RAC Preparation: What Hospitals Can Do To Prepare For Recovery Audit Contractors

  • Digital Marketing - Medical Marketing
  • June 10, 2021

Don't be caught off guard with a hospital recovery audit. Learn the best practices to prevent mistakes and manage a future RAC visit.

Recovery Audit Priorities

Medicare’s recovery audit contractor (RAC) program affects hospitals and medical facilities nationwide. Healthcare administrators are faced with the critical task of preparing for recovery audits. To manage recovery audits, administrators must take steps to avoid Medicare overpayments and prevent inappropriate claim submissions.

Viralmd connect RAC Preparation: What Hospitals Can Do To Prepare For Recovery Audit Contractors

What is a recovery audit?

The RAC program was created to fight fraud and waste in the Medicare program. RAC auditors review all claims on a post-payment basis made by hospitals and healthcare facilities that accept Medicare payments. RAC auditors use software to find obvious mistakes, such as overpayments or erroneous claims.

Get to know your RAC auditor

The government contracts RAC auditors. The RAC program has auditors assigned to 5 regions of the US. Identify who the RAC auditor is for the region of the hospital and never ignore a letter or communication from these organizations. Timely communication is critical to a RAC audit.

Be aware of what RAC auditors are looking for

RAC auditors use proprietary software to analyze claims based on a medical facility’s history and payments. Some items RACs often look for include:
• Clear billing errors
• Medically unnecessary treatment
• Medical treatment that is unsupported by records
• Claims with a secondary diagnosis assigned as a complication
• Excessive units billed

Understand your vulnerabilities with a self-audit

To assess the billing issues within a hospital, perform an internal audit of billing practices. Assign a knowledgeable staff member to review the processes and develop a compliance plan. Identify billing problems, track denied claims, and look for patterns to determine corrective actions to take.

Look for billing errors

RAC auditors are looking for billing errors and incorrect payments to Medicare. During an internal review, review circumstances that often lead to common billing errors such as:
• Lack of time
• Misinterpretation of rules
• Disregarding federal recommendations
• Untrained staff

Create a monitoring plan

An online monitoring plan is essential to staying on top of any changes to audits. Regularly check the RAC and Centers for Medicare and Medicaid (CMS) websites for new issues to be audited. Review the office of the inspector general (OIG) annual work plan to identify audit areas. Check RAC progress on regional RAC online postings.

Be prepared

To ensure a RAC audit goes smoothly, all medical facilities should stay on top of billing procedures and submitted claims. Also, ensure records are in an easy-to-retrieve format, and paperwork is organized. Don’t be surprised if a recovery audit happens, be prepared.

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