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RAC Audits: Tips from a Provider

Long-term care providers who maintain good clinical records will be the ones most likely to succeed under the federal government’s effort to combat fraud and abuse in the Medicare program - called the Recovery Audit Contract (RAC) program - according to Golden Living’s senior vice-president and chief legal officer David Beck.

Beck says that Golden Living benefited from being involved in the RAC demonstration program in California a few years ago: “The bulk of our experience during the demonstration program was with therapy claims, and from facilities that we no longer owned or operated. It was very frustrating, because people at those facilities didn’t let us know about the claim, and if you don’t know about it, you can’t very well appeal an inappropriate initial determination by the RAC contractor.”

Golden Living’s initial appeal strategy was to argue that the RAC contractor didn’t have “good cause” necessary to open a claim. “Just because you want to, isn’t necessarily good cause,” Beck explains. But, beginning with the Medicare Appeals Council decision in Critical Care of North Jacksonville v. First Coast Service Options, Inc., Order of Medicare Appeals Council Remanding Case to ALJ (Dept. Health and Human Services Departmental Appeals Board, Feb. 29, 2008), the federal government managed to short-circuit that strategy: “The court found that ‘good cause’ was a contractor requirement and providers couldn’t use that argument to get cases dismissed.”

The company’s appeals strategy has developed into one where “we review the allegation, and we decide quickly whether we can support the service we filed the claim for; if we can, then we appeal and, if not, we don’t. It’s not rocket science,” Beck says.

Beck suggests that providers who get to the ALJ stage of the proceedings should argue their case from the beneficiary’s perspective: “Our argument has been that this was a service the beneficiary needed. We don’t make that argument unless we have it documented in the clinical record. With the right documentation, you’ve got a good chance to win.”

It’s likely that the impact of the RAC program will be “pretty good recoveries” for the government, Beck believes: “The program will do what the feds want it to do.” He believes that the key to the whole process for providers is to make sure facilities are maintaining good clinical records and that each facility “is aware if they get a letter from the RAC to forward it to the appropriate person for consideration because time is everything with this process.” At Golden Living, that person is in the company’s Medicare review unit.

“The RAC contractors really amount to ‘bounty hunters,’ since they get paid only when they find improper Medicare claims,” Beck says. “They’re using reasonably sophisticated data mining techniques to identify potentially improper payments. It amounts to just another layer of people looking over our shoulder at things we do.”

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