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Introduction

The Centers for Medicare and Medicaid Services (CMS) announced in 2008 that more funds were being spent on Medicare and Medicaid benefits than they were receiving in tax revenue. In other words, they were losing money. Since then, there has been increased intensity and more scrutiny than ever as CMS struggles with trying to lower costs and looking for overpayments. 2010 is the year this initiative “shifts into high gear.” Coupled with trends in private payer insurers, there is already a shortage in qualified HIM and CDI professionals and that trend is expected to accelerate this year.

Trend 1: Significant increase in internal and external compliance audit requests

2010 is the final year that the CMS’s Recovery Audit Contractor (RAC) program is rolled out across all 50 states. RAC contractors are in high demand and the new work load they are placing on the HIM departments is significant. And, this is only the beginning. The mandate for RAC audits is for both claims submission and record review. Not all hospitals will be audited this year, however they must be ready. Once the first audit is complete, the RAC auditors will come back later to complete the next phase, and so on. As the RAC auditor is compensated on a percentage of the overpayment, there is a strong incentive to look deep into the details.

Also, the current definition for RAC audits does not include the area of “medical necessity.” This new test is being implemented this year in a further effort to control costs and limit abuse. Once implemented, compliance workload will increase to make sure claims are accepted.

On a positive note, several hospitals we have worked with have increased staff already to conduct internal audits in anticipation of the upcoming RAC audits. Almost all of them reported that they have found “significant” areas of underpayment due to incorrect coding because of poor staff training, inefficient processes, or lack of focus.

Trend 2: Movement to all payer system

Private payers have already increased their requests for information from hospitals. Now, experts believe that private payers will be developing their own “RAC type” audits that would be retrospective. Increased private payer, non HIPAA requests are already being studied and used to help the private payer renegotiate contracts with hospitals. Also, the increased work load on the HIM department is expected to increase further as consulting firms are being retained where their scope of work includes private payer auditing. Further, as hospitals roll out or expand their CDI programs, they are taking the initiative to go from strictly a Medicare payer model to an all payer model. This adds more workload as more cases are being reviewed for each CDI specialist. It is important that additional staff is planned for in order to maximize efficiency and quality for each program.

Trend 3: Increased need for both permanent and interim CDI professionals

There is a supply imbalance (shortage) for experienced HIM and CDI professionals in the market right now. NHS Solutions, Inc. specializes in permanent and interim CDI professionals throughout the country. The number of requests from clients looking for qualified individuals in the last four months is equal to the previous eight months. The new twist is that many of the hospitals have new needs for interim contractors as well. This is mostly because of the pressure caused by the two trends above. Many facilities are using the interim process as an extended trial period. Over half the interim contracts move into permanent positions. The jobs are here now.

Summary

It will be interesting to see in two to three years if the CMS initiative to find overpayments is ultimately offset by the underpayments found by incorrect coding. The trend with private payers is clearly gaining momentum as consulting companies ramp up training in this area. What is clear is that this government initiative and trends with private payers is already having a significant impact on the workload of the HIM professional. It will require additional investment in resources by hospitals to keep up with the increased information requests so internal quality reviews do not suffer.

John Jager
President & CEO
NHS Solutions, Inc.
11650 SW 67th Ave., STE 220
Portland, OR 97223
503 639 8010
503 639 8001 fax
johnj@nhsscorp.com