RAC audits on the rise

Home health agencies are reporting an upswing in audits by Recovery Audit Contractors

Did your home health agency just receive a notice that you were overpaid? Medicare’s recovery audit contractors (RACs) are largely regarded within the home health field as something akin to shakedown thugs who show up to tell providers they’ve charged too much for services rendered and need to cough up the difference or else. And they’re back on the streets. “We’re beginning to see more RAC audits going on,” said Heather Calhoun, Director of Special Projects and Appeals for Home Health Solutions, a nationwide consulting and outsourcing firm serving the home health, hospice and long-term care fields. RAC audits are ongoing and aggressive Medicare collection efforts with the sole purpose of recovering reimbursement from health care providers, Heather said. Recovery auditors review claims where improper payments have been made or a high probability exists that improper payments were made. The recovery auditors coordinate and communicate with the Medicare administrative contractor so the data can be used by the MAC for corrective actions. “As you can imagine, there is incentive for the contractor to find improper payments,” Heather said. “They’re going to be looking pretty hard for any mistakes you may have made.” When the RAC audit finds an error, a Notification of Improvement Payment (NIP) is sent to the agency. The NIP indicates the audit issue being reviewed, the applicable laws, the amount of the overpayment, how it was calculated and the agency’s appeal rights. An agency has 45 days from the date of the NIP to respond to the RAC, and the RAC has 30 days to submit its decision letter. "If the agency does not agree and would like to appeal then it follows the same guidance as a redetermination, reconsideration, ALJ that we are use to with the MAC," Heather said. What RAC audits look at

The Centers for Medicare and Medicaid Services (CMS) determines the specific criteria the RAC audit will review. “In general, the scope of a RAC audit tends to focus on areas highlighted as problem areas which have been identified in studies by the U.S. Department of Health and Human Services (HHS), the HHS Office of the Inspector General and the U.S. Government Accountability Office,” Heather said. “But the scope is completely up to CMS, and can be on any area, really.” Increasing RAC audits? Historically, RAC audits have tended to occur in clusters, Heather said, and there are signs that the number of RAC audits may be on the upswing right now. More agencies are reporting NIPs than in previous months, Heather said. “Currently we’re seeing RAC audits that are looking at the agency’s failure to document the patient’s response to treatment or services provided – and some agencies are even telling us that they are receiving letters because their home health aides did not document the patient’s response to the service provided,” Heather said. “We can argue that because the aides were not providing a skilled service in these instances, there was no need to document the patient’s response as there would be for skilled services and treatments. “But the larger takeaway from these issues the RAC audits are targeting is that is crucial for agencies to look hard at how well they are documenting patient response to what they do in the home. This is telling us that patient response is a big area RAC audits are looking at right now.” RCD states are not immune Agencies in Ohio, Illinois, Texas, Florida and North Carolina, the five states targeted for the Review Choice Demonstration, will not be immune to these types of RAC audits, Heather said. “Remember when we told you agencies choosing to opt out of the Review Choice Demonstration and take a 25 percent reimbursement cut instead were not going to be automatically immune from all audits?” Heather said. “Well, these RAC audits were one of the audits we meant.” Even agencies which have selected a pre-claim review option for RCD and appear to be doing well, with few non-affirmations, could find themselves in the RAC audit hot seat. A provisional affirmation does not guarantee that an agency’s claims will not be reviewed by the recovery audit contractor. What can you do? If your agency has already received a NIP and you need help in responding to it, Home Health Solutions offers the services to help you respond. Reach out to us here to ask for help or give us a call at 888-418-6970. If you want to shore up your documentation as insulation against future RAC audits, some of the products available in The Solutions Shop, the Home Health Solutions online store, can help. Both our RCD Staff Training Workbook and our digital Therapy Documentation Handbook address documentation requirements, including the need to show ongoing medical necessity in routine visit notes.