New RAC Announced: Resulting in Greater Scrutiny of Documentation for Agencies

Posted on Friday, November 4, 2016 5:39 PM

On October 31, CMS announced that Performant Recovery Inc. will be the first recovery audit contractor (RAC) devoted to home health, hospice and durable medical equipment (DME).

The RAC’s implementation means agencies and hospices “are far more likely to undergo a RAC audit,” says attorney Robert Markette of Indianapolis-based Hall, Render, Killian, Heath & Lyman.

It is possible there will be post-award protests for the new RAC contracts from those companies that were not awarded a contract, but the RACs likely will start operating during the first quarter of 2017, says Emily Evans, managing director of Hedgeye Risk Management of Stamford, Connecticut.

Providers “need to be aware of their claims data/billing patterns, because outlier agencies may be the first ones to undergo scrutiny,” Markette says.

Providers must focus even harder on documentation compliance, educating referring physicians and their own staff to ensure documentation is thorough, complete and timely, he adds.

Markette believes RACs will pay close attention to face-to-face documentation. For hospices, Performant’s biggest concern likely will be medical necessity, Evans adds.
The prior RAC model resulted in home health agencies and hospices being overlooked Evans says.

According to an October 2015 CMS report to Congress, FY2014 involved RACS correcting $1.1 million claims for improper payments, resulting in $2.6 billion in improper payments being corrected, according to a 2015 CMS report to Congress.

The average payment identification rate for RACs in Fiscal Year 2014 was 38.9%.

For the full article, please see the November 7, 2016 Home Health Line Edition.

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