Is Your Practice Ready For the RACS?
J. Claypool & Associates | Spicewood,
800-227-4594 (in Texas) or 512-264-3323 (Austin)
by Jamie Claypool
The CMS, after a pilot study over the last 3 years involving
3 states, will now contract permanently with Recovery Audit
Contractors, better know as the “RACS”. The program will be
expanded to all 50 states. Physician Part B claims will be
included in the reviews conducted by these companies. Texas will
be included in Region C, and the RAC contractor for our state
will be Connolly Consulting Associates, Inc. of Wilton,
Connecticut. Get ready for some intense times beginning March of
2009, when this RAC company begins in Texas to review
utilization patterns and claims for Part B physician
claims/payments. The purpose for using Recovery Audit
Contractors, according to the CMS, is to continue to reduce
waste and over-spending, and to decrease and/or to eliminate
fraudulent claims. The companies will focus on providers and
suppliers whose billings for Medicare services appear higher
than the majority of providers and suppliers in the community,
or appear higher for the specialty group.
If you have the dubious honor of being called upon by one of
these companies, you will most likely be asked to submit
documentation to substantiate your claims. It is difficult to
anticipate what happens after that, as the process has not been
made very clear. Some physicians who, in the past, have had
reviews by the CMS or Medicaid companies have complained that
they were asked to submit documents, but never knew the outcome
of these submissions. Many have gone with the “no news is good
news” attitude. For some, that may be fine, but the old adage
“if you fail to prepare you prepare to fail” comes to light.
Being prepared is the first step in dealing with these audit
How can you prepare for the RAC companies? Below are some
things you can do right now to make sure your
coding/billing/documentation is in order:
1. Take a sampling of your claims and look at the backup
documentation, then ask the following questions:
a. Is the documentation where it should be in the
paper or electronic chart?
b. Can you read it?
c. Does the documentation support the services you
billed? This element can be tricky if you do not have a
good grasp of coding –especially the E&M codes.
d. Is medical necessity documented, or inferred, in
e. Is your rationale for ordering services clear from
f. Are the results of the services you ordered in the
record, and have you signed off on them?
2. Bring your coding knowledge up to date by attending a
coding seminar or “webinar”. The Trailblazer Health web site
has coding exercises for E&M services for physicians and
www.trailblazerhealth.com (then go to “Med
Learn”). You may also want to bring in an expert(s) for an
educational review or training; or self-audit your
own claims routinely if you have the expertise in house.
3. Make sure that you have not ordered tests because of
patient demand. Some physicians allow patients to “run the
show”, so to speak, and overly assertive or concerned
patients demand tests and other services that may not be
appropriate. Although the majority of physicians do what is
right for the patient, some succumb to patient demands and
might have some exposure in this area. If it’s not medically
necessary, or there is some doubt of the necessity and you
still provide the service, be able to substantiate the
reason why in your medical record. Ask your billing
staff or service to explain the use of the Medicare ABN (
Advanced Beneficiary Notice) to you and to the patient. An
ABN is a waiver which allows you to bill Medicare for the
patient, but at the same time you are acknowledging that the
service may not meet medical necessity requirements, and the
patient agrees to pay for the service if it does not meet
medical necessity requirements. The claims that are
submitted with ABN waivers take the modifier “GA”, to denote
that an ABN was signed. Appropriate use of ABNs can help
physicians with patient demand for services which may not be
deemed medically necessary. An ABN must be signed for
each service rendered.
4. Do not make the mistake of thinking you are exempt
from reviews because you have an electronic medical record
that does the coding for you. Reviewers are looking at these
electronic records, or “templates”, that simply repeat from
one patient to the next the same HPI, ROS and Exam. Some
systems rely on the counting of elements and force you to
document a complete review of systems when it may not be at
all necessary. Additionally, read the electronic record
after documenting, and make sure that what you say in the
HPI is not “denied” in the ROS - auditors are particularly
attuned to this problem.
5. If records are requested, respond timely to the
request. If your billing staff or service receives the
request, make certain they know to respond in a timely
manner. No response, or a late response, may cast suspicion
when there is no real fault. You must be compliant, and you
must send the record requested in a timely manner; it is the
Finally, if you have made errors (especially with inadvertent
over-coding) simply accept the fact, refund any amounts, and
move on. Too many times, physicians become overly worried over a
situation that can be rectified in a simple and accurate manner.
If your documentation is clean and it substantiates your claims,
you have nothing to worry about. Being prepared ahead of time
for what is coming soon is the best possible course of action.
Jamie Claypool CMPE is a physician practice management
consultant who specializes in billing and coding.