Abby Pendleton Esq. and Jessica Gustafson Esq. of Michigan's The Health Law Partners, P.C. provides considerations for those facing the redetermination and reconsideration levels of RAC appeals and urges hospitals and providers to both read the fine print and stay abreast of all process timelines during RAC activity.HFMA: In terms of how to effectively respond to denied RAC claims, can you offer some best practices?AP:
I think that there's a number of areas to look at, but certainly, I think something that should happen right away for any provider that could be subject to the RAC process is to make sure that they have designated a person that would be a RAC point person. That person, it depends on the size of the organization, but certainly maybe a committee in larger organizations, is somebody that's really responsible for making sure that the process is organized so that the time frames can be met in a timely fashion and that all the rights of the entity are protected. I think that's a key area for any provider at this point in time, and in part, because once the time frames start running, providers may start receiving requests, maybe fast and furious, and you having the organization in place is just going to be crucial. In the demonstration program, a lot of providers faced a lot of challenges based on the time that it took to respond, to organize, and they didn't really have a lot of these systems in place yet, and so it created great challenges.JG:
In terms of how to effectuate those systems, I know that the American Hospital Association is recommending certain software, there's obviously other private companies that are putting software programs into the market. And it's just a matter of having the RAC point person make sure to maintain a spreadsheet of any and all claims that are requested for review so that the deadlines are all maintained and appropriately responded to. That's a very important thing in term of just staying on top of it as you move through the process.AP:
In the demonstration program, what happened in some cases is that the RAC vendors would issue a letter on certain issues after they had reviewed the records, and this was a letter that was actually before the official denial took place, and the RAC-er would ask the particular providers in some cases to admit that the coding was incorrect. For example, a medical records person that was just filling out these forms and admitting to the fact that, yes, we coded these incorrectly, and that person didn't really have all of the background information on the particular claims and what arguments may be made at a later time. That would be not just substantive arguments on appeal, but legal issues that could be raised to challenge the fact of the denial that had nothing to do with the substance. Those correspondences came to light during some of the hearings at the ALJ stage, and some of the judges said, but look at the providers already admitting that these are a problem, so how can I rule otherwise? Then we'd have to make these challenges why that person didn't have the authority and that they'd consider all of the resources that were available, and so it's just something to keep in mind that you don't want folks in the organization just to be answering correspondence that could have a detrimental impact later on in the appeals process.JG:
In terms of the actual preparation of the response to the record request that is made in the first instance, the recovery audit contractor will request the documentation for a certain code on a certain date of service, and it's important for all providers to keep in mind that they should submit more records than just the specific record for the date of service that is requested. They need to submit all of the records that will help substantiate the medical necessity for the service provided and the appropriateness for the level of code provided, things of that nature, and some of that information is likely going to be found in the note before, or two notes before, three notes before. All of this information should be included as part of the response, and it should be included thereafter as you move through the appeals process should that claim be denied, because in many cases, the actual note of the date of service, that issue will not be sufficient to substantiate the medical necessity of the service.AP:
That happens all the time on the part B side for the physician claims when it's a request for a particular procedure. And then the medical necessity is established, sometimes in the office visit prior where they're planning on why they're doing the procedure.HFMA: What do you think are the biggest overall challenges in the appeals process, and how do you think hospitals and providers can best work through these challenges?AP:
One challenge is the time frames. If you look at the time frames for appeals, there is plenty of time for appeals, the first stage of appeals, 120 days. However, the big challenge is going to be that the time frames are essentially shortened because of the rules that apply for the ability of the intermediary or carrier to withhold or recoup funds before you get your appeal in. For example, if the redetermination request is due in 120 days, if the provider wants to prevent the intermediary from recouping the money associated with that claim, they have to get that in by the 41st day at the redetermination level. So now we're talking about much shorter time frames, and now if you have a lot of requests that you're dealing with, you have short time frames. It becomes a challenge just to get it all together and you have to advocate your case in order to get it paid through the appeals process. So I think that's probably one of the biggest challenges in terms of cash flow issues for providers.JG:
In terms of how to best work through these challenges, it's really important to just have good systems in place so that the deadlines are being monitored, not only the appeals deadlines, which are the hard deadlines that cannot, under any circumstances, be missed, but also the time frames associated with recoupment or withholding of funds associated with any overpayment.HFMA: Can you both offer some considerations for providers facing the redetermination and reconsideration levels of RAC appeals?JG:
With respect to the redetermination and reconsideration levels of appeals, these are the two stages of appeals that will have the additional considerations of the withhold issue. The Medicare statutes and regulations that recently went into effect, do permit the intermediaries and Medicare contractors to begin withholding funds after the reconsideration level of appeal, so after the reconsideration level of appeal, the intermediaries and contractors can just begin to withhold funds. At the first two stages of appeal, it's important that from a cash flow perspective, the deadlines for presenting the withholds are closely monitored and addressed. And there's a second consideration at the reconsideration stage of appeal, so in addition to the fact that the separate time frames for withhold also must be monitored, also at the second stage of appeal, providers have to be aware that there's an early presentation of evidence requirement, which basically requires that all evidence that they want to be considered during the appeals process at the later stages all must be submitted at that second stage of appeal. So it's really important that all records that the hospital or provider want to be considered are submitted at this stage, because otherwise, we will not be able to introduce the MFD administrative hearing stage or the following stages without good cause, which is a really strictly defined term under that Medicare regulation.HFMA: So at the forefront, how do you think providers can most efficiently prepare to start the RAC appeals process?AP:
A consideration that's going to take place with the providers is that use of experts in these cases. For example, during the scrutiny on hospitals for inpatient claims it's very helpful in the appeals process to have experts lined up, a physician that can attest to the fact that the patient's condition was such that inpatient, as opposed to outpatient, was appropriate for that particular patient and that claim. Right now, the providers need to start thinking about who those individuals are going to be in a lot of the institutions, for example, for hospitals. When we pursued these appeals at the ALJ level, we would oftentimes work with a physician that was employed or contracted with the hospital to perform quality review and assurance functions and case management physicians who kind of took over that role, to be able to testify and review those cases. So, getting the experts available and ready is an important issue.
The other thing that providers need to do is start considering how they are going to pursue their appeals. Are they going to initially take certain categories of cases and try to handle those internally with the internal resources and staff and work them up to a certain stage, and then at some point are they going to seek legal assistance so they can have legal advocates who are participating in that appeals process? Some clients who did the initial workups wanted to say, 'hey, we're going to try the redetermination stage on our own, but if we get denials at that stage, we're turning it over because we need assistance.' Sometimes others can help us just to present the material to make it more of an advocacy piece and try to get those claims paid. So they'll have to start thinking about at what stage, and on what types of claims you are going to use it. Some providers take the approach that with claims that are over a certain dollar amount, we're going to seek assistance from outside, for outside help, things like that. Those are things that need to be considered now.
Publication Date: Monday, April 26, 2010