Minnesota Department of Human Services Recovery Audit Contract (RAC) Provider Outreach & Education Presentation April 18, 2013 - PowerPoint PPT Presentation

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Minnesota Department of Human Services Recovery Audit Contract (RAC) Provider Outreach & Education Presentation April 18, 2013. Agenda. Introduction HMS Overview Minnesota’s Medicaid RAC Program Complex and Credit Balance Reviews: Methodology Approach & Overview Review Process

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Minnesota Department of Human Services Recovery Audit Contract (RAC) Provider Outreach & Education Presentation April 18, 2013

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Minnesota department of human services recovery audit contract rac provider outreach education presentation april 18 2013

Minnesota Department of Human Services

Recovery Audit Contract (RAC)

Provider Outreach & Education Presentation

April 18, 2013



  • Introduction

  • HMS Overview

  • Minnesota’s Medicaid RAC Program

  • Complex and Credit Balance Reviews:


    Approach & Overview

    Review Process

  • Provider Portal

  • Answer Common Questions

Minnesota department of human services recovery audit contract rac provider outreach education presentation april 18 2013

Health Management Systems Presenters Lonnette Chilefone, Director, Minnesota Programs Joleen Bond-Livingston, Vice President, Recovery AuditGlenda Lloyd, Manager, DRG Coding Validation - RAC Mary Leigh Covington, Divisional Vice President Credit Balance Jeffrey Norman, Sr. Program Integrity Provider Services Supervisor

Hms overview joleen bond livingston vice president recovery audit

HMS OverviewJOLEEN Bond-livingstonVice President, Recovery Audit

About hms

About HMS

  • We provide cost containment services for healthcare payers

  • We help ensure that claims are paid correctly (program integrity) and by the appropriate responsible party (coordination of benefits)

  • As a result, our clients spend more of their healthcare dollars on the patients themselves


Background recovery audit contractor

Background Recovery Audit Contractor

  • Medicare Modernization Act of 2003 created a demonstration project to identify Medicare overpayments

    • The program was operational from 2005 through 2007

    • Following success of the demonstration project, the program was made permanent in 2008

  • Section 6411(a) of the Affordable Care Act expanded RAC to Medicaidand required each State to begin implementation by January 1, 2012

    • Identification of overpayments and underpayments

    • States & RAC vendor must coordinate recovery audit efforts

    • RAC vendors reimbursed through contingency model

Hms medicaid rac standards

HMS- Medicaid RAC Standards

Rac process flow

RAC Process: Flow

Transparency &

Collaboration with Minnesota

Key rac considerations

Key RAC Considerations

  • Diverse focus on multiple provider and claim types

  • Minnesota approval on all initiatives

  • Supplement and wrap around existing Minnesota efforts

  • Pilot approach to confirm issue/scenario

  • Comprehensive provider education

  • Same appeal rights as other DHS post-payment reviews

  • 360 degree claim review

    • Clinical

    • Regulatory

    • Billing

  • Comprehensive panel of experts

    • Physicians, Nurses, Coders

    • Data analysts

    • Financial auditors


Overview of review process

Overview of Review Process

  • Program Analysis

  • Data Mining/Scenario Design

  • State Approval


And Identification

  • Provider Contact

  • Record Request/Receipt

  • Tracking/follow up

Record Request

  • RN/Coder Review

  • Physician Referral

  • QA and Client Review/Approval


  • Notification Letter

  • Reconsideration/Appeal

  • Recovery Support


and Recovery

  • Provider Association Meetings

  • Program Recommendations

  • Newsletter/Website


Process Improvement

Hms rac support staff

HMS RAC Support Staff

  • Experienced staff performing reviews according to provider types included in contract:

    • Certified Coders

    • Registered nurses

    • Specialized Therapy Professionals

    • Review panel of over 1,000 physicians

  • HMS has in-depth knowledge of

    • Minnesota Medicaid billing & reimbursement practices

    • Claims adjudication process

    • Medicaid data processed by Minnesota MMIS


Hms audit support

HMS Audit Support

  • HMS Provider Services’ staff are practiced at establishing and maintaining effective communication with providers and strive to resolve provider issues on the first call


Minnesota medicaid rac lonnette chilefone director minnesota programs

Minnesota Medicaid RACLonnette chilefonedirector, minnesota programs

Minnesota audit areas

Minnesota Audit Areas

  • Complex Reviews – Clinical based on DRG

    • Three year look back from paid date

  • Credit Balance Reviews – Financial

    • Five year look back from paid date


Complex reviews

Complex Reviews

  • When analysis identifies a potential improper

    payment that cannot be automatically validated

  • Claims flagged for further review

  • Additional documentation is requested

  • Audit to determine if improper payment

  • Findings communicated with provider

  • Look back period is three years from paid date

Credit balance reviews

Credit Balance Reviews

  • Not clinical reviews

  • Financial reviews

  • Payments and adjustments exceed the claim cost

  • Can occur as a result of many variables

  • Provides for identification of Root Cause

  • Look back period is five years from bill date

Minnesot a medicaid rac program audit areas

Minnesota Medicaid RAC Program Audit Areas

Audit areas continued

Audit Areas Continued

Review process

Review Process

  • Providers will receive audit notifications HMS letterhead that will be accompanied by the DHS authorization letter on DHS letterhead.

  • Audits will be conducted as desk reviews by experienced certified coders with access to a panel of physicians.

