RARP: The Creation of a New Department
(Mary) Patty Cowles
The College of St Scholastica

Investigate: Why a New Department? Why was the Chief Financial Officer (CFO) of Mercy Health Systems so determined to create a centralized department to track deadlines, payments and recoupment of payments? Because deadlines for appeals were being missed, recoupment of payments with no documentation of reason for recoupment, and one centralized location for tracking audits and appeals needed. Bottom line for a CFO -- is the bottom line. Even with a simple tracking program and patient software for recording payments and adjustments, the administration of audits and appeals needed an overhaul. So after a contracted (government-like) study costing somewhere near $100,000 (L. Emerson, personal communication, October 14, 2014), a new department was recommended to handle any Recovery Audits. The Recovery Audit Response Program department was born. Let’s take a closer look…
Evaluate: Who makes up the new department? What are recovery audits? The Centers for Medicare and Medicaid (CMS) was issued a mandate to implement the Recovery Audit program (RACs) to investigate and correct the overpayments made by their Medicare Administrative Contractors (MACs) who are contracted to payment Medicare claims presented by Medicare participating providers. A demonstration program was implemented and running for a year before the Recovery Audit Contractors were chosen. Their directive was to look at a particular number of medical records and determine if Medicare overpaid or underpaid the provider. By looking at the documentation sent by the provider to the RAC, the RAC determined that the documentation supported the payment or fell short of supporting the payment made. Since there are over 20 (as of this writing) auditing bodies for just the Department of Health and Human