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Recent RAC Updates

Over $365 Million in Improper Payments Identified By RACs Since October 2009

CMS recently reported that RACs have identified $312.2 million in overpayments from October 2009 through March 2011. During the same period, $52.6 million in underpayments were identified. While these figures are well below the over $1 billion in improper payments identified during the demonstration program, they are expected to increase. RACs are currently reviewing large numbers of DRGs in coding and medical necessity reviews and it is anticipated that these will result in identification of more improperly billed claims. The first quarter of 2011 accounted for $184.6 million in identified improper payments and these trends can be expected to continue for the foreseeable future.

CMS also released the top approved issue for each RAC region. The top issue for RAC Region A is Ventilator Support of 96+ hours; the top issue for RAC Region B is Extensive Operating Room Procedure Unrelated to Principal Diagnosis; the top issue for RAC Region C is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay; and the top issue for RAC Region D is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay.

RAC Audit of Hematology Oncology Providers’ Infusion Claims Deemed Improper

Medicare carriers and Medicare Administrative Contractors (MACs) have different coverage policies for billing procedures involving infusions when the drugs infused were not billed to Medicare. The lack of a “J-code” for the infused drug does not guarantee that the procedure was billed improperly. Recoupment of an overpayment is improper if it is based solely on the lack of a J-code for the infusion procedure. Recently, a RAC and the physician regulatory issues team (PRIT) discussed this matter and determined that the proposed recoupment was improper and the recoupment was subsequently rescinded.

New RAC Issues Posted by DCS Healthcare, CGI and HealthDataInsights

DCS Healthcare, the RAC for Region A, has added 23 new medical necessity claims to its CMS approved list. The new approved issues include:

  • MS-DRG 329 major small and large bowel procedures with MCC;
  • MSDRG 234 coronary bypass with cardiac catheterization without MCC;
  • MSDRG 438 disorders of pancreas except malignancy with MCC.

These new issues are in effect for providers located in Pennsylvania, Washington D.C., New Jersey, Delaware, New York, Connecticut, Vermont, Maine, Massachusetts, New Hampshire, and Rhode Island.

CGI, the RAC for Region B, has added Diabetes; MS-DRGs 637-639 (DRGs 294-295) to its CMS approved list of issues. DCS Healthcare is the RAC for providers located in Indiana, Michigan, Minnesota, Illinois, Kentucky, Ohio and Wisconsin.

HealthDataInsights has added multiple issues to its CMS approved list. These issues include:

  • Medical Necessity Claims
    • DRG – 810 Acute inpatient hospitalization – major hematology immunological diagnosis;
    • DRG 934 – Acute inpatient hospitalization – full thickness burn without skin graft or inhalation injury;
    • DRG 541 – Acute inpatient hospitalization – osteomyelitis without CC/MCC
  • Part B Claims
    • Add on codes with denied primary code-by clinical laboratory;
    • Add on codes with denied primary code for professional services;
    • Add on codes paid without required primary code by ambulatory surgery center (ASC).
  • Part A inpatient claims
    • Source of admission code for acute inpatient psychiatric facility (IPF)

HealthDateInsights is the Region D RAC contractor which includes providers located in Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, North Dakota, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington, Wyoming, Guam American Samoa and Northern Marianas.




If you are the subject of a RAC audit, or are concerned about your current compliance program and procedure, please contact a Wachler & Associates attorney at 248-544-0888.

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