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Anthony Cirillo

Medicare Providers Cannot Object to RAC Decision to Re-open Payment Decision

By November 21, 2012

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Medicare service providers cannot object to a Medicare Recovery Audit Contractor's (RAC) decision to re-open a payment decision, a federal appeals court ruled.

A California appeals court voted to dismiss an inpatient rehabilitation facility's effort to prevent government auditors from investigating a Medicare payment decision. The appeals court sided with a district court's decision to dismiss a challenge brought by Palomar Medical Center in Escondido, CA.

Court documents state that Palomar Medical Center provided therapy to an individual who needed rehabilitative services following a hip surgery. At the time the therapy was delivered, Medicare reimbursed the facility. However, as RAC investigation determined that the services were not reasonable and necessary, and could have been delivered in a less expensive setting such as a nursing home or rehabilitation facility.

According to the decision, the court based its decision on Medicare regulations, which decree that reopening decisions are "not appealable" and are "final."

Maybe it's me but I thought that the whole idea of RAC was the audit piece retrospectively. So it has been about looking at items that have already been reimbursed. It seems that they will start switching to more intervention at the time of service to make sure charges are appropriate.

No matter how you look at it, RAC audits are occurring more frequently in hospitals and skilled nursing facilities. An American Hospital Association survey recently found that RAC requests for medical records jumped 22% between the first and second quarter of 2012.

As we have noted previously, you can help prepare for any audits by doing the following:

  • Perform a self-audit targeting known vulnerabilities targeted by RAC auditors.
  • Stay abreast of RAC information by subscribing to CMS updates.
  • Put in place key processes that can help address and avoid audits. These could include admissions screening criteria; coding reviews and training; and comprehensive case management.
  • Develop a denials management process to monitor and track denials.
  • Form a taskforce that meets regularly and can be mobilized upon a RAC request.
  • Conduct coding reviews yourself or through a third party.
  • Share the findings with your taskforce.
  • Develop a corrective action plan.
  • Develop ongoing staff training, particularly around coding issues.

Learn more ~ or join the conversation!

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