64 percent of appealed RAC claims decided for providers

According to a recently released report from Centers for Medicare & Medicaid Services (CMS), providers won 64.4 percent of appealed claims during the three-year Recovery Audit Contractors (RAC) demonstration project. Providers appealed 76,000 claims and received favorable decisions on 49,000.

Providers can win a RAC appeal. Preparedness is the first step to surviving a RAC audit. Providers must be prepared to respond to RAC demand letters and requests for medical records. Because RAC audits are generally unannounced, the appropriate time to prepare for an audit is now. Providers should consider the following to prepare for an audit:

• Not responding is not an option. Providers have a narrow window in which to respond to an audit. Providers have 45 days to respond to a RAC request for medical records. If a provider fails to respond, RACs are authorized to render an overpayment determination on the underlying claims. Failure to timely respond could also result in the loss of valuable appeal rights.
• Designate someone as the contact person for all audits. Providers should designate appropriate personnel to respond to all audit requests. RACs are required to communicate with providers by email, telephone, letters and in-person. Accordingly, administrative personnel must be available to process correspondence and respond to the RAC's various requests. Training personnel and cultivating a working relationship with the regional RAC may mollify interactions and aid in the timeliness of communications.
• Collect relevant documents and records. Providers should ensure that the records they produce to the auditor are complete. This will help show the appropriateness of the treatment, billing and reimbursement. The relevant records include not only medical records, but billing information as well.
• Contact legal counsel. Providers are well served to engage legal counsel to help navigate RAC audits and appeals. Lawyers can help train employees on the details of RACs, including an overview of the regulatory history, "hot button" issues RACs are likely to focus upon, and how to respond appropriately.
• Investigate the claims at issue. Providers should undertake a careful review of the materials investigated during an audit. RACs are sometimes perceived as overly aggressive in identifying overpayments largely because they are paid on a contingency fee basis. Staying abreast of the scope of the audit may reveal issues that are ripe for appeal.
• Keep a written record of all contact with auditors and a set of all documents sent to auditors. Because the audit findings can be appealed, providers should retain a copy of all documents provided to the RAC. Providers should also memorialize the date, time and a brief description of all communications during the audit. Keeping accurate records will protect providers if a problem arises regarding the conduct of the audit. It will also help the provider appeal an adverse audit finding.
• Become familiar with the appeals process. RAC denials are subject to the Medicare Part A and Part B appeals process with two differences. First, providers are given 15 days from the date they receive an improper payment letter from a RAC to rebut the RAC's findings, although providers are not required to go through this rebuttal process before filing an appeal. Second, a provider appealing a RAC determination must file an appeal to its fiscal intermediary within 30 days of the date that the provider receives the fiscal intermediary's notice indicating the amount of overpayment identified by the RAC. Given the number of appeals decided in the provider’s favor, the importance of audit preparation and understanding your appellate rights cannot be understated.