RAC Self-Auditing

Self-auditing is an important preparation tool as internal audit results can show where additional education and training are needed. Self-auditing should also be used when determining whether your staff is appropriately coding, billing, and documenting.

Recovery Audit Contractors are looking for errors. CMS has stated that only one type of self-audit will ensure RACs may not later review the claims, and it probably is not the kind of self-audit you are used to.

The type of self-audit you are probably used to is a Voluntary Refund audit. This type of self-audit is claim-based. If the required information is included along with the amount of the improper payment, the claim will be adjusted by the claim processing contractor. The RAC will be aware of the adjustment, but the refund does not preclude future review.

In an Extrapolation Audit, past historical data is used. The claim processing contractor will review the case file to determine if it is acceptable. The claims processing contractor will accept or deny the extrapolation for the issue you identified. If the claim processing contractor accepts the extrapolation, those claims will be excluded from RAC review.

What does this mean? If you use an extrapolation that is accepted by your Medicare carrier, the claims are off-limits for RACs. Otherwise, individual claims corrected after a self-audit are not immune.

If you review your claims, you may feel a little less incentive to report errors and over-payments that you discover since the claims are not protected from RACs, but not doing so is a compliance problem. Ignoring a false claim is never a good idea.