Author Archive for Julie McGinley

Surprise! Voluntary refunds don’t protect against RACs

For many providers, self-auditing has become an important RAC preparation tool. Certainly, internal audit results can show where additional education is necessary to ensure appropriate coding, billing, and documentation practices. And this will result in fewer RAC denials, because if practices are correct, the RACs will find fewer errors to deny.

But many providers also assume that reporting errors (and refunding identified overpayments) discovered while self-auditing will protect those claims from RAC review.

Not so, says CMS.

In a recently released FAQ on the CMS Web site, CMS clarified that only one type of self-audit will ensure RACs may not later review the claims, and it probably isn’t the kind of self-auditing that most providers are doing, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

The FAQ states:

There are two types of self audits. One is commonly called a voluntary refund and is claim based. If the required claim information is included along with the amount of the improper payment, the claim will be adjusted by the claim processing contractor. The RAC will be aware of the adjustment, but the refund does not preclude future review. The second type of self audit may involve the use of extrapolation. If extrapolation is used the claim processing contractor will review the case file to determine if it is acceptable. The claim processing contractor will accept or deny the extrapolation for the issue identified by the provider. If the claim processing contractor accepts the extrapolation, those claims in the universe will be excluded from RAC review.

In other words, if a provider uses an extrapolation that its MAC or FI accepts, the claims are off-limits for RACs. Otherwise, individual claims corrected after a self-audit are fair game.

“This will come as a surprise to a lot of providers,” says Mackaman. “Providers assume if they do a self-audit and correct and report errors, that [the claims] are excluded from future RAC audits. But they’re not.”

Those providers who review claims individually may feel a little less incentive to report errors and refunds they discover since the claims aren’t protected from RACs, but not doing so is a compliance problem. Ignoring a false claim is never a good idea, says Mackaman.

Nor should this news discourage providers from self-auditing in the first place. Providers can use audit results to better understand their risks, to change internal processes regarding areas of concern and to appropriately return reimbursements for claims paid in error, according to Mackaman.

“Voluntary refunds” to MACs/FIs

Many providers are taking a proactive approach to the arrival of the Medicare Recovery Audit Contractors (RAC) and performing their own audits. Using the RAC “hot topics,” providers are using those audit outcomes to understand their risks, to change internal processes regarding areas of concern and to return reimbursements for claims that were found to be paid in error.

Once a self audit has been performed and if an improper payment has been identified, what should be the provider’s next steps? CMS Frequently Asked Question (FAQ) #9503 was updated last week to clarify the process of notifying the RAC on self audit outcomes.  If an improper payment related to a specific claim is identified, the provider should report their findings to their Medicare Administrative Contractor (MAC) or their Fiscal Intermediary (FI) if their transition to a MAC has not been completed.

A “voluntary refund” based on the specific claim can be made and the MAC/FI will make the appropriate adjustment. For details regarding the required claim information that is necessary to complete a voluntary refund, contact your local MAC/FI.  According to CMS, the “RAC will be aware of the adjustment, but the refund does not preclude future review.” Providers should create an internal process to identify any claims that have been processed as a voluntary refund.

Editor’s note: This article was originally written for the MedicareMentor blog. Click here to read the original post.

Medicaid Integrity Contractors: Coming to a hospital near you

Nearly 500 Medicaid audits are under way in 17 states, and the program will roll out to the entire country through the end of the year, according CMS representatives who spoke on the Medicaid Integrity Program Special Open Door Forum on July 15.

CMS hopes to identify additional contractors within the next few days. These contractors, known as Medicaid Integrity Contractors, are firms CMS has chosen to carry out the following Medicaid Integrity Program goals:

• Review provider actions to determine whether fraud, waste, or abuse may have occurred
• Audit provider claims
• Identify overpayments
• Educate those involved in Medicaid administration, providers, managed care entities, beneficiaries and others with respect to payment integrity and quality of care

There are three types of contractors: Review, audit, and education MICs. The review MICs analyze data and identify issues to pass on to audit MICs to pursue, according to CMS. Education MICs will provide education to providers and others on Medicaid payment integrity and quality of care.

