Winning at RACS: The Best Defense Is The Best Offense

Winning at RACS: The Best Defense Is The Best Offense

By Randi Ferrare
for the Arizona Case Management Blog
September 2, 2008

In order to ward off the 40-45% denial rates that the CMS RAC Audit showed in the demonstration project, it is imperative that hospitals make changes to better control the utilization of services and improve medical documentation while the patients are still hospitalized.

There are some basic strategies to better your chances of not having the hospital stay denied. Most denials were because of either inpatient hospital stay was not medically necessary or services could have been performed as an outpatient. Basically, these two denial reasons mean the same and therefore can be avoided utilizing the same concurrent strategies:

1. Lower Patient Caseloads for Case Manager and Social Workers
2. Review Medicare Patients for Inpatient Criteria Daily
3. Emergency Department Case Management
4. Implement a Clinical Documentation Program


Case Manager Caseloads

What is an appropriate caseload for a Case Manager? 20-25 patients per Case Manager WAS the answer until the RAC Audits. However, that is for a “traditional” CM model, where the Case Manager performs utilization review, resource utilization, some discharge planning and basically manages the case through admission to discharge. However, the above ratio was for a payor mix of Managed Care and Medicare. Medicare patients, in the past, did not need daily review and to be scrutinized for meeting inpatient criteria for each day in the hospital. There was no accountability or reporting of these cases. In today’s environment, 15- 20 patients per Case Manager would be ideal.

Daily Medicare Utilization Review/Discharge Planning

As stated above, Medicare patients were not and still are not reviewed each day mainly because there was no reason or urgency to move them along the care continuum. Times have changed. Medicare patients should be treated no differently than a managed care patient. There is a real possibility that the RAC Audit will do a retrospective medical record review and deny the entire inpatient stay for not meeting inpatient medical necessity. Case Managers can no longer put the Medicare inpatient reviews to the bottom of their priority lists- they are just as important to review and case manage to the next appropriate level of care as quickly and as cost-effectively as the patients with managed care.


ED Case Management

If your hospital does not have an Emergency Department Case Manager, you need to get one fast! ER Case Management is your hospital’s weapon to keep inappropriate admissions (inpatients or Observation patients) out of the hospital if they don’t meet criteria. These specially trained Case Managers are part of the ER team and can assist the ER physicians by assessing the needs of the patient, applying admission criteria, utilizing their clinical judgment and utilize their discharge planning expertise to assist the ER Physician with the most appropriate disposition if admission to the hospital is not an option. Without this vital role, the influx of inappropriate admissions, whether full inpatient admissions or “Observation”, can only be addressed once they are on the patient floors in a bed. And by then it may be too late, you may already have admitted someone whom the hospital stay will be denied thusly costing your hospital thousands of dollars in lost revenues.

Clinical Documentation

Performed by either a specially trained Case Manager or a Clinical Documentation Specialist, clinical documentation involves reviewing the concurrent inpatient medical record for accurate and complete physician documentation that reflects the whole picture of the patient. The chart should show how sick the patient is; their co-morbidities, complications, resources, tests and treatments are being used to make the patient well. The significance of capturing this information, in the form of physician documentation is that when the medical record goes to coding for billing, the coders are only allowed to code what the physician actually documented. The ramifications and consequences of not having complete and accurate physician documentation in the medical record has taken clinical documentation from an unknown process to the latest healthcare strategy largely due to the resulting increased reimbursements, higher case mix indexes, and more accurate severity of illness.