Home Health & Hospice Week

Three-state medical review demo excludes home health agency claims.

The Recovery Audit Contractors are already hard at work scrutinizing Medicare claims data, and your audit or overpayment letter could come any day - unless you are a home health agency.
 
In a surprise move, the Centers for Medicare & Medicaid Services excluded HHA claims from "the initial data universe" that it gave the five new RACs to review, said Connie Leonard, CMS project officer for the demonstration, in an April 28 Open Door Forum about the new medical review contractors. The entire three-year demonstration will not include HHA claims, a CMS spokesperson confirms to Eli.
 
"That is the greatest news," cheers consultant Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas. Boyd feared major threats to cash flow from the RACs, reminiscent of Operation Restore Trust.

Beneficiary Address Determines Review Eligibility

However, claims from durable medical equipment suppliers are included in the RACs' review. If the beneficiary receiving the DME resides in California, Florida or New York, the claim is eligible for RAC scrutiny, CMS explained in the forum.
 
That means suppliers had better get to know their RACs: PRG Schultz International Inc. in California, Health Data Insights in Florida and Connolly Consulting in New York.
 
RACs Diversified Collection Services and Public Consulting Group also are conducting Medi-care Secondary Payer review in California and Florida, respectively.
 
Warning: If suppliers mistakenly pitch record requests from their RAC, the contractor will deny the entire claim and initiate an overpayment demand letter, CMS stressed in the forum.
 
How it works: Right now the RACs are using their own proprietary software to target claims for review from the data CMS gave them. That includes claims from one to four years ago, and that three-year window will roll forward on a monthly basis.
 
When the RAC targets a claim for review, it will send you a record request letter and will conduct medical review. If a medically oriented "complex" medical review is called for, a medical professional - usually a nurse - will conduct the review, CMS' Melanie Combs said in the forum.
 
Note this change: If the RAC decides all or part of your claim payment was an overpayment, it will issue you an overpayment demand letter directly. Previously, CMS had said the overpayment demand would go through a provider's usual intermediary or carrier.
 
When you receive the overpayment demand letter, you can pay it outright or you can work with the RAC and your carrier to have the amount recouped from your current Medicare payments.
 
In some cases the RAC may deny the claim without conducting medical review for obvious errors, CMS explained. Some examples are a hysterectomy billed for a male patient or an incorrect fee schedule amount.

Suppliers Buy Some Time

Even though supplier claims are included in those the RACs are scrutinizing, DME providers might not see medical review activity from them for a little while. That's because RACs have indicated they are going to zero in on inpatient claims first as being the most likely to have errors.
 
However, several CMS presenters mentioned DME - and specifically wheelchairs - in medical review examples. That could indicate suppliers' claims may top the RAC hit list soon.

All states affected: Even though the RAC demonstration project is running in only three states, providers all across the nation can expect to feel its effects. Intermediaries and carriers will be watching what areas RACs focus on and will adopt their techniques, CMS indicated.
 
Regular intermediaries and carriers "will be able to review those trends and identify where there are potential problems," Combs noted. Then they can "begin to target their education and their pre-payment review efforts into those areas, so that they can minimize the amount of improper payments that are happening going forward."

Address Concerns Plague Providers

Because the RACs can simply deny an entire claim if the provider fails to respond to the record review request on time, multiple providers and their representatives expressed concern about whether the record request letters will get into the right hands in a timely way.
 
One DME caller noted that current medical record requests are going to the company's remittance address, and thus are taking more than two months to get the correct medical records personnel - far past the timely response deadline.
 
CMS hopes the RACs will be able to benefit from the lessons the comprehensive error rate testing (CERT) contractor learned on obtaining accurate contact information for providers.
 
Try this: Providers can contact their RAC as soon as the contractor's contact information is published to give it the correct place to send requests or overpayment letters, one CMS official suggested.
 
Providers and reps also worried that CMS isn't getting the word out on who the RACs are, so providers won't send in their medical records as required.
 
CMS is using only Internet-based vehicles such as Medlearn Matters articles to advertise the RACs' identities and purpose, they complained. Many medical professionals don't use the Internet as part of their daily practice.

Editor's Note: Information presented in the forum is at www.cms.hhs.gov/opendoor/042005/rac_fac.pdf. Providers can email RAC questions to recovery auditdemo@cms.hhs.gov.