4 Ways to RAC-Proof Hospital Admissions

A third of the reimbursements collected in the demo phase of RAC were due to "wrong setting" denials, according to the Center for Medicare & Medicaid Services. This type of denial denotes hospitals that have provided patients with unnecessary care, mainly for keeping patients for overnight care when it was unnecessary. As we embark on a new year, financial leaders should ask everyone on their teams to make a resolution to address these problems before the RAC does it for them.  

To help in this effort, I touched based with Karen Bowden, president of ClaimTrust, a Murfreesboro, TN-based consulting firm, which has worked with several hospitals in the demonstration project to develop RAC-proof admission screening criteria.

With the goal of ensuring consistent admission screening among patients, Bowden suggests hospitals begin by adding the following screening criteria:

1. Use Medicare's (and any other payer's) published procedures from inpatient only lists.  This will provide case managers with a general guideline on whether a certain condition is acceptable to be rendered as inpatient.

2. Develop defensible criteria for "gray area procedures" that are sometimes billed as inpatient and other times as outpatient.

3. Select a case manager(s) to ensure consistent admission practices. This individual should have the authority to override screening criteria when necessary in order to approve inpatient cases on the sole basis that it can be clinically documented.

"All the administrators should be comfortable with the criteria for inpatient or outpatient admissions," says Bowden.

4. Review all RAC decisions. You should also keep in mind that each RAC decision should be reviewed by your team to determine if the RAC decision should be appealed.  You need key measure to appeal a denial, Bowden says, and if you are appealing every decision with the same criteria set it will help.
   
   "If the staff is too lax on these criteria or too aggressive, then you'll lose [the appeal]. Case managers need sensible criteria that define this area well for consistency, so if the RAC finds a 'wrong setting' denial the facility can defend it," explains Bowden.
   
   Bowden also recommends building your criteria and then sharing it with your commercial payors for instant feedback. "Showing how other payers are looking at this can also be useful in your defense," she says.  

With millions at stake for these RAC denials, establishing a simple set of criterion for everyone to work from is one quick and easy New Year's Resolution that every hospital and health system can tackle to make to 2011 a very prosperous New Year.