Breaking News 2013


CMS Recovery Medicaid Audit Contractor Final Rule

The State of Alaska Medicaid RAC contract was signed in May 2012 and awarded to HMS. The contract is a multi-state joint contract with Alaska, Idaho, Montana, and Utah.

The State of Alaska Medicaid RAC Audits are Projected to Commence January 2013.

HMS data analysis extends to all provider types, including hospital inpatient and outpatient, pharmacy, dental, long term care, hospice, and behavioral health. HMS will be paid on a contingency basis. Although HDI will perform Medicaid RAC audits in Alaska, Myer’s & Stauffer will continue with their current Medicaid billing audits.

Medical Necessity
DRG Billing & Coding Issues
Quality of Care
Coding and Clinical Review Patterns
Appropriate Setting
Overpayment Review (overpayments must be returned in 60 days)
Immediate Focus on High Expenditure Providers (hospitals)
Individual Services versus Bundled Services
Peer Reviews

Review financials for ALL Medicaid eligible residents in facility.
Initial review period is 2-1/2 years with a six month look back since inception.

“Rural hospitals are at risk,?NRHA senior national vice president Brock Slabach told RAC monitor, “the entire rural (hospital) infrastructure is beginning to deteriorate?

…Like the Arctic Tundra, once it’s gone, it’s gone.?/I>

Alaska providers are now subject to Medicare and Medicaid RAC audits as well as separate state and third party billing audits. Unlike large hospital (over 300 beds) systems elsewhere that can sustain the siege of government audits or significant volume fluctuations; the smaller Alaskan facilities can face extreme operational hardship if they encounter large audit paybacks, a decline in utilization, or a substantial number of outliers.


CMS recovery Medicaid Audit Contractor Final Rule

CMS published the Final Rule expanding the Federal Recovery Audit Contractor program to state Medicaid agencies. The regulations were effective starting January 1, 2012.

The State of Washington Medicaid Rac Contract was signed in May 2012. CGI will conduct audits and support the work of the Health Care authority staff in compliance with the Final Rule Regulations.

State of Washington Medicaid RAC Audits Began on October 1st, 2012

The State of Washington has recently signed a contract with CGI to perform the Medicaid RAC audits. CMS announced that CGI will begin the Medicaid RAC Audits in the State of Washington on October 1st, 2012. CGI intends to start their Medicaid RAC audits with the Critical Access Hospitals.

Listed below are some of the significant highlights that will be addressed on the audits:
  • High focus for critical access hospitals inpatient claims include:
    • Short stay /observation
    • High dollar claims
    • Medical necessity
    • Correct coding specific to Washington Medicaid codes
  • The Rac auditors will perform both desk audits and site review audits.
  • Providers must send in records within 30 days of request. CGI must respond with preliminary findings within 60 days.
  • CMS encourages providers to update their contact information.
  • Provider Assistance and Online tools will be provided, including an HCA/Washington RAC Online Portal.
  • Provider can also access and review their audit finding status by going to
  • CGI auditors have selected July 2010 as the claims look back period.
  • Providers may request an exit conference where CGI will provide summary level findings.
  • CGI will issue the following letters: medical records request, preliminary review results, final review notice, and informal dispute response letter.
  • One of the new target areas outlined in OIG 2013 work plan is critical access hospital’s payments for swing bed and long term care services.
  • Providers can appeal within 28 days from the date of the final review results.

Critical Access Hospitals are now subject to Medicare and Medicaid RAC audits as well as separate state and third party billing audits.

Articles & Links

Presentations Conducted From Our Firm

  • Critical Access Hospital Billing Guidelines 2010
  • Lost Charges CAH Billing Fraud Audits
  • CAH Hospital Fraud Audit Training Billing Guidelines
  • Missed Charges - Missed Opportunities - HMFA
  • Fraud Audit Training
  • Your Bailout Is Here
  • Compliance Audit Training
  • Lost Charges & Fraud Audit Assessment Projects
  • Who's Your Watch Dog Fraud/Recovery Audits Performed by Medicare & Medicaid
  • The Tangled Web of Fraud Audits
  • It's a Dangerous World
  • ZPIC Audits - HFMA
  • Medicare Reimbursement Updates - HFMA
  • Community Mental Health Fraud Audits
  • Financial Wellness Plan "Improve Your Bottom Line"
  • Healthcare Access Borders Hawaii - HFMA
  • Challenges of Establishing an American Standard Overseas
  • Health Care Facilities Overseas - HFMA

Articles published in Washington Healthcare News

  • July, 2010: 15.6 Billion Returned to the Medicare Trust Fund From All Fraud Audit Recoveries Since Inception in 1997
  • September, 2008: Recovery Audit Contractors Are Not Going Away...Will Your Facility Survive the Assault?
  • December, 2008: OIG Holds Hospital Boards Accountable on Fraud Audits
  • March, 2009: Boost Your Critical Access Hospital Bottom Line Swing Bed Designation
  • September, 2009: How Benchmarking Can Help Your Facility Achieve Financial Wellness
  • March, 2010: Government Budget Deficits Triggering Increased Provider Audits

FCAW's Most Recent Newsletter

  • Summer 2012 Articles Include:

  • CMS Post top recovery Audit
    • CMS posts year-end improper payment figures
    • CMS posts Q4 improper payment figures
    • Highest Error Rate by Programs
    • Some Error Rates Decline
    • From the Field: Demand Letter Confusion
    • CMS considers edits correct common Overpayments
    • Further edits listed transmittal R1031OTN,

    MAC ?ZPIC Issues
    • MAC auditors begin road show ?Focus Short Stay
    • ZPICs Dive Deep to Identify Fraud, Demands are Questioned
    • Many Roads Lead to Investigations

    Which Auditor will head Medicaid RAC recovery
    • Medicaid RAC expected to recover more than MICs

    RAC Letters Shifted to MAC prepayment
    • RAC Letters Shifted to MACs Bid to Solve lateness Problems

    SNF Billing Issues
    • SNF Billing Intense Rehab Review
    • Prepayment Review: New Kids on the Block
    • Error Rates High, RAC Prepayment Demo Returns

    Health Data Insights
    • HealthDataInsights post two New issues, Medical Necessity

    Physician Point Service Encounters
    • New CMS Policy Three-Day Payment Window Physician Final Rule
    • Some Readmissions Will be Costly
    • CMS: Physician Role Medical Necessity Denials

    Rural Health Clinic
    • Rural Health Clinic & Federally Qualified Health Clinics

    Hospice - Homecare Agencies
    • Hospice Home Health Agency (“HHS? Providers Subject to RAC Audits
    • Audit Risk Home Health Agencies: Face to Face Certification Requirements

    • OIG to Ramp Up Compliance Reviews, Develop Best Practices Provider Must re-enroll with Medicare by 3/2013
    • If initially enrolled prior to 3/2011

    CAH ?Issues
    • Critical Access Hospitals (CAHs) are different at least for Medicare
    • The RAC Investigate CAHs?
    • How Are CAHs Different?

  • Previous FCAW newsletters available upon request

Other Resources

Federal Government Links

State of Alaska Medicaid

State of Washington

State of Oregon

State of Idaho

State of Montana

Private Resources

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