Tag Archives: RAC Abuse

RAC Bullying of Physical Therapy


RAC Bullying of small health care providers is an epidemic.

A line of crumpled elderly patients hobble into the office.  Some are permanently bent over, supported by a walking cane.  Others walk unsteadily, wobbling back and forth. They are of all ages, but mostly old. Lines criss-crossing their faces betray constant joint and muscle pain. For some it is the shoulder, for others the neck, or the hips, or chest, or knees, or lower back. All are patients of Dr. Nguyen.

The work is boring and repetitive, but Dr. Nguyen is cheerful, and listens to each patient as they express the frustrations with the fall season of their lives.

Parked out back is her 2007 Honda Civic. She purchased it used.  A few dents, and duck tape covering a few holes in the seats, but it works. The office is drab, but spotlessly clean. Being a doctor is not making her rich.

RAC-BULLYINGFigure 1 – Examples of RAC Bullying Tactics

On the wall, a small black and white photo taken from the time when she was trapped in an internment camp in Thailand. It seems like ages ago, but also like yesterday. This is what her life was like before coming to the United States, learning English, then working her way through medical school while serving Pho at a Vietnamese restaurant, scrubbing the floors at night, cleaning the grease traps and helping the owner with other matters.

For each of her patients, the procedure is the same.  First, a conversation to record the patient’s history. Then a diagnosis followed by treatment. The doctor either performs manipulation of the tissue or if the pain is severe, she will relax the muscles with an injection.  Apart from extraordinary knowledge of anatomy and an appreciation of true pain, for her the practice is not complicated. There are only three Medicare codes in her billing.

I am visiting because of a RAC audit.  She explained the situation. The RAC had demanded a number of records, then wrote back denying almost 100% of the claims.

A hastily assembled extrapolation jacked-up the claw-back value. The money was due, pending appeal, and the doctor was very concerned about the interest that was being accumulated.

At the first level appeal, Dr. Nguyen had carefully written back to the RAC.  Everything had been explained and documented in detail. LCDs were quoted, specific errors in the RAC’s analysis were pointed out, and reference was made to the voluminous documentation that had been submitted. The doctor had experienced a fleeting sense that since everything had been clearly explained, the RAC would see what should at first have seen, and then things would be ok.

But the RAC had merely mailed back a form letter rejecting outright her first level appeal. The RAC was in no mood to reverse its own judgment. They rarely are. In contrast to the detail and specificity provided in the doctor’s first level appeal, the RAC letter was 99% boiler-plate, repeating platitudes about billing and responsibility. There was no analysis at all. Only cut-and-paste of off-the-shelf language of a general nature explaining the policies. There was no discussion of specifics. The wait was difficult, but the first level decision was discouraging.

Now it was time to make the second level appeal to the QIC. Even after being warned that the QICs usually are little more than a rubber stamp, she wanted to make every good effort to submit an even better appeal to this next level.

“I’m not worried.  Once we explain everything, it will be OK.
America is a fair place,” said she.

The QIC appeal document was a masterpiece. The doctor hired at attorney who instructed her to start with the rules and then show how the elements of each rule were satisfied in her documentation. She worked closely with the attorney. In order to save money, she made a deal to do most of the work with the attorney only directing what needed to be done.

The appeal was impressive. It started with each Local Coverage Determination (LCD) applicable to the appeal. For each LCD, she listed out the specific elements that must be present in order for a claim to be compliant. There are two types of elements: mandatory and advisory. Both types of elements were specified for each relevant LCD. In some cases, scientific articles were quoted to provide additional insight, and also a few notations from the Federal Register to supplement the record and clarify the applicable rules.

Then for each denied claim, the doctor showed with specificity exactly how the required elements were met, and pinpoint referenced where the information was located in the claim documents already filed with the RAC. Every single element was justified, and every single element was documented. The doctor was able to show also that even for those elements that were advisory and not mandatory, the bulk of those elements were met also.

Not only was the pinpoint reference made, but the actual information from the claim was quoted, so the RAC did not even need to look it up.

It had become clear that the RAC had made numerous mistake when it rejected so many claims. In some cases, it had mis-interpreted the LCDs; in others, it had simply not bothered to read through the documentation. But the RAC did more than that. It fabricated rules where none exist. It did this by taking many of the advisory elements and claiming that they were mandatory.

When Dr. Nguyen mailed the QIC submission, it was more than 1,300 pages. She took the large bundle down to the Sutter Street Post Office herself, a package almost as big as she.

Again, the doctor allowed herself to feel relieved. The second level appeal to the QIC was comprehensive, detailed, and able to match each element documented to specific requirements of the LCDs. She could not imagine that the result would be anything else but complete reversal of the denials. Nothing could be so clear.

But also nothing could be so straight. After the statutory time, the response from the QIC came back. The excitement felt upon opening the letter quickly faded. Like the RAC letter, the QIC response was mostly boiler plate. And like usual, the QIC rubber-stamped the RAC.

The QIC work was disturbing, and there were a number of anomalies. From the claim-by-claim spreadsheet supplied by the QIC, it was obvious that some denials were never even considered.

RAC demands treatment without diagnosis

One problem in the audit involved claims what included an evaluation component. It is standard for any doctor to examine patient before making a diagnosis. But when a patient came back for an entirely different problem, the RAC had rejected the need for an evaluation. They claimed the next visit was a “follow up” visit, and if a visit is a follow-up, then there can be no evaluation.

The problem is that each visit was to address pain in a different part of the body, and of course this was clearly documented, because each part of the body has a different diagnostic code. The doctor explained: “You will note that each evaluation was for a completely different condition,” she said, “We have a policy never to schedule follow-up treatments.”

It is important to understand the implications of the RAC’s decision. It means, in effect, that doctors are required to engage in prescribing treatment without having made an evaluation of the problem. Treatment without a diagnosis would be a classic case of malpractice, but that is what the RAC is demanding.

Arbitrary Time Cuts

Another policy of the RAC was to arbitrarily shorten all patient encounters to 15 minutes instead of the 45 minutes that were consumed. Every single patient encounter was documented completely with begin times and end times, and it is easy to see from the doctor’s calendar that she never engaged in the crooked practice of billing for large numbers of patients that would be impossible to service in the day. But in spite of all the documentation, and for no reason whatsoever, the RAC just said it would pay for 15 minutes, but not for the actual amount of time consumed, 45 minutes.

There is no justification for the RAC cutting back the time like this, and the RAC didn’t provide any justification, it just did it.

Re-writing the LCDs

The RAC also changed the LCD rules by making optional elements required. And the irony in all of this was that even in those cases where optional elements had been made mandatory, still the doctor had met those elements as well in her documentation. Yet still the claims were denied.

So first the RAC made some optional elements mandatory, and when the doctor met even those elements, still the RAC denied the claims. What is going on?

The bottom line is that there was simply nothing wrong with the doctor’s claims. Nothing.

As the doctor started to prepare the documentation to the third level appeal to the Administrative Law Judge (ALJ), a FedEx package arrived. It was from the RAC. The doctor was notified that she was being put on pre-payment review. Note that this is before any resolution of her outstanding case. Again, the RAC just decided to do it. It was a shock out of the blue.

The doctor’s cash has started to run short. In the last meeting, we discussed her future. The doctor looked off into the distance to a place known only to her. “I went into medicine to help people. Perhaps I’ll drop out of this and just go to an all-cash system.”

Something needs to be done to regulate the activities of the RACs or develop an entirely new approach to auditing.