Note: This article first appeared in RAC Monitor.
On Tuesday, April 26th, CMS placed an update on their Recovery Audit Contractor page under Recent Updates than can be seen as the beginning of reporting on results of the permanent RAC program. A document entitled "2011 FFS Newsletter" sheds light on the RACs’ efforts.
In all, the RAC program has identified $365.8 million in improper payments in the period from October of 2009 through the end of March 2011. From this number, $313.2 million were overpayments and $52.6 million were underpayments that were returned to providers. This already reflects one key percentage change. Under the RAC demonstration program, roughly 96 percent of improper payments identified were overpayments. Thus far under the permanent program, the percentage is 86 percent, which represents a decline, but not enough to make affected providers feel any better about the RAC process.
Of the total improper payments identified since October of 2009, $184.6 million, or just over 50 percent, were identified in the first quarter of 2011. This represents a nearly 114 percent increase in the identification of improper payments from the last quarter of 2010. Factor in the number of issues that have been added to the RAC websites since the beginning of the calendar year, and all trends point to the RACs rapidly expanding their activities.
The total numbers released represent a time period of one-half of the entire RAC Demonstration project. Interestingly, the improper payments identified through 6 quarters are 35.5 percent of the total improper payments identified in the 12 quarters of the Demonstration Project. With the enormous jump in improper payments in the last two quarters, it is reasonable to expect that the quarterly numbers will continue to increase at their present rate.
The one-page report identifies the largest RAC issues for each contractor. For Connolly Consulting and Health Data Insights, the Region C and D contractors respectively, the top issue has been the billing and reimbursement of durable medical equipment during an inpatient stay, which is considered a bundled component of the inpatient services. For Diversified Collection Services, the Region A RAC, the top issue has been the identification of coding errors related to improper calculations of the number of hours of ventilator support. CGI, the Region B RAC, has identified the improper surgical DRG being selected based on the severity of the primary and/or secondary diagnosis selected for the procedure performed during a stay. All of these problems are representative of the current heavy RAC focus on Part A services.
While the grand totals offered by CMS are interesting, there are two sets of numbers that are glaring in their absence.
During the RAC Demonstration Project, 12.7 percent of claim determinations were appealed, with the rate of successful provider appeals being 64.4 percent. The one-page RAC results "newsletter" offers no indication of either the percentage of total claims appealed or the success rate of appeals filed.
With this temporary void, we are left to review the results of the American Hospital Association's RACTrac report. The latest report from the final quarter of 2010 shows that hospitals taking part in the survey have submitted successful appeals 85 percent of the time. I eagerly await the final appeal totals from CMS to see if the numbers under the permanent RAC program are on a par with these findings or perhaps show signs of improvement.
The other numbers that are missing have to do with the overall job performance of the RAC contractors. Provider Resources, Inc., the RAC Validation Contractor, is tasked with assigning a score to each of the four RACs that acts as a grade to assess the quality of the work product of the contractors. To date, none of these scores have been revealed by CMS. While there have been anecdotes regarding less-than-adequate RAC performance across the country, in the context of the missing appeal numbers, there is currently no way to determine the quality of the work being produced by the RAC contractors.
The design of this newsletter gives every indication that this new report will be a quarterly offering by CMS. There are many conclusions to be reached from this first set of numbers, but it is reasonable to conclude that the Recovery Audit Contractors have now officially joined the pantheon of entrenched government programs.
Learn more about Fi-Med Management.
On Tuesday, April 26th, CMS placed an update on their Recovery Audit Contractor page under Recent Updates than can be seen as the beginning of reporting on results of the permanent RAC program. A document entitled "2011 FFS Newsletter" sheds light on the RACs’ efforts.
In all, the RAC program has identified $365.8 million in improper payments in the period from October of 2009 through the end of March 2011. From this number, $313.2 million were overpayments and $52.6 million were underpayments that were returned to providers. This already reflects one key percentage change. Under the RAC demonstration program, roughly 96 percent of improper payments identified were overpayments. Thus far under the permanent program, the percentage is 86 percent, which represents a decline, but not enough to make affected providers feel any better about the RAC process.
Of the total improper payments identified since October of 2009, $184.6 million, or just over 50 percent, were identified in the first quarter of 2011. This represents a nearly 114 percent increase in the identification of improper payments from the last quarter of 2010. Factor in the number of issues that have been added to the RAC websites since the beginning of the calendar year, and all trends point to the RACs rapidly expanding their activities.
The total numbers released represent a time period of one-half of the entire RAC Demonstration project. Interestingly, the improper payments identified through 6 quarters are 35.5 percent of the total improper payments identified in the 12 quarters of the Demonstration Project. With the enormous jump in improper payments in the last two quarters, it is reasonable to expect that the quarterly numbers will continue to increase at their present rate.
The one-page report identifies the largest RAC issues for each contractor. For Connolly Consulting and Health Data Insights, the Region C and D contractors respectively, the top issue has been the billing and reimbursement of durable medical equipment during an inpatient stay, which is considered a bundled component of the inpatient services. For Diversified Collection Services, the Region A RAC, the top issue has been the identification of coding errors related to improper calculations of the number of hours of ventilator support. CGI, the Region B RAC, has identified the improper surgical DRG being selected based on the severity of the primary and/or secondary diagnosis selected for the procedure performed during a stay. All of these problems are representative of the current heavy RAC focus on Part A services.
While the grand totals offered by CMS are interesting, there are two sets of numbers that are glaring in their absence.
During the RAC Demonstration Project, 12.7 percent of claim determinations were appealed, with the rate of successful provider appeals being 64.4 percent. The one-page RAC results "newsletter" offers no indication of either the percentage of total claims appealed or the success rate of appeals filed.
With this temporary void, we are left to review the results of the American Hospital Association's RACTrac report. The latest report from the final quarter of 2010 shows that hospitals taking part in the survey have submitted successful appeals 85 percent of the time. I eagerly await the final appeal totals from CMS to see if the numbers under the permanent RAC program are on a par with these findings or perhaps show signs of improvement.
The other numbers that are missing have to do with the overall job performance of the RAC contractors. Provider Resources, Inc., the RAC Validation Contractor, is tasked with assigning a score to each of the four RACs that acts as a grade to assess the quality of the work product of the contractors. To date, none of these scores have been revealed by CMS. While there have been anecdotes regarding less-than-adequate RAC performance across the country, in the context of the missing appeal numbers, there is currently no way to determine the quality of the work being produced by the RAC contractors.
The design of this newsletter gives every indication that this new report will be a quarterly offering by CMS. There are many conclusions to be reached from this first set of numbers, but it is reasonable to conclude that the Recovery Audit Contractors have now officially joined the pantheon of entrenched government programs.
Learn more about Fi-Med Management.