A Busy Year for the RACs
that raise suspicions of incorrect billing. For example, they may
occur with CPT codes with modi;ers such as 25. Organizations
should ensure they review all semi-automated denials to justify
codes submitted as billed and follow through with documentation to prevent denial. ;ere have been many instances in
which these accounts have to be reviewed case by case, and the
automated denial status is not foolproof.
Another area that has rendered much conversation is DRG
validation versus clinical validation.
Clinical validation, as described in the SOW, “involves a clinical review of the case to see whether or not the patient truly pos-sesses the conditions that were documented. Clinical validation
is beyond the scope of DRG [coding] validation, and the skills of
a certi;ed coder. ;is type of review can only be performed by
a clinician or may be performed by a clinician with approved
coding credentials.” 3
Common coding areas where clinical validation has been
problematic for providers are sepsis, pneumonia, and renal failure. Having a strong interdisciplinary team that includes a coding professional with strong clinical knowledge, documentation
specialist, and physician advisor is critical here. As the extent
of coding or clinical knowledge can be individualized, it is important providers review these types of denials carefully and use
team members or physician advisors to assist in discussion or
appeal of the case.
The discussion period process has
been successful, with 34 percent
of providers reversing denials
during discussion in late 2011.
If a strong documentation improvement specialist is not on
your RAC team, you may want to add one. ;is person can help
better prepare for clinical validation from an audit standpoint
and an ICD- 10 perspective. ;is can include education on speci;city in documentation and consistency of diagnoses within
the medical record to re;ect the true clinical picture of the patient.
Providers must work through solutions to clinical validation,
because it is likely here to stay. Use these types of denials as
teaching opportunities for both the provider and the RAC.
Despite skepticism about the success of the RAC discussion period, many providers across the nation, as well as the American
Hospital Association (AHA), have reported the process has been
very successful. Based on AHA RACTrac 3rd quarter 2011 data,
34 percent of providers reported reversing denials during the
discussion period. 4
As described in the SOW, providers are allowed this time, and
they should use it regularly. (To learn more about the discussion
period, see “RAC Forensics 101, Part 1,” in the February 2011 issue.) Work closely with your case management or utilization
review sta;, physician advisors, and coders to create a process
that makes the discussion period work for your organization.
We are all aware of how time sensitive this process can be and
the amount of follow-up needed to stay on top of current account status; however, using the discussion period e;ectively
can pay o; in the long run.
Based on the AHA RACTrac data, providers appear to continue
to do well on appeals. Providers have overturned approximately
77 percent of claims submitted for formal appeal (see “RAC Forensics 101, Part 2” in the March 2011 issue for additional information on the appeal process).
Financial Reconciliation of RAC Accounts
Financial reconciliation continues to be a problem for providers, as many are determining whether to allow immediate o;set, pay by check, or allow recoupment. As they have had the
opportunity to review the process and the 835 electronic remittance advice detail, providers have found that reconciling the
information back to a speci;c account can be di;cult.
CMS has stated it is aware of the problem and is working toward solutions, such as adding the account number to the PLB
segment to allow providers to easily reconcile the ;nancial detail, along with any interest, back to the speci;c patient.
Part A to Part B Rebilling Demonstration
;e Part A to Part B rebilling demonstration initiative will allow
providers to surrender all appeal rights, excluding discussion,
for the opportunity to resubmit Part A medical necessity (wrong
setting) denials as Part B outpatient (excluding observation payment and self-administered drugs). ;is will allow providers to
be paid at 90 percent for these services.
;is demonstration began with review results letters dated
January 1, 2012. Organizations that have not been noti;ed by
now that they were selected for participation likely will not be
Many providers chose not to participate due to the questions
they had about the denials they may receive, request volumes,
and reconciliation of monies, to name a few.
Organizations that are participating can consider the following processes:
Part A Denial Process
x Review account and perform discussion (follow cases
x If case not overturned by day 30 (or as determined by the
individual organization), pay by check, allow recoup, or
perform immediate o;set
x Inform coding sta; of the need to rebill, using outpatient
coding guidelines as appropriate and coding any proce-
dures as necessary
x Involve team in removal of charges related to observation,
x Review for addition of CPT charge detail as needed for
conversion to outpatient claim