Physician Advisors and RACs: Saving Grace, Defending Dollars

When it comes to surviving Recovery Audit Contractors, effective physician advisors can be a "saving grace," according to Elizabeth Lamkin, CEO of Hilton Head Regional Hospital, a Tenet hospital in South Carolina.

Lamkin spoke at the recent Healthcare Financial Management Association's annual conference in Seattle last week.

An ineffective program, however, just won't do.

For example, you may be able to overturn denials without a strong physician advisor program, but at what cost? The American Hospital Association places the cost of managing a Medicare denial at about $2,000 per denial, while the reimbursement for the commonly denied chest pain admission is approximately $3,000, according to Joe Zebrowitz, MD, executive vice president for Executive Health Resources.

"You lose as soon as Medicare denies your claim," he says. "It's not enough to be right. You have to be so right that nobody questions you. Because once you are questioned, once you start getting denials, you may win [appeals], but it is a Pyrrhic victory. You may have won the battle, but you've really lost the war."

Trying to ensure you meet medical necessity requirements without physician advisor review is risky. If a first-level review via Interqual or Milliman, for example, doesn't certify a patient as an inpatient, you need a second-level review by a physician to determine status, says Zebrowitz.