Six Ways to Avoid a RAC Audit

In recent months, little has been written about Recovery Audit Contractors (RACs), the CMS contractors charged with identifying improper payments to healthcare providers. Still, they remain a potent threat to practices' bottom lines, given the strong incentives under which they operate. RACs are paid on commission and get between 9.0 percent and 12.5 percent of any improper payments they identify. Small- and medium-sized practices are not below the RAC radar and should heed the following succinct steps to avoid and/or minimize exposure.

1. Avoid copy-and-paste documentation - While it is acceptable to use templates, your documentation must be patient-specific. The RACs have been chastised by the Office of Inspector General (OIG) for not giving this issue enough attention; expect greater scrutiny in 2015 and beyond. Boiler plate wording may be your starting point, but it only passes muster when made patient-specific.

2. Know where you stand on E&Mcoding - Physicians who over-code evaluation and management services (E&M) relative to their peers remain at a greater risk of audit. Compare your E&M coding averages to a national benchmark. The American Association of Professional Coders (AAPC) offers an easy and free way to get national E&M coding averages by specialty.

3. Focus on medical decision making - The OIG and RACs are focusing on the complexity of medical decision making as your primary determinant for selecting an E&M code. Do not use a higher-level code when the complexity is not there, regardless of how great your documentation may be.

4. Don't rely on your EHR's E&M codeselector - I have yet to meet anyone (other than EHR salesmen, of course) who believes these code-selection engines are consistently accurate. This especially holds true with the rising emphasis on medical decision making. These engines are good training tools but nothing more, in my opinion. They are particularly weak with medical decision making.

Consider that the use of Level 4 and Level 5 codes for E&M services has increased more than 60 percent since 2001, as EHRs have become commonplace. These higher level codes are a prime RAC target. Don't let your EHR's code-selection engine be your coding muse.

5. Four eyes are better than two - Have a certified professional coder (CPC) review several chart notes for every provider, every year, for appropriate coding and documentation. Use a CPC who audits medical records for a living; we pay ours $25 per chart; she is one of the best investments we make every year. I recommend this investment even for practices that have their own CPCs, as I have found most office-based CPCs do not conduct ongoing coding and documentation audits.

6. Document medical necessity - When ordering a test or procedure, make sure you document why it is needed. Sleep studies, MRIs, and outpatient physical therapy are three of the services the OIG feels are overutilized. The 2015 OIG Work Plan identifies many OIG/RAC targets.

Lucien W. Roberts, III, MHA, FACMPE, is administrator of Gastrointestinal Specialists, Inc., a 22-provider practice in Central Virginia. For the past twenty years, he has worked in and consulted with physician practices in areas such as compliance, physician compensation, negotiations, strategic planning, and billing/collections. He may be reached at muletick@gmail.com.