RAC Demands Can Expose Rifts Between Hospital, Physicians

Demands for necessary documentation of claims by recovery audit contractors can expose lack of alignment between a hospital and its on-staff physicians, according to a RAC Monitor column by Leo Paul D'Orazio.

Hospital claims are based on medical records created by physicians, but since physicians are under a different reimbursement system, they do not have a direct financial incentive to help hospitals with RAC demands. That means hospitals have to educate and incentivize physicians for the RAC response effort to work.

"Hospitals face the challenge of getting physicians to document clinical treatment given to patients accurately in order for the hospital to be reimbursed properly by Medicare," wrote Mr. D'Orazio, who directs the Healthcare Services Group in the New Brunswick, N.J., office of WithumSmith+Brown.

When the hospital receives an RAC demand letter asking for more information on a claim, it has only 15 days to get the updated paperwork from the attending physician and turn it in. Providing information in such a relatively short time period requires nurturing good relationships with physicians and making sure physicians understand RAC timelines and other requirements.

Mr. D'Orazio recommended holding education sessions for physicians showing how insufficient documentation can harm the hospital's bottom line. Physicians need to know about these risks in advance so that they are prepared to help when the documentation is needed, he said.

Furthermore, hospital personnel should make it as easy as possible for physicians to review RAC demand letters. For example, personnel should make sure to accommodate to the physician's schedule.

"A little effort potentially can go a long, long way in minimizing the risk of RAC take-backs," Mr. D'Orazio wrote.

Read the RAC Monitor article on RACs.

Learn more about WithumSmith+Brown.

Read more coverage on RAC demand letters:

- Region A RAC Sending Demand Letters on Therapy Untimed Codes

- 10 Tips on Improving RAC Readiness From Kaiser's RAC Expert

- Differences Between RACs' Automated and Complex Reviews

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