Spartanburg Regional Medical Center: Finding The Silver Lining In A Rac Audit

Up for a RAC ExperienceCreate a RAC response team. In mid- to late
As the first round of audits in the Centers for2006, a dedicated multidisciplinary team met
Medicare & Medicaid Services' Recovery Auditregularly to develop a plan for responding to the
Contractor (RAC) program got under way, weRAC project. We found that it was important to
suspected that we might be included in theassign primary responsibility for the development,
second round of the demonstration program. Sureoversight and coordination of the RAC process to
enough, Spartanburg Regional Healthcare Systema single point person. An RN-RAC coordinator was
(SRHS) was tapped to participate in a RAC audit.designated to fulfill these duties. We also found a
Of course, going through an audit — justtracking system for the RAC process is vital to
by the nature of the beast — can be amanaging the day-to-day process to ensure that
trying experience. And to no one's surprise, ourall data is received, RAC decisions are addressed
RAC audit presented some real challenges. First, inand appeals are processed.
October 2007, we had to respond to auditZero in on key areas. While we were not really
requests for "piles" of records. The RACsure what the RACs were looking for at the
requested 270 charts for complex review.outset, it has become clear that the auditors are
Six months later in April 2008, the RAC identifiedfocused on a few "red flag" areas:
104 overpayments, representing $1.3 million inDischarge disposition codes of Skilled Nursing
revenues. We had only 30 days to submitFacility (SNF) were data mined and compared to
appeals, or the money would be lost. WeMedicare claims processing for a bill from a SNF.
gathered the documentation needed to make ourIn one case, the patient and family did not remain
case and submitted our rebuttals and first-levelin the SNF overnight; therefore no bill was
re-determination to the audit findings.submitted to Medicare by the SNF. In other cases,
It was an arduous process, but we found therethe SNF billed sources other than Medicare for the
was a silver lining. While the RAC could havestay.
delivered a knockout punch, we came through itAuditors were keenly focused on patients
not only standing, but better off for the effort.classified as an inpatient for a short stay rather
How so? By leveraging the technology we alreadythan observation.
have in place, we have been able to meet theDRGs indicating a symptom diagnosis were also
requirements of the RAC audit. A positive bonustargets for review.
from our focus on clinical documentation andKnowing that these are potential areas of
coding is an improvement in our bottom-lineconcern, hospital staff members should ensure
results.that clinical documentation is complete and
Keys to a Successful RAC Auditthorough enough to support the DRGs. Failing to
As one of the RAC demonstration hospitals, wedo so will result in further scrutiny from the RAC.
had to take a reactive approach to the audit.Code for maximum reimbursement. The RAC
However, hospitals following us can be moreprocess has prompted our organization to focus
proactive. The following tips can help hospitalson clinical documentation and coding more than
more successfully navigate through RAC audits.ever before. As a result, we have discovered
Get rid of paper. At Spartanburg, we considerthat we have been "undercoding" many patient
ourselves fortunate because we operate in anencounters. So, while it is important to make sure
electronic environment. Access to patientthat clinical documentation matches the DRG
information via McKesson's Horizon Patientcodes assigned, there is no need for hospitals to
Folder™ online patient records system makes itshy away from seeking the deserved
much easier to secure the information needed toreimbursement.
satisfy the requests of RAC auditors. In addition,RAC Results and Beyond
online access to the patient record makes itBy accessing information in our online systems
easier for case managers to direct care andand focusing on clinical documentation and coding,
assign the appropriate diagnosis-related groupwe have been able to increase Medicare
(DRG) codes on a day-to-day basis.reimbursement "three-fold" in a six-month period.
What's more, having electronic access toIn addition, our automated patient records system
outpatient records online makes it possible forhas made it much easier for Spartanburg to
hospital-based clinicians, such as emergencycomply with the RAC. We have been able to
department physicians, to make the mostsubmit appeals to 97 of the overpayments cited
appropriate care decisions when patients presentby the RAC. So far, 23 of these denials have
for treatment. With access to such information,been overturned in our favor. And, we expect
for example, it is sometimes possible tothat we eventually will be able to recover about
determine the right level of medical necessity and$1.2 million of the $1.3 million that the RAC
admit a patient to the hospital instead of merelycollected from us.
treating the individual on an observational basis.