areas. "Any number of therapy visits over six can become an overpayment if the need for the service is not confirmed," Krafft cautions.

Target #2: RACs will zero in on outliers for measures like volume of visits, Dombi expects. In some areas of the country, figures for these measures are 30 to 50 percent higher than the national average.

For example, South Florida agencies have been targeted for traditional reviews because of their extremely high number of visits to diabetic patients. These claims would likely fall under RAC reviews too, Dombi predicts.

Target #3: RAC reviewers will find easy downcodes and denials by focusing on technical issues, Dusek expects. Signatures on documents are just one easy procedural reason to deny claims.

It's been a while since home care providers have undergone rigorous medical review, Dombi notes. Since the prospective payment system began in 2000, many HHAs have gotten a virtual free ride on medical review.

The result: At many agencies, clinician documentation is weak, Dombi worries. Records focus on extraneous details instead of the patient's clinical condition and need for home care. This will make RAC audits especially punishing for targeted agencies.

HHAs are hoping for more education from RACs that will help them know what to expect and focus on weak spots and vulnerable areas, Dombi says. Currently only Region D RAC HealthDataInsights Inc. has scheduled training that specifically addresses home care.

Like hospital trade groups, state home care associations will need to step up and host training in conjunction with RAC reps, Dombi explains.