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● RAC Audits How to implement R

ecovery audit contractor (RAC) activity is on the rise. RAC requests for medical records, denials and the dollar value for those denials all increased by 21 to 26 percent during the third quarter of

2012, according to the American Hospital Association’s (AHA) RACTrac survey.1 T e survey also notes that nearly 90 percent of hospitals report experiencing RAC activity, hospital staff s are spending more time responding to RAC requests and 56 percent of hospitals report increased administrative costs. T e survey calculates that more than 600,000 individual medical records were requested through third quarter of 2012. Furthermore, recovery audits are extending way beyond

Medicare’s original RAC program. A plethora of payer revenue recovery programs have been established on the heels of RAC, all trying to take back fraudulent or inappropriate provider reimbursements. One way for healthcare providers to cope is by successfully implementing RAC audit management software. A strong, feature-rich application helps hospitals manage heightened audit requirements while also protecting organiza- tional revenue. But with over 20 companies off ering packages, where do you begin? T is article takes a look at RAC audit management software, its key criteria, implementation considerations and added-value opportunities for healthcare provider organizations.

Four key criteria for evaluating RAC audit management software RAC audit management software is a core technology re-

quirement for handling an ever-increasing quantity of revenue recovery audits. Industry experts estimate that between 30 and 50 percent of hospitals have already implemented some type of RAC package. In fact, the AHA RACTrac survey mentioned above reports that 44 percent of survey participants use some type of RAC software tool. For those hospitals that have not yet installed RAC software, there are four key criteria to consider.

Flexibility to accommodate all audits First, the application should accommodate more than just

RAC audits, as non-RAC audits are growing exponentially. As an example, in 2012, HealthPort customers logged an aver- age of 39,000 non-RAC audits, compared to just 13,000 on

24 March 2013

RAC tracking Evaluating, implementing and getting every dollar out of RAC audit management soſt ware. By Lori Brocato

Lori Brocato is audit product manager, HealthPort. For more on HealthPort: www.

average in 2011. Flexibility to accommodate any type of audit, including internal ones, is a key capability. Furthermore, having the primary federal audits pre-defi ned within the system saves time during implementation and setup. Most audit software providers should off er prebuilt audits and system rules. Within the chosen software system, organizations should

be sure to delineate the diff erent types of reviews and services being reviewed. Types of reviews include automated review, complex review, prepayment review and more. Likewise, the patient service type should be recorded within the system (e.g., inpatient, outpatient, home health, etc.). System fl exibility to accommodate multiple types of audits and services is particu- larly important as organizations centralize audit management and processing across their organizations.

Robustness to support centralization and growth With so many types of audits and recovery contractors,

provider organizations should also consider centralizing the audit management and appeals function. Centralization makes the most of audit staff , reduces costs and minimizes revenue take-backs. By automating the management and appeals process across

all departments, organizations establish departmental ac- countability while enabling easier identifi cation of duplicate audit requests. If a particular record was previously audited by another government entity, then it is no longer eligible for a RAC audit. Audit software packages should easily identify these duplicate or confl icting audit requests. Furthermore, as organizations grow through mergers, ac- quisitions and consolidation, the audit management software should scale to accommodate multiple locations, additional users and new patient service types. T ere are fi ve steps for eff ective centralized audit manage-

ment. It is important that audit management software applica- tions support each of these steps: 1. Establish a centralized audit management department to receive, process and manage all audits across the organization.

2. Educate all departments on what audit request letters look like, what they contain and how to forward them along to the centralized audit department.


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