HCPro Associate Editor James Carroll recently sat down with Kimberly Anderwood Hoy, JD, CPC, and director of Medicare and Compliance for HCPro, Inc. to discuss some of the hot recovery audit contractor (RAC) issues of this past year, and what 2011 might hold for healthcare providers.
JC: What was one of most common front-end problems hospitals may have had that led to RAC audits and/or recoupments?
KAH: I’m not sure that there’s anything specific. I think that if there’s a strong compliance plan that is looking out for errors, a facility should and can be in good standing. In other words, the best defense is a strong compliance plan. [Editor's note: Can't hurt to read these survival tips.]
JC: Was there any one particular CMS-approved issue that may have given providers the most trouble this past year, and why?
KAH: If you went by the last year, there hasn’t been one particular issue, but rather a number of issues across the board. What’s been giving providers the most trouble are the operational difficulties the RACs have been having with everything from records receipt to timing of denial notices and recoupments.
JC: When it comes to a facility’s RAC team, is there a specific member of the team that is the most integral?
KAH: In my opinion there are a few members that are most important, and then there are other members that—if a hospital can afford it—are helpful and valuable to the team as well. I do think a compliance auditor is an extremely vital member. I also think that somebody from case management is valuable too because the majority of the errors that caused problems in the demonstration were medical necessity. In addition, you need somebody from the business office or billing area who understands the appeals process and billing aspect that can truly determine whether an error was an overpayment or an underpayment.
JC: Speaking of payments, in your opinion, what was it about Medicare’s three-day rule that had providers in such an uproar in 2010?
KAH: The problem with the three-day payment window is that some fiscal intermediaries and MACS had misapplied it even after CMS came out with additional guidance. The claims processing contractors were giving incorrect advice to providers and processing the claims incorrectly. Providers assumed the way the claims processing contractors were processing the claims followed the rule correctly, but unfortunately that was not always the case. Even providers who understood the rule and billed it correctly were getting denials when they should not have been, causing them to doubt how the rule should be applied.
What’s next?
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.
JC: What led you to a profession as a Medicare regulatory specialist?
KAH: Much of my family works in hospitals to this day and I had a lot of exposure to that growing up. So when I graduated law school, the hospital that I had been working at—it was essentially a college job at the time—was looking for a compliance officer and once I got started, I really enjoyed it. I love to solve problems and puzzles, and some of the regulations out there are just like a big jigsaw puzzle: You have to dig around and find the pieces and put them all together, and so I was very intrigued by it and it tends to fit my personality. So now, being able to find these answers and share them with people on a full-time basis is just so much fun. In addition, most hospitals in this country are non-profit, so I feel like they are serving their community. The more help that we can give them, the better.
Kimberly Anderwood Hoy, JD, CPC, is director of Medicare and Compliance at HCPro. She is the head of regulatory surveillance and custom education for HCPro’s Revenue Cycle Institute and is the lead instructor for HCPro’s Medicare Boot Camp® – Hospital Version. Hoy is a national expert in Medicare compliance and regulatory issues.
See Also:
RAC-Withdrawn Reviews, Explained
Physician RAC Vulnerabilities Detailed in CMS Release
CMS Unveils Billing, Coding Guidance
3 RAC Audit Survival Tips
18 Medical Necessity Issues OK'd for RAC Review
RAC: The Problem with the Three-day Rule
Getting Ahead of the Revenue Cycle Curve with Technology
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