RAC AUDITS
He went back to his office and started
sketching out a compliance plan for his
particular hospital, then determined it
made sense to develop a centralized plan
for all hospitals to comply.
After sending his idea up the flagpole he
was put in charge, and brought together
revenue cycle, nursing, physician, case
management and other experts to design a
centralized program that handles all payer
audit programs—commercial insurance
audits are becoming more frequent and
complex, Hegland says, adding that knows
of hospitals on the East Coast where their
commercial insurers are auditing more
than Medicare.
To handle audits, Ministry Health employs a hybrid document management
system using scanning technology from
Canon and eCopy software from Nuance
Communications to convert a scanned
document to an editable PDF file, apply
page numbers to the document to identify
each page for legal reasons (called “Bates
stamping”) and then upload to a multi-payer tracking database, called Compliance 360, from SAI Global Compliance.
One tracking feature is particularly help-
ful in identifying claims that have already
been audited, but the same auditor or an-
other auditor is asking for the same claims.
Either way, a provider can decline duplicate
requests if it has proof. The Canon system
has a handy tool to highlight provisions in
a document—such as vital signs and other
health status indicators at the time a phy-
sician was deciding whether to observe or
admit a patient—to help an administrative
law judge better understand the provider’s
justification for its charges.
Providers Say They’re Looking For A Level Playing Field
Here’s how it breaks down for
Larry Hegland, M.D., CMO
and leader of the RAC pro-
gram for 15-hospital Ministry
Health Care in Weston, Wis.:
A physician assessing a
patient in the emergency
department to determine if
the patient should be under
observation or admitted to
the hospital isn’t thinking of
whether the resulting claim
will be a Medicare Part B
outpatient claim or a more
expensive Medicare Part A
inpatient claim.
The care is the same he or
she would give any patient
in a situation similar to the
one now being treated. The
physician is considering severity, the degree of resources
needed and the complexity
of possible complications,
among other factors. Case
managers also are looking at
snapshots in time, such as
current severity and necessary resources. They aren’t
considering the risk of disease
quickly progressing, or chances of rapid improvement.
Months or years later, an
auditor at a Medicare Recovery
Audit Contractor is looking at
the claim of a patient that was
admitted, knows the outcome
of the treatment, and decides
that patient should have re-
mained on observation status
rather than being admitted
because the patient quickly
stabilized and observation was
all that was needed. And the
auditor will ask the hospital
to repay the difference in the
observation and inpatient
charges, plus 11 percent inter-
est. Oh, and by the way, if the
auditor finds a claim that was
underpaid, it will send the hos-
pital a check for the difference
plus interest—at 2 percent. Is
the process fair?
