Part One: The RACs are Coming, the RACs are Coming!

There have been a lot of changes that have greatly affected therapy.  Most of the changes affecting our area started back in 2009, with the development of the RACs (Recovery Audit Contractors).  According to CMS, their mission entails:

• The RACs detect and correct past improper payments so that CMS and Carriers, FIs, and

MACs can implement actions that will prevent future improper payments:

Providers can avoid submitting claims that do not comply with Medicare rules

CMS can lower its error rate

Taxpayers and future Medicare beneficiaries are protected

The first phase of the RACs involved looking at inaccurate coding/billing, and the second phase looked at “medical necessity” of care.  The most prepared therapy departments provided training to their employees prior to the implementation dates.  The education we provided involved educating all staff members on the mission and purpose of the RACs, as well as how we should properly document diagnosis codes as well as medical necessity, on our therapy documentation.  We suggested that therapy departments have some version of a Triple Check with the nursing home Billing and MDS departments, to insure that everyone is documenting on each patient appropriately.  This is extremely important, as the only thing worse than having to pay money to Medicare, is to have to pay money back to Medicare, as this audit is completed after Medicare has already dispersed funds.  The RAC audits are very thorough, as they are looking at the entire length of stay in the facility, not just the therapy component.  Documentation that needs submitted includes doctor’s orders and notes, nursing notes, therapy documentation, admission information, proof of notification of services to be provided, etc…  I am happy to say that I feel we were “as prepared as possible,” when it comes to RACs.  Although no one can guarantee they will never receive a denial through a RAC, I feel we have mitigated the likelihood of one, through our trainings, policies and procedures implemented in preparation.

written by:  VP of Operations of a Contract Rehab Provider


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Odyssey Rehabilitation – Partners with long-term care facilities to provide affordable, compassionate PHYSICAL, OCCUPATIONAL and SPEECH THERAPY services in addition to complete, comprehensive management for your rehab department.
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