CMS acknowledged on the call that it could do a better job of provider outreach, and it is taking measures to increase educational efforts, now that it has finished building the Medicaid Integrity Program organization and developing the audit process.

Fortunately, additional resources will soon become available for providers. CMS plans to soon release FAQs, a procurement timeline, background on the program and its goals, as well as other information on the Medicaid Integrity Program Web site. CMS also plans to release Web-based training currently in development for pharmacies.

Hospitals aren’t the only providers that need to prepare: 44% of the current audits focus on hospitals, but 29% are on long-term care facilities, 21% of audits are on pharmacies, and the remaining 6% are on physicians, labs, transportation, and other types of providers, according to CMS.

RACs vs. MICs

MICs have been termed “RACs for Medicaid,” but there are certainly differences between the programs. For example, the RAC lookback period is three years, but MICs base the length of time on individual state lookback guidelines. Similarly, the number of days a provider has to produce medical record copies for MICs is dependant on state rules, unlike with RACs, where providers have 45 days regardless of their location. In addition, MICs have no set medical request limits, while RACs max out at 200. Also, CMS will not reimburse providers for the cost of copying records, which is also different from the RAC program.

And unlike RACs, MICs are not paid by contingency fee, but rather through a sort of fee-for-service model. The dollars MICs recover aren’t tied to their compensation, according to CMS, although they will be eligible for bonuses based on how “effective and efficient” they are. Finally, in some cases MICs will do desk audits, and in other instances, auditors will come on-site to do the reviews.

MICs will also attempt to coordinate with RACs so as not to audit the same facilities simultaneously, CMS Medicaid Integrity Program field director Rob Miller said on the call.

Tip: Query for Noncompliance with medical treatment (V15.81)

Editor’s note: This blog was written by Brian Murphy, CPC, the director of the Association for Clinical Documentation Improvement Specialists, for the ACDIS Blog. Read the original post here.

CDI specialists should be on the lookout for indications of patient noncompliance with medical treatment when reviewing patients’ charts, says Garri Garrison, RN, CPUR, CPC, CMC, director of consulting services with 3M Health Information Systems (HIS) and a member of the ACDIS advisory board.

According to Garrison, payers are increasingly denying hospital readmissions and the problem is likely to worsen with the nationwide rollout of the Recovery Audit Contractor (RAC) program and CMS’ increasing scrutiny of the cost of readmissions. “Readmissions can be the result of, or influenced by, patients who leave the hospital and refuse or elect not to follow recommended treatment plans (by choice, by misunderstanding of discharge instructions, or due to costs), which may cause their condition to worsen, resulting in a readmission,” Garrison says.

However, CDI specialists can assist facilities by identifying when noncompliance plays a role in the readmission. By securing the necessary documentation to allow coders to report V15.81, hospitals can use this documentation and coded data to help prevent or appeal denials, Garrison says. “If the V code is reported in the top nine diagnosis codes when it is transmitted on the UB-04, (it allows) the payer to have the knowledge that patient noncompliance may have contributed to the readmission,” she says.

“I have always recommend the use of the V15.81 code for noncompliance to both coders and physicians when supported by the clinical documentation,” adds Gloryanne Bryant, RHIA, CCS, CCDS, regional managing HIM director, NCAL Revenue Cycle of Kaiser Foundation Health Plan Inc. and Hospitals in Oakland, CA, and a member of the ACDIS advisory board. “I agree this is helpful, but mostly for understanding which patients really are not following medical instructions. Is it the diabetic patient or the dialysis patient, etc?

“It further explains and provides insight into healthcare resource use, length of stay, costs, and readmission rates,” Bryant adds. ”I would recommend that facilities run a data report on their inpatients with this V code assigned and conduct some audits and reviews to gather insight. I would also track/trend this V code over time and share the information with providers.”

NGS statement on billing condition code 44

We have received many questions on the articles we have published on the counting of hours of observation in cases where condition code 44 is used to convert an inpatient to an outpatient after UR review.  A couple weeks ago I wrote about this issue following contact by a National Government Services representative, encouraging providers to contact their local MAC for more information.

