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This week CMS published two transmittals that affect CMS systems as a result of the recovery audit programs.  One directs contractors to develop edits to avoid common overpayment situations the recovery auditors have found.  The other allows providers a more streamlined option for recouping overpayments without incurring interest.

In transmittal R1031OTN, CMS directed its contractors to develop edits around the following overpayment issues identified through recovery audits or other sources:

  • Incorrect “office” place of service for services rendered in the facility setting
  • Evaluation and management (E/M) services billed during the global period
  • Incorrect discharge status codes triggering full payment rather than transfer payment (Note: CMS appears to list some discharge status codes that should not trigger transfer payment, including 01-Home, 04-Custodial or Supportive Care, 50-Hospice Home, and 51-Hospice Facility)
  • Outpatient services billed by a provider other than the skilled nursing facility (SNF) for a patient in a covered part A stay at a SNF
  • Source of admission code other than “D” when patients are transferred from an acute care hospital to that hospitals distinct part inpatient psychiatric unit
  • Untimed codes billed with units greater than one without an appropriate modifier (i.e. modifier 59) (Note: See transmittal for a list of codes CMS considers untimed codes)

Contractors involved with developing the edits include claims processing contractors as well as the Fiscal Intermediary Shared System contractor, the Multi-Carrier System contractor and the Common Working File contractor.  CMS is scheduling up to eight calls between July 15, 2012 and September 6, 2012 with the various contractors to discuss implementing the edits.

Continue reading on the MedicareMentor blog.

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A RAC coordinator at a hospital in Region B (who wished to remain anonymous) shared one of her latest recovery auditor stories with the Revenue Cycle Institute. She explained that her facility was assigned a new MAC, CIGNA Government Services, and that her facility has a back log of 125 claims from CGI. In addition to this, the demand letter responsibility has shifted to the MAC, so she isn’t sure what to expect, concerning timeliness and correspondence.

“We were informed that CIGNA will send the letter to the address that is in their file, which is not the address where the demands from Region B RAC were sending the letters to,” she says.  “In addition, we received a template yesterday -- I believe CMS released it -- but no envelope was attached so we don’t know what we’re looking for.”

 She continued, “It would be nice for the first two months of the switch that the deadlines either be waived or extended.  We had been receiving the demand letters usually 7 to 10 days from the date on the letter, so it will be interesting to see how this evolves.”

Do you have any advice, comments, or questions for this provider? Has something similar happened at your facility? Have you contacted/heard back from your particular recovery auditor or MAC?

These “Share your RAC story” submissions are intended to show other provides out there that these things are happening everywhere. But they are also intended to create conversation and connect likeminded individuals. Have you been experiencing any type of problems with recovery auditors lately at your facility? Would you like to offer advice to this reader by sharing your experience? If you do, or if you have ideas, questions, or concerns of your own, then submit them to

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In the calendar year (CY) 2012 OPPS Final Rule, CMS once again amended the regulations for supervision of hospital services, and once again CMS seems to have made unclear clarifications that are stirring up controversy.  The crux of the confusion is around its amendment of 410.27, the regulation containing coverage requirements for hospital outpatient therapeutic services furnished incident-to a physician’s service. CMS expanded the definition of incident-to services to include all services that are not diagnostic.

Previously, the regulation appeared to be limited to services provided incident to a physician’s service and covered under a specific provision of the Social Security Act that describes coverage of hospital outpatient departments services provided incident to.  This limitation seemed to indicate that other services such as physical therapy (PT), occupational therapy (OT) , speech language pathology and radiation therapy, which are covered under other provisions, did not have to meet the requirements in 410.27, most notably the supervision requirements.

Continue reading Kimberly Hoy’s note on the MedicareMentor blog, and stay tuned to the Revenue Cycle Institute for the release of a white paper that takes an in-depth look at physician supervision.


