Compliance: Treat orders like audits

Q. How can I avoid a RAC audit?
Tuesday, August 25, 2015

A. The Recovery Audit Contractors (RACs) are back and stronger than ever with the development of a fifth team dedicated to identifying overpayments for durable medical equipment nationwide. 

A referral is only as good as the documentation that supports it. If the paperwork isn’t compliant, the DME provider is at a higher risk of failing an audit.

There is a common misbelief among competitive bid winners that they are exempt from audits but this is not the case. The RAC is a for-profit entity that generates revenue by identifying improperly paid claims. The best way to be prepared for a RAC audit is to treat every order as if it is undergoing an audit. The Affordable Care Act requires the treating practitioner to conduct an in-person or “face-to-face” office visit with the patient prior to prescribing 166 DME items. The practitioner must document the FTF encounter, detailing the need for each prescribed item. Providers are required to obtain compliant documentation prior to delivery.

In my experience, practitioners document the FTF evaluation in one of two ways: either by referring to a lengthy check list or by using an online electronic template that prompts the user to ask questions regarding social, environmental and past history of the patient. Online electronic templates require the practitioner to include pertinent tests related to the physical exam, such as manual muscle testing of the upper and lower extremities, and compare all the information with Medicare’s coverage criteria using algorithms to determine medical necessity. An online program that lets practitioners know during the FTF exam which equipment, if any, the patient qualifies for is a win-win for everyone.

Jamie Loper, ATP, is the chief compliance officer at Reach her at or 800-986-9368.