I recently received some further clarification from National Government Services and wanted to update you.  As you know, I’ve advised that hospitals should not be counting the time between the inpatient order and the change to outpatient status as observation – rather, I said, the observation time should begin with the change in status to outpatient when the observation order is written (assuming the appropriate level of care). NGS’ recent clarification, confirmed to me in an email exchange, is as follows:

As you are aware, the recent regulation changes resulted in many questions.  We received confirmation from our CMS representative that indeed, a written order for observation status is required and that the inpatient stay can not be converted to observation time when CC 44 is applicable.  If the physician (or UR committee in conjunction with the physician) deems the patient meets observation criteria after conversion to outpatient status, then observation time may be billed if the level of care is met.  But observation time would begin when the order is written; and the previous (although incorrect) inpatient time could not be billed as observation. The services rendered while the patient was placed in inpatient status would be billed as outpatient services, but no observation time could be billed.

NGS is relying on their CMS central office contact for this clarification and not just their individual interpretation.  Therefore, if any of you have received conflicting advice from your MAC, I would encourage you to provide them with this information and continue to use caution in billing any hours of observation without a proper order for observation services.

Editor’s note: This article was written by Kimberly Anderwood Hoy, the director of Medicare and regulatory compliance for HCPro. It was originally published on the MedicareMentor blog. Read the original post here.

Readmissions data now reported by CMS

CMS released a statement on Thursday, July 9, saying that its Hospital Compare Web site will now contain data reporting how frequently patients return to a hospital after being discharged, “a possible indicator of how well the facility did the first time around,” says the statement.

The statement goes on to say that, on average, one in five Medicare beneficiaries discharged from a hospital is readmitted within a month.  President Obama and Congress are focusing on reducing readmissions as a way to improve quality and achieve cost savings, according to the statement.

Hospital Compare data show that 19.9% of patients admitted to a hospital for heart attack treatment will return to the hospital within 30 days, 24.5% of patients admitted for heart failure will return to the hospital within 30 days, and 18.2% of patients admitted for pneumonia will return to the hospital within 30 days.

“Research has shown that hospital readmissions are reducing the quality of healthcare while increasing hospital costs,” the statement reports.

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Call for Complex Cases

Are you proud of the way your case management staff handled a particularly difficult case? Want to share your experiences with other hospital case managers?

In each issue of HCPro’s journal, Case Management Monthly, we feature a true Complex Case submitted by you, our readers. This is a great opportunity for you to get published and share with hospital case managers around the country.

Interested in submitting a case? Have questions about how your case will be used? Email editor Julie McGinley at jmcginley@hcpro.com.

Case study: Avoidable days

The following case study uses InterQual® commercial screening criteria as an example.

InterQual is a set of clinical, criteria-based guidelines that give hospitals suggestions for the most appropriate level of care based on the patient’s medical needs and stability. It is a common language for practitioners that, if used correctly, will help a hospital reduce medically unnecessary acute days, improve the quality of discharges, promote patient safety, and reduce denials from third-party payers.

InterQual’s medical necessity criteria are:

• Severity of Illness (SI): Criteria that consist of objective, clinical indicators of illness, which focus on an individual patient’s clinical presentation rather than diagnosis
• Intensity of Service (IS): Criteria that consist of monitoring and therapeutic services, singularly or in combination, which can only be administered at a specific level of care
  • Stand-alone IS criteria: Criteria that consist of services that should only be provided in an acute care hospital, given that the SI supported an inpatient admission
  • *(Asterisked) IS criteria: Criteria that consist of services that could be provided at a lower level of care based on the type of service or the patient’s stability
• Discharge Screens (DS): Criteria for determining clinical stability and level of care appropriateness

The three criteria patterns are:

1. Does not meet IS and meets DS. This pattern represents patients ready for the next level of care with unnecessary and avoidable days. This is the most common pattern and may represent unnecessary utilization.

2. Meets IS and meets DS. This pattern represents patients who may be ready for a lower level of care, but who are still receiving acute care services. This pattern may represent overutilization.

3. Does not meet IS and does not meet DS. This pattern represents patients who are acutely ill and may not be receiving acute care services necessary for definitive treatment. This pattern may represent underutilization.

