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Possible MIC audit issues that involve case management

Editor’s Note: This post was excerpted an article on the Revenue Cycle Institute Web site.

There’s no question that audit activity is escalating.

It’s no longer just RAC, MAC, CERT, and ZPIC audits looking to ensure the accuracy of Medicare payments. Providers are also subject to increased scrutiny on the Medicaid side, as states are working with the federal government to help reduce payment error rates and recoup overpayments.

The scrutiny comes in the form of Medicaid Integrity Contractors (MICs), who will begin auditing providers in all states by the end of 2009.

What will MICs be auditing? It will vary from state to state, of course. But James G. Sheehan, the Medicaid Inspector General for New York, listed several issues he expects the MICs will audit during the October 15 HCPro audio conference, “Medicaid Integrity Contractor Audits: Know What to Expect and How to Prepare.”

The following are some of the potential MIC audit issues Sheehan listed that case management staff members should be aware of:

• Heart failure and shock. For this issue, MICs will look for failure to meet InterQual criteria for inpatient care.
• Ambulatory surgery with no complications to justify inpatient stay. “Commonwealth Fund just came out with a ranking of the states on this issue, and some states are better than others. It may not be a bad idea to find out where your state stands and whether this will be an issue,” Sheehan says.
• Observation beds. This is always a popular issue because Medicaid rules differ by state and also differ from Medicare in most states, explains Sheehan.

Editor’s note: Sheehan and Sarah Kay Wheeler, partner at King & Spaulding LLP in Atlanta spoke during the October 15 HCPro audio conference, “Medicaid Integrity Contractor Audits: Know What to Expect and How to Prepare.”

For additional background information view the April 22, 2009 GAO report “Improper Payments: Progress Made but Challenges Remain in Estimating and Reducing Improper Payments,” visit the GAO Web site.

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.

CMW News: Demand for Medicaid increases while funding decreases

Since the economic recession began in December 2007, the unemployment rate has risen from 4.7 to 6.7%. Economists estimate that each 0.1% rise in the unemployment rate translates into an additional one million enrollees in Medicaid and the State Children’s Health Insurance Program (SCHIP), according to a Kaiser Family Foundation report.

This increase in enrollment comes at a time when tax revenues are falling short of predictions, leaving a large gap in funding for the programs. State governors are asking President-elect Barack Obama and Congress to increase the federal government’s share of spending by $40 billion. The governors say this would help states reduce service cuts or tax increases needed to balance state budgets.

So far, 19 states have proposed or enacted cuts to Medicaid and SCHIP for the current year or fiscal year 2010. For example, Governor Arnold Schwarzenegger (R) of California has proposed changing income eligibility for parents of SCHIP enrollees to 72% of the poverty level from the current level of 100%.

Source: San Francisco Chronicle