RAC Preparations Well Under Way Despite Budget Issues

HealthLeaders Media Staff, November 17, 2009

Budgets are tight, but it seems that many healthcare providers are aware that setting aside resources to prepare for RAC audits is non-negotiable.

HCPro's Revenue Cycle Institute examined this concept as a part of its recent nationwide survey of RAC readiness. The study, which was released recently, garnered more than 700 participants from all four RAC jurisdictions. The respondents hailed from various size healthcare providers: 25% came from hospitals with fewer than 100 beds, another 25% came from hospitals with more than 400 beds, with the remaining 50% falling in between. Approximately 14% of respondents had taken part in the RAC demonstration project.

"Respondents seem to have their RAC preparations well under way, although it's not surprising that they are struggling with resources to devote to preparation," according to Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, and author of the "RAC Preparedness Benchmarking Report," which details the full results of the survey.

"Providers appear to be crunched for resources to provide to the RAC team, with 50% indicating that departments are just absorbing RAC costs into their current budgets," Hoy wrote in the report. "This may be driving the relatively high number of respondents using homegrown software and tools for risk assessment. Software for tracking requests is a bit of a different story, with providers split roughly equally between homegrown methods and third-party vendor software."

Amounts facilities budgeted to deal with RACs varied greatly, according to the survey. Reported amounts averaged between $200,000 and $600,000, although some survey participants mentioned smaller budgets of $15,000 to $40,000 (often used primarily for adding staff members to deal with the increased workload).

A surprisingly high number of respondents said they already had a RAC preparedness program in place (71%). This number may be inflated by providers with heightened awareness of the RAC initiative that may have been more likely to respond to the survey, according to Hoy. Programs generally appear to still be in their early stages. Of respondents with a program in place, 85% started in the past year, and more than 50% started in the past six months.

"As providers begin to receive routine RAC requests, the teams will undoubtedly continue to develop and become more sophisticated," Hoy says.

Nearly half of respondents already have a RAC coordinator in at least a part-time capacity; and 40% have a full-time coordinator. Out of the respondents who said they don't yet have a RAC coordinator, many are in the process of hiring one for a full-time position. Others hadn't begun hiring yet because they were waiting until RACs become active in their area. Others reported that two or more staff members shared the full-time position. Coding and compliance were the most popular backgrounds for the coordinator position.

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