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Update on Recovery Audit Contractors
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In addition to focused medical review, comprehensive error-rate testing (CERT), and Office of Inspector General and Medicare Advantage plan audits, ophthalmology can add recovery audit contractors (RAC) to the list of growing types of mandated audits.

The goal of the RAC program is to identify improper payments made on health-care services claims provided to Medicare beneficiaries. Improper payments can be overpayments or underpayments.

undefinedA few things you should know: 

  • There are two types of RAC audits. One is based on documentation investigation, the other on claims data (where physicians’ charts are not reviewed, only the claims submission errors). Academy and AAOE members report being subject to data audits.
  • Audits can’t go back further than three years of information.
  • Offices may resubmit corrected claims, but only through the RAC-resubmission process, not through the Medicare Part B process. The time frame for resubmission is three years. RAC audits are not subject to the 12-monthly timely filing deadlines.
  • CERT shares their findings with RAC. 

Physicians should identify areas of improper-payment audits by reviewing RACs’ websites and identify any patterns of denied claims within their own practice or facility. To date, ophthalmology practices have not been a target of aggressive RAC audits, but they have, with increasing frequency, reported receiving requests for overpayments in the following situations: 

  • Billing a new-patient exam code when the patient was actually an established patient of the practice. Physicians should not bill new-patient exam codes on the same beneficiary within a three-year period of time.
    • Example 1: Comprehensive ophthalmologists examines a patient and refers to their cornea colleague in the same group practice. Even though the cornea specialist has not seen the patient before, he/she should not be billing a new patient exam as the patient is considered an established patient of the practice. 
    • Example 2: When a physician buys another practice, those patients can be considered new to him/her. But if a new physician joins an established practice, the physician is new to the patient, but the patient is not new to the practice.

  • Neglecting to append modifier -57 to an exam, indicating the office visit was to determine the need for a major surgery. Exam services without modifier -57 should not have been paid.
  • Appending the wrong modifier.
    • Example: Appending modifier -25 (separately identifiable exam performed the same day as a minor procedure), when it should have been modifier -24, indicating the exam was unrelated to a global period.

  • Physicians are paid globally for the technical (-TC) and professional (-26) components of a test, and then receive additional payment for the (-26) component for the same test when incorrectly submitted.
  • An inherently bilateral test is billed with two units when only one unit should have been submitted.
  • Physicians should not bill a Correct Coding Initiative Column II code when billed by the same physician and same date of service as a Column I code on a regular basis by appending modifier -59, indicating a distinct procedural service was performed.
    • Example: Submitting CPT code 66984 Cataract extraction with IOL with CPT code 65772 Limbal relaxing incision for surgically induced astigmatism, when the LRI for correction of natural astigmatism should be the patient’s responsibility for payment.

  • Submission and subsequent payment of claims submitted more than once (duplicate claims). 
For additional information about RAC audit, visit the AAOE website or e-mail your questions directly to Sue Vicchrilli.

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About the author: This article has been adapted from the March 2011 issue of Coding Bulletin. It was written by Academy Coding Executive Sue Vicchrilli, COT, OCS.

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