Reducing the Administrative Burden of RAC Audits – Guest Post by Lori Brocato

Lori Brocato - Healthport
Lori Brocato is Director of Audit at HealthPort. With more than 15 years in health care technology, Lori serves as HealthPort’s resident government and third party audit expert, sharing educational information and best practices with health care facilities via Webinars, media interviews and industry articles. Additionally, she is the AudaPro product manager for HealthPort and authors her own blog, Audit Insights, on the HealthPort website. Lori is also a monthly contributor for RACMonitor, an online knowledge source for healthcare providers. She is RAC certified by the Medicare RAC summit and a member of HIMSS and HFMA.

Taking Paper Out of the Audit Process
The amount of provider and governmental resources now dedicated to processing and managing recovery audits is staggering. According to the American Hospital Association RACTrac Survey in May 2012, 76% of participating hospitals reported that RAC activity had increased their administrative burden including additional costs, training, software and full time equivalents needed to manage the workload. Similar findings were reported in the August 2012 RACTrac report.

Costs to cover the growing administrative load range from $10,000 to over $100,000 per quarter. Nine percent of hospitals spend over $400,000 annually to manage audit. And when multiple auditors come after the same encounter, expenses rise. The majority of these costs come from producing copies of medical records, sending them to review contractors, and managing appeals.

Making RACs a Paper-Free Zone
When RACs and other auditors need medical records to conduct their reviews, they request them by submitting a formal letter to the provider. These request letters land in the Audit or HIM department where internal staffs or outsourced Release of Information (ROI) companies find the requested records, produce photocopies and submit paper to the auditor.

Efforts to streamline this paper process began in 2011 with the introduction of CMS’s Electronic Submission of Medical Documentation  (esMD) project. Since then, information exchanges designed solely for provider-auditor medical record transfer have grown and matured.

Three Provider Options
Along with esMD, many ROI companies and other Health Information Handlers (HIH’s) have developed private exchanges. Providers have three choices to reduce the paper burden of RAC and other audits. They can build their own esMD gateway using the CMS CONNECT architecture, connect to esMD through an HIH, or use the HIH’s private exchange. All three options result in the following four benefits:

  • Elimination of paper and postage
  • Increased automation request delivery
  • Improved tracking
  • Faster delivery

However, since HIHs have already established connections either through esMD or a direct, private audit exchange, providers save time and IT expense by using an HIH.

Direct Connections: What Providers Need to Know
Because the number of auditing bodies continues to expand and reach of recovery contractor activity continues to grow, the use of direct audit connections (or exchanges) may outpace submissions through esMD. Direct exchange by an HIH uses a one-to-many connection with auditors and provides four benefits:

  • Request letters from RACs and other auditors can be received electronically.
  •  One access point is established by the provider and from there, the HIH is responsible for establishing all the various auditor connections; saving time and IT resources.
  • Providers have a secure, private portal with end-to-end tracking capability for all audit record requests.
  • Providers can obtain a FedEx comparable tracking number instead of just a date and time stamp confirmation.

Paper’s Coming Out of the Process….It’s Only a Matter of Time
Audits will continue. Demands for medical records will expand. Administrative burdens will increase. These are the realities of today’s pay-and-chase model. However, new technologies to cope are emerging.

These technologies, in concert with centralized audit management and EHR advances, are poised to reduce administrative burdens and move audit processing from “paper-intensive” to “paper-free”. The future of audit management will be paper-free: one way or another!

About the author

John Lynn

John Lynn

John Lynn is the Founder of, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.


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