Medicare RAC audits review post-payment claims to detect and correct improper payments from both Part A and Part B providers. These reviews are allowed a look back period of up to three years from the date the claim was paid.
There are two types of reviews under the RAC audit program. Automated reviews address “clear black and white” issues and require no medical record reviews, and complex reviews require detailed medical record reviews.
What can providers do to continue preparing for the RAC audits?
The RAC audit processes are continuing to evolve, which requires practices to continually monitor information provided by both CMS and HealthDataInsights, Inc. (HDI), the Region D RAC Audit Contractor. Improper payment issues are being reviewed and monitored regularly, which continues to expand the audit program.
Practices should already have in place a dedicated RAC coordinator who will review all audit correspondence from HDI. The coordinator should consistently monitor HDI’s website for new issues covered under the audit that are approved by CMS. In addition, this person should communicate all valuable information to the practice’s physicians and billing personnel.
Secondly, practices should constantly improve their understanding of the RAC auditor’s communication tools. For example, the audit coordinator should quickly recognize HDI’s demand letter and understand the timeframes to which a reply is needed. Ensuring that your current mailing address is on file with HDI is also important. Once the medical record requests’ cap for the complex reviews has been determined, physician groups will need to respond to medical record requests timely. Thus, understanding the auditor’s communication tools will ensure that all correspondence is sent and received accurately.
Understanding where the practice’s improper payments have been found in the past will only create an easier audit under the RAC. Groups can review where improper payments have been found under the RAC demonstration project, the OIG, and the CERT reports through CMS’ website. Additionally, the practice should continue to monitor which specific providers are consistently submitting claims with improper coding and/or incomplete documentation.
The RAC auditors have identified an overpayment…How do you appeal?
When the RAC audit contractor has identified an overpayment, a denial code of “N432” will appear on the remittance advice to alert the provider of the RAC adjustment. There are two steps practices can initiate when the RAC has found an overpayment prior to filing an appeal. First, the discussion period allows the provider to submit additional information to the RAC auditors indicating why recoupment should not be initiated. This process also provides an opportunity for the RAC to explain in further detail their overpayment decision. The communication is handled by the RAC audit contractors, not the Medicare carrier (MAC), and all documentation and communication must be completed no later than the 40th day from the date of the demand letter for automated reviews and from receipt of the review results letter for complex reviews. Secondly, the rebuttal process allows providers the opportunity to supply a statement and supporting documentation indicating why the overpayment action will provide a financial hardship on the practice, if the overpayment is recouped. A rebuttal is not intended to evaluate additional medical documentation nor dispute with the overpayment decision. The rebuttal process must be completed by day 15 from the date of the demand letter.
Providers should appeal when necessary. Practices may initiate an appeal with their Medicare carrier (MAC). Appealing a denied claim can be a multi-step process. The five levels in the Medicare appeals process include the following:
- Redeterminations by a MAC
- Reconsideration by a QIC
- Hearing by an Administrative Law Judge
- Review by the Medicare Appeals Council within the Departmental Appeals Board
- Judicial review in U.S. District Court
First level of appeal: Redetermination
Once the claim denial has been received and reviewed by the MAC, a provider may appeal the denial by requesting a redetermination of the claim within 120 days of the initial decision. A redetermination must be submitted within 30 days to prevent the offset on day 41, however. A minimum monetary threshold is not required to file a re determination. Form CMS-20027 must be filled out and submitted.
Second level of appeal: Reconsideration
If a practice is dissatisfied with the redetermination decision, a reconsideration request may be submitted to the MAC. A QIC will complete the reconsideration by reviewing the medical necessity issues with other physicians and other healthcare professionals. Again, a minimum monetary threshold is not required to file a reconsideration. The reconsideration request must be completed within 180 days of receipt of the redetermination. Form CMS-20033 must be filled out and submitted along with the Medicare Redetermination Notice (MRN).
Third level of appeal: Administrative Law Judge (ALJ) Hearing
If a provider is not satisfied with the result of the reconsideration, a hearing before an ALJ can be requested if the amount in controversy is no less than $140. The request for a hearing must be made within 60 days of receipt of the reconsideration, and the hearing must be completed prior to the ALJ’s ruling. The ruling is usually made within 90 days from the date of the hearing request was submitted.
Fourth level of appeal: Appeals Council Review
If a provider is dissatisfied with the ALJ’s ruling, a request for review by the Appeals Council can be made at that time. There is no minimum monetary threshold that must be met for an Appeals Council’s review. The request for review must be made within 60 days of receipt of the ALJ’s decision, and it must state the specific issues that are being disputed. The same process is followed for the Appeals Council Review as the ALJ’s review. Typically, a decision is determined within 90 days from the date of the request for review.
Fifth level of appeal: Judicial Review in U.S. District Court
A provider may request a judicial review in the U.S. District Court, if more than $1,400 is still in controversy following the Appeals Council’s review. A request for review must be made within 60 days following the Appeals Council’s decision. The council’s decision will contain specific information on how to file a request for a judicial review.
Additional information on the Medicare RAC audits can be found on Health Data Insights’ website.