This information is provided courtesy ofPayment Automation Network, Inc.

www.PaymentAutomation.netProviding Cash Flow Solutions for Medical Providers Nationwide

Recovery Audit Contractors (RACs) Medicare. Medicaid and Commercial Insurance

Investigations

What you Need to Know

Agenda

• What is the Recovery Audit Contract?

• How does the RACs affect providers?

• Goals of the government Contractors?

• How do Providers Prepare?

• What Commercial Insurance Companies are doing

• Call in the Marines!

Recovery Audit Contract-”RAC”

Government awarded March 5, 2009:

4 (Four) Private firms to perform medical records and billing audits on providers in all 50 states and Puerto Rico

Inpatient

Outpatient (clinics and Ambulatory Surgery)

Home Health

Nursing Home

Regions and timelines

D

C

B

A

March 1, 2009 March 1, 2009 March 1, 2009

March 1, 2009 March 1, 2009 March 1, 2009

August 1, 2009 August 1, 2009 August 1, 2009

Provider Outreach Claims Available for Analysis Earliest Correspondence

*RACs are required to perform outreach programs for all providers in their region

From CMS

How the Medicare RAC Audits affect Medical Providers

If the providers bill Fee-for-Service Medicare, Medicaid or Commercial Insurance programs, their claims will be subject to review by the investigators and auditors

Who has the Authority

• Medicare (CMS) was authorized by Congress to perform audits on all physicians, hospitals and allied health providers with the purpose of identifying:

• Documentation and coding inconsistencies• Overpayments (& Underpayments) made to the providers based

on the findings• Clear documentation to support the medical necessity of the

services being provided or dispensed

$1 billion identified overpayments in 3 states in ONE year(California, New York and Florida Hospitals only)

What about the other entities

• Medicaid (partially funded by the federal government and

managed by each state)– They are hiring firms like Healthnet Federal Services to

mimic the identical issues as the federal government

• United, Aetna and All others-

because they have implied authority to review all providers claims

What does the RAC do?

• Review claims and medical records on a post payment basis

• Review claims paid after October 1, 2007

• RACs will be able to review medical records three years from the date the claims were paid

• Collect overpaid claims paid

Fiscal Year 09Medical Record Limits

Physicians• Single Practitioner: 10 medical records per 45 days per

NPI• Partnerships 2-5 individuals: 20 medical records per 45

days per NPI• Groups 6-15 individuals: 30 medical records per 45 days

per NPI• Large Group Practices 16+ individuals: 50 medical

records per 45 days per NPI

Other Part B Billers (DME, Labs) • 1% of the average monthly Medicare claims (max 200)

per NPI per 45 days

Importance of Documentation Compliance

• The medical record or chart notes must match the codes you submit– Evaluation & Management (office visit)– Diagnosis– Injections– Supplies

• Medical Necessity must clearly state the need for all services provided or prescribed.

When the RAC Letter arrives

• You must provide a clear response to the letter within 45 days

• Retain a certified coder review the records prior to submission

• Send copies of the charts to the RAC- signature required notification of receipt.

• Digitized/electronic file of your charts and supporting documentation.

WATCH THE MAIL FOR A RESPONSE

Next Steps from the RAC

• RAC will issue a Demand letter

• RAC will offer an opportunity for the provider to appeal the decision

The Collection Process

14

Demand letter comes from the (RAC)– Issue Remittance Advice

• Remark Code N432: “Adjustment Based on Recovery Audit”

– Recoups by offset unless provider has submitted a check or a valid appeal

Providers HAVE NO CHOICE…

THEY TAKE THE $$ DIRECTLY FROM YOUR MEDICARE CHECK

Disagreement –No Appeal

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• Send check on or before Day 30 -if you do not appeal

• Recoupment by Medicare (overpayment + interest) on Day 41 and do not appeal

• Extended Payment Plan-Request or apply for extended payment plan (overpayment + interest) and do not appeal

Appeals

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• Pay by check on or before Day 30 (interest is not assessed) and file an appeal by Day 120

• Allow recoupment (overpayment + interest) on Day 41 and file an appeal by Day 120

• Stop the recoupment by filing an appeal before Day 31

• Request or apply for extended payment plan (overpayment + interest) and appeal by Day 120

What to Expect Next

RAC will repeat the exact same process every 45 days until they find no more

overpayments

Where do you turn?

