Code Correctly to Avoid RAC Audits at Your Practice

On December 17, 2012 CMS published “Medicare Fee-For-Service Recovery Audit Myths.”  Try as I might, more eloquent words cannot better describe my thoughts, than the two-word colloquium preferred by my 13-year-old: “Defensive much?”

The “myths” sought to be debunked are (in no particular order):

1. RACs deny every claim that they review.

2. Every RAC denial is overturned on appeal

3. RACs have non-clinicians conduct review of medical records

4. RACs create their own policies and are not bound by CMS regulations

5. RACs can review as many claims as they want from a provider

6. RACs don’t have physicians on staff

7. RACs do not tell anyone what they are reviewing

8. RACs outsource all the medical review to staff in India and the Philippines.

Twenty-five years of trial experience have taught me many lessons about the art of persuasion. Chief among these is a simple rule: “Hostile” audiences will usually disregard the “negation” of any declarative statement. (“We are [not] out to get you,” will generally only serve to validate an unreceptive audience’s suspicion.)  I could only ponder what might motivate CMS to produce this “RAC Apologist’s Manifesto.” Unlike John Adams’ explanation for his defense of the British soldiers accused of the Boston Massacre (“somebody had to do it,”) I can’t begin to imagine what CMS hoped to accomplish. 

CMS’ argument, (RAC auditors aren’t incompetent buffoons,) not only begs to mind the obverse inference, acceptance of the premise ignores Office of the Inspector General's (OIG's) Regional Inspector General Ann Maxwell’s congressional testimony six months prior which directly criticized Medicaid Auditors misidentification in all but 25 of 113,378 files reviewed (auditors were wrong in 113,353 out of 113,378 cases)-because the auditors don’t know what they are doing.

The years have also taught me an additional lesson: It is a good idea to spend less time marveling how clumsily an overwhelming enemy wields its sword, when time could be better spent “getting out of the way of the strike’s thrust.”  

So I called my friend, Mary Pat Whaley, a coding expert with Manage My Practice, LLC, based in Durham, N.C., who agreed to share some of her insights.

MM: What can physicians do to minimize the chances of an unfavorable audit?

MW: There are a number of things physicians can do immediately to reduce risk of adverse audits:

First:Clear up the confusion over midlevel providers (MLPs)

Most practices use nurse practitioners or physician assistants to provide care to patients.
Few are sure, however, of the rules surrounding billing for MLPs. There’s a good reason for this; most payers, including Medicare, have individual guidelines for reimbursing MLPs.

Second:At least annually, internally audit your coding/billing department,
your billing service or third-party vendor.

Maybe you’ve had turnover in your coding or billing department, or maybe you wonder if your billing service is doing everything exactly right. If you have coders (in-house or third-party) assigning/abstracting codes from your medical records, they should be audited annually to make sure you are protected. Top-notch coders and billers will welcome an opportunity to have their work audited, and if your coders, billers, billing service, or third-party vendors are defensive about an audit, it should make you wonder why. The good news is that one of the best risk management strategies you can have is a solid coding and billing compliance plan, and an important part of the plan is the annual audit. You will find it difficult to protect yourself against compliance issues if you do not perform annual monitoring and auditing as required by the OIG.

Third: Do not assume either newly hired physicians, or seasoned veterans understand and are properly trained as to CMS’ current expectations.

Many physicians come out of residency with little or no coding or documentation experience. Often, veteran physicians with a great deal of practical experience are not current on CMS’ ever-expanding expectations. New physicians and all new hires, regardless of practical experience, should have initial education on coding and documentation and should be audited when they have been seeing patients for four to six weeks.

Fourth: Proper training and regular outside auditing is an excellent defense against the dual hazards of over- and undercoding.

I find that many of my clients are so fearful of the consequences of “overcoding,” they needlessly sell themselves short. The truth is, “overcoding” and “undercoding”  are like navigating between “Scylla and Charybdis.” Overcoding certainly carries the danger of a devastating audit, but conversely, your practice cannot survive if you are not charging appropriately for what you do. This is where an outside coding consultant can help.

…While no amount of diligence or experience can guarantee a clean bill of health, it is important to realize the RAC audit program is so new, many RAC auditors are learning as they go. An experienced independent coding consultant with years of experience may be able to explain with greater certainty and conviction exactly what CMS manuals require.