From the July 2015 issue of HealthCare Business News magazine
Earlier this year, CMS announced a limited return of the controversial recovery audit contractor program and also announced several new contracts with claims auditors.
In 2010, CMS expanded the RAC program from the three states where it was piloted. RACs collected $75 million that first year, a figure that rose to $141 million in 2011 and has exceeded $2 billion in each subsequent year. Those numbers have obviously led hospitals to complain that the growing financial and administrative burdens from auditors seeking medical records to deny payments for services already delivered is causing them hardships and siphoning organizational resources that should be devoted to patient care.
According to the American Hospital Association, two-thirds of the medical records reviewed by RAC auditors contain no errors, and hospital staffs say that auditors are second-guessing physicians’ medical judgments, and hospital coding experts and consultants suggest that the auditors are not interpreting standards clearly and that they are too quick to punish hospitals that don’t return documentation or appeals on time.
In regard to the audits, hospitals must respond to information requests efficiently and track the paperwork to ensure claims are verified. The process can be expedited when using electronic submission of medical documentation (esMD) compared to traditional paper-based processes.
When responding to the audit requests, electronic attachments solutions also can reduce the time it takes payors to process claims. The solutions help improve security of the records being exchanged and can eliminate the need for physical files to be shipped to support claims adjudication or audits.
From a claims perspective, electronic data exchange automates and streamlines adjudication, helping hospitals save money each year related to the identifying, processing, storing and tracking of attachments, as well as decreasing paper volume and increasing paid claims volumes. In most cases, electronic attachment and data exchange solutions are compatible with existing practice management and electronic health record systems, and they enable providers with the ability to create a secure electronic envelope containing all requested documents needed for medical record reviews.
When responding to RAC audit requests, one of the biggest issues is doing so in a timely manner. By the time a request is received, as many as 10 days, of the 45 available, have likely passed. Until recently, the process had been largely driven by the manual administration of tasks and collecting and compiling physical records. Most hospitals still take a great deal of time to print, sort, package and mail documents to auditors to support original claims because they are not using solutions to avoid this practice. Additionally, since one patient record can physically fill a box or more, hospitals are left paying for the lion’s share of all materials, labor and shipping involved, which can be an enormous annual cost. This is the primary reason for esMD, and a problem solved by electronic attachment solutions.
