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Medical Necessity RAC Strategies

James Carroll, for HealthLeaders Media, September 29, 2010

"Providers who cannot demonstrate a compliant utilization review process consisting of first level screening criteria followed by a strong concurrent second-level physician review for all inpatients who failed to meet the first-level screening criteria may face difficulties during the appeals process."

Next, and in tandem with a strong utilization review process, you must recognize that documentation is a critically important factor in building strong appeal cases for RAC medical necessity denials. Providers need to be sure that they are submitting all evidence and medical facts that support the case by the second level of appeal, he says.

Lastly, providers should not be discouraged if they do not find success in the first two levels of appeal.

"Some facilities may stop before the ALJ Level because they are intimidated by the hearing; are hesitant to pay legal fees; or begin to doubt the strength of their case," he says. "But many hospitals experience their greatest success at the administrative law judge (ALJ) level of appeal."

Q: What's the most important thing for providers to keep in mind when it comes to RACs and medical necessity?

A: When it comes to developing your appeals strategy for medical necessity, your argument should address the following components:

  • Clinical. Form a strong medical necessity argument using evidence-based literature.
  • Compliance. Demonstrate a compliant process for certifying medical necessity.
  • Regulatory. Show, when applicable, that the RAC has not acted in accordance with rules, regulations or other relevant CMS or contractor guidance.

Dr. Taylor is speaking in the November 3, 2010 HCPro audio conference: RAC Medical Necessity Reviews: Understand Target Areas and Prepare for Audits.


James Carroll is associate editor for the HCPro Revenue Cycle Institute.
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