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Medical Documentation and Coding Processes to Avoid Recovery Audits

October 1, 2012

RAC ProcessesThe time to prepare for a RAC audit is not when a healthcare provider facility receives a request for records.  RAC audit preparation should be an ongoing process to ensure the highest level of medical billing and documentation compliance, as well as to ensure maximum legal profitability for a practice.  Too often, physicians and ancillary providers do too little to late.  A proactive compliance program focussed on thorough and accurate documentation, and the accurate translation of medical records into industry-standard medical code is a guarantee that a RAC auditor’s findings will be in the provider’s favor.

The last thing a medical biller wants to see on a Medicare Remittance Advice is the Remark Code N432, which means “Adjustment Based on Recovery Audit.”  This usually means that payment has been reduced or denied because provided documentation did not meet the required standard needed to justify a medical service.

Medical documentationists spend their careers studying the various published regulations that govern Medicare coding and billing.  The Centers for Medicare and Medicaid Billing (CMS) and local A/B Medicare Administrative Contractors regularly update their guidelines regarding which services are covered under which circumstances.  These National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs) are available online.  Billed services must meet the criteria established in these documents.

In addition to opinions available in these NCDs and LCDs, Medicare billing manuals and the National Correct Coding Initiative Manual (NCCI) contains additional benchmarks of documentation and coding standards.  Medical documentation, coding, and billing professionals deal with these shifting issues on a daily basis.  A healthcare provider cannot be expected to be up to speed on every aspect of the billing process and still be able to effectively treat patients.

By employing credentialed and certified medical documentationists, physicians have powerful and experienced allies when they receive a records request for a RAC audit.  In truth, to be most effective, pre-audit processes should be in place before a physician’s billing comes to the attention of a Recovery Audit Contractor.  With constant professional review of documentation before bills are submitted, physicians can be assured that their medical claims can be expected to pass muster when reviewed by a government-contracted auditor.

There are two ways to prepare for a RAC audit: 

1. Always employ sound documentation, coding and billing practices.  This entails having medical records translated into code by professionals through the use of CAC software to match terminology to appropriate codes.   Codes based on documentation are not enough.  NCCI is full of examples in which CMS does not consider code combinations appropriate.  When two HCPCS codes are considered mutually exclusive, they cannot be reported together for reimbursement, regardless of what is documented in the medical record.  A medical documentationist can review the patient’s record and determine if a modifier to one of the codes is appropriate under NCCI standards.

2. Prepare for a RAC audit is to conduct regular pre- and post-payment audits of claims by trained medical documentationists.  Beyond the letters after their names, professional documentationists specialize in different medical fields.  Radiology coders and laboratory coders share a frequent usage of modifiers -26 and -TC to differentiate between the professional and technical components of a provided service.  Coders used to translating surgical services or the services provided in an otorhinolaryngology practice are not used to making this distinction when they code claims.  The right documentation specialist for the right specialty is key to performing private audits that will prevent negative RAC audit findings. 

The process should be two-fold: employing seasoned professionals as claims are being constructed on an informal basis, and employing regularly scheduled pre- and post-payment audits to focus on specific issues that may be of concern to a medical organization before the RAC targets them for future review. 


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