The Recovery Audit Contractor (RAC) program was initiated in 2005 as a demonstration project by CMS to identify underpayments and overpayments and to recoup overpayments under Parts A and B of Medicare. By 2010, DHHS had implemented the RAC program in all 50 states. During the first quarter of fiscal year 2013, RACs collected over $740M in overpayments alone. In each of the four RAC regions, the number one reason for denial was lack of medical necessity.

MCG products support decision-making based on the patient’s clinical condition, helping clinicians document medical necessity at each decision point along the care pathway. If indications do not meet criteria for inpatient admission, users can review observation care criteria as well as alternatives to hospital admission. Recovery and discharge milestones help care managers track a patient’s progress during a hospital stay. If a patient does not meet a milestone, the care manager records a variance and identifies evidence to justify a continued stay. The care guidelines also account for patients admitted with comorbidities who may stay longer than the goal length of stay. Care managers can readily identify this information with the extended stay criteria and common complications and conditions guidelines, which further support the need for hospitalization.

 

 

 

Learning Objectives:  

 

Explain the importance of rigorous evidence-based documentation of medical necessity for preventing and appealing RAC denials

 

Describe how to use evidence-based care guidelines to support and document admission and level-of-care decisions

 

Identify tools that support proactive best practice care for complex patients