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Oct
29
CGI, the RAC for Region B, has posted three new issues for review in Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin. This means CMS has now approved issues for RAC auditing in all states.
The new issues approved for physician and outpatient hospital claim review in these states are:
For more information on these and other issues approved for Region B states, visit the CGI Web site.
In addition, CMS has approved a new issue for DME provider audits in Region D—Knee orthotic bundling. “There are Knee orthotic addition codes that cannot be billed separately due to the fact that they are bundled with the base knee orthotic code or that the addition code is not medically necessary when billed in conjunction with a specific knee orthotic base code,” according to HDI, the Region D RAC.
For more information, visit the HDI Web site.
Oct
29
On October 15 CMS released an FAQ on the appearance of code N432 on remittance advice. The question is as follows:
Will Code N432 appear on the remittance advice for RAC adjusted claims?
Oct
29
Sneak preview: Comparing appeal rates for RACs vs. claims processing contractors
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Editor’s note: This excerpt is adapted from the soon-to-be-released book, “The RAC Survival Guide: Successful management of Recovery Audit Contractors,” by Kimberly Anderwood Hoy, JD, CPC. Pre-order your copy on HCMarketplace.com.
The high number of claims determinations appealed was a measure of dissatisfaction with the RAC demonstration project. In January 2009, CMS updated the Evaluation Report with appeal statistics through August 31, 2008. By the beginning of 2009, all timely appeals should have been filed, although some claims still in the appeals process remain undecided at various levels of appeal. The January 2009 update indicated that providers appealed 22.5% of all RAC claim determinations. In contrast, CMS reported in the Evaluation Report that providers appealed only 4% of improper payment determinations by claims processing contractors during the same period. With nearly one-quarter of RAC claim determinations appealed—a rate that is five times higher than for typical claims processing contractors—the data seem to indicate provider dissatisfaction with the accuracy of RAC payment determinations.
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Type of Reviewer
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Percent of Improper Payment Determinations/Denials Appealed by Provider
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Percent of Appealed Claims Overturned in Favor of Provider
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Percent of All Improper Payment Determinations/ Denials Overturned in Favor of Provider
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Claims Processing Contractors1
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4%
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59%
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2.3%
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Recovery Audit Contractors2
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22.5%
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34%
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7.6%
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1 The Medicare Recovery Audit Contractor (RAC) Program: An Evaluation of the 3-Year Demonstration, June 2008
2 The Medicare Recovery Audit Contractor (RAC) Program: Update to the Evaluation of the 3-Year Demonstration, January 2009
The rate of determinations overturned on appeal in favor of the provider was also high, indicating that providers’ concerns were not totally without merit. The January 2009 update reported that 34% of appealed claims were decided in providers’ favor. Note that this is lower than the rate of appealed claims overturned in the provider’s favor for claims processing contractors, which CMS has said is 59%. However, combining the much higher rate of appeals for RACs with the high rate of claims overturned in providers’ favor reveals that the percentage of all RAC claim determinations overturned was three times higher than it was for claims contractors. Only 2.3% of all improper payment determinations made by claims processing contractors were overturned on appeal, but 7.6% of all RAC claim determinations were overturned in the provider’s favor on appeal. This 7.6% rate of reversal lends credence to providers’ concerns regarding improper determinations and improper application of Medicare guidelines.
Oct
29
St. Joseph Medical Center in Houston has been preparing for RACs for months now, says Cucharras Martin, vice president of revenue enhancement at the hospital and chair of the RAC team. But even though she began long ago, it doesn’t mean she and the rest of her RAC team are now just sitting back and waiting for the audits to begin at her hospital.
“We’re still refining,” she says. Even though her processes have been in place for a long time, Martin is continuously tweaking them.
Martin’s RAC team started by outlining process flows, determining the path RAC correspondence would take through the hospital. The team then assigned roles for everyone involved in the process, and determined the necessary timeline for each step. The goal was to have a medical record request fulfilled in 30 days, as opposed to the 45-day deadline set by the RACs.
