RAC Updates June 2017

on Monday, 26 June 2017. All News Items | Recovery Auditor

All Systems Go

In October, 2016, CMS finally awarded the new Fee-for-Service (FFS) Recovery Auditor contracts. The new Statements of Work contained the promised remaining enhancements to the RAC program. It has taken a while for the new contractors to educate providers, develop or revise their websites, and get CMS approval for review issues and to begin audits. In May, the last of the new RACs, HMS, the Region 4 RAC, received approval to begin audits. This means all systems are go for the latest round of RAC audits.

Performant, the Recovery Auditor for Region 1, and Cotiviti, Regions 2 and 3 RAC, have added two new issues for all three regions since last month’s article, but neither issue applies directly to hospital services. One is a complex review of Skilled Nursing Facility (SNF) documentation and medical necessity. There is also an automated review of ambulance services during an inpatient hospital stay. As a reminder, “Ambulance services during an Inpatient stay are included in the facility’s PPS payment and are not separately payable under Part B, excluding the date of admission, date of discharge and any leave of absence days. Ambulance providers are expected to seek reimbursement from the inpatient facility.”

HMS, Recovery Auditor for Region 4, now has their new website up and running - https://racinfo.hms.com/home.aspx . On May 18, 2017, an update posted to the website states “HMS Region 4 RAC has received CMS approval to begin audits for the Noridian JE and JF MAC Part A and Part B Jurisdiction.” The HMS approved issues appear to mirror the issues already approved for the other 3 regions. Here is a summary of the HMS issues that affect inpatient or outpatient hospital services. All issues have a posting date of April 13, 2017.

ISSUEProvider TypeReview Type
Inpatient Hospital MS-DRG Coding Validation Inpatient Hospital Complex
Comprehensive Cataract Removal Outpatient Hospital, ASC Complex
Medical Necessity Bariatric Surgery Outpatient Hospital Complex
Medical Necessity Cardiac PET Scans Outpatient, Carrier, Physician Complex
Medical Necessity Sacral Neurostimulation Inpatient Hospital Complex
Cataracts Billed with Unit > 1 or Multiple Claims Outpatient Hospital, CAH, ASC Automated
Inpatient Psych Billed without Source of Admission Equal to "D" Part A Inpatient Automated
Regadenoson (Lexiscan) Billed with Units > 4 Part A OP Automated
Transtuzumab (Herceptin), J9355 - Multi-dose Vial Wastage Billed with JW Modifier Part A OP, Part B Automated
Transtuzumab (Herceptin), J9355 - Multi-dose Vial Wastage Part A OP, Part B Complex
Ibandronate sodium (Boniva), 1 mg - Excessive Frequency Part A OP, Part B Automated
Drugs & Biologicals - Units Exceed the only FDA Approved Dose Part A OP, Part B Automated
Improper Payments for Endomyocardial Biopsies and Right Heart Catheterizations that were Not Distinct Services Outpatient Hospital and Physician Complex

On a related note, at the end of March, the Council for Medicare Integrity (CMI) asked Congress to consider a prepayment Recovery Audit Contractor (RAC) Program. This would allow the RACs to review Medicare claims before they are paid to identify errors. The CMI, a non-profit organization that educates policymakers and other stakeholders about programs that identify and correct improper Medicare payments, believes this would prevent tens of billions in improper payments each year. See the CMI Press Release for more details.

Whether prepayment RAC reviews become a reality remains to be seen, but the post-pay reviews across the nation are definitely a reality. Now that all systems are go, providers need to be on the lookout for RAC document requests.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc. Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system. In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers. You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

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