March 01, 2010 | | Comments 1
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RAC coding reviews and fraud training

This week several transmittals, including the April quarterly OPPS update, were listed on the transmittals page on the CMS Web site. However, as noted in the transmittals section of the Medicare Weekly Update, we are unable to access the actual transmittal documents. Transmittal numbers appear in the list of transmittals for 2010 and there is some basic information (e.g., subject, effective/implementation dates, etc.), but the links to the transmittal documents are broken.  MedicareFind staff have been in contact with CMS multiple times on this issue but there is no resolution at this time. We will report on the affected transmittals when they are made viewable by CMS.

In other happenings this week, the OIG reported on the fraud referral process, or rather, lack of process, during the RAC Demonstration Project. Although RACs received minimal Medicare fraud training, they did identify and report two provider-specific fraud issues, according to the OIG. However, CMS did not have a record of these referrals when asked by the OIG. The OIG recommended CMS follow up on these two referrals, and they have been sent to the OIG for further investigation.

In addition, the OIG recommended that CMS require RACs to receive mandatory training on identification and reporting of fraud. It also recommended that CMS maintain a database to track fraud referrals. CMS concurred with these recommendations and had already started training on the RACs on fraud. For more information, see the report.

I also wanted to share what I have heard from a provider who was the subject of a RAC DRG coding validation audit in North Carolina.  They reported to me that they received DRG findings that they did not agree with. They contacted the RAC to discuss the findings during the “Discussion Period” and asked for the credentials of the personnel making the determination, as is allowed under the RAC Statement of Work. They were told the person who reviewed their claim had a CPC coding credential.

A CPC is a Certified Professional Coder, and is a credential granted by the American Academy of Professional Codes. I, myself, am a CPC. It is an outpatient coding credential that would not include expertise in inpatient diagnosis code sequencing for proper DRG assignment. I verified on the AAPC’s web site that even the CPC-H is applicable to “outpatient facility/hospital services”. While familiarity with ICD-9 Volumes 1 & 2 is required to maintain a CPC-H, it does not include use of ICD-9 Volume 3. These are the codes used for inpatient procedures and would be essential for proper coding and DRG assignment for an inpatient case.

The RACs are required by their Statement of Work to employ “certified coders” to complete their reviews. This was added as a requirement in the permanent RAC Program in response to concerns of inappropriate coding denials during the Demonstration Project. While it does appear that using a CPC to review inpatient cases may comply with the letter of the requirement, it certainly would not be in the spirit of the requirement.

I know, even though I have extensive knowledge of the DRG system, I would not feel qualified to do DRG validation because of the complexity of assigning and properly sequencing under the inpatient coding rules, which differ significantly from the outpatient diagnosis coding rules. I often verify my understanding of inpatient coding with our certified inpatient coding experts. It remains to be seen if this is an isolated occurrence, but providers should take a lesson from this facility and use the available discussion period to question the RAC if you do not agree with their determinations. And if you do not receive a satisfactory answer, ensure you exercise your appeal rights.

This week several transmittals, including the April quarterly OPPS Update, were






listed on the transmittals page on the CMS Web site.  However, as noted in the

transmittals section of the Medicare Weekly Update, we are unable to access the

actual transmittal documents.  Transmittal numbers appear in the list of

transmittals for 2010 and there is some basic information (e.g., subject,

effective/implementation dates, etc.) on the details page, but the links to the

transmittal documents are broken.   MedicareFind staff have been in contact with

CMS multiple times on this issue but there is no resolution at this time.  We will

report on the affected transmittals when they are made viewable by CMS.

In other happenings this week, the OIG reported on the fraud referral process, or

rather, lack of process, during the RAC Demonstration Project.  Although RACs

received minimal Medicare fraud training, they did identify and report two

provider-specific fraud issues, according to the OIG.  However, CMS did not have a

record of these referrals when asked by the OIG.  The OIG recommended CMS

follow-up on these two referrals, and they have been sent to the OIG for further

investigation.

In addition, the OIG recommended that CMS require RACs to receive mandatory

training on identification and reporting of fraud.  It also recommended that CMS

maintain a database to track fraud referrals.  CMS concurred with these

recommendations and had already started training on the RACs on fraud.  For more

information see the report.

I also wanted to share what I have heard from a provider who was the subject of a

RAC DRG coding validation audit in North Carolina.  They reported to me that they

received DRG findings that they did not agree with.  They contacted the RAC to

discuss the findings during the “Discussion Period” and asked for the credentials

of the personnel making the determination, as is allowed under the RAC Statement

of Work.  They were told the person who reviewed their claim had a CPC coding

credential.

A CPC is a Certified Professional Coder and is a credential granted by the

American Academy of Professional Codes.  I, myself am a CPC.  It is an outpatient

coding credential that would not include expertise in inpatient diagnosis code

sequencing for proper DRG assignment.  I verified on the AAPC’s web site that even

the CPC-H is applicable to “outpatient facility/hospital services”.  While

familiarity with ICD-9 Volumes 1 & 2 is required to maintain a CPC-H, it does not

include use of ICD-9 Volume 3. These are the codes used for inpatient procedures

and would be essential for proper coding and DRG assignment for an inpatient case.

The RACs are required by their Statement of Work to employ “certified coders” to

complete their reviews.  This was added as a requirement in the permanent RAC

Program in response to concerns of inappropriate coding denials during the

Demonstration Project.  While it does appear that using a CPC to review inpatient

cases may comply with the letter of the requirement, it certainly would not be in

the spirit of the requirement.

I know, even though I have extensive knowledge of the DRG system, I would not feel

qualified to do DRG validation because of the complexity of assigning and properly

sequencing under the inpatient coding rules, which differ significantly from the

outpatient diagnosis coding rules.  I often verify my understanding of inpatient

coding with our certified inpatient coding experts.  It remains to be seen if this

is an isolated occurrence, but provider should take a lesson from this facility

and use the available discussion period to question the RAC if you do not agree

with their determinations. And if you do not receive a satisfactory answer, ensure

you exercise your appeal rights.

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Kimberly Hoy About the Author:

Kimberly Anderwood Hoy is director of Medicare and compliance for HCPro, Inc.

As a hospital compliance officer, Kimberly regularly provided research and guidance on coding, billing, and reimbursement issues for a wide range of hospital services. She has a particular expertise in charge description master operation, development, and maintenance. She has experience conducting billing compliance audits and internal investigations. Kimberly also has had primary responsibility for HIPAA privacy regulation compliance, including risk assessment, program development, implementation of policies and procedures, and ongoing operations.

As In-House Legal Counsel, Kimberly had oversight of expense contracting and regulatory compliance, including federal and state laws and regulations. Kimberly regularly provided legal advice on such complex topics as consents, EMTALA, Stark, anti-kickback and anti-inducement laws, physician recruiting, and tax exemption regulations.

Kimberly has served as a speaker at compliance-related conferences in the areas of compliance program effectiveness and physician education. Kimberly is an active member of the American and California Bar Associations, the American Health Lawyers Association and the Health Care Compliance Association.

Kimberly earned her Juris Doctor degree from the University of Montana School of Law, where she received the Corpus Juris Secundum Award for Excellence in Contracts. She also holds a Bachelor of Arts degree in Philosophy from Yale University.

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  1. Hello;
    My question pertains to the RAC/Medicare program, are there positions for outpatient coders without extensive inpatient experience? I am interested in your response.
    Thank You
    Roxanne

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