JC: What type of impact do you expect RAC expansion into Medicaid to have on providers or what should providers be doing to prepare for the RAC expansion into Medicaid?
KAH: That will all depend on where providers are at. Some Medicaid programs are much more sophisticated than others, because they have much higher populations in their states and therefore are much more fraught with errors and problems. I do think that in the end, the RAC program for Medicaid will be positive. I think there are far more system problems and unclear guidance on the Medicaid side and as the RACs look for incorrect payments they will identify these and bring them to the state Medicaid agencies’ attention. This may result in clarification of some issues that providers have struggled with in the past.
JC: First it was DRG validation, then medical necessity issues – what will be the next big target of the RACs?
KAH: I thought that once the RACs started on medical necessity that it was going to be the next big thing and that would be all that we would see for a while, but they have continued to approve more automated issues. I think that by being unable to audit medical necessity issues for the beginning portion of the program they found other lucrative areas and realized that medical necessity wasn’t the only avenue for recoupment.
JC: What is the one word of advice you’d give to providers when it comes to preparing for RACs in 2011?
KAH: My best word of advice when it comes to RACs—and I know some people may disagree—is to have a strong compliance plan and strong revenue cycle team to ensure what you are doing is correct in the first place, and let the chips fall where they may. If you focus more on getting what you are doing right and less on how the RACs will catch you on something, then you will benefit from it in the end. Hospitals truly should be taking control of their own agenda and not be driven by government auditors.