HCPro’s 2011 Recovery Auditor Benchmarking Survey

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Be part of a comprehensive assessment of the recovery auditor program and learn how facilities nationwide have handled this intricate process. The following questions explore your experiences with recovery auditors and the process your facility has put into place to deal with them. We value your input and appreciate your time and effort in completing this 29-question anonymous survey. As a thank you, we will be happy to send you our benchmark report. Upon completing the survey you will have the opportunity to request your free copy. We know you must be as interested as we are in finding out what your peers are doing to handle the recovery auditor process.

To take the short survey, please click here.

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From the field: Demand letter confusion

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A compliance director at a hospital in Region C (who wished to remain anonymous) shared one of her latest recovery auditor stories with the Revenue Cycle Institute. She informed us that her facility has been receiving demand letters from Connolly before receiving the results letters for some complex reviews. Connolly is also sending demand letters that contain both automated and complex reviews, and do not contain the account patient control number, making it more laborious to try to identify the account and the issue. “When this happens, they are essentially throwing in every possible issue that an account could be audited for and making you choose which one they have targeted and identified,” she says. “They are also taking money back on the date of the demand letter without giving the provider a chance to stop recoupment.”

Has something similar happened at your facility? Have you contacted/heard back from your particular recovery auditor?

Help us to understand your RAC experience. Have you been experiencing any type of problems with recovery auditors lately at your facility? Would you like to offer advice to this reader by sharing your experience? If you have tips, ideas, questions, comments, or concerns to share with your peers, then submit them to

The following a checklist of best practice techniques when it comes to medical necessity and RAC tracking management strategies provided by Stacey Levitt RN, MSN, CPC, senior administrative director of patient care management at Lenox Hill Hospital in New York City.

  • Admit orders. While everyone has probably heard it before, be sure to look at your admission orders. If the admission order does not match the level of care provided, that’s a red flag. Does the order say “Admit to a floor?” Does it say “Admit to a service?” Does it say “Admit as inpatient?”
  • Utilization review. Look at your utilization management team. Are there case managers reviewing all of your cases to see if they meet the criteria for admission, or does it need to be bumped up to a physician advisor?
  • Clinical documentation improvement (CDI). Do you have a CDI program in place? Because that’s where you are going to ‘beef up’ the information in the charts that will actually support your admission.
  • Audits. Audit your charts to verify the necessity of an admission and to identify potential denial vulnerabilities.
  • ·Physician education.  Be sure to educate all of your physicians, starting with your residents.

This checklist was adapted from the HCPro audio conference, “Combat RAC Denials: Strategies for Successful Appeal.”

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The RAC Toolkit for Physician Practices

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RACs are auditing practices. Learn how to prepare.

The RAC Toolkit for Physician Practices is your practice's answer to turning plans into proactive action for RAC success.

Authors Elizabeth Lamkin, MHA, and Amanda Berglund, MS, MBA, describe how to establish and sustain an effective RAC-preparedness structure that can be adapted to fit any organization's system. They provide best practices for successful processes and outline each staff member's role in your RAC audit program.

Physician practice settings are getting audited by RACs. Whether you're dealing with a RAC or another government auditor, you need a program that's running as effectively as it can be. You will use their tested, proven, and practical tools to build a more effective billing compliance program. You'll learn how to bring finance, business office and clinical groups together for operational improvements that drop right to the bottom line.

For more information, call 800-650-6787, or visit the HCPro Marketplace.

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2012 IPPS Final Rule Explained

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The sheer volume of new payment information in the 2012 IPPS Rule makes the rule difficult to navigate—and once you find what you need to know, it can be hard to decipher CMS' "government speak." Join HCPro on Thursday, September 29, 2011, at 1PM (Eastern) for 2012 IPPS Final Rule Explained, This 90-minute live audio conference is your life line. Our experts will comb the rule and pull out the information you need to know. You’ll learn what the new proposals mean for IPPS payment in FY2012 as well as how the readmission reduction and value-based purchasing programs will affect future payments. .

For more information or to order, call 800/650-6787 and mention Source Code EZINEADp3 or visit the HCPro Healthcare Marketplace.

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