Recording and written materials of AIS's audioconference on November 18, 2008

Strategies to Prevent and Successfully Appeal RAC Payment Denials

CMS formally launched the national version of the Recovery Audit Contractor (RAC) program Oct. 6, when it announced the four companies that won contingency-fee contracts for identifying Medicare payment errors. When the RACs begin their audits, hospitals will face medical-record requests and overpayment determinations by the hundreds. The damages could be staggering, given the fact that during the three-year pilot, the RACs identified more than $1 billion in improper Medicare payments in just a handful of states. But many hospitals and health systems have saved a fortune by successfully appealing unjustified overpayment determinations. Learn what your organization should do to prepare for RAC audits and, most importantly, which strategies have been used with terrific success to reverse unfavorable outcomes and to prevent future risk exposure.

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As contingency-fee contractors, RACs only get paid when they identify payment errors. This compensation incentive has led to fears that RACs will be overzealous in finding billing errors — and some hospitals that have already been involved with RACs now claim that these fears are well-founded. While there have been some adjustments made to the way in which RACs will be compensated and held accountable in the permanent program, expect them to still be diligent in identifying as many payment errors as possible.

• How to prepare for a RAC audit and identify potential risk areas in your organization.
• Which risk areas RACs are expected to target nationwide.
• The details of best-practice strategies you should use to appeal RAC overpayment determinations.
• Updates on the latest changes to laws related to Medicare overpayments.
• How to protect your organization and reduce your risk exposure moving forward through establishing consistent operational processes to ensure ongoing compliance with CMS regulations

 

DIANE CAHALAN is a director in PricewaterhouseCoopers LLP’s (PwC) Health Industries Advisory Practice, where she is responsible for inpatient coding consulting engagements. Prior to joining PwC, Ms. Cahalan held positions as DRG coordinator at two acute-care facilities, assistant director of medical records at a teaching hospital and adjunct instructor in a medical records technology program. She has more than 20 years experience in the health information management field, specializing in coding compliance activities, and has extensive experience with ICD-9-CM coding and DRG payment methodologies. She has worked with hospitals affected by the RAC demonstration project since its inception, having completed RAC readiness assessments and implemented processes and controls at providers to successfully respond to RAC denials. Ms. Cahalan has a B.S. in medical records administration from Ithaca College.

LAWRENCE VERNAGLIA is a partner with Foley & Lardner LLP and a member of the firm's Health Care Industry Team. Mr. Vernaglia represents hospitals, health systems and academic medical centers and a variety of other health care providers. Mr. Vernaglia's practice involves regulatory and transactional matters, including Medicare/Medicaid reimbursement compliance advice and appeals. He is a regular lecturer on hospital issues, physicians, long-term care, and other topics in law and medicine. He is the past chair of the Boston Bar Association's Health Law Section (2006-2008) and has published more than 40 articles and book chapters on various topics in law and medicine. Mr. Vernaglia has been a part-time faculty member in Providence College's Health Policy and Management Program, where he has taught health care law for eight years. He also served as a judge/instructor at the Boston University School of Law for various programs since 1993. Mr. Vernaglia earned his J.D. and his master's in public health from Boston University and his bachelor's degree from New College of Florida. He is admitted to practice law in Massachusetts, New York and New Hampshire.