In medieval times “the rack” was a torture device that stretched human victims, usually to try and get at the truth. In swashbuckling movies, the truth often involved learning where the treasure was hidden.

I would bet the Department of Health and Human Services wasn’t thinking of that medieval extractor of real or extorted truth when they created the homonymous RAC (Recovery Audit Contractor) audit.

Nevertheless, today’s RAC audits remind us that quality documentation in the medical record is “good medicine” and can help us avoid the RAC. (I’ve been talking about this topic — documentation, not medieval torture — for a long time. See the chief of staff column from February 1998:

http://med.stanford.edu/shs/update/archives/feb98/shuer.htm)

I first heard of RAC audits after learning that SHC was the subject of such an inquiry (No, I won’t say inquisition). Because of the RAC’s findings, SHC returned a lot of money to the federal government. So here is the background on that case, and a lesson about how good documentation — good medicine — can stretch our resources by avoiding unnecessary paybacks to the government.

Medicare says they have overpaid hospitals an average of $19 billion per year for various claims in recent years. Congress created RACs in 2003 and directed HHS Secretary Michael O. Leavitt to conduct a project demonstrating if recovery audit contractors could identify payment errors in the Medicare program.

The RAC audit program was launched as a pilot in California, Florida and New York, states where Medicare utilization rates are among the highest per capita. The RACs are contractors with a track record of running cost control or recovery audits with private insurers, health plans or providers. They cannot be current fiscal intermediaries or carriers. When RACs identify an overpayment leading to recovery, the government may pick up the ball and investigate and prosecute the affected hospital for fraud or abuse. It’s interesting that RACs are required to identify both overpayments and underpayments to hospitals, and that they may be paid on contingency — for the overpayments they recover. Not only are they thus offered an incentive to identify overpayments, but if a hospital appeals and overturns the findings, the RAC is not required to return the contingency fee it had collected.

None of this is theoretical. An audit early in the demonstration period already denied a claim to pay the bill of a total joint replacement surgery patient who had been transferred to our rehab unit, C1. This adverse audit, one of several similar around the country, was leveled despite orthopaedic surgery chair Bill Maloney’s view that this is the “standard of practice” nationally for total joint patients, especially those patients who have bilateral procedures. Although other institutions subsequently audited have appealed similar decisions, that time SHC unfortunately just returned the amount our RAC auditor identified. Our administration now believes that we need to appeal decisions when we believe the RAC was wrong.

It’s now clear that if we need to appeal a RAC audit in the future, we will need your help to interpret treatment associated with disputed bills. I encourage each of you to help when asked, since we physicians drive patient care, and understandably, we need to justify our therapeutic plans appropriately.

But to minimize the occasions when we will need to justify our plans retrospectively, let’s make certain going forward that what we write will give the chart coders, abstractors and auditors an accurate picture of what we intended when we formulated our treatment plans. Sometimes this requires a little explanation, as when patients receive a test or procedure that seems to be unrelated to the admitting diagnosis. For example, a patient may have an episode of cholangitis while hospitalized for, say, herniated disc surgery. The episode would prompt a gall bladder operation — necessary but completely unrelated to the admitting diagnosis. Unless you explain this, the auditor sees that a gall bladder operation was billed during a hospitalization characterized by back and leg pain or herniated lumbar disc — and that won’t fly. This is a fairly extreme example, but it highlights why we must match each lab test and radiology procedure to a diagnosis that makes sense.

Also, when you don’t give complete documentation, coders and chart abstractors understandably have a hard time appropriately categorizing patients and accurately assessing severity of disease or co-morbidity. This can come back to hurt us if we end up having a higher mortality or complication rate in patients who seem to be coded as “routine” for their admission diagnosis, but are in fact quite complex because of co-morbidity.

Put simply, your documentation should be specific:

1. List the principal diagnosis for the hospitalization.
2. Also list other diagnoses which may be co-morbidities affecting the patient’s treatment and/or length of stay.
3. Apply appropriate adjectives: acute or chronic.
4. Use appropriate qualifiers, such as a “secondary diagnosis” “due to” or “secondary to”.
5. Specify whenever a patient has heart or renal disease “due to hypertension”.
6. List whatever may be a “late effect” or due to the residual of a prior illness or injury.
7. Use only approved abbreviations and try to use words instead of symbols. (For example, coders may not understand that <Na+ is hyponatremia.)
8. Last and most importantly: make sure that the documentation is legible. Happily, this will be easier to deal with when we shift to electronic documentation.

Remember: according to a coder or chart abstractor, if it isn’t documented it didn’t happen. And finally: the patient is the ultimate beneficiary — but the hospital and our practices benefit as well. Good documentation is good medicine.

lshuer@stanford.edu