Three demonstration projects were announced on Nov. 15, 2011 by CMS. The most challenging of these projects for hospitals is the Recovery Audit Contractor Pre-Payment Review. The three-year pilot was supposed to begin Jan.1, 2012, but amid much uncertainty and strong feedback from the healthcare industry, it was delayed pending resolution of process issues.
However on Feb. 3, CMS announced that it will move forward on or after June 1, 2012. Generally, this means June 1 is the go live date. Now is the time for providers to dissect, understand and prepare for RAC Pre-Payment Reviews.
Breaking down RAC Pre-Payment Reviews: What are they?
Currently, Medicare RACs conduct reviews after reimbursement has been paid. The new demonstration project institutes a process where the claim would be reviewed, and maybe even adjudicated, but the payment would be pended for a medical record review to determine appropriateness of care.
The project is to be a three-year pilot conducted in 11 states. The states selected are in two groups. Group one includes states that have historically high populations of fraud and error prone providers. These are: Florida, California, Michigan, Texas, New York, Louisiana and Illinois. The second group includes states that have high volumes of short hospital stays. These are: Pennsylvania, Ohio, North Carolina and Missouri. The pre-payment reviews will be limited to these 11 states when they get started and will be for inpatient services only.
Further narrowing the targeted cases, for the first six months of the project the RACS will only evaluate eight inpatient Diagnosis Related Groups. These are primarily high volume diagnoses that have a "questionable" need for hospital admission. It seems that CMS feels that these 8 DRGs should be treated on an outpatient basis much more frequently than they are now. The eight DRGs are:
• MS-DRG 312: Syncope and Collapse
• MS-DRG 069: Transient Ischemia
• MS-DRG 377: G.I hemorrhage with major complications or co morbidity(MCC)
• MS-DRG 378: G.I hemorrhage with complications or co morbidity (CC)
• MS-DRG 379: G.I hemorrhage without CC/MCC
• MS-DRG 637: Diabetes with MCC
• MS-DRG 638: Diabetes with CC
• MS-DRG 639: Diabetes without MCC/CC
These phase one DRGs provide areas of focus for documentation improvement. They will be followed by more targeted DRGs and likely will include procedures that are performed on a short stay inpatient basis. The objective seems to be to push more Medicare services to the outpatient side of the house.
Other specifics to know
The RACs will have limits on the number of records they can review in any 45-day period. This limit is expected to be the same as the limits of records for post payment RAC reviews. For example, if a hospital has a 500 record request limit for post payment, they would also have a 500 record limit for prepayment for a total of up to 1,000 requests every 45 days.
The prepayment requests will be made electronically only, by the Medicare Administrative Contractor through the Medicare Direct Data Entry System. DDE is also known as the Common Working System or Florida Shared System There will not be paper requests as is the current norm.
Provider feedback postpones start
The feedback was intense and caused the initial delay and it is widely expected that some of the providers' questions and concerns will be answered before go live. Some of the questions include:
• The MACs will be making the request for records and the RACs will be doing the reviews. So who do the records get sent to?
• The records are to be requested electronically, as stated, but many hospitals do not have any workflow centered around the CFW as part of the audit process.
• The program was to have a 30-day turnaround for response to requests which differs from post payment reviews-which have 45-day turnaround times.
• There is question whether or not providers will be reimbursed for their efforts in providing the requested records. This would include copying and postage. CMS initially said they are reimbursable but the RACs said that they are not. The MACs are doing some prepayment reviews now and those records are not reimbursable.
• As MAC prepayment reviews have no limits in terms of number of records that can be audited, there is concern that the new RAC prepayment reviews will lead to duplicate reviews.
As of the writing of this article, answers to these questions have not been provided.
Three ways to prepare
First, it is important to restructure processes and workflow to include working with the CWF. Make sure you have access and develop a workflow around it. It is generally a manual, labor-intensive process. The function best resides with a centralized audit team. Remember that CMS does not want non-providers to access the CWF.
Secondly, there are specific DRGs that CMS is going to look at each month. Begin now by auditing these cases and improving clinical documentation associated with them. In this way, providers can correct issues before the reviews begin and payment gets pended.
Third, tie this process back to what you have already learned from RAC audits thus far. Audit mitigation is tied to workflow re-engineering, supported by audit tracking software, and clinical documentation improvement. Apply the same principals to the prepayment-targeted areas and you will lower the risk of your revenue stream being held at bay.
Impact to cash flow
Prepayment reviews will become part of the audit landscape on June 1, 2012. These audits are more onerous in that payment is withheld until the case gets resolved. Cash flow is impacted immediately versus months or even years down the road. Prevention is the best course of action. Do your work now instead of later.
