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New Issues Highlight Need for RAC Strategy

James Carroll, February 2, 2010

Last December, the first sets of complex RAC review issues were released. Since then, the list has grown, as each RAC has released its own DRG validation issues.

The official definition of DRG validation, according to Connolly Healthcare, says that diagnostic and procedural information and discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary's medical record.

The initial set of issues released indicates they are targeting a number of different areas, including incorrect code assignments. Taking a closer look at these issues will help to identify your organization's vulnerabilities, and what can be done to strengthen them.

This recent set of approved RAC issues illustrates the need for providers to incorporate a RAC strategy, says Shannon McCall, RHIA, CCS, CCS-P, CPC-I, CCDS, director of coding and HIM at HCPro, Inc. Getting the coding and billing correct in the beginning is the only option, as it is too difficult to correct past improper payment. Preparation is essential, in terms of compliance.

"Billing compliance is here to stay and this new set of issues gives a glimpse of what is to come, says Elizabeth Lamkin, an associate at Axcel Healthcare Group in Tampa, FL. "Automated reviews will be employed for the issues with a pass/fail mindset."

Lamkin took a look at two specific DRGs to offer her view of best practices moving forward.

Skin Graft MS DRG 573

The key to success for DRGs is the same approach to medical necessity, which is to get it right in the beginning. For this to happen, clinical documentation must match the service billed, and the physician has to be precise in documentation.

"Physician education is vital and should be part of the physician advisor role," says Lamkin. "They [physicians] need to know and understand the relationship between accurate documentation and coding."

Specific to this DRG is the description of method or procedure for debridement by the physician. "If the physician documents accurately, his outcomes will match the acuity and his profile will be accurate," says Lamkin. "Otherwise, the patient DRG may not reflect true acuity and the outcome may look worse than they are for the physician."

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