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CONTACT:
Alven Weil
Premier Inc.
704.733.5797

Premier healthcare alliance enhances RAC capabilities to help hospitals achieve maximum revenue retention

Recent acquisition of Phase 2 Consulting complements Premier Consulting Solutions' existing RAC preparation and management offerings

CHARLOTTE, N.C. (June 30, 2009) – Over a two-year period from 2006 to 2008, Medicare's Recovery Audit Contractor (RAC) demonstration program corrected more than $1.03 billion in improper Medicare payments. During the demonstration, auditors recouped $992.7 million in Medicare payments, or 96 percent of the improper payments; more than 85 percent of those overpayments were collected from our nation's hospitals. And 60 percent of these payment recoveries occurred in 2008, suggesting a continued trend of hospitals returning funds to Medicare once the permanent RAC program is fully implemented by January 1, 2010.

To help hospitals properly prepare for a nationwide RAC program, the Premier healthcare alliance has enhanced its RAC preparation and management solutions that assist providers in achieving maximum revenue retention. In June, Premier acquired Phase 2 Consulting (P2C), which offers expertise and consulting capabilities around RAC readiness and charge capture, revenue cycle services, strategic planning and service line analysis.

"From value-based purchasing to payment bundling to payment recovery audits, pressure on healthcare providers to properly identify every opportunity to receive reimbursement for services provided has never been greater," said Wes Champion, senior vice president of Premier Consulting Solutions (PCS). "Premier's existing capabilities combine expertise in RAC preparation and management with experience in clinical process and revenue cycle management, along with the collaborative knowledge sharing among our more than 2,100 alliance member hospitals."

"The RAC program represents an immediate opportunity for organizations to ensure they are receiving appropriate reimbursement while minimizing the risk of both past and future payment recoveries," said Susan DeVore, Premier president and CEO. "Premier's offerings in this area will help our alliance members transition smoothly into the permanent RAC program."

Steps that hospitals should take to ensure the highest level of admission and claims accuracy and minimize the risk of past and future RAC audit payment recoveries include:

Forming a multidisciplinary RAC task force to oversee RAC preparation, management, and ongoing process improvement;
Performing a high-level assessment of existing tools and processes to identify current RAC exposure for errors and payment recoveries;
Conducting an internal coding and documentation audit to assess current RAC risk and quantify financial exposure for accounts dating back to October 1, 2007, based on key risk areas identified during the RAC demonstration project;
Developing a formal process to educate staff and physicians about the permanent RAC program, findings from the ongoing audit process and process changes required to reduce the risk of future denials or payment recoveries;
Developing a formal strategy to prepare for and manage the RAC process (notifications, chart requests, staffing requirements, tracking, etc.) and determine whether outside assistance is needed;
Identifying a formal tool/system to track the RAC process (notifications, chart requests, recoveries, appeals, etc.);
Developing a formal RAC-specific appeals management process with case management, legal and other compliance leadership.

For more information regarding Premier's RAC solutions, please contact Premier Consulting Solutions at pcs_info@premierinc.com or 877.777.1552.

About Premier Inc., 2006 Malcolm Baldrige National Quality Award recipient
The Premier healthcare alliance is more than 2,300 U.S. hospitals and 64,000-plus other healthcare sites working together to improve healthcare quality and affordability. Owned by not-for-profit hospitals, Premier maintains the nation's most comprehensive repository of clinical, financial and outcomes information and operates a leading healthcare purchasing network. A world leader in helping deliver measurable improvements in care, Premier works with the Centers for Medicare & Medicaid Services and the United Kingdom's National Health Service North West to improve hospital performance. Headquartered in Charlotte, N.C., Premier also has offices in San Diego, Philadelphia and Washington. Follow Premier on Twitter.