RACs:

5 Target Areas
Your Group Needs to Know
Jen Godreau, CPC, CPMA, CPEDC
Director
jenniferg@codinginstitute.com
 Understand Alphabet Soup

Acronym Title Area

MAC Medicare Administrative Contractor
MPIC Medicaid Program Integrity Fraud
Contractor
RAC Recovery Audit Contractor Overpayments

ZPIC Zone Program Integrity Contractor Fraud

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12/08/2021 3
CMS Delays Medicaid RAC Program
“Out of consideration for state operational issues
and to ensure states comply with the provisions
of the final rule, we have determined that states
will not be required to implement their RAC
programs by the proposed implementation date
of April 1, 2011.”

When the Medicaid RAC Final Rule is issued

later this year, it will indicate the new
implementation deadline.

Source: CMS Bulletin

12/08/2021 4
RAC Basics
Purpose: Detect and correct past improper payments so
CMS and the MACs can prevent such problems in the
future.
Employer: RACs are hired as contractors by the
government, and they can collect “contingency fees”.
Scope: The maximum RAC lookback period is three years,
and they cannot review claims paid prior to Oct. 1, 2007.
Recovery: Between 2005 and 2008, RACs involved in the
original demonstration project recovered over $1.03
billion in Medicare improper payments.

12/08/2021 5
RAC Fraud
Referred only two cases of
potential fraud to CMS
“Because RACs do not receive their
contingency fees for cases they
refer that are determined to be
fraud, there may be a disincentive
for RACs to refer potential cases of
fraud.”
Source: OIG February Report

12/08/2021 6
What Can You Do? Prev
entio
Tips n
1. Know findings of OIG CERT
2. Know findings of RAC Preliminary Program
3. Know plan of RAC Implementation Program
4. Know the target areas for your contractor
5. Identify your weaknesses
Review documentation before payments
Review documentation postpayment
6. Educate physicians, coders, billers

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RAC Preliminary Findings

Source: RAC Error Report

12/08/2021 8
RAC
Preliminary
Findings

Source: RAC Error Report

12/08/2021 9
Top Overpayments!

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 IV Hydration
Rule: Should be billed with a maximum number of
units (1) per patient per date of service
Setting: Outpatient Hospital, Physician
Affected Areas: IL, IN, KY, MI, MN, OH, WI (MAC
Region B), Connelly Consulting (MAC Region C)
Codes: 90760 (deleted), 96360 (effective CPT ® 2009)
Descriptor: Hydration IV infusion , initial

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12/08/2021 11
Hydration: Initial Code = 1 Unit
96360 (Intravenous infusion; initial, 31 minutes to 1 hour)
Logic: Based on the hydration code’s definition, you
should report this “initial” code once per patient per date
of service
Typically report 96360 only when medically necessary
hydration is the lone infusion performed at the
encounter.
Exception: Can append modifier 59 (Distinct procedural
service) for a legitimate reason
Bottomline: Reporting 96360 more than once on a single
date of service is highly unlikely.
12/08/2021 12
1 Unit Maximum Exception

Can append modifier 59 if circumstances require

that two separate IV sites be used
 Example: The IV in the left arm blows out or has
complications after 31 minutes and another IV is
started in the right arm that goes for 32 minutes.
Code: 96360, 96360-59

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Guidelines
• Clear notation should exist for actual start and stop
times for each bag, the route of administration, and
whether a flush or hydration is performed.
• If only a flush (clearing of lines) is performed, the
procedure is not coded unless the flush occurs with
medication. An IV push may be coded.

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  Check for clear notation for actual start and stop times for Action Plan
each bag, route of administration, hydration is performed.
  Check that 31+ minutes to 60 minutes of hydration infusion
is recorded for 96360; for intervals of greater than 30
minutes that go beyond one-hour increments, each additional
hour is coded with 96361. No modifier is required.
 Pull claims that contain a Chemotherapy and an IV hydration
code. IV hydration may only be coded if documentation of
start and stop times in the record that show the hydrations
are given before or after chemotherapy.
 Look at claims that contain a Therapeutic Infusion and an IV
hydration code. Hydration may only be coded if the
hydrations are given before or after the therapeutic infusion.
 “Correct” claims that contain a IV hydration and blood
transfusion code. IV hydration codes ARE NOT coded and/or
reported with blood transfusion codes, regardless of when the
IV hydration is administered.

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Improper Documentation
• “over 1 hour”
• 600cc infused with no start or stop times
• medically unlikely amounts of medications versus
route (for instance, “NS 400cc per hour flush”)
• “Initial line (INT) removed/hep-lock discharged”
• administration times that are marked through
and/or illegible
• times recorded that do not make sense (such as start
time 6:39 with stop time 4:19) cannot be coded and
thus should not be billed. 
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Know the Facts About Self Audit
If self-audit identifies improper payments, you should:
 report the improper payments to your MAC
 remit any necessary refunds.

“The RAC will be aware of the adjustment, but

the refund does not preclude future review.”

