A Primer on Audits by RACs MACs, ZPICs and CERTs

Michael Taylor, MD, vice president for clinical operations at Executive Health Resources, explains four programs that monitor and audit Medicare payments to hospitals.

RACs. Recovery Audit Contractors are the most familiar claims-watchdogs and they have a well known modus operandi. "They look at areas where there are likely to be high errors rates and lots of dollars at stake," Dr. Taylor says. RACs recently started performing medical necessity audits, where they determine whether clinical documentation supports the claim.

Recently, several RACs have been investigating transient ischemic attacks, syncope (a kind of fainting spell) and chest pains. "All have the potential to be extremely serious, but not always," he says. A person with chest pain could be hospitalized for a pulled muscle or for symptoms gravely concerning for a heart attack, and fainting may be caused by anything from low blood sugar to a cardiac event. RACs have also been examining some procedures, such as the placement of cardiac defibrillators and vascular stents. Hospitals should frequently consult their RAC's website for CMS-approved audit issues.

MACs. In addition to processing and paying claims for both Part A and Part B services, Medicare Administrative Contractors can also audit claims. They have the ability to compare Part A and Part B claims for the same services to look for discrepancies. "The MACs have the responsibility to make sure the hospital doesn't have a high payment error rate," Dr. Taylor says. "They have the power of prepayment review, which can dramatically affect hospitals' cash flow."

In fact, a MAC can potentially have a much greater impact on a hospital than a RAC. "The MACs can review any claims they choose to and hold up payment," Dr. Taylor says. Hospitals should strive for open lines of communication with their MAC, and may appeal those claims decisions they disagree with.

ZPICs. Zone Program Integrity Contractors are the policemen of the Medicare contractor world. They are authorized to conduct investigations, provide support to law enforcement and conduct audits of Medicare advantage plans. ZPICs look for fraud (purposeful overbilling) and abuse (reckless disregard of proper billing practices). "Hospitals should take a communication from the ZPICs very seriously," Dr. Taylor says. "It could lead to referral to a regulator such as the Office of the Inspector General." Following a contact from the ZPIC, hospitals need to perform a self-assessment and determine if the contractor is correct. If the hospital finds the ZPIC is right, steps need to be taken to make sure the mistake is not committed again.

CERTs. Comprehensive Error Rate Testing contractors work with the MAC to lower error rates. The CERT review contractor selects random samples of claims from each Medicare claims processing contractor for medical review. CERT alerts, frequently posted on MAC websites, are a good way to anticipate future targets of RAC and MAC audits. "CERT topics of investigation drive the actions of the MACs," Dr. Taylor says. "MACs will then get around to auditing more thoroughly."