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New Study Shows RAC Audit Activity Increasing

July 3, 2013

RAC audit activity increasingRAC Audit Activity Increase

A recent AHA survey shows increase in RAC activity. According to AHANEWS , there is an increase in RAC audits of hospitals. The primary reason for denied claims was Medical necessity denial. Approximately 2/3 two-thirds of these denials were for care given in the wrong setting rather than due to issues of medically necessity. Over 40% of denials were appealed with a success rate of 72%.

Both the rate of denials and the rate of medical record requests have been increasing; so hospitals are being bombarded with RAC requests. Ninety one percent of the hospitals that participated in AHA’s 2013 1st quarter survey experienced an increase in the number of audits. RAC hospital medical record requests increased 53 percent from the third quarter of 2012, while complex audit denials had over a 40 percent increase, according to the 2013 RACTrac survey.

Short stay medical necessity has been the top reason for complex denials which reached a rate of 75%. The next most frequent category is inpatient coding. Forty four percent of denials were appealed by hospitals and these had a success rate of seventy two percent. Seventy five percent of appeals are still being processed. For about sixty percent of hospitals, RAC requested claims for audit purposes well after the audit period had elapsed. Medicare RAC collected about $1.4 billion in overpayments while returning about $65 million in underpayments in the first quarter of this year.

How to Manage RAC Denials

It is essential for hospitals to understand and manage the appeals process successfully. Reviewers often make mistakes, so appeals have a good chance of success. Here are some suggestions that should facilitate RAC Audit procedures in a hospital environment:

Self-audit – Monitoring your own practice for errors and omissions is essential. RACs are required to post what they’re auditing on their websites. Hospitals should be prepared for extra vigilance on the part of auditors in these areas. While hospitals should strive to keep their error rates under 5 percent, they should be well aware of what their actual error rate is.

M-Scribe Expert RAC Audit Assistance

Because the best offense is a great defense one of M-Scribe’s initial steps in Audit Assistance is to identify areas of vulnerabilities that could cause a coding audit to take place. Correct coding and billing procedures, as well as fully compliant documentation and transcription will further protect your practice. Sadly, the lion’s share of hospitals and physician practices has insufficient internal resources to successfully avoid becoming vulnerable.

M-Scribe’s offers an Audit Program that assigns a personal audit specialist to review every patient record over a six month period. Included in the review are procedure and diagnosis codes, documentation and all other relevant information. The objective of the M-Scribe Expert RAC Audit assistance process is to ensure that your practice is following compliance regulations. Once M-Scribe’s assessment is complete, follow up steps will be determined to reduce future susceptibility to RAC Denials.

Learn more about how M-Scribe Audit Programs will decrease the number of RAC Audits at your facility as well as the number of claims denials. See how you can reduce costs accrued due to RAC Audits and denials and start saving money today.


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