CALL IN THE MARINES!

Payment Automation Network, Inc. can help. We recommendYou:

• Schedule a Base Line Audit as soon as possible

•Determine where your Practice will stand with the RAC team

• We will become your “go to” team for the Practice when the RAC arrives

How Can the Payment Automation Network Baseline

Audit Service Help You?

• We will identify improper coding and billing that is based on documentation in the patients medical record

• Assist the providers with training programs that can ensure they are meeting documentation compliance

• Be available to assist the office in the event that the RAC communicates an audit

How We Help You Get Prepared

• We will perform an independent assessment to identify areas of non-compliance with Medicare/Medicaid rules

• Identify any corrective actions required for compliance

• Help you implement any required changes to stay in compliance

Beyond the BaseLine Audit Review

• Our Billing team can track all denied claims

• Identify all the issues

• Look for patterns

• Deploy any corrective actions to avoid improper payments

Payment Automati

on Network,

Inc. is Your

Solution

RAC Preparation Support

Medicare Documentation &

Coding Benchmark Audit

•Random selection of 50 office notes

•Release of Information

Fax to HIPAA secure site

(iDocumentNow)

for certified coders to

review

Documentation and coding Compliance audit performed

by certified coders

Web-based Training

AuditReport

•Eliminates copying•No space for auditor required

•RAC Audit Management•RAC Findings Review•RAC Appeal

•All Medical Specialties•Designed for Physician

•Training for your coding team

Sample report to follow

Guess who’s coming to the Audit Table

• Medicaid

• United Health, Aetna

• And other commercial payers

What they are saying..

“if the providers are miscoding for Medicare they are miscoding our claims also”

How We Can Help

Our team will provide a base-line audit on your documentation and billing practices. Our report will allow you time to make any needed changes in your current practices billing and coding procedures.

So why should I use your service for a baseline audit prior to being audited by the RAC?

• By using a third-party audit in advance, your practice can identify improper billing and coding practices and take necessary corrective actions prior to the RAC audit. This can help you save both time and money. In addition, you may find areas in which you are being under reimbursed as well. The audit works both ways. If you have been underpaid due to incorrect coding, etc. then you may collect that amount.

So why should I use your service for a baseline audit prior to being audited by the RAC?

• Our process is easy and turnaround time is quick. We will provide you with a base line audit of your billing and coding. Our audits are performed by certified coders who have extensive experience doing government audits. After receiving the information we need from you, a report will be delivered approximately one week later. We will go over that report and help identify and make suggestions as to areas for improvement.

So why should I use your service for a baseline audit prior to being audited by the RAC?

• Prepare your practice for the impending CMS RAC (Recovery Audit Contract). Our team will provide a base-line audit on your documentation and billing practices. Our report will allow you time to make any changes in your current practices.

How do I schedule a Medicare RAC Baseline Audit with your company?

• Call toll free (800) 813-3740 x 1 today to prepare for the RAC Audit and have peace of mind. Waiting for CMS RAC to audit can prove you costly. The RACs are compensated on a contingency basis, so they are very aggressive in their audits. These audits typically include very complex appeals processes with stiff penalties such as the automatic recoupment of funds if appeals deadlines are not met. We will sail you smoothly through the whole RAC process.

Review

• The RAC is serious- Providers need to know and understand the implications

• Determine where the practice will stand

• Understand that you may need to call for help to manage the process

• Medicare is likely NOT the only payer going to take a peek.

Thank You

Payment Automation Network, Inc.Offering Full Service Medical Billing and Cash Flow Solutions for Medical

Providers

Toll Free (800) 813-3710 x 1

info@paymentAutomation.net

www.PaymentAutomation.net