Blog, Revenue Cycle, The Hospital Finance Podcast®

Compliance pitfalls and how to understand RAC findings on your discharge status [PODCAST]

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In this episode, Mary Devine, Senior Manager on the Revenue Cycle team at BESLER, walks us through compliance pitfalls and how to understand RAC findings on your discharge status.
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Mary mentioned that providers need to review their RAC issues on their RAC websites and determine if their RACs are reviewing discharge status or not.

Overall, the RACs are looking to confirm that whatever you put on your claim as the discharge status location, that’s in fact where the patient did go and they did receive those services because, as part of the Post-Acute Transfer Rule, the discharge status does impact your payment. And if you put on a code that was not impacted by the rule, you’ll receive an overpayment and RACs will look to take the money back.

RAC reviews are an automated process relying on established computer logarithms. These logarithms are logic-written based on the Post-Acute Transfer Rule and the available data the RACs have.

This process does not take into consideration the fact that there are some post-acute care providers that may not have submitted a claim to Medicare.

Mary discusses discharge statuses such as O1, O2, O3, O4 and how the RACs review this information to determine improper payments.

To prevent receiving improper payments, Mary suggests:

  • Providers should make sure that they are reviewing all the recommended RAC adjustments whether it be an overpayment or an underpayment
  • Internal processes should validate the appropriateness of each results letter and not whether it’s an underpayment or an overpayment
  • Appeal both underpayments and overpayments to ensure you are correct and compliant

You should make sure that accounts are reviewed and judged by someone who has Post-Acute Transfer Rule knowledge and knows how the rules should be applied to the discharge status in determining that the patient was in fact transferred for additional post-acute care services. This could be accomplished through internal processes, but is greatly enhanced by leveraging the expertise of an outside vendor.

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