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The Keys to a Successful Audit Appeals Program Larry Hegland, MD, MMM System Medical Director for Recovery Audit and Appeal Services Chief Medical Officer:

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Presentation on theme: "The Keys to a Successful Audit Appeals Program Larry Hegland, MD, MMM System Medical Director for Recovery Audit and Appeal Services Chief Medical Officer:"— Presentation transcript:

1 The Keys to a Successful Audit Appeals Program Larry Hegland, MD, MMM System Medical Director for Recovery Audit and Appeal Services Chief Medical Officer: Ministry Saint Clares Hospital, Ministry Good Samaritan Health Center and The Diagnostic and Treatment Center

2 Insert large graphics on this slide.

3 RAC Structure Centralized RAC team serving Ministry Health Care System with dedicated staff –Medical director (0.5) –Administrative director (0.5) –Audit and appeal nurses (4) –Database coordinators (4) –Local site liaisons Administrative Health information management RAC Steering Committee RAC tracking software Document management system

4 Ministry RAC Summary Greater than $50 Million at risk 5156 complex reviews >600,000 pages of documentation submitted 80% no findings rate –15.5% overpayment –4.5% underpayment Appeal rate: 75% –86% of closed appeals have been won What about the money? –$0 Recouped for failure to meet a deadline or properly follow the rules –Recoupment <3% overall of at risk dollars –Underpayments and appeals >3% overall

5 Rationale For Our Structure

6 Federal Auditors US Department of Health & Human Services CMS Centers for Medicare & Medicaid Services OIG Office of Inspector General MedicaidMedicare MIC Medicaid Integrity Contractors CHIP Childrens Health Insurance Program RAC Recovery Audit Contractors (Post-payment, Automated & Complex) MAC Medicare Administrative Contractor CERT Comprehensive Error Rate Testing ZPIC Zone Program Integrity Contractors Prepayment Probes From the FI (Fiscal Intermediaries) 2 PERM Payment Error Rate Measurement RAC Recovery Audit Contractors RAC Recovery Audit Contractors (Pre-payment & Semi - Automated)


8 Constantly Shifting RAC Landscape 2012 –Increased record request limits –Part A/B and RAC Prepayment demonstration projects –Everyone wants in on the RAC-style action –Administrative Law Judges and Part B 2013 –New CMS Ruling and Proposed Regulation for Part B rebilling Self denial of Part A with Part B rebilling New billing rules –New record request limits and audit rules –Medicaid RAC –Unofficial 2013 Statement of Work changes –Predictive analytics/OIG validation audits

9 Keys to Success

10 It Starts With Dedicated Resources Optimum results require staff who: –are trained to respond to recovery audits –have time to keep up with the constant flow of program changes –can keep track of the little details to ensure that auditor and fiscal intermediary errors are caught –can do follow-up education to help prevent future billing errors Poor results achieved when staff must squeeze audit response work into an already over burdened workload without training or ongoing education For systems, a critical piece of the dedicated resources approach is to centralize RAC operations –Experience helps drive improved performance

11 Advantages of Centralization Improved consistency, coordination and quality of RAC efforts across system Allows for a more professional staff using processes that are easier to manage More efficient communication with RAC auditor and fiscal intermediary (including an audit trail) as well as internal stakeholders and external consultants –Focus on respectful relations with no demonizing of the RAC program More efficient and effective management of appeals process Can react more quickly to new audit types, rule changes, auditor errors and other problems

12 Advantages of Centralization Improved capabilities to monitor auditor activities Allows for more extensive report production Easier to capture opportunities for improvement and helps drive system process improvement efforts to reduce future audit risk –Coding –Development of a physician advisor program –Standardization of case management use of criteria Improved justification of technology use and costs (RAC tracking software and document management system) Reduced overall administrative cost to system (?)

13 Focus on Process Hire right –Talent and professional diversity – nurses, coders, administrative backgrounds –Skill diversity – writing, database management Dedicated physician support/leadership –Appeals, ALJs, education, management –Can tie coding, documentation improvement, case management and utilization review together Positive, high performance culture –A team effort including internal experts –No negative energy/do not demonize RAC

14 Focus on Process We are extremely methodical with a process in place for every aspect of the audit process from first receipt to when we finally close an account –Meticulous account tracking with our RAC tracking software –We prepare a case summary for each denial Includes RAC argument, key components of the patients chart (from document management system), the opinion of the nurse reviewing the case and any others involved in the review, relevant source material such as Coding Clinics and clinical literature Developed as part of the decision process to appeal and updated as the appeal progresses –All appeal letters prepared as if going to the Administrative Law Judge and include clinical and legal arguments

15 Opportunity for Value Creation Direct feedback to coders and providers Documentation improvement education –Excisional debridement, sepsis and etc. Coding newsletter related to RAC issues RAC Relief listserv Order set development for CPOE system Meetings with case management, health information management and compliance Education for boards, management teams and medical staff –Intranet site with dashboard –Detailed audit summaries provided


17 A Bigger Role for Physicians Physician support role (physician advisors) –Clinical knowledge and complex medical judgment –Understanding how documentation translates into coding –Can develop a high level of experience managing appeals –Reduce the need to involve individual physicians/timeliness –More reliable support to the ALJ hearing process Physician leadership role –Can more effectively turn audit lessons into physician and staff education –Integrate coding, documentation improvement, case management and CPOE –Turn audit lessons into clinical/documentation process improvement to improve patient care and prevent future audit denials

18 Questions? For additional information or to be added to the RAC Relief Listserv, please direct requests to: or or

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