Martin then decided to test their processes. She took a sample RAC record request letter and, without informing other staff members when it would occur, sent it to her facility. After working the letter through the work flow, the team realized where changes were necessary.
“We found out we really had to have some sort of log where [the RAC team] could sign off on having seen a medical record request,” she says. The log they developed is now in a binder that tracks each step of the process, and requires signoff when each step is completed. There is also a comment section where staff members could record any relevant notes. “If there is a denial, we can go back and see what we initially said for each claim. This helps us track and document that records were reviewed [prior to submitting them to our RAC],” Martin says.
The test was so effective that she plans to do it again soon. The first time around her team learned which time frames worked, and which didn’t. They also learned where they needed additional resources to make the process effective, be it staff time or something as simple as a binder to track the letter’s path. Martin expects additional tests to show her where else their process works well but also where it still needs work, and she knows that now is the time to refine, while her hospital has not yet been audited.
Developing such a process has also helped her hospital deal with other types of audits—not just RACs. They now track all audits. “Now everyone is aware of all of the auditing activity going on,” she says.
Martin is also taking the following steps to prepare:
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Data mining to uncover potential vulnerabilities is another part of her ongoing preparation. Martin says. She has learned from other payers conducting audits on her facility where some vulnerabilities may exist, so she’s looking at those areas for RACs too, even if they may not have been approved as issues—yet.
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Conducting education for her staff members. She presents educational sessions to individual departments, taking care to explain what the RACs are looking for, the department’s role in the process, how to handle any correspondence or medical record requests and other relevant information.
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Posting educational information on their hospital’s intranet where staff members can go to find out more information. There, staff members can find helpful links and other info they may need.
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Distributing information to physicians. She created a weekly newsletter, “What’s up Doc?” which the medical staffing office faxes to the physician offices. It contains pointers and information specifically for the physicians so their practice can prepare. And she knows they’re reading it. “I get comments back, and they ask for it when they don’t receive the fax each Wednesday.” She also has a physician liaison on their board.
Martin and St. Joseph Medical Center have been readying themselves for RACs for a long time now, but she laughs when asked about when she may conclude preparations. She won’t finish until the RACs are.
Oct
29
There’s no question that audit activity is escalating and the healthcare provider community needs to find a way to deal with the higher volume of audits and increasing number of auditors conducting them.
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.
Providers in some states may be ill prepared for the increase in audit activity. “Some states have been more aggressive recently and some states have not had the resources to do it. But I think it is going to be a wakeup call in those states where enforcement has not taken place to receive and respond to the audits,” says James G. Sheehan, the Medicaid Inspector General for New York.
“It is very challenging. The audits are stacking up,” according Sarah Kay Wheeler, partner at King & Spaulding LLP in Atlanta. “And add to the list is the Medicare Advantage plans contracting with different groups to conduct independent audits for Medicare Advantage purposes.”
Sheehan agrees that Medicare Advantage auditing is probably on the horizon, and believes providers may also need to watch out for Medicare Prescription Drug Benefit program audits. “I think it is reasonable to expect that the lessons that CMS learns in calculating estimates of improper payments and in auditing will be extended to the Medicare Prescription Drug Program and the Medicare Advantage Program going forward.”
For now, providers should definitely spend time preparing for Medicaid Integrity Contractor audits, as these should begin in all states by the end of 2009.
What will MICs be auditing? It will vary from state to state, of course. But Sheehan believes some of the following may be issues on which MICs will focus, at least at first:
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Dead or alive. In other words, was the patient alive at the time that the treatment was allegedly rendered to him or her? “This may seem obvious but in a number of states their system controls process usually takes 3–4 months to identify a patient as deceased,” says Sheehan. “That’s a pretty straightforward issue for the MIC to focus on.” In addition, MICs may look at whether a physician was deceased at the time he or she allegedly wrote an order, he says.
