Audit Insights Blog

This blog provides tips, tools and information about all audits that affect the revenue of healthcare facilities, including Recovery Audit Contractor (RAC) audits. Authored by Dawn Crump, industry leader and HealthPort's Vice President of Audit Management Solutions, Audit Insights gives healthcare professionals a comprehensive look at healthcare audits, the risks they present and ways to effectively manage and understand the entire process.

About Dawn...

Dawn Crump, MA, SSBB, CHC, has been in the healthcare compliance industry for more than 18 years and joined HealthPort in 2013 as Vice President of Audit Management Solutions. Prior to joining HealthPort, Ms. Crump was the Network Director of Compliance for SSM. She has healthcare experience in education, organization development, quality improvement and corporate compliance. 

Trained as a six sigma black belt, Ms. Crump used this holistic, fact-based approach to establish audit tracking (RAC) programs. Her expertise includes coding and billing compliance as well as HIPAA compliance and government audit programs for acute care facilities. She is on the board of the Greater St. Louis Healthcare Finance Management Association chapter and is a member of the Health Care Compliance Association.

Check this page often for the latest news, education and information on healthcare audits.

Click here to see all of Dawn's upcoming speaking engagements.


  • OMHA should rectify its two-year audit appeal delay

    The recent announcement by the Office of Medicare Hearings and Appeals (OMHA) that it will delay assigning an administrative law judge (ALJ) to any new audit appeals for two years has significant impact for providers. The December 30, 2013, OMHA memo to Medicare appellants states, “We do not expect general assignments to resume for at least 24 months and we expect post-assignment hearing wait times to continue to exceed six months.”  Adding that kind of delay to a system already woefully behind in audit appeals has complicating results.  

    Likewise, the ALJ has cause for complaint as they never anticipated receiving so many cases. As of AHA’s 3rd Quarter 2013 Survey Results, there are over 150,000 active ALJ cases with over 500,000 cases processed in total since RACTrac reporting began. Needless to say, both sides are equally frustrated.

    Here are five key points for providers to consider. 

    Fairness of deadlines
    As part of the Centers for Medicare & Medicaid Services (CMS), OMHA is charged with providing a forum for the fair and timely adjudication of Medicare claim and entitlement appeals. With this announcement, CMS can be more than two years late and not suffer any ramifications. According to OMHA’s website, “Based on our current workload and volume of new requests, we anticipate that assignment of your request for hearing to an Administrative Law Judge may be delayed for up to 28 months.”

    Providers certainly want to be able to continue to work nicely together with the government; however, CMS is complying with appeals guidelines initially set forth. The initial rule stated ALJ appeals would be heard in 60-90 days, not 28 months. Conversely, the ALJ infrastructure was never built to withstand the volume of cases they have processed over the years. 

    Dramatic changes to the process were inevitable. Now they are here. 

    AHA’s stand
    The announcement raises four questions for providers. Is the delay denying due process? How can providers appeal in a timely fashion? What rights do providers have? What improvements in ALJ infrastructure can be made to expand their bandwidth? The American Hospital Association (AHA) is taking a stand.

    On behalf of its nearly 5,000 member hospitals, health systems and other healthcare organizations, and its 43,000 individual members, AHA urged CMS to work with OMHA to remedy this situation immediately. In the memo, AHA suggested to CMS solutions to help mitigate the detrimental impact of hearing requests on hospitals, including postponing recoupment for appealed claims until after the hospital receives an ALJ determination, and enforcing the statutory timeframes to issue appeals decisions.

    The AHA memo goes on to state, “It is clear that the RAC program and the resulting volume of inappropriate claim denials are putting significant strain on the appeals process. And hospitals are bearing the financial burden with over a billion dollars caught in a broken appeals process that takes several years to issue a final determination…Action must be taken to address this problem now.”

    What you can do
    So what can hospitals do to encourage change? Here are some steps to take: 

    Discuss with internal appeals department/staff and legal counsel;
    Work with AHA at the state level to lobby for reform.

    According to the OMHA’s website, “Although OMHA is processing a record number of Medicare appeals, we continue to receive more requests for hearing than our Administrative Law Judges can adjudicate in a timely manner.” By its own admission, OMHA cannot keep up with the current level of appeals. Delaying the process by more than two years will only make the problem worse.Now’s the time for providers to take a serious look at all appeals currently in process and those cases planned for appeal. Measure your financial risk, consider your options and stay tuned!



