"What's so interesting about this is the fact that, across the country, we see that a common practice of the RACs is to deny an entire claim instead of a partial denial, and so why aren't we seeing these partial denials? If we have a patient that is admitted for an inpatient admission when observation was appropriate, then the SOW would suggest that the RAC should just be down coding the claim to a partial denial, instead of issuing a full denial. It will be interesting to see if this statement of work changes RAC behavior," he said.
Many providers are already aware that recovery auditors—which are now the official names for RACs, according to the new SOW—have been using what are known as "semi-automated reviews." These reviews are now officially recognized as a form of claims review in the new SOW as follows:
[Semi-automated reviews] are a two-part review that is now being used in the Recovery Audit Program. The first part is the identification of a billing aberrancy through an automated review using claims data. This aberrancy has a high index of suspicion to be an improper payment. The second part includes a Notification Letter that is sent to the provider explaining the potential billing error that was identified.
In order to be current on the recovery audit process, providers should definitely take a look into the updated guidance on the discussion period, medical necessity, and semi-automated reviews, suggests Taylor.