HIPAA News

Compliance 360 Helps Healthcare Providers Reduce Risk and Scope of Medicare RAC Audits

(August 06, 2008)-- Compliance 360, provider of on-demand software solutions for enterprise governance, risk management and compliance (eGRC) and the most widely used solution in the healthcare industry, announced that its healthcare provider customers are using the compliance software solution to proactively reduce the likelihood of audits
conducted under the Medicare Recovery Audit Contractor (RAC) program.

In June 2008, the Centers for Medicare and Medicaid Services (CMS) reported that Medicare has corrected more than $1 billion in improper payments through the Recovery Audit Contractor (RAC) program since 2005, with 85 percent of the corrected payments coming from hospitals. Thus far, the RAC program has been conducted as a limited pilot in several states, with plans to begin the nation wide rollout later this year. According to CMS figures from 2007, estimated improper Medicare payments exceed $10 billion annually.

"Based on the results so far from the RAC pilot program and the projected figures going forward with the fully deployed program as planned, the potential cost to healthcare providers is significant and they need to begin preparing now," said Steve McGraw, president and CEO of Compliance 360. "Much of the current focus in the healthcare community is based on a reactive strategy of response, rebuttal and appeal. In light of the impending onslaught of RAC audits, this is a very short sighted approach that may leave healthcare providers exposed to a great deal of financial risk. A RAC preparedness program should also include proactive strategies that focus on reducing the likelihood of RAC audits and minimizing the scope of RAC audits should they occur. Regardless of positive or negative outcomes, audits and appeals result in overhead that eats away at the bottom line. Healthcare providers are much better off if they can start by simply reducing their risks in the first place."

As an example of the value of taking a proactive approach, in a recent letter from the Office of the Inspector General (OIG), healthcare providers were advised to adopt proactive programs for compliance testing, error prevention and self-disclosure. By doing so, healthcare organizations that can demonstrate effective programs, may be able to avoid the requirement to sign a corporate integrity agreement (CIA) with the OIG as a result of claims errors.

The Compliance 360 solution is being used today by leading healthcare providers to support both their proactive compliance programs as well as their response and appeal initiatives related to RAC and other medical records audits. The system provides robust capabilities for facilitating internal audits and self assessments to proactively identify outlier cases based on standard practices for diagnosis related groups (DRGs). As a result, hospitals can identify and address claims errors and outliers before they are submitted, thus reducing the number of claims denials and the likelihood of raising the red flag with auditors. The Compliance 360 solution also facilitates audit response and appeal requirements with the project management and workflow needed to collaborate on compliance-related incidents and track the progress of investigations. The unique Virtual Evidence Room(TM) links all activities and documents to demonstrate proof of compliance in an easily accessible view for internal and external audits. Extensive reporting capabilities support analysis requirements as well as summary information for executives.

"Our solution is helping many hospitals manage both their proactive compliance programs and audit response requirements today, and we will be keeping a close watch on this watershed Medicare compliance program going forward," said Debbie Luyk, director of product management for Compliance 360. "As a premiere provider of comprehensive compliance and risk management solutions for healthcare providers, we will ensure that the Compliance 360 solution addresses the unique requirements created by the Medicare RAC program as it evolves."

To learn more about the Compliance 360 solution for healthcare, visit www.compliance360.com/healthcare.

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