The Role of the Recovery Audit Contractor

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Audra James
8 years ago
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1 The Role of the Recovery Audit Contractor Presented by: Franco Signor LLC Brought to you by: Alliance Collection Services, Inc Manatee Avenue West, Suite N, Bradenton FL / /

2 Overview Congress authorized a three year demonstration project to review, audit, and recover questionable Medicare payments made to health care providers starting in Private contractors were used to audit Providers Medicare billing and the contractor was paid a percentage of the potential recoveries identified because of improper billing methods. The program was limited to a few jurisdictions; but the results were positive - Centers for Medicare & Medicaid Services (CMS) identified almost $1B in overpayments and collected about $693.6M when the program ended in Congress encouraged by the recovery results added Recovery Audit Contractor (RAC) provisions to the 2006 Deficit Reduction Act. Section 302 made permanent and required nationwide implementation of the RAC program by It also authorized that RAC compensation continue to be based on a contingency fee arrangement which CMS has established between %. CMS divided the Country into four regions and each region was awarded one contract by October, The applicable RAC and Region is identified in Chart 1 (below) and each RAC is charged to identify and recover improper Medicare payments to Providers under patients fee-for-service (FFS) Medicare Plans in their applicable region. Region A, awarded to Diversified Collection Services, Inc. of Livermore, CA ; Region B, awarded to CGI Technologies and Solutions, Inc. of Fairfax, VA ; Region C, awarded to Connolly Consulting Associates, Inc. of Wilton, Conn; and Region D, awarded to HealthDataInsights, Inc., of Las Vegas, NV

3 RAC and Medicare Secondary Payer The RAC audits Provider claims on a post payment basis made for hospital inpatient, outpatient, nursing, physician, ambulance, and lab services using proprietary software programs designed to indentify errors such as duplicate pays and mistakes in the coding. All Providers that bill Medicare are subject to a potential RAC audit. RACs have not audited Plans that are responsible to make payments for medical items and services under Medicare Secondary Payer provisions. CMS has not yet required RACs to undertake that responsibility. [1] It appears CMS believes a specialized auditor would be necessary for these situations and announced a contract award for a MSP RAC on June 20, However, the identity of the MSP RAC has been withheld. [2] The MSP RAC would include the identification and development of Non-GHP recovery cases where ongoing responsibility for medical care exists, and all associated recovery activities which include, but are not limited to: Identifying and developing debts; Responding to incoming inquires; Reviewing and responding to demand defense and rebuttals; Providing litigation and negotiation support; Performing all related Debt Collection Improvement Act of 1996 (DCIA) activities; Complying with all required financial activities The MSP RAC would not be limited to FFS Medicare programs (Part A and Part B). The Affordable Care Act mandated use of RACs for private insurance contracted with Medicare to supply Part C (Medicare Advantage) and Part D (Drug Coverage) as well. Consequently, Plan payments for all coverage related to Medicare would be included. Further, CMS recognizing the complexity of these MSP RAC audits over Plans, has established a higher contingency fee of 29.33%, when compared to RAC Provider audits. Further, CMS recognizing the complexity of these MSP RAC audits over Plans, has established a higher contingency fee of 29.33%, when compared to RAC Provider audits. [1] See CMS Business Programs Operations Contractor SOW Communicating with RACs [2] 6 Month Extension for MSPRC JOFC dated September 12, 2012

4 Prepared for MSP RAC? Every Responsible Reporting Entity has already agreed to a CMS audit when it executed the Safeguarding & Limiting Access to Exchange Data agreement with CMS during the registration process for Mandatory Insurer Reporting. The terms of this document allow CMS to have access to the data of the RRE to perform their official duties. This access would be critical for a RAC to request claims data to compare it to Section 111 Mandatory Insurance Reporting data previously reported. Policies, procedures and claim workflows must be in place to manage all aspects of Medicare Secondary Payer compliance 1) Reimbursement to Medicare; 2) Reporting to Medicare; and 3) Protecting (Considering) Medicare s interest. Stale claim practices don t work well to meet the RRE s responsibility to identify any Medicare or potential Medicare beneficiary that would trigger MSP compliance requirements. Further, leaving the Medicare beneficiary in charge of completing what is owed to Medicare is not financially advantageous to the Plan. Comprehensive approaches that close Medicare s record will help insulates the Plan from MSP RAC audits and mitigate financial exposure. Franco Signor provides security to the RRE in a number of ways. We are recognized national experts that can address the complex topic of MSP in a way that is easy to understand. Our experience in risk management, litigation and legislative reform efforts in D.C. gives us the perspective to offer recommendations and solutions tailored to the RRE to achieve maximum MSP compliance. Whether it be managing the Ongoing Responsibility for Medical reporting, and making certain it can be timely terminated or deciding whether it is appropriate to use a Medicare Set Aside, we offer information and services that implement money saving programs for the organizations we work for. Appeal Process from RAC Determinations MSP RACs will soon be a reality. There does not appear to be a look back time limit and lucrative contingency fees will drive the private contractor to dig hard for recoveries. MSP RAC audits are subject to appeal and our legal staff can assist in the several levels that are available. Missing time-frames are easy, so managing this process is equally important. Call us today to discuss implementation of our MSP compliance services.

5 Contact Us For more information about RAC or any of our areas of service, please contact us at:

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