For example:

8/07/09 IS cardiac monitor, Lasix 20 mg PO BID, 2LO2/NC*
_____________________________________________________________________
DS NSR (82), RR 20, O2 sat 97% RA, eating 80% of meals, 1.3 kg Ø

On this day (8/07/09), the patient does not meet IS and meets DS. Fortunately, since the case manager was monitoring the patient yesterday, the discharge has been preplanned and everything is ready to go. There will be no potential avoidable day (PAD) assigned to this case.

But what if the attending physician refused to discharge the patient on this day (8/07/09)?

In general, if the DS is met and the discharge is not scheduled or is not included in the immediate plan of care, the case manager must contact the attending physician regarding the discharge plans or justification for continued stay. If the attending physician does not agree with the case manager’s assessment of discharge readiness and cannot justify a continued stay, the case should be referred to the physician advisor (PA). If the PA concurs with the case manager’s findings, the attending physician must be contacted to discuss the case. The PA may approve a continued stay based on medical judgment and not the criteria. The PA should document the outcome of his or her review and rationale for the decision on a PA referral form. If the PA concurs with the case manager, then:

a. A PAD is assigned to the attending physician
b. The case manager and PA follow the hospital and QIO procedure for issuing a Medicare continued stay denial letter, if necessary

This patient (let’s call her Mrs. B) had an LOS of two days. This is a very short LOS, but as you can see from the previous scenario, Mrs. B did not need to stay another day in the hospital. She was stable and safe to go home—and home is a much safer place than a hospital.

Editor’s note: This case study was adapted from The Avoidable Day Analyzer: Data Identification Tools for Effective Case Management, Second edition.Order your copy today online at HCMarketplace.

Can Twitter improve healthcare communication?

Twitter, the social network based around the phrase “What are you doing right now?”, continues to gain popularity in world of healthcare.  But can it help improve communication with patients’ families?

Children’s Medical Center in Dallas thinks so.

The latest facility to “tweet” during surgery (a concept created in February by Henry Ford Health System), Children’s sees the technology as a way to help communication between physicians and families.

Read more about the idea here.

Do you use Twitter? Know anyone that does? Feel free to share your thoughts.

Manual changes related to condition code 44

I’d like to turn my attention to the manual changes related to condition code 44, as promised. Overall, the changes were designed to incorporate discussion and FAQs that were previously published in MLN Matters Article SE0622. In this respect, the changes to the manual have very few surprises. Almost everything added came directly from SE0622 and nothing added was really anything new. With that said, however, I do think that hospital case managers and anyone involved in condition code 44 cases or billing for cases with changed status should review the changes carefully to be sure they are following all the guidance provided.

One of the disappointing things about the changes is that they did not address the issue of whether the period of time from the inpatient order up to the time the patient is changed to outpatient and the observation order is written can be billed as observation time. The language stating that the entire episode of care should be billed as outpatient remains unchanged and nothing was added to clarify it. However, if we carefully consider the other changes made to the observation sections, I think we can discern that CMS does not mean for these hours of care to be billed as observation.

The statement that the entire episode be billed as outpatient would seem to be saying that any service that was rendered during the episode of care should be billed under the outpatient billing, coding and coverage rules. For instance, if the patient had an x-ray during the time prior to being changed to an outpatient, this x-ray would be billed on a revenue code line with a HCPCS code, in accordance with any outpatient edits and policies that might exist. An order for the x-ray would be required and it would be subject to the outpatient medical necessity coverage rules like any other outpatient x-ray.

Applying this same analysis to the observation services, they would be billed as outpatient services on a revenue code line for observation with the appropriate observation HCPCS code. To be billed to Medicare they would have to meet all the coverage and billing requirements, just like the x-ray. This is where the new changes to the observation section of the manual perhaps add a bit of clarity, though the issue is still not crystal clear. The revisions to Claims Processing Manual, Chapter 4 § 290.4.1, indicate that G0378 is used when observation services are “ordered and provided”, with the word “ordered” added. Additionally, revisions to Claims Processing Manual, Chapter 4 § 290.2.2 indicates that time is calculated from when the services are initiated in accordance with the physician’s order. Both of these changes emphasize that an order is required for the observation services to be billed, and seem to indicate that order must be received before time for the services can be counted. [more]