The Cohen Report: Free Webinar on Auditing the RAC Auditors

NOTE: If you need the basics on RACs, click here for my article.

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From our friend Frank Cohen:

Over the past year or so, I have been involved in conducting post RAC (and other) audit analyses to determine whether the RAC (or other auditing agency) was using appropriate statistics and calculations to create their overpayment estimates.

As you can probably imagine, in nearly every case, I have found this not to be true. In fact, as it turns out, the errors I find nearly always are in favor of the auditor, not the healthcare provider.

RAC is able to take advantage of the practice in three areas

The first area has to do with pulling samples for review. If these samples are not random or worse yet, if they are intentionally biased, they can create a misrepresentation of overpayment that unfairly penalizes the provider and because RACs are paid a commission, benefits them.

The second area has to do with the way in which the overpayment point estimate is calculated. This is where they come up with something like the average overpayment per audited unit (i.e., claim, claim line, member event, etc.).

The third has to do with the methodology used to extrapolate the point estimate for the sample to the universe of units for the healthcare provider. An error in any one of these areas can result in a gross exaggeration of the final overpayment demand.

Understanding how to defend yourself from the results of an audit

Frank Cohen
The Frank Cohen Group, LLC
www.frankcohen.com
frank@frankcohen.com
727.442.9117