A scary pilot program!

If only we could say all news of health care reform was good news! Modern Healthcare recently announced a rather scary kind of pilot program: a RAC demo program. RAC, what's that? Recovery Audit Contractors. 


The infamous RACs have been around for years already. Typically, they've gone into practices to do Medicare audits, primarily checking to see that patient records substantiate past Medicare claims. In many cases, records were found not to substantiate the claims, and significant penalties or "clawbacks" have resulted. This program was so successful in getting big dollars back into Medicare coffers that CMS could do nothing other than multiply its army of auditors. Now, CMS has taken it to a whole new level.

"After an eight-month delay, the CMS has set Aug. 27 as the date for the start of a demonstration program that will allow Medicare recovery audit contractors in 11 states to review the medical necessity of claims before the providers are ever paid. 

The demonstration program, called recovery audit prepayment review, will focus on certain types of claims that the CMS says are prone to high rates of improper payments. The reviews will focus on seven states with providers prone to errors and fraud (California, Florida, Illinois, Louisiana, Michigan, New York and Texas) and four with large volumes of short inpatient hospital stays (Missouri, North Carolina, Ohio and Pennsylvania)."

Read more here: CMS sets start date for RAC demo program | Modern Healthcare 

So what does this have to do with eye care? As is the case for all manner of change arising from health care reform, it has everything to do with eye care. It's only a matter of time before any aspect of the transformation of healthcare comes home to roost in your practice. 


A primary concern for eye care as a profession is that we're second only to radiology in the volume of imaging used for diagnostic purposes. Imaging is a primary target for RACs since they're notoriously poor at showing what the claim says they show, especially if the images are kept as paper records. 


A big lesson we see in just the brief quote above is that audits are now occurring statewide and across defined groups. How far a leap is it to move from provider groups "prone to errors and fraud" or that demonstrate "short inpatient hospital stays" to specialty provider groups? These examples prove that the analysis of broad-based provider data is alive and well at CMS. Do we think CMS has not yet identified or cannot easily spot professions or provider groups that claim every billable specialty test in order to maximize revenue? 


The bad news here is the catch-all nature of the new RAC process. Once a group is identified, it matters no longer that you're the exception. By virtue of association, you've effectively failed the audit before it starts ... akin to guilty until proven innocent. Even if the verdict is favourable, going through the process is ugly.


Our message here is more for the eye care profession and significant provider groups within it than to individual providers: it's time to pay heed to the pilot program developments in healthcare. Too often we still hear, "that's down the road" or "we'll do that once it's important. Sometimes those are foolish words from sleeping giants.


Alistair Jackson, M.Ed.