Source: RAC FAQs

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 3 Often Missed Coding Basics
 Untimed codes, excluding modifiers KX
and 59. Bill one unit of these codes per date
of service.
 Once in a lifetime procedures, which
should be billed just once in a beneficiary’s
lifetime.
 Pediatric codes that are billed for
patients who exceed the age limit defined by
the CPT® code.
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12/08/2021 18
Once in a Lifetime
G0389 (Ultrasound B-scan and/or real time with image
documentation; for abdominal aortic aneurysm [AAA] screening)
Code’s Purpose: Onetime AAA screening for Medicare
patients referred following an initial preventive physical
examination.
Medicare coverage: The patient must meet one of the
following risk categories:
has a family history of AAA
is a man age 65 to 75 who has smoked at least 100
cigarettes in his lifetime
is a beneficiary who manifests other specified risk factors.

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CPT© 2011 American Medical Association. All rights reserved.
CPT® is a registered trademark of the American Medical Association. All rights reserved.

Global Billing of Radiology

Codes in the Facility Setting
 Region: RAC for Region A (DCS)
 Professional Component: Owner of the
equipment bills the technical component with
modifier TC (Technical component)
 Problem: FIs and MAC A/Bs include TC
component in hospital PPS payment.
“Hospital bundling rules exclude payment of Source:
radiology services to suppliers of the TC clm104c13
portion of the radiology service for
beneficiaries in a patients in a hospital
inpatient stay.”
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Split Billing Values
75310 (Radiologic examination, hip, unilateral; complete, minimum of 2 views )

Payment
Payment Equation
26
15% 26 + TC = Global
Service National Rate
Global 26 $11.55
50%
TC $27.52
TC
35% Global $39.07

Source: MPFS 2011

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12/08/2021 21
 Untimed PT Coding
 Codes: Untimed therapy codes, such as a PT or OT
evaluation (97001 or 97003)
 Affected Regions: DCS Healthcare (Part A),
Connolly Healthcare (Region C, SC only) Health Data
Insights, Inc., (Region D, all 20 states in jurisdiction)
 Type of Review: Automated
 Settings: Outpatient & facility PT, OT, SLP
 Rule: Enter only “one” in the units billed column per
date of service
RAC will not consider modifiers KX or 59 in these CPT® codes.
CPT© 2011 American Medical Association. All rights reserved.
CPT® is a registered trademark of the American Medical Association. All rights reserved.

12/08/2021 22
Dodge Potential Pitfalls
Definition: An untimed code, according to the CPT® code definition,
is one billed irrespective of the time spent on the service. If the code
doesn’t have a time indicator, it’s at an untimed code.
 Problem: The therapy documentation may include the
number of minutes. A coder who isn’t familiar with the codes
may bill for four units or an hour for an untimed code. If the
MAC or FI system pays it by mistake, then there’s an
overpayment.
 Solution: Alert billers to this potential snag.
 Problem: Medicare allows you to use the 59 modifier to
identify situations where you provided therapy to more than
one body site. But you can’t use a modifier 59 for an untimed
code.
 Solution:
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All rights reserved.
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12/08/2021 23
Look for Duel Untimes Service Appeals,
Adjustments
 Check denials of untimed code with another untimed code
 No prohibition against billing two untimed codes – the approved RAC issue is
for two units of an untimed code. Appeal these denials.
 Example of an acceptable claim: A speech swallowing evaluation and a speech
swallowing service on the same claim.
 Expect DCS (Region A) refunds
 Letters were mailed to affected providers the first week of February 2011 with
notification of the incorrect edit resulting in the overturned automated reviews. 
 Adjustments may take up to 4 weeks.  Providers should receive a remittance
advice that will show reason code N432 for the repayment of any related
recouped amounts. 
 Steps: Source: DCS Provider Notice,
 Allow time for adjustments.  Feb. 16, 2011
 Do not need to appeal.

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 Neulasta Admin Coding
 Code: J2505 (Injection, pegfilgrastim, 6 mg)
 Affected Areas: All
 Setting: Physician, Outpatient
 Type of Review: Automated
 Guideline: Report 1 unit of Pegfilgrastim for per 6 mg
injected
 Old way: Prior to Jan. 1, 2004, Neulasta’s code descriptor
(Q4053) indicated you should report one unit per 1 mg.
 New way: The current definition requires one unit per 6
mg.

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CPT® is a registered trademark of the American Medical Association. All rights reserved.

