Holland and Knight attorneys have penned this helpful 25-point list for providers to consider when you consider Recovery Audit Contractors (RACs). Note that most of the audit protection measures are aimed at inpatient hospitals - that's because most of the money is in inpatient hospitals not in small, private practice physical therapy clinics.
Nevertheless, PTs may want to familiarize themselves with audit risk in general and with small practice compliance specifically. Get the small practice compliance template here.
This blog has previously commented on our experience with the RAC demonstration project in Florida (2005-2008) and the amount of the adverse impact on PTPP, on average.
We have included a chart that describes the average repayment amount from physicians (PTs are lumped in with physicians).
|RECOVERED AMOUNT||NUMBER OF PROVIDERS||TOTAL PHYSICIANS AUDITED BY RACS: 2005-2008|
|My experience: 2005-2008||~$80/year||7|
|Average Florida Provider: 2006||$135||21,927|
|Average California Provider: 2006||$216||50,054|
Note, I have revealed my own clinics' individual repayment experience.
Nationally, over the three-year demonstration period private practice physicians and physical therapists groups have repaid only $19 million from a total over- and under-payment determination of over $1 billion dollars.
Consider the circumstances in the demonstration project - if an overpayment determination reached the third level of the appeals process (Administrative Law Judge) then the RAC was not paid for the overpayment.
Now, in the permanent RAC (2009 going forward), if an overpayment is appealed at any level (1st, 2nd or 3rd) then the RAC will not be paid - this is a HUGE incentive for the RAC to avoid cases which seem likely to appeal, at any level.
Many hospitals have pledged to appeal every overpayment determination based on this rationale. Holland and Knight attorney/blogger Greg Piche' advises against 'knee jerk' audit appeals - only appeal those findings that seem unwarranted and excessive.
Small PT practices may have limited resources (time and money) to automatically appeal every time but with "skin in the game" an owner is personally incentivized to appeal large overpayments based on "medical necessity" (the most prevalent audit finding).
Medically unneccesary physical therapy speaks to the "home court advantage" of small private practices - how well do you know your patient and how well do you document your evaluation findings?
Most practice owners do a very good job with the face-to-face interaction. It should be a simple matter to go one step further to use a standard documentation format to show medical necessity.
The OPTIMAL is one such format to create baseline self-report data that shows medical necessity (need) for physical therapy.
Other baseline formats include the following:
- performance measures (like TUG test, Single Leg Stance time, etc.)
- impairment measures (like Straight Leg Raise, hip internal/external rotation ROM, etc.)
- treatment-based classification measures (like traction, manipulation, stabilization, etc.
RAC audits are an unlikely but persistent threat for small practice physical therapists. The federal governement's current budget difficulties have only increased the need for 'self-funding' programs like the RACs.
Therefore, RACs seem unlikely to go away in the near term.