3 RAC Audit Survival Tips

2. Do the legwork. Is the appeals process the best use of your valuable resources? Much like preventing claims denials begins during the admission phase, surviving a RAC audit relatively unscathed requires legwork upfront, which according to Bowden, includes using published inpatient procedures (Medicare or other), developing of defensible criteria for "gray-area" procedures, and instituting a second-level reviewer or case manager to ensure consistent admission practices.

In the medical necessity demonstration appeals process, organizations that were successful in appealing denials were the ones that took the Medicare guidelines for admissions and responded to them point-by-point.

3. Watch the handwriting. Though it sounds complicated, proving medical necessity may be the easy part with the new RAC audits. Hospitals are in for quite a surprise, though, when it comes to physicians' handwriting. "The thing I'm most worried about is hospitals losing payments because of illegible physician handwriting," Bowden says.

Unbeknown to many organizations, auditors have been instructed to challenge any patient record in which the doctor's admission order, including signature, is illegible or missing, which places revenue at risk. "This is just another thing that can bury a healthcare provider in denials," according to Bowden.

One bright note from the demonstration project: CMS has taken a more reasonable approach to diagnosis-related group (DRG) reviews. "The quality of what they're doing vastly improved throughout the process," Bowden claims. "We need to give them credit for responding appropriately to the criticism that came out of the demo project."