Understanding the RAC Audit Process

Understanding the RAC Audit Process

One of the greatest challenges facing practitioners is a potential investigation by a Medicare Recovery Audit Contractor (RAC). Medicare estimates that there is a sixty two percent error rate among reimbursement claims in which documentation doesn’t match the billed expenses.

Private practice marketing expert, Nitin Chhoda, says that when services, fees and documentation don’t match, it increases the possibility of a RAC audit. The good news is that there are concrete steps clinicians can take to reduce the risk. And he shares that information in this article.

RACEven with the best coders and billers, errors can occur and it’s ultimately the responsibility of the practitioner to ensure that records match.

Knowing how the RAC process works allows clinicians to develop measures and install appropriate software systems to minimize risk factors that lead to an audit.

Medicare RAC auditors examine reimbursement claims after payment has been made, using methods similar to those employed by commercial healthcare insurance carriers.

The practice is known as pay and chase among industry officials. They look for inconsistencies in the billable services and submitted documentation.

RAC auditors utilize methods that comply with the Centers for Medicare and Medicaid Services (CMS) rules and regulations.

Determining the Two types of Audits

There are two types of audits – automatic and complex.

  • An automatic audit seeks easily identifiable errors in payments, but doesn’t require human intervention or medical records to determine a problem exists.
  • A complex audit addresses improper payments through a manual evaluation and a request for extensive supporting documentation. Medical providers have strict and definite timelines in which to request an extension, comply with producing the appropriate records, and make appeals.

The process doesn’t stop there. Practitioners singled out for a RAC will be reported to CMS for potential fraud. If the RAC determines the problem is a potential quality issue, they report the provider to the state’s Quality Improvement Organization.

Initiate Self-Audits in order to Minimize RAC Interventions

Conducting self-audits will help minimize RAC interventions, but the best way clinicians have of avoiding an audit is to ensure their flow sheet, plan of care and billed expenses all match. If they don’t, it’s a problem and the responsibility of the practitioner.

Integrated electronic medical record (EMR) software is a critical element and provides the first line of defense toward that goal of avoiding an audit.

RAC auditorsEach EMR differs slightly, but systems such as the In Touch EMR, and In Touch Biller Pro, have capabilities specifically designed to assist coders and billers.

When data is entered, it prompts and advises the user for information and data to ensure all the components match and support each other.

It’s a crucial feature that offers a greater level of compliance and minimizes the probability of an audit.

Knowing how and why a RAC audit is conducted provides clinicians with the necessary information to help them avoid the experience. Confirming that the flow sheet, plan of treatment and documentation are all in agreement is the first step. The second is implementation of an “intelligent” integrated EMR physical therapy software system.

An audit isn’t desirable, but instead of living in dread practitioners should look upon a RAC audit as an additional way to maintain compliance.