How to Avoid a RAC Audit?

by | Published on Feb 27, 2015 | Medical Billing

RCA Audit
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Recovery Audit Contractors (RAC) audits, as physicians know, are part of the government’s program to reduce fraud, waste, and errors in medical billing practices, especially Medicare and Medicaid. Improper payments include incorrect payment amounts, miscoding, non-covered services including those that are not reasonable and necessary, and duplicate services. Though RAC audits came under scrutiny recently and were put on hold, the government announced plans to restart them in August 2014. Physician practices need to be ready for complex and automated reviews on claims related to spinal fusions, outpatient therapy services, durable medical equipment, prosthetics, orthotics and supplies, and cosmetic procedures. These audits can have a negative impact on their bottom line. Here are some tips to minimize the exposure to an RAC audit.

  • Ensure Accurate Medical Coding – A practice is a target for an RAC audit if a medical service is coded incorrectly and that service is reimbursed by Medicare or Medicaid. Monitoring coding activities on a regular basis can eliminate auditing as well as safeguard revenue.
  • Avoid Copy-pasting – The documentation regarding patient details and illness information must be patient specific, and should not be copy-pasted from the previous visit if it has no relevance to the problem. This copy-paste could result in wrong information that is no longer relevant, confusing and can result in coding errors. Mistakes in documentation can violate HIPPA rules and expose the physician to risk of fraud and malpractice charges.
  • Conduct Internal Audits – Conduct an internal audit of the coding and billing department or billing service vendor at least once annually. Coding mistakes can happen due to inadequately trained staff. Make sure that the staffs are properly trained. Overcoding can pose a threat of an audit. With a professional medical coding company, physicians can ensure they this does not happen and that they are charging appropriately for their services, which is crucial for the survival of the practice.
  • Compare E/M codes averages to a BenchmarkEvaluation and Management (E/M) codes are well-known targets for external audits. Physicians who over-code evaluation and management services (E&M) relative to their peers are more prone to risk of audit. The key to compare E/M codes averages to a national benchmark. If the result is different from that of their peers, physicians stand a greater risk of being exposed to an audit.
  • Never Over-rely on Automated E&M Coding Feature of EHRs – EHRs can automatically assign E&M codes, but they are particularly weak when it comes to medical decision making. The hidden danger is that EHRs automatically guide the physicians to create records that document high levels of care which results in an increase in the percentage of claims with level-4 and level-5 codes. These higher level codes are a prime RAC target. So it is better not to rely completely on the EHR’s code-selection engine to assign codes for E&M services.
  • Medical Necessity Documentation – When ever a specific test or procedure is ordered, the medical necessity behind this order must also be documented. The Office of the Inspector General (OIG) feels that sleep studies, MRIs, and outpatient physical therapy services are over-utilized, so ensure comprehensive documentation for these.

An RAC audit can mean a heavy financial burden on providers as it results in administrative expenses for coordinating requests and legal processes. One survey found that nearly one out of every three hospitals spends more than $200,000 annually on RAC-related costs.

Choosing to partner with a professional medical billing and coding company is one of the best ways to minimize the risk of RAC audits. With a team of professional billing and coding staff and stringent quality control measures, these companies help physicians ensure accurate clinical documentation and claim submission processes. They also perform mock audits to identify issues such as overcoding and undercoding which can attract a RAC audit. The services offered by their certified professional coders results in cleaner claims, greater efficiency and a healthy bottom line.

Meghann Drella

Meghann Drella possesses a profound understanding of ICD-10-CM and CPT requirements and procedures, actively participating in continuing education to stay abreast of any industry changes.

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