Last year, health care organizations across the country successfully made the transition to ICD-10 coding. Although the storm of changes has finally abated, the threat of Recovery Audit Contractors (RAC) still looms overhead. Errors made on claims to Medicare beneficiaries may cause problems for organizations, including loss of revenue.

Should a RAC audit of your charts show instances of overbilling, the government will take back that reimbursement and could flag your organization for future audits. So while you may think your organization is safe, there could still be unexpected errors lurking within your charts. Human error, including misunderstandings of the new ICD-10 codes, could prove costly. In addition to the lost revenue, a single RAC audit could cost your organization wasted time and may trigger subsequent investigations by the Centers for Medicare and Medicaid Services.

To prepare for potential RAC audits, your organization needs to identify areas where risk is most likely to occur and perform rigorous internal assessments to identify problems before a government auditor does. This may sound like a difficult process, but with the right tools, performing internal audits is easy and affordable.

Preventing RAC audits
Some organizations may feel safe because the CMS recently stated it will waive payment adjustment penalties to groups that fail to fully report for 2016 as a result of the ICD-10 code updates. According to CMS, the code updates impacted quality measures for 2016, and will likely cause issues for the CMS's ability to process reported data. However, it should be noted that the waiver only applies to the physician quality reporting system and even then, only to claims from 2016. Effectively, a substantial portion of the organization's revenue remains exposed to these audits.

For other organizations, having a clinical documentation improvement program may seem like enough to keep RAC auditors at bay. While a CDI program is certainly helpful, it doesn't automatically prevent errors from occurring. The only true way to mitigate the risk that surrounds these moving parts – CDI programs and ICD-10 implementation – is to conduct a self-audit. In fact, conducting a self-audit was one of the CMS's top recommendations to prepare for audits and avoid improper payments in the future.

Why self-auditing is the best way to prepare for RAC audits
A self-audit will highlight any potential problems before RAC gets involved and reduce legal risks moving forward. A traditional audit, performed after billing, still has one fatal flaw: it can only detect errors after the fact, and leaves a very limited window of time to correct them before exposing your organization to penalties or loss of revenue. In the case of overbilling, money will need to be reimbursed to the patient. In the case of underbilling, that money is likely lost for good. Additionally, audits of randomized, representative samples are still far from comprehensive. Errors still have a chance to slip through the cracks.

"Computer assistance isn't a luxury, it's a necessity."

The first way to improve self-audits is to make the process more efficient. Streamline Health's CORE platform removes cumbersome spreadsheets from the equation, vastly improving how you conduct audits. This saves time and resources while allowing an improved reporting process to thrive.
With CORE, auditors can share valuable data with the right people within the organization. In doing so, managers can assess risk properly and make the necessary adjustments to improve the process, including providing coders with training or changing key workflows.

ICD-10 implementation may be behind you, but with thousands of additional codes, computer assistance isn't a luxury, it's a necessity. If computer-assisted coding is already part of your organization's workflow, it makes sense to have a similar resource to help you execute self-audits. Looking Glass® eValuator™ from Streamline Health is a tool that automatically audits your codes before they go to billing, which means you can make corrections early and protect your revenue.

Managers can define the parameters for triggering a warning so that they see the best ROI based on the amount of risk the organization is willing take on. ICD-10 implementation may have introduced risk that is difficult to quantify because it is so new. Rather than discovering that risk during an RAC audit, your organization should conduct a thorough self-audit to catch – and address – mistakes proactively. Moving forward, pre-billing audits can ensure that you continuously mitigate risk levels throughout the year.

The clinical providers in your organization will be the first to tell you: prevention is the key to ensuring wellness. With regard to RAC audits and the resulting repercussions, the same concept applies. Pre-billing audits are the proactive approach you should implement "stat."