There is a famous political quote from the late former New York Senator Daniel Moynihan, who stated “You’re entitled to your own opinion, but you’re not entitled to your own facts”. When I watch what passes for news nowadays, I tend to think Senator Moynihan was ahead of his time.
While I usually cover non-audit health care issues on Fridays, CMS released a document this past Monday that was so riddled with self-pity and abbreviated clarifications, it must have been written by a 4-year-old.
The title of the document is “Medicare Fee-For Service Recovery Audit Program Myths”. The document contains 14 so-called myths, but at least half are issues that I have never heard raised by a reputable source, and the remainder appear to be the incomplete thoughts one would expect from someone currently between lithium refills. My jaw ended up hanging so far beneath my face at the conclusion of these four pages that nothing short of a point-by-point rebuttal is warranted. Without further ado, we begin:
Myth 1 – RACs deny every claim that they review- I have never heard anyone make this claim, though I am sure that some hospitals feel this way based on the way RACs tend to hyper-focus on some facilities in the same way that armed robbers look at unarmed urban liquor stores. CMS goes into a tortured explanation of the CERT study to refute this, but the explanation ends up going nowhere. The Part They Left Out: According to the AHA, two-thirds of all RAC documentation requests do not lead to the determination of an improper payment. Duck-hunting in the dark offers a better accuracy percentage than this.
Myth 2 – RACs have a contingency fee between 30 and 50 percent – Anyone who had this perception would have been so far separated from the RAC Statement of Work that it would be quite obvious that they have no day-to-day contact with the RAC program and its process. The Part They Left Out: While the RACs are paid on a contingency fee basis (up to 12.5% at the high end for CGI), the rest of the integrity contractors (MIC, ZPIC) are paid flat fee contracts for a fixed time period, and their rate of success is actually worse than the RACs.
Myth 3 – Every RAC denial is overturned on appeal - To prove that this is false, CMS provides appeal data from FY 2010, seemingly forgetting that we are currently in FY 2013 and that according to the AHA, more than 71% of all appeals filed by their RACTrac participating hospitals have yet to be finalized. Of the ones that have, hospitals are winning 3/4 of the time. CMS has responded to this success rate by attempting to eliminate the ALJ level of appeal, where most of their losses are occurring. The Part They Left Out: Remembering that over 40% of all RAC determinations are appealed, CMS’ elucidation of this “myth” appears rather combative.
Myth 4 – RACs have non-clinicians conduct review of medical records – The response to this “myth” is classic deflection. The memo states “Fact: Each RAC employs certified coders, nurses, therapists and a physician contractor medical director (CMD)”. The last time I checked, clinical decisions are made by doctors, with nurses and therapists defined as “ancillary providers” and coders defined as “those people who tell me I’m billing something wrong”. Unless the lone CMD at each contractor, armed with candy dispensers full of Dexedrine and crystal meth, has a hand in every RAC determination, then the fact that non-clinicians are conducting review of medical records is not a myth! The Part They Left Out: CMS goes on to state that a RAC org chart is submitted “as part of the proposal and identifies the number of key personnel and the organizational structure of the [RAC] effort”. These charts were not offered as an addendum to this memo, so the “myth” actually stands as fact, given that the ratio of employees for each RAC remains a mystery to the provider community.
Myth 5 – RACs create their own policies and are not bound by CMS regulations, NCDs or LCDs – Again, no one dealing with the RAC process ever made this claim. The claims that they are actually making, particularly as it applies to the enormous number of denials for short stays, is that the CMS regulations are poorly written and inadequately clarified. Additionally, the MACs, whenever they make an attempt at clarification, have clouded key issues to such a degree that they can’t answer provider inquiries regarding past guidance they have provided. The problem has gotten so bad that NGS, an affected MAC, won’t allow any recording of their teleconferences based on past embarrassments. The Part They Left Out: The ALJs seem to have a good grasp of the issues involved, but because they more often find in favor of providers, CMS’ game plan, as stated previously, is to take them out of the game.
Myth 6 – RACs can review as many claims as they want from a provider – CMS goes on to state that the maximum number of requests per 45 days is 400. Actually, providers with over $100 million in payments can have up to 600 charts requested every 45 days, based on the ADR limit update effective on March 15, 2012. The Part They Left Out: CMS conveniently ignores semi-automated review in addressing this issue, as there is no limit to the number of claims that can be selected under semi-automated review. Hence, RACs indeed can review as many claims as they want from a provider, making this CMS myth (you guessed it) a non-myth.
Myth 7 – RACs don’t have physicians on staff – If you exclude the one solitary CMD strung out on stimulants, then yes, the RACs don’t have physicians on staff conducting complex reviews. While we’re on this topic, I think it’s worth questioning the motives of any physician, nurse, therapist or coder who makes it their life’s work to make the lives of hospitals a Hell on Earth with their activities. Is this really what you want to do for a living? As a certified coder, anyone with credentials similar to mine who is working for a RAC isn’t trying very hard to build a career in my opinion. The best people who happen to find themselves under the umbrella of these organizations eventually leave, partly because that identified as “fraud” is usually CMS-induced ignorance (see notes under Myth 5) and partly due to wanting to have their souls cleansed and in good repair as life’s end draws near. The Part They Left Out: RACs have been going after hospitals primarily, but when Part B claims are reviewed, I would say that the odds of a specialist having their clinical documentation reviewed by a physician of the same specialty are practically nil, making appeals virtually automatic.
