June 2013

RAC Notification of Medical Necessity Denial

Physicians who have Recovery Audit Contracting (RAC)-denied cases will soon begin receiving notification letters sent via fax about medical record documentation that does not support the medical necessity for the inpatient level of care.

The Centers for Medicare and Medicaid Services (CMS) has retained HealthDataInsights, Inc., (HDI) to carry out its RAC program in the state of Illinois. The RAC program was established by Congress and is aimed at identifying Medicare improper payments, placing hospitals and physicians under increased scrutiny to properly document medical necessity of an inpatient admission. Improper payments may occur due to incorrect coding, lack of sufficient documentation and/or no documentation, use of an outdated fee schedule, or billing for services that do not meet Medicare's coverage and/or medical necessity criteria.

Gabriela Zdun, NCH's new Denial Management Manger, is overseeing coordinated denial efforts.