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Use Appropriate Modifiers to Avoid RAC Audits for Anesthesia

October 14, 2013

rac audits for anesthesia resized 600Recovery audit contractor (RAC) audits can be more frustrating for anesthesiologists than some other providers. These challenges are inherent in anesthesiology function complexities. According to The Health Law Partners anesthesia practices should prepare for even more RAC audits for anesthesia in the future.

Understanding the RAC audits for anesthesia practices helps providers perform better. The major components of all RAC audits apply to anesthesiologists. The Centers for Medicare and Medicaid Services (CMS) recovery audits all contain the same focus (recovering overpayments) and identical components.

The RAC Process

  • Review all claims for up to three years prior to audit date.
  • CMS pre-approved issues, often all-encompassing, are the focus or target.
  • Identify possible overpayments using software algorithms.
  • Use an automated or complex audit review.
  • When identifying potential overpayments, RAC issues demand letters, offering providers the opportunity to discuss potential violations.
  • Providers must send overpayment amounts to CMS, if they do not or lose an appeal.

Anesthesia Regulatory Audit Requirements

Anesthesiologists must fulfill their regulatory obligations to be confident in the face of RAC audits. They should have evidence of the fulfilling the following responsibilities.

  • Perform pre-anesthetic exams and evaluations.
  • Creates a formal anesthesia plan.
  • The physician participants in important procedures of the anesthesia plan.
  • The anesthesiologist ensures that all procedures not performed by him or her were completed by another qualified person.
  • Provides post-anesthesia care as prescribed by the plan.

Download: RAC Audit Checklist – Simple Action Plan for RAC Audit Compliance

When facing RAC audits for anesthesia, physicians and practices should prepare all documentation necessary to substantiate and prove they’ve fulfilled these requirements. This “physician insurance” should satisfy RAC auditors as they review claims and service documentation.

Use Accurate Codes and Code Modifiers

Experienced physicians are well aware of the benefits and downsides of using or not using accurate diagnostic and procedure codes when billing for reimbursement. However, the criticality of using accurate codes cannot be overemphasized when facing a RAC audit.

Equally important to avoiding RAC audit problems is using the proper anesthesia modifiers when submitting claims. Anesthesiologist billing personnel not using appropriate modifiers has generated numerous Medicare overpayments and serious RAC audit problems for anesthesiologists.

Consulting with patients and pre-procedure visits may or may not qualify as covered procedures. Many times they do not. Yet, anesthesiologists bill for these services and suffer the unpleasant consequences when RAC auditors deem them unbillable.

Using appropriate modifiers, such as “AA,” designating covered anesthesia services personally performed by the anesthesiologist, and “AD,” identifying supervision by qualified anesthesia professionals of procedures performed by others, typically diffuse concerns by RAC auditors.

Combined with appropriate CRNA and MAC codes identifying other providers and treatment, using proper procedure codes will help you perform better when facing RAC audits for anesthesia. You’ll avoid a common problem caused by anesthesiologist billing staff using codes that pre-procedure activities not qualified by Medicare or Medicaid for reimbursement.

Don’t allow RAC auditors to assume the validity–or lack thereof– of your pre-procedure activities. Use descriptive code modifiers to more appropriately identify the services you performed to avoid auditor misunderstanding or potential violations per CMS rules.

Coding your billings correctly, using the appropriate modifiers, generates more that great pride in your practice and your staff or third-party billing firm, it can save you thousands of dollars in RAC audits for anesthesia repayments and penalties.


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