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Based on the Centers for Disease Control and Prevention’s (CDC) National Health Interview Survey, 43.8 million Americans did not have health insurance in 2008. That’s 700,000 more people than in 2007 and 2.8 million more than 1997.
The amount of children under 18 that were uninsured in 2008 remained the same as in 2007 at 8.9%, and was down from 1997 at 13.9%.
Massachusetts had the lowest rate of uninsured persons (3%), and Texas had the highest (22.9%).
Q: Are the Medicare Advantage plans included in RAC audits?
Section 306 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (see Appendix A) directs the Secretary of the U.S. Department of Health and Human Services (HHS) to demonstrate the use of Recovery Audit Contractors (RAC) in:1) Identifying Medicare underpayments and overpayments; and2) Recouping Medicare overpayments.Under the demonstration, the Centers for Medicare & Medicaid Services (CMS) pays the RACs on a contingency basis; that is, the RACs receive a portion of what they identify and collect. The demonstration program is designed to determine whether the use of RACs will be a cost effective means of adding resources to ensure correct payments are being made to Medicare providers and to ensure that taxpayer funds are used for their intended purpose. The legislation requires the Secretary to conduct the demonstration for payments made under part A or B of Title XVIII of the Social Security Act (i.e., traditional fee-for-service (FFS) Medicare). Thus the RAC demonstration does not include the audits of payments for Medicare Part C (managed care) or Part D (the prescription drug benefit).
- One of the most important lessons Tanja Twist, MBA/HCM, director of patient financial services for Methodist Hospital in Arcadia, CA, learned from the demonstration project was the need to diligently track and monitor all correspondence to and from the RAC. “This goes beyond tracking the date you send or receive the actual documents (e.g., determination letters, medical record requests and appeals) or send the medical records, but should include tracking the receipt of the documents by the RAC to ensure you are responding timely.” Send everything via certified mail with a return receipt, she suggests. And make sure you are educating your entire facility-not just the mailroom-on what the RAC documents will look like so that correspondence will get to the right person or department. “Don’t assume that because you are able to identify a recipient for correspondence that the RAC will get it right every time,” she says.
- Tracking appeals was the single most important way to survive a RAC audit because it allows you to prioritize your appeals, says Stacey Levitt, RN, MSN, CPC, director of patient care management at Lenox Hill Hospital in New York City. “This way you can spend your available time where you get the biggest bang for your appeal effort.”
- Having a strong physician advisor program-not just having the concept on paper, but an available and active physician participant reviewing and interceding when appropriate-is critical for surviving RACs, according to Yvonne Focke, RN, BSN, MBA, revenue cycle director at St. Elizabeth and St. Luke Hospitals in Covington, KY. “Having such an advisor strengthens your compliance program which is more defensible when appealing cases, especially once they reach the Administrative Law Judge,” she says.
- It’s important for hospitals to regularly assess the effectiveness of their concurrent Medicare admission review processes, according to Joe Zebrowitz, MD, executive vice president for Executive Health Resources. Hospitals have to get the Medicare patient’s status correct every time. Establish a strong utilization review plan that follows Medicare’s Conditions of Participation. But a good plan does not solely ensure good results. You must make sure that the plan is being followed every day and that your case managers are using criteria to review all Medicare admissions and that every case that does not meet the criteria is undergoing a second-level review by a physician advisor, according to Zebrowitz. This physician advisor must be well versed in medical necessity regulatory guidance and use evidence-based medicine and risk stratification protocols to establish correct patient status. Your organization should also conduct retrospective audits on an ongoing basis to identify incorrect certifications from the past and self-disclose these errors, he says.
- Remember that RAC contractors are authorized to refer cases for investigation to the OIG when fraud or abuse is suspected, says Nancy Beckley, MS, MBA, CHC, of Bloomingdale Consulting Group, Inc.
- Take advantage of the 15-day rebuttal period prior to the actual appeals process, says Focke. “Even if only 10% of our cases were spared from this process, it was worth pursuing,” she says.
- Fran LaPrad, RHIT, CPHQ, director of health information at AdCare Hospital in Worcester, MA, had difficulty communicating with her RAC during the demo. LaPrad hopes communication will improve during the permanent program but suggests you should follow up voice mail messages with official letters if you don’t receive a phone call back within the allotted time.
- Zebrowitz also calls out the importance of physician education and collaboration. Many physicians working in hospitals do not have a firm understanding of the regulatory guidance on inpatient versus observation status certification and, more importantly, the ramifications of getting the status wrong, he says. It is your hospital’s responsibility to educate your physicians on the importance of documenting all of their concerns and findings in order to demonstrate medical necessity for all inpatient admissions. You also need to encourage strong collaboration between treating physicians, case management and physician advisors as they work to correctly certify each Medicare admission, ensuring that your hospital will be in compliance with the law and reimbursed appropriately, says Zebrowitz.
