Recipe for necessity
Providers wary of delays from new RAC reviews
Healthcare experts are questioning whether outside auditors for the Medicare program are prepared to take on a new type of advanced audit that addresses a touchy and personal subject: the necessity of a patient’s care.
The CMS said it approved the first “medical necessity review” audits for the Recovery Audit Contractor program, opening the door to more potential problems for providers, who fear added delays and increased rejection of reimbursements. RAC third-party auditors hired by the CMS get to keep 9% to 12.5% of provider payments they identify as improper.
So far, the agency has approved 18 types of inpatient hospital claims and one type of durable medical equipment claim for medical necessity reviews. As of now, “All of the RAC regions have some medical necessity reviews approved,” a CMS spokeswoman said. Medical necessity reviews are likely to begin in the next couple of weeks.
RACs previously had mainly been conducting automated audits, which are less-complex reviews that involve running data queries and seeking immediate claims denials, and complex reviews, which ask for medical records and the coding of a specific claim.
Medical necessity reviews, though, delve into the appropriateness of medical care given to a patient, meaning they’ll require more resources from hospitals and more digging on behalf of the RAC program auditors. The addition of these reviews adds “another complicated burden to the RAC process,” said Karen Schmidt, director of medical records for 777-bed Henry Ford Hospital in Detroit. Hospital clinicians are already pressed for time, and the medical necessity review adds a clerical component, where “the hospital will have to coordinate with a physician or caregiver in preparing an appeal” in the event the hospital wants to challenge the review, she said.
What concerns the American Hospital Association and others in the industry is that RAC auditors may lack the necessary clinical and Medicare knowledge to determine whether prior hospital care was reasonable, given the experiences of hospitals during the RAC program’s three-year demonstration project.
The AHA “continues to have concerns about RACs being paid on a contingency basis to do medical necessity reviews,” which caused more problems during the demonstration project than any other type of audit, said Don May, the AHA’s vice president of policy.
Schmidt: Hospitalphysician coordination necessary for appeals.