RAC Training: Protect Yourself When RAC Audits Hit

You should really ask yourself “What's the big deal about clarifying versus changing?” Well, it turns out that it is a big deal everyone because under MMA 2003, if CMS makes a change in policy, they're not allowed to retroactively apply it. Go through this expert information provide by our coding and compliance expert in a health system conference.

But if the situation is that they are simply clarifying their guidance, then they can retroactively apply it. And that's why you're seeing language from Medicare and you'll see it in a Federal Registry elsewhere as well where CMS will come along and say, “Well, our policy is, and always has been,…” and they'll go on with whatever the policy statement is.

And of course, they're claiming that these are not changes. So that they can apply them retroactively. It's very important because we have the recovery on a RAC contractors coming.

Now, what is provider based status? Why have it? Well, provider based status simply means at least for a clinic is that the clinic really is an integral integrated part of a hospital. It really is part of the hospital.

Why have provider based status? Well, let's be honest all the way around the reason for this is that your hospital can make more money and you can. There are that are making millions of dollars a year more by having provider based clinics versus freestanding clinics.

CMS is interested in those situations where there's a payment differential. So whenever you look at a clinic or department or an organization or whatever it is, ask yourself is there the potential of a payment differential?

In other words, could this hospital based thing be freestanding on the outside out of the hospital and make or less money. In other words, is there a payment differential? Those are the ones that CMS is really interested in.


Provider based status, the provider based rule is a Medicare concept. Other third party payers will have no idea what it means. Generally they don’t recognize provider based status based on the Medicare guidelines. But even in recognizing provider based status, they don’t do any different payment wise. So this really truly is a Medicare concept.

In the official rule, 41365, you'll see the two words “facility or organization” facility or organization. Now, these two words are not further defined. So we don’t really know exactly what they are. Sometimes we use the word “operations” or “situations”. And now, recently, it's only been very recently. CMS is starting to use provider based departments. They're using the word “department”, provider based departments. But that's relatively recent. And that's not inside the code of Federal Registers as well.

Healthcare Training Tip: The provider based rule encompasses more than just outpatient. It applies to inpatient services as well. Now, the place where it applies is relative to the prohibitions. It's relative to the prohibitions, certain things that you cannot do through the provider based rule. So just be aware. Don’t think just outpatient. It can be inpatient as well.

Visit AudioEducator and ensure medical compliance with expert guidance on HIPAA security rules with a wide range of online HIPAA training events.

Our Accreditation Partners
Facebook Twitter Linkedin Youtube RSS Feeds Google Plus
Audio Educator


Dear Valued Customers


We regret to announce that ProEdTech LLC and all its affiliate brands will cease operations on April 1, 2019.


We are no longer able to fulfill online orders. We will fullfill all DVD and book orders already placed.


Customers of canceled webinars and subscription products may request a refund at (800) 223-8720 or service@proedtech.com. You must do so by April 1, 2019.


Thank you for your business and loyalty over the years. We sincerely apologize for any inconvenience caused.


Best regards,

The ProEdTech Team