- The care management department at is becoming more and more important as the RAC program moves forward, says Focke. “Historically, care management departments have had a difficult time in justifying their existence because they were seen as a cost center that did not generate revenues,” she says. “But the value of having a compliant program has escalated with the advent of RACs and other regulatory agencies.”
- If you have the capability, scan all documentation to and from your RAC (including your medical records), says Twist. As you move through the appeals process, you will find that having the documents stored electronically will ease the process, she says.
Offering case management intervention and housing to homeless patients reduced hospitalizations by 29% and ED visits by 24%, according to a May 6 study published in The Journal of the American Medical Association.
Providing care to the homeless has always been a challenge for providers. An estimated 3.5 million Americans likely to experience homelessness during some or all of 2009. This study sought to investigate care coordination solutions for homeless adults with chronic illnesses such as HIV, diabetes, and hypertension.
For the study, patients were provided with hospital social workers for discharge planning, and were placed in transitional housing immediately after a hospital stay. The patients were later transferred to long-term housing.
The study revealed fewer hospitalizations and ED visits for homeless patients who received these case management services than for those who did not receive similar services.
CMS’ RAC project has made it necessary for case managers to become as knowledgeable as possible about denials and appeals. What do you need to do to be prepared for the RAC in your state? Here is a checklist to help you:
- Form a RAC committee in your facility. Include a medical advisor and representatives from finance, compliance, billing, and admitting. This committee should be a clearinghouse and review center for all RAC-related activities, including preparing for audits and understanding and determining vulnerabilities.
- Perform an internal audit of improper payments. Use findings from the RAC demonstration to help you prepare and identify the areas of vulnerability in your facility by visiting www.cms.hhs.gov/rac.
- Conduct a medical records audit of short stays. Examining your one- to two-day stays will help you gain an understanding of prior and present cases, as will the use of standardized clinical leveling criteria to establish the medical necessity of each case.
Check out the May 2009 issue of Case Management Monthly to read the full story.
CMS Issues Instructions for Recoupment of Overpayments related to MS-DRG 956
On May 8, CMS issued instructions on the mass adjustment of claims for MS-DRG 956 (Limb Reattachment, Hip & Femur Proc. For Multiple Significant Trauma). The Inpatient Pricer had mistakenly identified this DRG as a “special-pay” post acute care transfer DRG. Payment under the “special-pay” methodology resulted in overpayments for discharges that met the criteria for the post acute care transfer rule. The mass adjustments must be completed by August 1, 2009.
Effective date: October 1, 2008
Implementation date: April 27, 2009
CMS implements Section 148 of MIPPA regarding outpatient status for a CAH
On May 8, CMS issued a transmittal providing billing instructions based on the new criteria for determining a patient’s outpatient status for a critical access hospital (CAH) or an entity provider-based to the CAH, per Section 148 of the Medicare Improvements for Patients and Providers Act of 2008.
Effective date: July 1, 2009
Implementation date: July 6, 2009
CMS clarifies requirement for podiatric treatment
On May 8, CMS issued a transmittal clarifying the requirement for podiatric treatment in Pub. 100-04, Ch. 32, § 80.8. This clarification is necessary to support podiatric coverage requirements found in Pub. 100-02, Ch. 15, § 290.
Effective date: June 8, 2009
Implementation date: June 8, 2009
CMS releases MLN Matters articles
CMS released two MLN Matters article related to a transmittal previously outlined in Medicare Weekly Update.
- Ensuring Only Clinical Trial Services Receive Fee-For-Service Payment on Claims Billed for Managed Care Beneficiaries
- Surgery for Diabetes National Coverage Determination (NCD)
CMS also released a special edition MLN Matters article.
CMS issues transmittal on billing for clinical trial services provided to managed care beneficiaries
On May 1, CMS issued a transmittal updating system editing to ensure accurate billing, and ultimately correct pricing of clinical trial services provided to managed care beneficiaries.
Effective Date: October 1, 2009
Implementation Date: October 5, 2009
CMS announces deductible application on clinical trial claims
On April 24, CMS issued a transmittal announcing that it is updating the claims processing system to correctly apply or not apply the deductible on clinical trial claims.
Effective date: Dates of service on or after September 19, 2000
Implementation date: October 5, 2009
CMS announces implementation instructions for new discharge status code
On April 24, CMS issued a transmittal announcing implementation instructions for new patient discharge status code 21 (discharges or transfers to court/law enforcement).
Effective date: October 1, 2009
Implementation date: October 5, 2009
View a related MLN Matters article.
CMS releases special edition MLN Matters articles
CMS issued two special edition MLN Matters articles last week:
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