Myth 8 – RACs are focusing complex reviews on Critical Access Hospital claims – CMS goes on to state that “Recovery Auditors have not completed any complex reviews on Critical Access Hospital claims”. The automated reviews continue, and who knows whether any semi-automated reviews have been conducted? I would say that this statement of “myth” is perhaps best described as a half-truth. The Part They Left Out: I appeared on a broadcast of Monitor Monday back in September where the administrator from Pushmataha Hospital in Oklahoma related that he had elevated his complaints to his congressperson, as Connolly was picking them apart financially. In addition, he is having to go to his community and beg for tax increases because he can’t get funding to keep his doors open. If a rural population being served by a hospital is threatened by RAC activity, it matters not that they lack the imprimatur of the CAH designation. It means that care for an under-served population is being threatened just so someone can wave poorly-estimated RAC dollar results in all of our faces to pound their chests about how they are funding health care reform.
Myth 9 – RACs do not tell anyone what they are reviewing – Anyone connected with the RAC program knows that there is an approved issues list on the RAC websites. This is yet another example of a myth that no one has profligated. The Part They Left Out: Medicaid RACs are not required to provide approved issues listings for the audits they are conducting, so when it comes to Medicaid, it is indeed true that the RACs do not tell anyone what they are reviewing.
Myth 10 – RACs do not issues (sic) detailed results letters – I’d like to pause to state that the garbled word usage in this myth, along with the appearance of the word “rational” in explaining myth 9, where the word “rationale” would have been more appropriate, tells me that this whole memo was a panicked rush job. With regard to this myth, The results letters I have been made aware of do not go into dramatic detail, but rather contain “canned” language from a template explaining a general reason for a claim denial based on the approved issue being applied. The Part They Left Out: If you are ever able to have a conversation with the actual reviewer of your documentation who retroactively denied your claim, consider yourself lucky.
Myth 11 – RACs do not issue timely denial letters – This is actually not a myth. The MACs took over the process of issuing demand letters back in January, and the timely issuance of letters has been an ongoing issue for most of 2012. The Part They Left Out: CMS lists this issue as a myth, but in the ensuing paragraphs beneath it, they do not refute it, but rather use twisted language about the importance of timely issuance based on appeal time lines. There are some RAC claims that have been in the appeals process for over two years and have only reached level 3 out of 5, so I think it best that CMS not descend into pontification about the importance of appeal time lines.
Myth 12 – RACs outsource all the medical review to staff in India and the Philippines - Again this is the first that I have heard of this, so this is actually a myth. The Part They Left Out: PRGX is a RAC subcontractor here in Region B. They have subcontractor status because the quality of their work product was sub-par during the demonstration project. Region B has the highest appeal overturn percentage, and I am sure that a number of those issues can be traced to the subcontractor rather than CGI. Maybe outsourcing overseas would provide a better result than an entrenched government contractor who fought the permanent RAC awards? A man can dream.
Myth 13 - RACs deny Inpatient Rehab Facility claims because the care could have been given in a less intensive setting - CMS does not refute this in subsequent paragraphs. They only explain the rationale for such denials. Remember kids, it’s only a myth when someone says three little words: “that’s not true”. The Part They Left Out: Whenever I hear the word “rehab”, I immediately think of my colleague Nancy Beckley, an expert on the subject. In a brief phone call today, she reminded me of the widespread denials for IRFs that occurred during the RAC Demonstration Project related to joint replacements being “not medically necessary” for stays. Every one of these denials was reversed on appeal, and the contractor, (wait for it) PRG Schultz, now known as (you guessed it) PRGX was “penalized” into subcontractor status. Not surprisingly, the issue of joint replacements being not medically necessary is rearing its head again, so expect this “myth” to soon come true in spades.
Myth 14 – RACs target providers who are part of CMS demonstrations – CMS explains that any hospital can be targeted, but I have heard anecdotal evidence that strongly suggests that hospitals who entered into demonstration projects and then exited (more than likely because they wanted their appeal rights back that were negated by participation in the demonstration) suddenly and mysteriously see a jump in ADR requests. The Part They Left Out: RACs are ripping the daylights out of hospitals, but physicians and DME suppliers (!!) are getting all but a free pass, based on current issues lists. We are now three full years into the permanent RAC program. It certainly appears to me as if the RACs continue to focus their work on the claims with the highest dollars, rather than the claims with the highest error rates. I would call that “targeting”.
Perhaps the late Senator Moynihan’s quote could be sligthly altered in this case to read, “You are entitled to your own opinions, but you are not entitled to your own facts, and based on your lousy facts, I find what you proudly label ‘myths’ to be highly questionable as well”.