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Steps to Consider When Preparing for RACs

James Caroll, December 28, 2009

Taking certain preventive measures can go a long way toward preparing your facility for RAC audits. One of the first steps is for you to make sure your staff understands the issues. Educating staff members builds the foundation for a successful system to deal with RAC audits.

According to Marion Watson, PT, MBA, administrative director of rehabilitative medicine services at Glendale (CA) Adventists Medical Center, some other steps that providers can take to prepare are:

  • Create a RAC team and identify a "lead person." The team could include HIM, coding, patient financial services, and utilization review or management staff members, as well as medical directors, nursing staff members, nurse auditors, administrative representation, finance, IT, and compliance staff members.
  • Review your medical records for accuracy and completeness.
  • Get receipts for everything sent.
  • Log and track everything from initial requests.

Preparing a team to deal with RACs will better equip your organization to manage the audits. "It has to be a team effort," says Tanja Twist, MBA/HCM, director of patient financial services at Methodist Hospital of Southern California in Arcadia. "You've got to find a way to get your physicians involved and educate them upfront on what RACs are, what their role is in [the RAC process], and work together as a team to really survive this."

What else can be done to mitigate the effects of RAC audits? Twist suggests the following:

  • Identify a physician to assist when appeals reach the administrative law judge level. "It really did make a big difference in our case [during the demonstration project]," Twist says. "We also had legal representation there as well."
  • Create a separate P.O. Box for RAC correspondence. "We're hopeful that this is going to be very fruitful for us," she says, alluding to the permanent program.
  • Decide on insourcing vs. out-sourcing your RAC appeals. "It's something you're really going to have to take a look at," Twist says. "And based on the volume, can you or should you do it?"
  • Identify risk areas. Steps in this process should include doing some validation audits and concurrent chart review, as well as figuring out where you can make the complex simple and practical to make improvements. Also, look at your billing edits. "What are your billers fixing? It's time to go back and fix it on a department-charging level."
  • Implement a physician document improvement program. This process will help in the long run, she says.
  • Educate the entire hospital. In particular, staff members need to know what various forms of RAC correspondence looks like so they can get it into the right person's hands quickly because items are so time sensitive.
  • Run some tests. "Set up a fake internal processes check," suggests Twist. "Have [a sample RAC request] go through your system." If it ends up in some strange department like the housing department, conduct the appropriate education to make sure everyone knows where RAC correspondence needs to go.

While the sheer size of this list may appear daunting at first, preparing for RAC audits is critical. "Make sure that you are prepared for this now while you still have time," says Twist. "Check the RAC Web sites regularly, and communicate and educate."

Editor's note: Watson and Twist spoke during the recent HCPro audio conference, "RACS and Inpatient Rehab: Understand the Top Demo Targets to Survive Audits."


James Carroll is associate editor for the HCPro Revenue Cycle Institute.

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