A Brief Note On The Recovery Audit Contractors

Retrospective reimbursement method was based on actual cost the providers assumed the previous year. On this method rates were evaluated retrospectively and costs were used to determined the amount paid to the provider and had no incentive to control cost. On the other hand, prospective reimbursement methods can determine in advance how much a provider is going to get compensated. (Shi & Sing, 2017) The way retrospective reimbursement contain perverse financial incentives happened when institutions increased their profits by increasing costs and this system payment method was based on costs. Due to this issue the method was changed to the prospective to avoid abuse of the system.

Federal or state authorities may investigate allegations of fraud depending on where the fraud was reported, the laws broken, and the amount of money involved. The strictness of penalties levied by state governments varies from state to state. Federal laws such as The False Claims Act, Anti-Kickback Statute, and Social Security Act are laws that address fraud and abuse. Title XI of the Social Security Act contains Medicaid program-related anti-fraud provisions, which impose civil penalties, criminal penalties, and exclusions from federal health care programs on persons who engage in certain types of misconduct (Staman, 2010). Under federal regulations, providers convicted of fraud are excluded for a minimum of five years from receiving funds from any federally

Auditor, an instructional novella written by James K. Loebbecke, tells the story of Jack Butler, a man from the San Francisco Bay area, who goes to college, majors in accounting, and goes to work for a large accounting firm referred to as “The Firm.” The story is loosely based upon the real world experiences of the author, and is written to give students a look into the world of public accounting that goes beyond a textbook. The Auditor not only gives students a chance to follow Jack Butler’s journey up the company ladder at The Firm, but also reiterates the relative importance of conventional lessons learned in school.

Region C: Cotiviti Healthcare (Recovery Audit Program-Center for Medicare & Medicaid Services Retrieved on May 9, 2016).

Healthcare providers that elect to participate in and receive reimbursement from Medicare must be licensed through their state, as well as, obtain and maintain certification for compliance with the Center for Medicare and Medicaid Services (CMS) Conditions of Participation (COPs). CMS is an agency within the Department of Health and Human Services that drafted guidelines for healthcare providers to meet acceptable minimum standards to operate and be reimbursed for services. Once providers are able to meet the COPs, they become a Medicare-Certified Agency and are granted a provider number. Each state is responsible for the certification of healthcare providers and a state survey is conducted every three years and as needed to determine if the healthcare provider continues to meet the minimum standards set in the COPs.

This newer reimbursement system has been a topic of contention amongst a large portion of the professional medical community due to the perceived unfairness that it brings in certain situations where a patient must be readmitted and, as a consequence, the primary care providers may not be reimbursed for the readmission regardless if they were responsible. With the introduction of the Affordable Care Act in 2010, further criteria such as the Readmissions Reduction Program have been added that determines the eligibility of a primary care provider being reimbursed through the Medicare/Medicaid program. These new requirements have led to new avenues of contention amongst healthcare professionals and, in some cases, new avenues for fraud and patient discrimination.

On October 1, 2013 CMS has implemented a two midnight rule. If a patient is not in the hospital over two midnights the claim will not be eligible for payment under Medicare Part A (Pahuja, 2014). The physician must document and prove necessity for a two night stay. The American Hospital Association and three hospitals have sued Medicare based on ethical standards of RAC. The claim is that RAC auditors are paid based on the funds recovered from hospital audits. The push to pay auditors a flat fee, eliminating the unsubstantiated over riding of a physician decision in order to increase the amount of dollars

Contract monitoring is the systematic review of a contractor’s records, activities, etc. to ensure compliance with the terms and conditions of the contract (Texas HHSC 2015). Because privatization aims to provide the government with the best value in terms of quality, service, and conditions, contracting does not end after the procurement process (Schooner 2011, 3). The administration of the contract, including monitoring, is just as important to ensuring that the state gets the best value. Despite the fact that there is a clear contract monitoring process within HHS, time is not always invested into developing a comprehensive monitoring approach and funds are not always allocated towards that process, preventing agencies

Id. In order for providers to avoid costly claim denials, a risk management and compliance program should be in place and annual monitoring and auditing of internal controls needs to occur on a regular basis. This text will review the issues that medical providers face with coding and billing regulations, the consequences of improper billing and coding, and resolutions that will aid in the prevention of claims being denied.

Some federal statutes address fraud in government health care programs, and many of these laws vary considerably (Krause 2004). Some of these laws specifically target health care fraud. Example of the laws that the government direct at inappropriate health care activities includes the “Medicare and Medicaid Anti-Kickback Statute and Ethics in Patient Referrals Act (EPRA).”

Prior to this enactment providers had the option to make unsolicited or voluntary refunds to Medicare administrative contractors who process claims and issue payments on behalf of CMS. Generally, these refunds are in the form of adjustment bills or checks. The Medicare contractors process the refunds and review the circumstances surrounding the overpayment and take appropriate steps to resolve the issue. Entities could also request an advisory opinion from CMS to resolve violations. For CMS to consider an advisory opinion the requester must be a party to the existing agreement and is the only individual or entity that may rely on that opinion.

There first noncompliance act was between the coder and the physician, the physician was admitting fraud when he ask the coder to code things that is not true, so he can get more money from the insurance company, at the same time the coder should not listen to the physician, and should send a report to a compliance officer and committee.

The Recovery Audit Contractor (RAC) program was created by the Medicare Modernization Act of 2003 and made permeant By the Tax Relief and Health Care Act of 2006. These private contractors are on consignment to identify and recover improper Medicare payments to healthcare providers. The American Hospital Association (AHA) feels the RAC audits are inaccurate, duplicative, increase hospital administrative burden, and are time consuming and costly to appeal. The AHA further asserts the RACs have no consequences to their poor performance.

• Directing appropriate attention to the different areas of the audit such as assessing materiality, so that when the detailed audit plan is prepared, audit procedures can be directed towards the material amounts.

| * David should keep a straightforward and honest relationship with MAL. * David integrity will be compromised if these errors are discovered.