While hospitals do not appeal many denials from recovery audit contractors, those denials that are appealed often lead to successful results. Across the nation, hospitals are appealing roughly one-quarter of all denials, and of the claims that have completed the appeals process, 84 percent have been overturned in favor of the provider, according to the American Hospital Association's second quarter RACTrac survey.
In a recent webinar titled, "Navigating the RAC Appeals Process," several hospital and healthcare industry speakers explained what RACs are looking for and how hospitals can effectively steer through the RAC appeals process.
Michael Taylor, MD, vice president of Executive Health Resources, said RACs target two types of admissions: short-stay inpatient medical admissions and short-stay procedures. Those procedures include cardiac procedures, urological procedures, gynecological procedures and others. Compliance with admission medical necessity regulation is not always clear cut, but Robert Corrato, MD, president and CEO of Executive Health Resources added that appealing the denials is the right course of action if the hospital has the right claim practices already in place. "We should be appealing every denial that occurs if we have a compliant process upfront," he says.
Andrew Wachler, JD, principal of Wachler and Associates, noted that many inpatient hospital short-stay claims were denied for the reason that care could have been provided at the observation level rather than the inpatient level of care. He added that Medicare rules do not adequately distinguish between inpatient services (Part A) and observation services (Part B) and therefore creates a complex medical judgment.
Navigating across the five-level RAC appeal process is no walk in the park, and it could be costly, especially if appeals reach Level 5, which involves the federal courts. "The costs and burdens increase exponentially, so you want to try to win these cases as early as possible," Dr. Taylor said. He said Levels 1 and 2 lead to a lot of frustration for hospitals, as it appears RACs apply the same criteria to the original denial, and hospitals have a low- to mid-teen overturn rate in those areas. The level to put the best case forward is Level 3 with the administrative law judge. This is where cases are more closely scrutinized, and hospitals with legitimate claims have had more success.
Knowing that inpatient errors are driving Medicare's erroneous payment rates, hospitals should implement a best practice admission review program to be prepared for the RAC appeals process, said Jean Buble, vice president of case management and health information management at Barnabas Health in West Orange, N.J. "The best defense is a good offense," she said.
There are two key things a hospital can evaluate when preparing its "offense" for the RACs: internal resources and potential RAC appeals partners.
• Internal resources. Ms. Buble said it's important for health systems to make this initial determination: Will each site hospital handle their own RAC appeals, or will they be handled at a system level? She said Barnabas controls appeals at a system level so that all denials are funneled into one area. For all hospitals, though, Ms. Buble said the corporate case management teams must have the RAC process expertise and necessary written and verbal communications skills for effective appeals management.
• Potential RAC appeals partners. If a hospital evaluates its internal resources and finds it lacks the requisite RAC appeals process expertise, it might be time to look for a partner, Ms. Buble said. The easiest place to turn is if a hospital is already partnered with a group who handles the concurrent medical necessity admission reviews, she added.
Ms. Buble noted there are several lessons she has learned so far in her RAC appeals experience. Hospitals must have a strong and well-documented concurrent review process when RACs deny claims; understand all aspects of the appeals process and medical necessity; centralize RAC response efforts; make sure all pertinent case details are presented during the first two levels of appeal to prevent the case from dragging on; and remember that even if a hospital goes with a RAC appeals partner, it's still the provider's responsibility.
CMS Increases RAC Record Request Limit for Providers With Low Medicare Claims
Medicare RACs Have Collected Estimated $575M in Overpayments Since Oct. 2009
In a recent webinar titled, "Navigating the RAC Appeals Process," several hospital and healthcare industry speakers explained what RACs are looking for and how hospitals can effectively steer through the RAC appeals process.
Michael Taylor, MD, vice president of Executive Health Resources, said RACs target two types of admissions: short-stay inpatient medical admissions and short-stay procedures. Those procedures include cardiac procedures, urological procedures, gynecological procedures and others. Compliance with admission medical necessity regulation is not always clear cut, but Robert Corrato, MD, president and CEO of Executive Health Resources added that appealing the denials is the right course of action if the hospital has the right claim practices already in place. "We should be appealing every denial that occurs if we have a compliant process upfront," he says.
Andrew Wachler, JD, principal of Wachler and Associates, noted that many inpatient hospital short-stay claims were denied for the reason that care could have been provided at the observation level rather than the inpatient level of care. He added that Medicare rules do not adequately distinguish between inpatient services (Part A) and observation services (Part B) and therefore creates a complex medical judgment.
Navigating across the five-level RAC appeal process is no walk in the park, and it could be costly, especially if appeals reach Level 5, which involves the federal courts. "The costs and burdens increase exponentially, so you want to try to win these cases as early as possible," Dr. Taylor said. He said Levels 1 and 2 lead to a lot of frustration for hospitals, as it appears RACs apply the same criteria to the original denial, and hospitals have a low- to mid-teen overturn rate in those areas. The level to put the best case forward is Level 3 with the administrative law judge. This is where cases are more closely scrutinized, and hospitals with legitimate claims have had more success.
Knowing that inpatient errors are driving Medicare's erroneous payment rates, hospitals should implement a best practice admission review program to be prepared for the RAC appeals process, said Jean Buble, vice president of case management and health information management at Barnabas Health in West Orange, N.J. "The best defense is a good offense," she said.
There are two key things a hospital can evaluate when preparing its "offense" for the RACs: internal resources and potential RAC appeals partners.
• Internal resources. Ms. Buble said it's important for health systems to make this initial determination: Will each site hospital handle their own RAC appeals, or will they be handled at a system level? She said Barnabas controls appeals at a system level so that all denials are funneled into one area. For all hospitals, though, Ms. Buble said the corporate case management teams must have the RAC process expertise and necessary written and verbal communications skills for effective appeals management.
• Potential RAC appeals partners. If a hospital evaluates its internal resources and finds it lacks the requisite RAC appeals process expertise, it might be time to look for a partner, Ms. Buble said. The easiest place to turn is if a hospital is already partnered with a group who handles the concurrent medical necessity admission reviews, she added.
Ms. Buble noted there are several lessons she has learned so far in her RAC appeals experience. Hospitals must have a strong and well-documented concurrent review process when RACs deny claims; understand all aspects of the appeals process and medical necessity; centralize RAC response efforts; make sure all pertinent case details are presented during the first two levels of appeal to prevent the case from dragging on; and remember that even if a hospital goes with a RAC appeals partner, it's still the provider's responsibility.
Related Articles on RACs:
AHA: 93% of RAC Complex Denials Involve Medical NecessityCMS Increases RAC Record Request Limit for Providers With Low Medicare Claims
Medicare RACs Have Collected Estimated $575M in Overpayments Since Oct. 2009