RAC Rules and Assessing Risk

In this episode, we cover how to choose your RAC appeals wisely, understanding what happens when you don't appeal, and how to create a long-term defense strategy against RAC audits.

Transcript of the Podcast:
Hello and welcome to the ClaimTrust RAC Insight podcast, brought to you by ClaimTrust, the leader in software tools and consulting services that help hospitals get paid for all of the work they do.

This podcast is part one of our three part series on “Top Tips for RAC Success”. It covers our top, highly valuable but sometimes overlooked tips for helping your organization successfully take on the RAC challenge with the most efficient use of your resources.

The RAC Insight Top Tips were created by Karen Bowden, President of Consulting for ClaimTrust and a thirty year veteran in the areas of hospital administration and revenue cycle. Her team led one of the nation’s most successful RAC appeal efforts during the RAC demo phase, recouping more than $6.8 million for ClaimTrust clients and achieving an 84% success rate on RAC appeals.

This content along with other useful tools and resources is available online at the ClaimTrust RAC Insight Center at: www.claimtrust.com/RAC.

Assessing your RAC Risk.

You need to carefully assess whether or not to appeal a RAC denial. Once you start down that path you are putting more at risk than just your time and effort.

If you lose your appeal, you’ll pay interest on the full amount of the claim, which is around 12% from the date of the denial. Also, be aware that new issues within the same claim can be brought in during the appeal process that can increase the amount being taken back. So, for example, you might appeal a ruling that says a procedure should have been provided on an outpatient basis, and the Fiscal Intermediary or FI can come back and say that now they see there is no signed consent form so even the outpatient-level payment is forfeited.

So be sure to carefully assess two things:

What is the likelihood you will win the appeal?

You should base that on the strength of your case -- as well as any data you have on the past success of these kinds of appeals -- such as past performance on similar cases -- and the track record of the assigned judge.

What is the value to you of winning the appeal?

This means the dollar value of this and other comparable claims, but it also means looking at the impact of losing these kinds of appeals will have on your business in the long run. Ask yourself: is this a fight we need to win to stay in business?

Understanding What You Are Not Appealing

We will talk a lot in this series about how to win RAC appeals, but I want to make the point that what you do not appeal is actually more important to your organization and its financial performance than what you do appeal. The RAC-audited claims you do not appeal represent areas of care where your organization may need to change the way it has traditionally operated, and that can be a very significant shift depending on the organization.

It is critical that you look carefully at these areas of care and analyze the implications for your organization. Ask yourself:

• Do we need to change the way we provide certain kinds care?
• Do we need to stop providing certain kinds of care altogether?
• Do we need to do research or petition specialty boards to help us develop more clinical support before we start to appeal in these areas?

These questions may ultimately need to be worked at the highest levels of your organization. So don’t be afraid to escalate these issues when appropriate.

Defense Strategies: The RAC Rule Book.

When it comes to RAC, one of the most powerful weapons you can have in your arsenal is a solid rulebook that documents your organization’s clinical foundation for level of care decisions.

To create your level of care rulebook, you’ll need strong support from your clinicians to research and document standards of care, evidence-based guidelines and community practices. Once it is built it will serve not only as your play book for RAC appeals, but also as an indispensible internal tool for negotiating tensions between administrative and clinical leadership around standards of care.

Focus first on areas of care where there is the greatest risk of RAC attention and the least clinical consensus. Things like high-cost, one-day stays and certain chemo meds for instance promise to be among the most-audited. In a forthcoming podcast we will go into more depth on the areas most likely to receive attention from the RACs.