It was an afternoon ordinary as any other, as I brought in the mail.  Little did I know what awaited me. 

As is my ritual, I began to open all the envelopes, separating out the recycling from the important documents.  As I opened the People’s Gas bill (figures it was a bill), I gave myself what in my layperson’s opinion can only be described as a level-4 paper cut.  There was blood.  There was yelling and cursing.  There was a trail of band-aid wrappers.  It was not pretty.  

That night, with my hand bandaged up like a prize-fighter, I had a beautiful dream, one of a paperless world, where mail opens itself and little children with their unsullied fingers grow up with no idea what paper cuts are.

The next morning, I realized that my dream may someday become a reality, thanks to the Centers for Medicare and Medicaid Services and their RAC Audits  (whose dreams aren’t answered by an audit from a government agency, really?).  

In my inbox, like a dispatch from that wonderful dream, was a great guest post on John Lynn’s blog, EHR and HIPAA, from HIMSS member and all-around RAC expert, Lori Brocato, who described the costs and administrative considerations for healthcare providers due to increased RAC activity.

“The amount of provider and governmental resources now dedicated to processing and managing recovery audits is staggering. According to the American Hospital Association RACTrac Survey in May 2012, 76% of participating hospitals reported that RAC activity had increased their administrative burden including additional costs, training, software and full-time equivalents needed to manage the workload. Similar findings were reported in the August 2012 RACTrac report.

Costs to cover the growing administrative load range from $10,000 to over $100,000 per quarter. Nine percent of hospitals spend over $400,000 annually to manage audit. And when multiple auditors come after the same encounter, expenses rise. The majority of these costs come from producing copies of medical records, sending them to review contractors, and managing appeals.”

Read the post here.

RACs seem to be on a lot of people’s minds these days, and their effects on various parts of the care delivery supply chain present unique challenges.

In his On Demand session at HIMSS13 Online, Brian Carlson discusses the motivations behind prepayment audits, and explores strategies to improve and identify clinical documentation  as well as complementary strategies to aid in successful audit defense. He also describes the motivations for CMS behind their strategy of increased audit activity.

“The Centers for Medicare & Medicaid Services (CMS) loses approximately $28.8 billion in improper payments each year.  This represents 8.6% of the total $336 billion Medicare payments issued annually”

Register for HIMSS13 Online here.

Stopping losses on almost 10% of all annual Medicare payments issued represent cost savings impossible to ignore in this age of increased healthcare cost burdens and increased scrutiny on federal budgets.   This reality is not going way.  The main thrust of Lori’s argument confirms, for me, this reality and suggests that effective use of health IT will go a long way to bring down the costs associated with the audits.

“These technologies, in concert with centralized audit management and EHR advances, are poised to reduce administrative burdens and move audit processing from “paper-intensive” to “paper-free.” The future of audit management will be paper-free: one way or another!”

Typing this entire post with my wounded finger high in the air, consider me raising my hand for the paper-free future Lori is dreaming of…