  • During this period, HMS may be in contact with the provider to ask questions or to request additional information. The provider may contact HMS at any time to discuss their review.

  • After the review process is completed, result letters are sent to

    providers to communicate:

    • Detailed description of final determinations

    • Improper payment amount

    • Option to appeal

Review process1

Review Process

  • Receipt of records is extremely important to accurately and effectively conduct the audits in a timely manner.

  • Initial records request requires receipt of the records by HMS, no later than the end of the 30th business day from receipt of the letter documented by standard postal delivery tracking methods

  • Failure to produce records will result in the determination that your agency was improperly paid for all services under review for the requested dates of service resulting in a refund request for these amounts

  • Case reviews to be completed within 60 days from receipt of complete medical records

Review process2

Review Process

  • Extrapolation will NOT be applied for hospital DRG inpatient review overpayment amounts identified

  • Current Minnesota appeal process will be utilized

  • Concentrated effort made to assure that audit letters are detailed and specific, helping reduce the burden of appeal on all parties

  • Providers are encouraged to call HMS’ Provider Services to discuss and resolve issues

    MN RAC toll free number: 855-394-8063

  • Call volumes are monitored to address potential issues which may be used in educational sessions

    Questions for DHS may be sent via email to DHS.RAC@state.mn.us


Review process responsibilities

Review Process Responsibilities



Review Draft Audit Findings and respond within 30 calendar days of signed receipt of letter

If in agreement with findings remit payment within 30 days

If not in agreement with findings, submit a request for reconsideration within 30 days

Review Final Calculation of Overpayment letter and:

Agree and proceed with repayment, or

File an appeal within 30 days

  • Send Draft Audit Findings Letter with results of review.

  • Work one-on-one with the provider to resolve any disputed cases, if provider requested reconsideration.

  • Send Final Calculation of Overpayment letter to provider indicating remaining interest owed after claim adjustment requests have been processed.

  • Support appeals process when applicable

Diagnosis related group drg audits g lenda lloyd mba bs rhia

Diagnosis Related Group (DRG) auditsGlenda Lloyd, MBA, BS, RHIA

Diagnosis related group drg validation

Diagnosis Related-Group(DRG) Validation

  • The purpose of DRG validation is to ensure that diagnostic and procedural information and the discharge status of the member, as coded and reported by the hospital on its claim, matches both the attending physician's description and the information contained in the member’s medical record.

Validation sets

Validation Sets

  • Target analysis identifies situations in which demographics, billing attributes, diagnosis codes, procedure codes, and/or factors affecting the DRG assignment appear to be inconsistent with other attributes of the claim or case documentation within the medical record, and in instances where providers have billed for a higher paying DRG in an outlier status.


Credit balance overview mary leigh covingtong divisional vice president credit balance

Credit Balance overviewMary Leigh CovingtongDivisional Vice President, Credit Balance

Hms credit balance audit cba overview

Currently serves 24 State Medicaid agencies, Medicaid Managed Care Organizations (MCO) and Commercial Insurance Plans

14 years of experience working with providers on credit balance audit projects

Credit Balances Audits (CBAs) are focused on financial reimbursements to the provider

Primarily the CBAs are focused on reviewing the Provider’s Accounts Receivables (AR), Remittance Advices (RA), Explanation of Benefits (EOB) and miscellaneous relevant financial documents.

Experience determining and communicating with the provider the root cause of the identified overpayments or accounts resulting in credit balances

HMS Credit Balance Audit (CBA) Overview

What is a credit balance

A credit balance occurs when the sum of payments received plus adjustments exceed the total charges on a claim

Just because an account is sitting in a credit balance does not mean money is due back to the payer

Common causes of credit balance include:

Payments from third party payors and from Medicaid

Duplicate Medicaid payments

Charge reversals/adjustments/transfers

Duplicate adjustments made to an account

What is a Credit Balance?





  • Inaccurate postings

  • Charges written off in excess of amounts actually billed

  • Provider A/R collection systems modeling net revenue at the time of billing




  • COB

  • Retroactive payments

  • Double payments

  • Incorrect payments

Not all overpayments are credit balances; not all credit balances are overpayments

HMS provides a root cause analysis to prevent future credit balances.

Credit balance audits process overview

Audit notice and Initial Contact

Entrance Conference

Review all active and inactive accounts in credit balance status as of the notice date

Remote/Desk Reviews

Provider Self Disclosure

Review and Finalize findings

Provider Attestation Process

Exit Conference

Recovery and Reporting

Credit Balance Audits: Process Overview

Credit balance provider education

Open communication with providers throughout the audit process

Root cause analysis assists providers in preventing future overpayments

Insure providers are up to date on the latest billing and reimbursement methods utilized by MN DHS

Credit Balance: Provider Education

Minnesota provider portal jeff norman

Minnesota Provider PortalJeff Norman

Provider portal

Provider Portal

  • The Provider Portal is a secure website that allows providers manage their RAC reviews.

  • More than 15,000 providers currently use HMS’s Provider Portal.

  • Contact information can be updated by providers.

  • Contains HMS contacts.

Provider portal1

Provider Portal

Secure website for each provider to manage reviews

Provider portal2

Provider Portal

Provider portal3

Provider Portal

Provider portal4

Provider Portal

Provider portal5

Provider Portal

Provider portal6

Provider Portal

Provider portal7

Provider Portal

Minnesota department of human services recovery audit contract rac provider outreach education presentation april 18 2013


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