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How Revised RAC Statement of Work Will Impact Providers



The Centers for Medicare & Medicaid Services has released a revised recovery audit contractor statement of work. Now providers are going to have to choose between going right into the appeals process or using the discussion period first.



1 comments on "How Revised RAC Statement of Work Will Impact Providers"
Terry Myers (9/23/2011 at 11:30 AM)

The example provided for the partial denial using an inpatient admission down graded vs. denied to observation is very misleading. The RAC auditor can not downgrade/allow a partial payment in this situation. If this is an inpatient admission with an inpatient admission order the RAC auditor can not create an observation (refer to observation) order only a physician (primarily responsible for the care of the patient with proper privileges at the hospital) can create an order. The RAC has no choice in this situation but to deny the inpatient admission. The hospital can try to go back and bill for services provided, lab, X-ray and others (no observation) IF they have valid physician orders for the services that include the medical justification. The job of the RAC is not to bill for the hospital. The above example is driven by three primary issues: 1) Physician education on inpatient vs. refer to observation requirements is important. 2) Lack of case management and other physician support assessing a patient upon admission that provides assistance to physicians in [INVALID]ing the appropriate service. 3) CMS has clarified that an admit order without any further clarification as to inpatient or refer to observation is an inpatient admission. Good forms design along with a process to assure a proper admission order is also required. A valid example would be a partial denial caused by a coding change that takes away a CC or MCC. In this case the hospital will see the removal from the MAC of the total payment for the original DRG than a payment for the new (lower) DRG. This example also requires that a valid physician inpatient admission order exists. A normal validation item for the RAC audit.