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● Revenue Cycle Management Data in, audit insight out

Analytics improve RAC experience. By Dawn Crump


he fi rst recovery audit contractor (RAC) pilot programs began in 2008. More than 1 mil- lion medical records have been requested, and hundreds of thousands of appeals have been

conducted. HealthPort alone averages 39,000 RAC medical record requests per month. Furthermore, nearly $2 billion has been recouped by Medicare in complex medical record denials over the past fi ve years, representing 96 percent of all complex audit RAC activity. By all predictions, the number of auditors and the volume of audits will continue to grow, which will further burden health information management (HIM), information technology (IT), compliance and revenue cycle staff . Auditors have developed sophisticated tools and algorithms

to fi nd “suspected” improper payments. Now is the time for hospitals and physician practices to do the same. T e American Hospital Association (AHA) states that 43

percent of hospitals responding to RACTrac questions regard- ing the administrative burden of audits use some type of audit management software. For Cathy Watts, RHIA, administrative director of HIM, Cape Fear Valley Health in Fayetteville, N.C., software for tracking and reporting audit activity is one of the top fi ve requirements for success; it is critically important to ensure the accuracy and timeliness of the data entered – both electronically and manually. Data input should be restricted to only a few, well-educated

staff , as multiple data entry points confuse results and derail data analysis. According to the results of the AHA RACTrac survey (fi rst quarter, 2013), commonly used data fi elds for RAC analytics are audit determination, record requested, original payment, status, audit type, audit outcome, appeal level and key dates. Once analyzed by the audit management team, results should be disseminated to executives, physician advisors, case management, coders, compliance, revenue cycle and fi nance. Every hospital should be able to answer three basic audit questions: • How much money is at risk? • How many audits are held in appeals? • How are audits impacting cash fl ow? Beyond these three questions, a deeper dive into RAC data helps hospitals further control risk. Another multispecialty, multi-location organization uses data analytics within HealthPort’s AudaPro application to

14 September 2013

run reports, create graphs and communicate audit activity to the organization’s CEO and fi nancial leadership. AudaPro is compat- ible with the organization’s EHR systems, release of information (ROI) electronic delivery ap- plication and AHA’s RACTrac survey data entry system. Record requests, RAC correspondence and all appeals are managed electronically through the audit management system and EHR software. T e software provides a consistent way to manage the audit workfl ow and ability to track and trend results for improved outcomes. Denial data analysis helps hospitals understand denial rates

Dawn Crump, M.A., SSBB, CHC, is VP, audit management solutions, HealthPort. For more on HealthPort: www.

per volume of records requested from the RAC and compares reasons for denials to focus coding, education and clinical documentation improvement eff orts. Deeper analysis uncovers how many dollars are at risk within each step of the review/ appeal process (pending, dispute, RAC discussion, rebut- tal, levels 1 through 5, etc.). Armed with this information, organizations are able to demonstrate the value of their audit management eff orts and identify any bottlenecks or workfl ow logjams throughout the appeals process. Appeals data becomes increasingly important as cases

remain stuck within the appeals process. According to the AHA, hospitals appeal only 44 percent of all Medicare claims denied by RACs. However, 72 percent are overturned, total- ing $157.2 million nationwide. T e entire process typically takes 18 months to two years, and interest may accumulate on these dollars. Here are four questions to consider on appeals:

• Do you separate out automated appeals versus complex appeals?

• What is the cost of appeal versus dollars at risk? • Should you use an internal versus external appeal partner? • What is your overturn rate? Finally, data analysis helps hospitals determine if there

are any potential opportunities for Part B rebilling. T e fi nal rule on Part B was released by CMS on Aug. 2, 2014, and becomes eff ective on Oct. 1. T e rule opens the door for hospitals to rebill denied inpatient admissions under Part B payment. However, it is a very narrow opening, due to a one-year time limit from the date of service. T ere may only be a few eligible Part A claims, but RAC data analytics will help hospitals fi nd them.


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