Best Practice RAC Preparation

1. Best Practice RAC Preparation Jeremy Rittierodt, MSN, RN, CCM, CTT+ Account Executive, MCG Greg Borden, RN Senior Systems Analyst, Sarasota Memorial May 15, 2013 Colleen Ryan Manager of Integrated Case Management, Sarasota Memorial Diane Settle, CPA, CHFP Executive Director of Revenue Cycle, Sarasota Memorial

2. Overview • The RAC program was created through the Medicare Modernization Act (MMA) of 2003 to identify inappropriate payments and recoup overpayments under parts A and B of Medicare • RAC reviews are retrospective, with a look-back period of three years • Congress made the RAC program permanent in 2010, extending it to all 50 states

3. Impact on Hospitals • RACs made medical record requests associated with $6.4 billion in Medicare payments in 2012 • Hospitals reported nearly $1.3 billion in automated and complex denials from RACs in 2012 • The average value of an automated denial was $734; the average value of a complex denial was $5,358 • During Q4 2012, 43% of all hospitals reported spending more than $25,000 managing the RAC process; 13% spent more than $100,000 Source: AHA RACTRAC Survey, 4th Quarter 2012

4. Medical Necessity Denials with the Largest Financial Impact Source: AHA RACTRAC Survey, 4th Quarter 2012

5. Establishing Medical Necessity: Syncope

6. Best Practice RAC Preparation Completely and Accurately Document All Clinical Decisions Measure Patient Progress Against Optimal Care Pathways Track and Report on Variances from Optimal Care Identify and Prepare for the Issues RACs Are Targeting Respond Promptly to RAC Demand Letters Place Case Managers in the Emergency Department, Seven Days A Week Use Internal Audits to Prepare for RAC Audits

7. Completely and Accurately Document All Clinical Decisions • Inpatient admissions and extended stays • Changes in level of care (e.g., observation to inpatient) • Surgery and other procedures • Care planning

8. Measure Patient Progress Against Optimal Care Pathways • Identify the optimal care pathway for each patient • Make sure everyone on the care team understands the care plan • Document the medical necessity of every decision along the pathway

9. Track and Report on Variances from Optimal Care • What are the variances? • Medically necessary • Potentially avoidable • Favorable • Where are the variances? • How should we respond to them?

10. Identify and Prepare for Issues RACs Are Targeting • Short stays • Interventional cardiology • Syncope • Gastroenteritis • Chest pain • Joint and spine surgery

11. Respond Promptly to RAC Demand Letters • Put a RAC team in place • Know the response deadlines • Centralize the receipt and management of demand letters • Only appeal denials that make sense • Winnable appeals • Appeals worth the investment of time and money

12. Place Case Managers in the Emergency Department, Seven Days a Week • Determine a strategy for case management in the ED (24 hours a day versus peak hours) • Make sure case managers engage with providers • Consider the role of case managers in other areas of the hospital system

13. Use Internal Audits to Prepare for RAC Audits • Identify areas RACs are targeting • Review documentation in those areas • Put on your RAC hat • Look at variances and opportunities for improvement • Promote ongoing communication between appeals and case management staff

14. Sarasota Memorial • Sarasota memorial Health Care System, an 806-bed regional medical center, is among the largest public health systems in Florida • Founded in 1925, the system has about 4,000 staff, 802 physicians, and 1,000 volunteers

15. Structure of Sarasota Memorial’s Case Management Program • Original case management model • Design and adoption of Triad Model • Design process • Structure of Triad Model • How Triad interacts with other departments • Benefits and drawbacks of Triad Model

16. How Sarasota Memorial Prevents and Appeals RAC Denials • Prevention • RAC committee – members • Identified issues • Appeals • Medical necessity team • Review/appeal process

17. Role of MCG Products in Integrated Case Management and RAC Defense • Integrated case management • RAC defense • Admission review

18. Impact of Integrated Case Management Program on RAC Denials and Appeals • Demonstration period • Volume • Success rate • Permanent RAC program • Volume • Success rate – % still in appeal

19. Performance Prior to Integrated Case Management • Sarasota Memorial contracted with Milliman to: • Review 100 cases for medical necessity against admission and continued stay criteria • Review the current utilization process • Design a case management/physician advisor process • Instituted an electronic case management tool to track: • Medical necessity • Delay days/delay rates • Denials

20. Performance After the Introduction of Integrated Case Management • Current review processes • Delay rates • Physician advisor rates • Denial tracking

21. Questions Jeremy Rittierodt jeremy.rittierodt@careguidelines.com Greg Borden Greg-Borden@smh.com Colleen Ryan Colleen-Ryan@smh.com Diane Settle Diane-Settle@smh.com