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Inpatient at time of ambulatory service. MICs will look for patients who were inpatients at the hospital at the time they were given home healthcare or ambulance trips.
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Hysterectomy on male. This is just one example of inconsistent coding, Sheehan says. “There are computerized techniques for identifying things that are impossible or highly unlikely. Hysterectomy on a male is one of them.”
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Debridement requiring actual cutting. MICs will look at regulations and statutes and coding guidance, such as Coding Clinics.
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Heart failure and shock. For this issue, MICs will look for failure to meet InterQual criteria for inpatient care.
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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.
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DRG assignment. Take a code pair with pretty clear criteria (e.g., temporary paralysis vs. more permanent paralysis) and examine which code pair you report more often. If you are heavily weighted toward the more expensive and many other hospitals are weighted the opposite way, you might want to take a good hard look, says Sheehan.
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Observation beds. This is always a popular issue because Medicaid rules differ by state and also differ from Medicare in most states, explains Sheehan.
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Exclusion. “This is my personal prediction… Over the last three years, the OIG has issued guidance on exclusion that says you can’t even have a janitor who is an excluded person working for your organization if you’re getting paid Medicare or Medicaid money,” says Sheehan, who is finding that many providers don’t have the necessary screening in place to prevent employment of persons excluded under state or federal law. “You may want to take a look before the auditors come in at 2 CFR 402.209 which talks about the scope and effect of exclusions. I find in my own work there’s not as much awareness of these issues as there should be. And it’s an easy data run to do if you are a MIC.”
Feeling overwhelmed? When it comes to MIC audits you may have an ally. In New York, for example, a topic on the table is minimizing the burden on hospitals and other providers . So Sheehan suggests that if you’re overwhelmed and your MIC isn’t responsive, it might be wise to go to the program integrity head in your state. “If you don’t get a positive response from your MIC when you say, ‘Hey, we’ve got 20 audits stacked up here. Can you please take your place in the queue?’ then go back to the state and tell them you need some relief in the short term.”
Editor’s note: Wheeler and Sheehan 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.
Oct
28
The Los Angeles Medicare Fraud Strike Force arrested 20 California residents for their involvement in various Medicare fraud schemes that resulted in over $26 million in fraudulent bills to the Medicare program, according to a Department of Justice (DOJ) press release.
A total of seven cases are pending trial all involving durable medical equipment company owners and marketers who are accused of fraudulently ordering and billing for power wheelchairs, orthotics, and hospital beds.
Since its inception in 2007, the Los Angeles Medicare Strike Force has indicted 331 individuals who collectively have billed the Medicare program falsely for more than $720 million, according to the DOJ.
Oct
28
“60 Minutes” recently featured a report on how criminals are defrauding Medicare out of billions of dollars every year. To see a short clip from that segment, click here.
Oct
28
By Loretta Sandy, PhD, RN, CCM
One of the primary rules physicians and nurses learn in school is "if it is not documented, it is not done." Another concern expressed by medical professionals in our litigious society is "remember that you may need to defend what you charted in a court of law." Finally, attorneys caution healthcare professionals that the more they chart, the more they may have to defend.
Although these statements are not contradictory, healthcare professionals are typically cautious. However, with the implementation of RAC audits, documentation must be comprehensive because it helps ensure that hospitals receive fair and justifiable reimbursement.
Given the potential effects of a RAC audit, healthcare professionals must understand why they should carefully document the following:
- Presenting symptoms
- Rationale for a particular level of care
- Treatments provided to improve a patient’s clinical status
Healthcare professionals must also substantiate their clinical judgment as to why a patient needs to remain in a given level of care on a daily basis. The case manager should confirm that the documentation is accurate and consistent with the hospital’s level-of-care criteria (e.g., Milliman, Interqual). If clinical documentation is not consistent with screening criteria, it must define the rationale for treatment decisions.
Check out the November 2009 issue of Case Management Monthly to read the other creative ways to reduce LOS. You can also discover the benefits of becoming a Case Management Monthly subscriber.
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