12/08/2021 25
 Resources
AHANews, “CMS delays Medicaid RAC implementation.” Feb. 18, 2011.
http://www.ahanews.com/ahanews_app/jsp/display.jsp?dcrpath=AHANEWS/AHANews
NowArticle/data/ann_021811_RAC&domain=AHANEWS
Cheryl E. Servais, MPH, RHIA, “IV Hydration Documentation and Coding Could Be Vulnerable
to RAC Audits Part 1.” RACMonitor.com. Aug. 12, 1009.
http://racmonitor.com/news/12-from-the-editor/209-iv-hydration-documentation-and-c
oding-could-be-vulnerable-to-rac-audits-part-1.html
CGI Federal, “IV-Hydration.”
http://racb.cgi.com/IssueDetail.aspx?isd=2
CMS Bulletin, “CPI-B-11-03.” Feb. 1, 2011.
https://www.cms.gov/MedicaidIntegrityProgram/Downloads/6411racdelay.pdf
CMS, Medical Claims Processing Manual, Chapter 13.
http://www.cms.gov/manuals/downloads/clm104c13.pdf
CMS Manual System, “Pub 100-04 Medicare Claims Processing.” Nov. 17, 2006.
http://www.cms.gov/transmittals/downloads/R1113CP.pdf
CMS, “MLNMattersArticles SE1028.”
https://www.cms.gov/MLNMattersArticles/downloads/SE1028.pdf
CMS, “RAC Evaluation Report.”
http://www.cms.gov/RAC/Downloads/RACEvaluationReport.pdf

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 Resources
CMS RAC Web site
www.cms.hhs.gov/RAC/Downloads/RAC%20Expansion%20Schedule%20Web.pdf
DCS Healthcare. “Important Provider Notice:  February 16, 2011.”
http://www.dcsrac.com/PROVIDERPORTAL.aspx
Deborah Dorton, JD, MA, CPC, CHONC, “Focus on Transfusion, Hydration, and J2505 —
Before RACs Do.” Oncology and Hematology Coding Alert. October 2009.
http://www.supercoder.com/articles/articles-alerts/onc/focus-on-transfusion-hydration-
and-j2505-before-racs-do/?zoom_highlight=96360+racs
Deborah Dorton, JD, MA, CPC, CHONC, “Red Flag: G0389 May Be a Potential RAC Target.”
Oncology and Hematology Coding Alert. September 2009.
http://www.supercoder.com/articles/articles-alerts/rca/red-flag-g0389-may-be-a-potenti
al-rac-target/?zoom_highlight=radiology+rac
Federal Register, Proposed Rules. “Medicaid Program; Recovery Audit Contractors.” Nov. 10,
2010.
http://edocket.access.gpo.gov/2010/pdf/2010-28390.pdf
OIG, “Review of Medicare Part B Claims for Neulasta – Wisconsin Physicians Service for the
Calendar Years 2004 Through 2007.” June 2009.
http://www.oig.hhs.gov/oas/reports/region5/50900070.pdf

12/08/2021 27
 Resources
Jan Milliman, MA, HCS-D, COS-C, “NEWS BRIEFS: Careful — RACs Are Watching Your
Untimed Therapy Codes.” Physical Medicine & Rehabilitation. September 2009.
http://www.supercoder.com/articles/articles-alerts/pmc/news-briefs-careful-racs-are-wat
ching-your-untimed-therapy-codes/?zoom_highlight=physical+therapy+rac
Jan Milliman, MA, HCS-D, COS-C, “Billing: Make Time to Target Untimed Codes on Your Part
B Therapy Claims.” Physical Medicine & Rehabilitation. April 2010.
http://www.supercoder.com/articles/articles-alerts/pmc/billing-make-time-to-target-unti
med-codes-on-your-part-b-therapy-claims/?zoom_highlight=physical+therapy+rac
Torrey Kim, MA, CPC, CGSC, “In other news...” Part B Insider. June 2010.
http://www.supercoder.com/articles/articles-alerts/pbi/in-other-news...-102017/?
zoom_highlight=neulasta
Torrey Kim, MA, CPC, CGSC, “In other news...” Part B Insider. September 2010.
http://www.supercoder.com/articles/articles-alerts/pbi/in-other-news...-102988/?
zoom_highlight=physical+therapy+rac
Torrey Kim, MA, CPC, CGSC, “RAC AUDITS: RAC Contractors List 7 Audit Issues on Their
Radar Screens.” Part B Insider. August 2009.
http://www.supercoder.com/articles/articles-alerts/pbi/rac-audits-rac-contractors-list-7-
audit-issues-on-their-radar-screens/?zoom_highlight=96360+racs

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 Resources
ZPIC Information
http://www.cms.gov/manuals/downloads/pim83c04.pdf

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 RAC Sites
Region States Contractor Approved Issues Page
A CT, DC, DE, MA, DCS Healthcare http://www.dcsrac.com/IssuesUnder
MD, ME, NH, NJ, Review.aspx
NY, PA, RI, VT
B IL, IN, KY, MI, MN, CGI Technologies http://racb.cgi.com/Issues.aspx
OH, WI and Solutions, Inc.
C AL, AR, CO, FL, Connolly http://www.connolly.com/healthcare/
GA, LA, MS, NC, Healthcare pages/ApprovedIssues.aspx
NM, OK, SC, TN,
TX, VA, WV
D AL, AZ, CA, HI, IA, ID, HealthDataInsight, https://racinfo.healthdatainsights.co
KA, KS, MO, ND, SD, Inc. m/Public1/NewIssues.aspx
UT, WA, WY, Guam,
Am Somoa, N
Marianas

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