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  • RAC Dollars at Risk: Enhance Your Chances

    Check out my article in Advance Healthcare Network for Health Information Professionals where I show you how to calculate and communicate RAC dollars at risk.

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  • Changin’ Times, Changin’ RAC Regions

    As Bob Dylan sang in the early 1960s, “The times, they are a’ changin’.” If he were to recompose that song in 2013, he might write “the boundaries, they are a’ changing,’” alluding to Medicare’s Fee for Service Auditor Recovery Program.

    Setting Boundaries

    The new boundaries for CMS’s Recovery Audit Contractor (RAC) four regions are expected to go into effect in late 2013 or in early 2014. A sneak peek of the new RAC region map is available on the CMS website. RACs will continue to work with the existing regions through November 15; they’ll respond with results until January 15, 2014.

    The new territories were designed to reduce audit management disruption, especially for organizations with facilities in multiple states. Though disruptions will be minimized, a variety of key operational and workflow modifications will be needed to accommodate the changes.

    The new RAC regions--Northeast, Southeast, Midwest and West--should dramatically simplify the audit process since they are designed in a more consistent, regional manner. (Please note that Pennsylvania, New Jersey, Maryland and Delaware will be served by the Western Region RAC.) Fewer RACs will be involved, and audit management and reporting should become more straightforward.

    To get started, get acquainted with the new RAC region map. Then adjust team assignments, software databases and executive reporting dashboards to reflect new RAC assignments. Once that’s accomplished, solidify plans to communicate with your new RACS and to educate your staff.

    Communicate and Educate

    Take the following steps as to assist while preparing to meet your new RACS:

    • Ask your existing RAC if your contact information will be transferred. If not, quickly share all contact information with your incoming contractor. Remember, faulty addresses and contacts continue to be a chief complaint of the RAC program and may lead to unwarranted technical denials.
    • Conduct educational sessions for all staff involved in the RAC request process and audit management, including your release of information (ROI) staff or outsourced vendor. Also ask your new RAC if any education will be provided.
    • Request samples of the incoming contractor’s request letters and other correspondence to familiarize everyone with the new request and response paperwork formats.

    Old Cases are Still Appealing

    So what becomes of the RAC denials and audit appeals already in progress? Whichever RAC originally issued the denial follows that denial through the entire appeal process, even if the provider’s RAC region changes. Organizations should prepare to manage a large number of “in process” cases. These cases must be separated out, carefully tracked and closely monitored for several reasons:

    • Block any inadvertent duplication by the new RAC.
    • Measure the correct appeal success and activity by RAC auditor and case type.
    • Know denial rates by old RAC versus new RAC and by case type.
    • Calculate the financial impact of RAC regional transition.
    • Calculate the operational costs of RAC regional transition.

    Obstacles Ahead

    Expect delays in workflow between RAC reply periods during the transition. The normal process of communicating audit results and sending demand letters may also be temporarily interrupted. Documenting the old RAC and future new RAC for each case is a must. Best practice is to document every aspect of every audit during the transition period.

    Uncharted Territory

    After five years, we’re well acquainted with the RAC program. We know the typical audit patterns, we’ve learned important management lessons, and we’ve devised successful appeal strategies. Yet transitioning to new RAC regions will be a bit of a challenge. It’s critical to continue capturing data and tracking audits throughout the transition. You’ll mitigate current RAC risk and garner valuable business intelligence for tomorrow.

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  • RAC Appeals: Should You Bother?

    This month, Dawn Crump was quoted in the July issue of For the Record discussing the low number of RAC appeals from hospitals, despite the relatively high success rate. Why aren’t more organizations taking advantage of the appeals process? Would the ability to submit appeals electronically result in more filings? How will the ability to bill for Part B impact your appeal decision? Most importantly, what can hospitals do to ensure valuable dollars aren’t slipping through the cracks?

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  • Five Years Wiser: Analyzing RAC Data to Mitigate Risk

    It’s hard to believe that, for some hospitals, this summer marks the fifth year of managing RACS. Nearly $2 billion has been recouped via complex medical record denials, representing the lion’s share of RAC activity. Thousands of audits have been conducted and millions of records have been requested, logged, reviewed and tracked. HealthPort alone averages 39,000 RAC record requests a month.

