Ask the payment expert: How will the RAC audit process affect nursing homes?

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Patricia Boyer, MSN, NHA, RN
Patricia Boyer, MSN, NHA, RN
Q: We keep hearing about RAC reviews. Are they really going to affect nursing homes?

A: They already are. We were recently involved in a RAC audit appeal process. Nursing facilities should be prepared to know what a RAC review can result in.

Let me share the experience. The initial audit was done of 40 claims over four years. It resulted in a denial of over $70,000. Although that is a large amount of dollars as is, the results were then extrapolated over the entire population and the facility received a bill from the Centers for Medicare & Medicaid Services for over $750,000.

Now it is more than difficult. It could be a severe financial situation, and for some facilities the difference between financial viability and bankruptcy. This is serious business.

First and most important, you should not attempt to do this process yourself. Although your staff has very good intentions, our experience shows that facilities send too much information or not all the required documentation.

Once you have submitted information, you cannot take it back or add to it during an appeal. Facilities also highlight information to “point it out” to the reviewer but they fail to realize that when they copy that documentation, they actually have obliterated the important information they were trying to emphasize.

The best recommendation I can make to a facility is to get expert advice upfront. As soon as you receive a letter asking for your medical records, you need to know you are in medical review. The good news with all of this is that facilities still have good success at the administrative law judge level. This is now the third level of appeal, and if your staff can present a good case for why they provided the appropriate amount and intensity of services, you have a good chance or reversing the denial.