More Articles on RAC Prepayment Review:
RAC Prepayment Review Demo to Begin June 1
CMS Shelves RAC Prepayment Review Demonstration
Medicare Prepayments for Heart, Orthopedic Procedures Limited to Florida
However on Feb. 3, CMS announced that it will move forward on or after June 1, 2012. Generally, this means June 1 is the go live date. Now is the time for providers to dissect, understand and prepare for RAC Pre-Payment Reviews.
Breaking down RAC Pre-Payment Reviews: What are they?
Currently, Medicare RACs conduct reviews after reimbursement has been paid. The new demonstration project institutes a process where the claim would be reviewed, and maybe even adjudicated, but the payment would be pended for a medical record review to determine appropriateness of care.
The project is to be a three-year pilot conducted in 11 states. The states selected are in two groups. Group one includes states that have historically high populations of fraud and error prone providers. These are: Florida, California, Michigan, Texas, New York, Louisiana and Illinois. The second group includes states that have high volumes of short hospital stays. These are: Pennsylvania, Ohio, North Carolina and Missouri. The pre-payment reviews will be limited to these 11 states when they get started and will be for inpatient services only.
Further narrowing the targeted cases, for the first six months of the project the RACS will only evaluate eight inpatient Diagnosis Related Groups. These are primarily high volume diagnoses that have a "questionable" need for hospital admission. It seems that CMS feels that these 8 DRGs should be treated on an outpatient basis much more frequently than they are now. The eight DRGs are:
• MS-DRG 312: Syncope and Collapse
• MS-DRG 069: Transient Ischemia
• MS-DRG 377: G.I hemorrhage with major complications or co morbidity(MCC)
• MS-DRG 378: G.I hemorrhage with complications or co morbidity (CC)
• MS-DRG 379: G.I hemorrhage without CC/MCC
• MS-DRG 637: Diabetes with MCC
• MS-DRG 638: Diabetes with CC
• MS-DRG 639: Diabetes without MCC/CC
These phase one DRGs provide areas of focus for documentation improvement. They will be followed by more targeted DRGs and likely will include procedures that are performed on a short stay inpatient basis. The objective seems to be to push more Medicare services to the outpatient side of the house.
Other specifics to know
The RACs will have limits on the number of records they can review in any 45-day period. This limit is expected to be the same as the limits of records for post payment RAC reviews. For example, if a hospital has a 500 record request limit for post payment, they would also have a 500 record limit for prepayment for a total of up to 1,000 requests every 45 days.
The prepayment requests will be made electronically only, by the Medicare Administrative Contractor through the Medicare Direct Data Entry System. DDE is also known as the Common Working System or Florida Shared System There will not be paper requests as is the current norm.
Provider feedback postpones start
The feedback was intense and caused the initial delay and it is widely expected that some of the providers' questions and concerns will be answered before go live. Some of the questions include:
• The MACs will be making the request for records and the RACs will be doing the reviews. So who do the records get sent to?
• The records are to be requested electronically, as stated, but many hospitals do not have any workflow centered around the CFW as part of the audit process.
• The program was to have a 30-day turnaround for response to requests which differs from post payment reviews-which have 45-day turnaround times.
• There is question whether or not providers will be reimbursed for their efforts in providing the requested records. This would include copying and postage. CMS initially said they are reimbursable but the RACs said that they are not. The MACs are doing some prepayment reviews now and those records are not reimbursable.
• As MAC prepayment reviews have no limits in terms of number of records that can be audited, there is concern that the new RAC prepayment reviews will lead to duplicate reviews.
As of the writing of this article, answers to these questions have not been provided.
Three ways to prepare
First, it is important to restructure processes and workflow to include working with the CWF. Make sure you have access and develop a workflow around it. It is generally a manual, labor-intensive process. The function best resides with a centralized audit team. Remember that CMS does not want non-providers to access the CWF.
Secondly, there are specific DRGs that CMS is going to look at each month. Begin now by auditing these cases and improving clinical documentation associated with them. In this way, providers can correct issues before the reviews begin and payment gets pended.
Third, tie this process back to what you have already learned from RAC audits thus far. Audit mitigation is tied to workflow re-engineering, supported by audit tracking software, and clinical documentation improvement. Apply the same principals to the prepayment-targeted areas and you will lower the risk of your revenue stream being held at bay.
Impact to cash flow
Prepayment reviews will become part of the audit landscape on June 1, 2012. These audits are more onerous in that payment is withheld until the case gets resolved. Cash flow is impacted immediately versus months or even years down the road. Prevention is the best course of action. Do your work now instead of later.
More Articles on RAC Prepayment Review:
RAC Prepayment Review Demo to Begin June 1
CMS Shelves RAC Prepayment Review Demonstration
Medicare Prepayments for Heart, Orthopedic Procedures Limited to Florida