Healthcare providers are faced with a number of challenges on a day-to-day basis, and as healthcare reform continues to unfold, unexpected issues are bound to spring up. Medicare and Medicaid fraud have taken center stage in the discussion surrounding healthcare reform, and with the recent release of individual doctors’ billing information by the U.S. department of Health and Human Services, fraud perpetrated by providers has drawn the scrutiny of journalists and the general public. There are some concerns regarding the release of the HHS data without its being placed into context, however. For example, some doctors have pointed out that their names were attached to billing information that encompassed not just the services they provided, but the services provided by an entire practice.

Taking on a bigger workload
With the delayed but still impending introduction of the ICD-10, doctors have been preparing in a number of ways, one of which is by hiring more staff to take on the new system. Even before ICD-10 was looming large on the horizon, healthcare providers were trying to deal with heavier workloads and increasingly complicated coding by hiring outside partners to handle it. While not uncommon, doctors need to be careful and do their due diligence on the third party they hire, according to the Leavitt Group, a major U.S. insurance broker. If mistakes are made by the third party, the doctor is still liable. Doctors can be subjected to an audit of Medicare payments by the Recovery Audit Contract program, a program that has come under fire in recent years.

Subject to unfair audits?
​When subject to audits by the Recovery Audit Contractor program, a number of doctors took issue with the RACs findings that medical procedures the doctors found important were deemed unnecessary. The major areas in which the RACs found “waste” of Medicare funds were admissions to inpatient facilities, and patients admitted for “acute care stays.” The American Health Association challenged the findings (PDF, 32 KB) of the audit in a lawsuit that alleged the HHS’s “refusal to reimburse hospitals for reasonable and necessary care when the government in hindsight believes that such care could have been provided in an outpatient facility,” was inappropriate.

Part of the argument by the AMA is that the RACs are essentially playing the role of Monday morning quarterback to healthcare professionals who need to make split second decisions about what’s best for a patient. If a doctor believes that a patient is not stable enough for an outpatient program and decides to place him or her in a more expensive inpatient program, it is possible that months or years down the road an audit could find evidence that this was not entirely necessary.

With the implementation of the Patient Protection and Affordable Care Act, RAC audits have increased with the goal of recovering money that was misspent. As doctors look to third parties to help relieve their staff they ought to be acutely aware of the risks involved in contracting outside companies and of the heightened scrutiny now focused on Medicaid and Medicare payments. Click to learn how McKesson is helping to mitigate compliance risks here.