Home Health & Hospice Week

If you submit claims to Medicaid, get ready for another set of eyes looking over your shoulder.

The Patient Protection and Affordable Care Act (PPACA) calls for every state Medicaid program to contract with at least one Recovery Audit Contractor to review claims. That totals a minimum of 56 Medicaid RACs, points out consultant Tom Boyd with Rohnert Park, Calif.-based Boyd & Nicholas.

Like their federal counterparts, Medicaid RACs would be paid on a contingency fee basis. That means their fee would be based on a percentage of the funds they recover. However, they also would receive a set fee for cases in which they find underpayments, adds the health care reform law that was enacted in March.

Health care providers have roundly criticized this bounty hunter model of payment, which encourages RACs to make unnecessary recoupments, they say.

The new Medicaid RAC requirement "adds one more auditor," observes attorney Robert Markette Jr. with Gilliland & Markette in Indianapolis. And if the Medicaid RACs use statistical sampling and extrapolation, the reimbursement hit to providers could be severe.

Medicaid RACs also may duplicate efforts already underway by the Medicaid Integrity Contractors (MICs). In some states, MICs already have been targeting hospice claims for review, relates consultant HeatherWilson with Weatherbee Resources and Hospice Education Network in Hyannis, Mass.

One difference: However, MICs are not paid on a contingency basis, Markette points out. That could mean MICs would be more likely to go after home care providers, because the overall dollar amount isn't as high of a priority in establishing targets for scrutiny.

If the Medicaid RACs follow the federal RACs' example, home care providers may not have much to worry about from the program for a while. That's because the federal RACs still haven't established any home health agency or hospice-specific audit topics, the Centers for Medicaid & Medicaid Services confirmed in a May 4 educational conference call.

However, Medicare RACs have established a score of durable medical equipment topics. And they've established topics that relate to home care, such as bundling of items and services in home health consolidated billing and hospice payments (see Eli's HCW, Vol. XIX, No. 9, p. 67).

Medicaid RACs may be more willing to look into home care claims, too, particularly if the state has a high level of spending on the program, experts predict.

Hopefully PPACA's requirement for Medicaid RACs to coordinate with other auditors will reduce the number of duplicative audits providers will see under the program, Markette notes.

But the law's requirement for the Medicaid RACs to coordinate with law enforcement officials could mean more scrutiny, Markette adds. In the wake of the Government Accountability Office's report criticizing the Medicare RAC demonstration program for producing few fraud referrals (see Eli's HCW, Vol. XIX, No. 15, p. 118), CMS may take pains to ensure fraud referrals occur when appropriate.