    But what has your hospital learned during the past half-decade? Is your organization any closer to mitigating risk and reducing takebacks? Do you know how increased audit requests impact your cash flow? Are your dollars tangled in the appeals process?

    You certainly can’t stop the RAC tornado from striking, but you can make sure that your organization is prepared for it. Analyzing your historical RAC data with visibility into dollars at risk is one way to begin building a strong shelter.

    Read more…


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  • esMD and HealthPort: Working Together to Process ADR Requests

    Although there are future plans for a variety of different document formats to be processed through esMD, the Additional Documentation Request (ADR) document format is the only type currently being accepted. Appeals and other correspondence cannot be sent at this time. While a timeframe has not been established, the next phase of esMD document acceptance is expected to include appeals.

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  • Supplemental Medical Review Contractor (SMRC)

    The Centers for Medicare & Medicaid Services (CMS) has contracted with StrategicHealthSolutions, LLC, a Supplemental Medical Review/Specialty Contractor (SMRC) to perform and provide support for a variety of tasks aimed at lowering the improper payment rates and increasing efficiencies of the medical review functions of the Medicare and Medicaid programs.

    The SMRC will focus on areas that RACs and other review entities have not evaluated in the past, such as compliance with coverage, coding, payment and billing practices. CMS will select providers and specialty services for evaluation. Today, published criteria for evaluation isn’t specific, however, determinations will likely be made using the same regulations as other auditing entities like CERT and PERM. 

    This is a new type of audit that should be tracked and monitored, especially since there doesn’t appear to be any limitations to the number of requests the SMRC can submit. Records can be submitted using esMD, fax, mail, paper and CD.

    Click here to read full article

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  • The Real World of Audit: Inquisitive Minds Ask 5 Questions

    This month’s RACMonitor includes an interview with the former network director of audits and compliance at a 6-hospital health system in Missouri. My inquisitive mind asked her five tough questions about the real-world of audit management. 

    See if her answers resonate with you! Or meet her in person at the HCCA Compliance Institute on Monday, April 22nd. 

    What were your two biggest challenges?
    Juggling all the different types of audits, and incoming communications.
    Financially reconciling the audits with findings.

    How did you deal with requests?
    We used a comprehensive audit management software application, HealthPort AudaPro™, for all our audits: RACs, MACs, QIO, CERT, etc.

    What was your staffing? 
    We managed the audit program centrally with four FTEs. HIM managed the view-and-approve process and HealthPort, our outsourced ROI vendor, processed the releases. 

    What were your most common requests? 
    Short-stay medical necessity denials

    What’s ahead?
    More audit activity and more delays in the appeal process.

    Click here to read the entire RACMonitor article.

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  • AHA RAC Update

    AHA has issued a Regulatory Action Alert to AHA members to encourage comments to a new CMS proposed rule on rebilling.  The proposed rule would permit rebilling for some Part A claims that have been denied because the hospital inpatient admission was later determined not to be medically reasonable and necessary. However, AHA believes the proposal, as drafted, restricts a hospital’s ability to rebill claims. 

    Let your voice be heard by providing comments on the proposed regulation before May 17th.  AHA has provided a model letter addressing this important issue to help guide you as you draft your comments. Visit www.aha.org/rac and select the Action Alert link for more detailed information.

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  • CMS Issues Updated Medical Record Request Guidance

    Hospitals are focused on caring for patients, but also challenged with more audits of payment claims, including by recovery audit contractors (RACs), which subject them to additional administrative burden and costly payment denials.

    In this April 5 RAC Update from the American Hospital Association, the Centers for Medicare and Medicaid Services has reduced the minimum number of medical records that Recovery Audit Contractors may request from Medicare providers other than physicians and suppliers.

    Key changes include:

    • Effective April 15, RACs may issue a minimum request of 20 records in a 45-day period from hospital and other provider campuses, down from a previous minimum of 35 records. 
    • Only 75% of a hospital’s record request limit may be used for a particular type of claim, such as inpatient, down from 100% previously.
    • The AHA-supported Medicare Audit Improvement Act (H.R. 1250), introduced March 19, would limit RAC medical record requests by campus to 2% of the Medicare claims submitted for a particular care setting, such as inpatient, outpatient, skilled nursing facility or inpatient rehabilitation.
    Click here to read the article in its entirety.

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