Medicare recovery audit contractor program expands in April.
Hospitals in 15 states this April will join those in California, Florida, New York, South Carolina and Massachusetts to participate in the Centers for Medicare & Medicaid Services' (CMS) recovery audit contractor (RAC) program. Beginning in April, RACs can review Medicare claims dating back to Oct. 1, 2007, to identify improper payments. RACs are paid on a contingency fee basis to collect improper payments. CMS must have RACs operating in all 50 states by 2010. The AHA is advising hospitals to begin preparing immediately by reviewing claims, medical records and documentation procedures and performing a self-audit. The AHA also suggests identifying a RAC team and educating them on the RAC process. The AHA plans to introduce early this year its own data-collection effort to track the impact of the RAC program on hospitals. It will survey hospitals on the number of medical records requested; claims reviewed, denied and appealed; and the number of denials overturned on appeal. For more information, click here.

Yellow - March 2008
Greeb - October 2008
Blue - January 2009 or Later
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Hospitals must submit “present on admission” information.
As of Jan. 1, the Centers for Medicare and Medicaid Services requires hospitals participating in the Medicare inpatient prospective payment system (PPS) to submit “present on admission” (POA) information for all primary and secondary diagnoses on all claims. The agency has indicated it will accept all claims and provide feedback on reporting errors. However, beginning April 1, claims with incorrect POA reporting will be returned to the hospital, and for discharges on or after Oct. 1, hospitals will not receive payment for eight secondary diagnoses if they are not POA.
The eight conditions are: object left in during surgery; air embolism; blood incompatibility; catheter-associated urinary tract infections; pressure ulcers; vascular catheter associated infections; mediastinitis after coronary artery bypass graft; and hospital-acquired injuries including fractures, dislocations, intracranial injury, crushing injury and burns. When these conditions are not POA, their presence will keep the patient from being assigned to a higher-paying diagnosis related group (DRG). Conditions that develop during an outpatient encounter, including emergency department, observation or outpatient surgery, are considered to be POA.
The POA requirement, part of the fiscal year 2008 Medicare PPS final rule, carries out a provision of the 2005 Deficit Reduction Act that called for an adjustment in Medicare DRG payment for certain “health care acquired conditions” - an illness or condition acquired during hospitalization and was not present on the patient's admission.
For more information on the program, including affected hospitals and the reporting of POA information, visit http://www.cms.hhs.gov/HospitalAcqCond/.
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