Physician RAC Vulnerabilities Detailed in CMS Release

James Carroll, for HealthLeaders Media , December 14, 2010

What these issues are in actuality—which CMS is not directly stating—are medically unlikely edits (MUEs), which should come as no surprise, according to Elizabeth Lamkin, MHA,president of Dalzell Consulting Group, Inc., in Hilton Head, SC.

"During the demonstration project RACs were very sensitive to physician providers and other small providers, and RAC auditors at this time were also very clear about medically unlikely edits, which is what we see here."

In the case of medically unlikely edits, physician offices, as well as any other type of provider organization, should be able to take notice of these issues prior to receiving a demand letter.

"Physician offices need to be proactively self-auditing their billing process and actively monitoring the RAC websites for medically unlikely edits such as IV hydration, fulvestrant—dose vs. billed units, and so on," says Lamkin. "Issues involving MUEs are often times clerical errors though, so this is an issue that can be avoided with comprehensive review."

While the two vulnerabilities described in SE1036 apply to duplicate payments and services with excessive units, it's clear that RACs and MACs may eventually choose to target physicians for other vulnerabilities as well, according to Michael Taylor, MD, vice president of clinical operations at Executive Health Resources in Newtown Square, PA.

"A clear vulnerability—although not listed in SE1036—involves cases where the physician billing does not match the hospital's billing status," he says. "For instance, when the physician's billing is for an inpatient level of care but the hospital bills for an outpatient observation service. This would be a simple, clear-cut reason for a RAC or MAC to audit and potentially deny cases when the billing is incongruent."

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