RAC Audits - Impact on Physicians

Posted by mgsionline on July 2nd, 2013

The RAC audit program has been around for 8 years now, having started in 2005 as a ‘demonstration project’.   While it was only the Hospitals – Part A claims - that were targeted due to the higher $ value for inpatient claims, the program is slowly expanding to the Part B claims which cover physician billing.

Background:  The original ‘demonstration project’ was very successful in that close to $ 900 million were recouped from Hospitals while $ 38 million was paid back for underpayments on provider billing claims.  The 4 contractors and their 3 sub-contractors got an extension to continue the program in 2008. It must be remembered that they get paid a percentage from the overpayment and recoupment they identify.  Having targeted the Hospitals in the initial phase (low hanging fruit?), the RAC contractors shifted their attention to Part B physician billing claims as well. 

Hospital affiliated specialties:  Though the primary targets of the RAC audits have been Hospitals, it must be remembered that it is the physicians who refer patients to the Hospitals.  So when the RAC audits identified an error or inconsistency in Part a provider billing, they sometimes also pulled the Part B physician billing claim for review.  In addition, there are several specialties that can be considered as Hospital affiliated – Radiology, Pathology, Anesthesia, Hospitalists, Pain Management, Rehab, Behavioral Health to name a few.  Also, other specialties such as OB/Gyn, Ophthalmology, and Orthopedics etc. have surgical procedures that can be performed only in a Hospital setting.

Medical Billing and RAC:  The entire RAC program is aimed at discovering the inaccuracies in medical billing of claims.  So the role of medical billing - be it for the technical component or the physician billing component is very important.  As long as the medical billing is done in compliance with the documentation and actual services rendered, there is not much that the RAC audits can identify or recoup.

Outsourced Medical Billing:  Given the close association of accurate billing and RAC audits, it is imperative to get the physician billing component right the first time.  It would be worthy to note that the RAC contractors are running out of Hospital sites to audit and the next target could and will be large Medical Groups, IPAs, and multi-specialty Group practices etc.  One of the options to be considered is to have your billing audited for accuracy by an external entity.  The other option is to consider outsourced medical billing, where professionals who are well versed with the latest compliance requirements handle the medical billing.  MGSI is one such professional physician billing company that has been helping physicians and providers for the past 20 years.

About MGSI:

No one can predict if a practice or group will be targeted for RAC audits. But the group/practice can take preventive action by outsourcing medical billing to a professional company.  MGSI, a leading medical billing company in Florida, has been doing this for several years to many of its clients. With more than 20 years of experience, it has been providing exceptional physician billing services that are better than industry standards. Take MGSI’s help to get your billing right. For more details, log on to www.mgsionline.com.