The aim of the Recovery Audit Program is to reduce Medicare improper payments by detecting and correcting improper payments, identifying underpayments and implementing measures to prevent future improper payments. These audits are part of government and payer initiatives to prevent health care overpayment and fraud. Outsourcing medical billing is an effective strategy to ensure preparedness for recovery audits. Professional medical billers are knowledgeable about billing and reimbursement. They will evaluate practices’ risk for billing problems, do an internal audit of their revenue cycle management processes, identify potential issues before a claim is submitted, and take corrective action to ensure compliance.

Contracted by the federal government, Recovery Audit Contractors (RACs) review providers’ medical billing to ensure that only appropriate medical services are being rendered and billed correctly. Hospitals, physician practices, nursing homes, home health agencies, durable medical equipment suppliers and any entity that that submits claims to Medicare can be audited. RACs review claims on a post-payment basis. Review is restricted to claims that were paid within the past three years (www.thedoctors.com). There are different types of review processes:

  • Automated – no medical record required. Automatic audits may occur when CPT codes that are incompatible are billed on the same day. These audits may be also triggered if the provider’s total claims data point to a higher than normal frequency of a particular code
  • Semi-automated – claims review using data and potential manual review of a medical record or other documentation.
  • Complex – medical record needed.

Conducting internal audits regularly is the best way for providers to prepare for a RAC audit. Medical billing companies have experts who can help practices with this. They will review and audit coding accuracy, policies, and procedures to providers maximize coding and billing efficiency. Experienced medical auditors will review billing processes and create a billing compliance plan. They can recognize billing problems and identify circumstances that can lead to common billing errors. They will also track denied claims, look for denial patterns, and decide on remedial actions to be taken to avoid improper payments.

The corporate compliance plan defines the internal audit process, including monitoring, training, investigations, and responses to offenses. The first step in preparing for an audit is to develop the mechanism around the corporate compliance plan. The person identified as the RAC team leader should have a good understanding of the audit process, including current issues, timelines, etc. The RAC team will also have billing and coding experts and representatives from medical records. RAC team meetings should be conducted periodically to assess trends and processes. Internal medical audits can:

  • Detect outliers before payers find them in their claims software
  • Identify coding issues before payers challenge them
  • Promote accurate medical billing and coding of documented procedures
  • Defend against fraudulent claims and billing processes
  • Reveal whether inappropriate coding, insufficient documentation, or lost revenue led to variation from national averages
  • Protect against scrutiny by recovery audit contractors (RACs)
  • Identify opportunities for proper reimbursement

Scrutiny has increased in recent years. According to a recent AAPC article, 23 topics are already under review in 2019 and three more have been recommended. Areas approved for review this year are

  • Medical Necessity Pannulectomy
  • Pneumatic Compression Device
  • E/M Save Day as Admission to a Nursing Facility
  • PET Scans Paid without Tracer Codes
  • Cryosurgery of the Prostate
  • Cardiac Rehabilitation
  • Complex Chest X-ray
  • IV Hydration Administration
  • SNF- Consolidated Billing for Therapies
  • Complex Medical Necessity Vertebroplasty and Kyphoplasty
  • Pulmonary Rehab
  • Therapeutic Shoes and Inserts for Persons with Diabetes
  • ASC Services During a Covered Part a SNF Stay
  • Medical Necessity for Vitamin Assay D Testing
  • Off-the-shelf Knee Orthosis
  • Endovenous Radiofrequency Ablation and Endovenous Laser Treatment for Lower Extremity Varicose Veins
  • Unbundling of CT Scans
  • Unbundling of MRI Procedures
  • Knee Orthosis within the RUL
  • Subsequent Hospital Visit and Discharge Day Management
  • Mohs Micrographic Surgery Units Billed
  • Physician/NPP Coding Validation Complex All Regions
  • HCPCS A4253: Blood Glucose Test or Reagent Strips

Partnering with an experienced medical billing company can ensure efficient internal auditing of claims providers to prepare practices in advance of audits. Expert billers and coders are knowledgeable about all the areas pertaining to billing and reimbursement. Internal audits by a skilled team will help identify improper payments, and address coding errors and documentation inconsistencies.