March 02, 2009 11:23 ET

New VHA Inc. RAC Readiness Assessment Program Mitigates Risk and Helps Members Better Prepare for Audit

IRVING, TX--(Marketwire - March 2, 2009) - Strengthening its efforts to help hospitals prepare for the national recovery audit contractor (RAC) program, VHA Inc.'s new RAC Readiness Assessment identifies potential problems in hospitals' high-risk areas, including coding and indications for medical necessity.

"Hospitals are concerned about the RAC program and its potential financial impact on their organizations," said Patricia Tyson, vice president at VHA. "Our experts are well-equipped to help members prepare for the RAC audits and to help them identify vulnerable areas and the work necessary to improve them."

VHA's RAC team can monitor RAC notifications and quarterly releases relating to inpatient and outpatient services.

During the RAC demonstration project, approximately 50 percent of overpayments collected from hospitals were attributed to insufficient or inaccurate coding and reporting or providing medically unnecessary services. This underscores the need for complete and accurate clinical documentation that meets the requirements outlined in CMS regulations, local policy determinations and adherence to accepted clinical practice guidelines.

"This is an educational process," said Tyson. "Before any on-site assessment, we identify and discuss patient volumes, patient acuity/case mix and other relevant data. On-site, our expert investigators review and analyze records and data to identify vulnerabilities. Our follow-up reports identify problems, provide remediation and implement an education plan."

The national RAC program is the outgrowth of pilot programs that took place in California, Florida, New York, Massachusetts, South Carolina and Arizona to identify Medicare overpayments and underpayments to health care providers and suppliers. The national program should roll out to all states by 2010.

In late 2008, protests filed with the Government Accountability Office (GAO) by two unsuccessful bidders for the RAC program required the Centers for Medicare & Medicaid Services (CMS) to impose an automatic suspension of RAC contract work. CMS recently announced that the work is resuming in March 2009.

About VHA Inc. - VHA Inc. is a national alliance of leading not-for-profit health care organizations that work together to improve the health of the communities they serve. VHA delivers industry-leading supply chain management services and enables regional and national member networks to improve clinical and operational performance, and drive sustainable results. Based in Irving, Texas, VHA has 16 local offices serving more than 1,400 hospitals and 23,000 non-acute health care organizations across the United States.

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