RAC Audits Now a Potential Risk for Physicians

Two of the four RACs added Medically Unlikely Edits (MUE) to their list of CMS-approved issues earlier this year, which gives RACs a new set of issues to study, including physician services.

MUEs are units of service edits for HCPCS codes when a single provider/supplier render the services to a single beneficiary on the same date of service, according to CMS.

While physician services have not been the target of RACs since early in the demonstration project, the approval of MUEs by Connolly and HDI puts them back on the RAC radar. (CGI had approved the issue as well, but has since removed it.)

While physician services have not been a primary focus for the RACs, they have been targeted by MACs, CERT contractors, and the Office of Inspector General, says Peggy S. Blue, MPH, CPC, CCS-P, regulatory specialist at HCPro, Inc.

Blue gives an example of how physician services may be at risk. "For example, let's say a unit of drugs is 10 units, and there's a medically unlikely edit for 10, but a provider bills 100 units, it's going to trigger that MUE," says Blue. "The fact that MUEs are approved by CMS for the RACs to review means that this is an issue that can have claims reviewed, and they can go in and do audits on those claims."

There are a number of reasons that RACs haven't targeted physicians in the past. For one, RACs may have had less of a focus because the largest overpayments will come from Part A hospital billing, and not from physician services, Blue says.

"The big overpayments that RACs are going to find will be in a hospital, but it's probably a matter of time before they really start focusing on physicians."

In addition, physicians fall under Part B billing, and RACs receive 50% of the agreed upon contingency percentage for recovery efforts accomplished through the offset process of Part B claims, as opposed to 75% for Part A claims, according to Blue. However, despite the fact that physician audits will result in lower recoupment amounts, RACs can still target anywhere where there are problems, and physicians should be aware.

"It's something that's always in the back of a physician's mind, but at this point I'm not sure how it will immediately affect anything."

With that in mind, physicians should take the same preventive measures that facilities take against RACs. By making sure the billing is clean, the documentation is in order, and that the bill matches the documentation, this strategy should benefit physicians and prevent audits.