How RAC Preparation and Your Compliance Plan Can Work Together

Different from other initiatives in the past, whether it be IL-372, Lab Audits, Evaluation and Management documentation or old fashioned fraudulent/abusive activities, etc... where a whistle-blower (disgruntled employee) was the catalyst for a long investigation (with much paperwork to review/audit/debate) to validate a payback, the Government is now using very powerful data mining technologies and capabilities to identify billing/payment abnormalities or "outliers" (a scary compliance term in some parts of the country) via their identified RAC Contractors, who happen to be directly incentivized to find overpayments. Thus, what was previously a long, drawn out process (remember "shadow audits") is now quick and payback focused/driven.

As a healthcare provider, you must be concerned that, if you have a long-standing billing/documentation practice that is inconsistent with the accepted applicable billing/documentation standards (ex: medical necessity), one could potentially argue against you that you have a "pattern or practice' of billings that could subject you to further reviews (longer time periods). Such reviews have the potential for discussions of larger paybacks and possibilities of fines and/or penalties and all of the expense and negative exposure that is included. In some instances, it is not beyond the realm of possibility that criminal investigations could ensue if a provider has behaved in a manner that shows intent to defraud the government.
What I believe is similar between the RAC initiative and previous investigations/areas of focus is that all providers have the opportunity to utilize the Office of Inspector General's Model Hospital Program Compliance (first published in 1998 with a supplemental document published in 2005) as a pro-active resource/planning tool to prepare for the RAC initiative. Whether you have "sat across the table from the RAC", appealed an identified overpayment(s), just learned or have not done anything to prepare, a refresher on the elements of the OIG Model Compliance Program Guidance for Hospitals ("CPG") is a must-read at this time.
As an introduction/refresher to the basic compliance plan elements of the 1998 hospital CPG, below is a summary of the structure and processes that make up the recommended seven elements of a compliance program.

  1. Designation of a compliance officer and compliance committee
  2. Development of compliance policies and procedures, including standards of conduct
  3. Development of open lines of communication
  4. Appropriate training and education
  5. Internal monitoring and auditing
  6. Response to detected deficiencies
  7. Enforcement of disciplinary actions

It is clear that one of the most important elements to having a successful compliance program is the direct commitment and involvement of your Board and Senior Management. Hospitals that have an organizational culture that values compliance are more likely to have effective compliance programs and, thus, are better able to prevent, detect, and correct problems. At this juncture, all of these individuals (Board and Senior Management) should be fully informed about the RAC initiative and its' applicability to your institution.

What is the most important element of a compliance plan?
I am asked frequently, "which is the most important element" or "do I really need to complete all seven elements." My responses include that I don't think you can say that one element is always most important and certainly "yes" you need to address each element or you are opening your organization up for increased risk. Having said this, I must comment that a very important element for all of your compliance efforts is always training and education.
For those of us assigned to manage or prepare our organizations for RAC, one of the first tasks to accomplish, after gaining the appropriate knowledge about the topic ourselves, is to determine how to get the key stakeholders "on board" that this is an important topic that demands their attention and the potential need for an allocation of additional resources. One of the most effective ways to accomplish this is to begin to educate those stakeholders with an outcome goal for this initiative being appropriately identified. By this, I mean after providing education to a group, what is it that you want them to walk away from the meeting with?
Depending upon the audience, you will need to structure your education appropriately. Consider each of the following audiences with some suggestions for the "take-away message" for each:

Board Members - provide a general overview of RAC including some findings from the RAC Demonstration Project, what the threat is to their organization, what measures the Senior Management team is taking and what financial resources (personnel, technology, consultants, etc...) are needed to accomplish these measures.

Senior Management - provide a detailed overview of RAC including detailed findings of the Demonstration Project, Project Preparation Planning Overview and Strategies to Protect, Management Assignments to Specific Tasks and other necessary actions including having dollars available to get outside consulting assistance, if you deem it necessary.

Physicians - provide a general overview of RAC, focus time and attention on areas of documentation inconsistencies that were discovered during the Demonstration Project, spend time on specific documentation examples in your own medical records some which are done appropriately and some that are not done appropriately that might result in a payback to the RAC.

Please note that, for each of these audiences, I mention utilizing the Demonstration Project results as a major component of your presentations. Many times, as a former Compliance Officer when making presentations, I would hear from audiences, "well, that will never happen here" or "this is nothing but another scare tactic by the government." These types of responses are normal and should be expected (unless, of course you are in a facility that has already paid back to the RAC). There is a strategy to handle these types of objections in a concise and productive manner and that is with quantifiable and factual data. The value of the Demonstration Project results is that they give you quantifiable results to allow you to "impress" upon your audience the need to prepare. Some presenters use these results to convey that the "Platform is Burning" to those audiences who have yet to react and prepare appropriately for the RAC. Whether the "Platform is Burning" is the proper approach to take in your organization when doing RAC Education is clearly a decision the presenter needs to make. Due to the inherent difficulties that may be present with internal management making these types of presentations, some organizations are electing to hire consultants to perform this education and other associated RAC preparation functions.

The financial threat and potential disruption of the RAC is a very real concern for all Providers. Hopefully, the above information can assist you in your RAC preparation efforts, serving as a starting or refresher point for the goals of your RAC education efforts. Obviously, education is just one component of your preparation efforts, but properly accomplished with "the proper message to the proper audience" it can be time well spent for your organization. 
We are pleased to have the opportunity to present this information to you. If you have any questions regarding RAC preparation, compliance, or education efforts, please do not hesitate to contact either Bob De Luca at 484-354-7595 or me at 484-844-3327.

Yours very truly,  
Bret S. Bissey, FACHE, MBA
IMA Consulting