Why is it important to you? Volume of Medical Records Requests Technical denials Response time Lengthy and Costly Appeals Process How many requests are in appeals? Denials cost the facility both time and money Identifying Compliance Issues What are your denial reasons? Financial Implications to the Facility How much is the program costing the facility in time and resources? How are audits impacting cash flow? How are audits impacting the facilities bottom line?
Reality Check Facts from Recent AHA RACTrac Survey 57% of record requests did not contain an overpayment 50% reported having a denial reversed through the discussion period Hospitals are appealing 50% of all denials* 66% overall success rate on appeals 63% of appealed claims are stuck in the appeals process RACTrac Q1 2014 survey 6
Current Recovery Audit Contractor Regions Region A – Diversified Collection Services Region B – CGI Region C – Connolly Consulting Region D - HDI
Who’s Who??? –Medicare Recovery Audit Contractors – Improper Payments – goal is to recover money for medicare –Fiscal Intermediary/ Medicare Administrative Contractor (FI/MAC) – administer payments, do probe audits to correct and educate –Comprehensive Error Rate Testing (CERT) – Measures Improper Rate for payments made by the MAC –Probe Audits – MACs will do testing on claims to see if providers are implementing billing guidelines correctly –Zone Program Integrity Contractors (ZPICs)-also known as UPIC (Unified Program Integrity Contractors) Investigate Fraudulent activity RAC MAC CERT Probe Audits ZPIC
Who’s Who??? –Medicaid Recovery Audit Contractors (RAC) – Identify Improper Payments –Medicaid Integrity Contractor (MIC)- Fraudulent patterns; appropriate utilization of Medicaid –Payment Error Measurement Testing (PERM) – Establish Improper payment rate made by state Medicaid – once every 3 years per state –Quality Improvement Organizations (QIO)- Investigate Quality of Care, DRG’s and Medical Necessity complaints –Commercial Audits – Identify Improper payments, establish quality data Medicaid RAC MIC PERM QIO Commercial Audits
STATE AND FEDERAL AUDITORS U.S. Department of Justice U.S. Department of Health & Human Services CMS Centers for Medicare & Medicaid Services Medicaid MEDICAID RAC Medicaid Recovery Audit Contractor MIC Medicaid Integrity Contractor PERM Payment Error Rate Measurement Medicare MAC Medicare Administrative Contractor CERT Comprehensive Error Rate Testing RAC Recovery Audit Contractor Prepayment Probe (targeted reviews) OIG Office of Inspector General ZPIC Zone Program Integrity Contractors
Audit Reviews/Request Types of Reviews: Prepayment: Claim submitted not yet paid Post payment: Claim submitted and paid Types of Requests Complex: Records requested ( ADR, ROI) (reimbursable) Automated: Denial and Demand all-in-one – no record requested – usually a known error Informational/Semi-Automated: Like an automated request but requires records to defend (records are not part of maximum RAC limits- not reimbursable) If records are not received, it is considered a technical denial and the claim is denied.
Lifecycle of an Audit Payor review identified ADR request issued Record submitted for review Result /Findings communicated Repayment requested (Demand) Appeal initiated/ Re-bill initiated Appeal Decision communicated Final exchange of payment based on appeal outcome
CMS Overpayment Collection Timeline Adapted from http://www.cms.gov/Outreach-and-Education/Medicare- Learning-Network- MLN/MLNProducts/downloads/overpaymentbrochure508-09.pdf
30 days if appeal before recoup Currently a 24 month suspension on assigning to an ALJ Interest starts accumulating on day 31 and every 30 day after until repaid or overturned 60 days if appeal before recoup
What can hospitals do to lessen the impact? Review denials Cases that are NOT appealed Automated denials Monitor RAC websites for targeted issues Weigh the results of appealing vs rebilling Follow up on repayments for successful appeals Improve Physician Documentation Have a system to track audits/appeals Lessons learned from the first 5 years of RAC program
Top 10 Mistakes in Audit Management Mistake #1: Not centralizing your audit management program –Reduce the number involved, increase their involvement, review processes Mistake #2: Not understanding who the auditors are –Know auditors procedures and educate audit team Mistake #3: Not following up on key audit trends –Demonstration projects, probe audits, PEPPER reports Mistake #4: Not controlling costs –Audit software, electronic delivery, centralizing Mistake #5: Ignoring the lampposts –Analyze data, improve current coding/documentation
Top 10 Mistakes in Audit Management Mistake #6: Failing to respond to denials timely –No technical denials, utilize discussion, monitor appeals Mistake #7: Excluding billing and revenue cycle –Electronic ADR notifications, recoupments, repayments, Rebills Mistake #8: Becoming e-mail dependent –Lost/unread emails, email overload, no reminders for deadlines Mistake #9: Too many dabblers –Standard consistent process, subject matter experts, more efficient Mistake #10: Not Taking Ownership –Analyze data and coordinate entire process
Data Analysis According to AHA RAC Trac Q1 2014 –Only 43% percent of all records requested last quarter were denied What should you be reviewing in your data? –Requests and denials –Patient type –Audit type –Diagnosis What is your denial rate per volume requested? Compare your reasons for denials. –Drill down to root causes
Shift in focus – Are you ready? What are your top DRG denials? Are you reviewing your coding denials? What are your denial rates for the RAC Prepayment DRGs? MS-DRG 312 Syncope & Collapse MS-SRG 069 Transient Ischemia MS-DRG 377-379 G.I. Hemorrhage MC-DRG 637-639 Diabetes MS-DRG 252-254 Other Vascular Procedures
Basics of data analysis GIGO -Garbage in- garbage out rule Your analysis is only as good as your data Do you trust your data?
Garbage in vs Clean data Standard definitions and protocols are key to clean data Too many cooks can ruin the stew –How many people do you have entering ADR requests? Results letters? Appeals? –Validate staff understanding of the process and the auditors language on denials –Examples: ** services in an inpatient setting were medically unnecessary and could have been provided in an outpatient/observation setting? –Short Stay Medically Unnecessary? –Medically Unnecessary? **Documentation does not support the necessity for the procedure –Short Stay Medically Unnecessary? –Medically Unnecessary?
Mount Sinai Health System ACA – contains provision for Medicaid and Medicare overpayments be returned to the program within 60 days of being identified Failing to comply with the 60 days results in sanctions under the False Claims Act Penalties of up to $11,000 per “fraudulently delayed” claim - multiplied by three –Two hospitals with Continuum Health Partners submitted improper Medicaid claims in 2009 and 2010 due to electronic coding errors –An internal audit identified 900 claims in early 2011 which resulted in about $1 million incorrectly paid to the hospitals –Money was repaid but not within the 60 day window –Potential cost to system is about $30 million
Upcoming changes RAC Reform New RAC contracts/territories – when? Contracts will include 5 changes (Discussion period, contractor payment, ADR limits) Investigate the overturn rate at ALJ level August 2014 – extending contract for current RACs to restart some reviews Electronic appeal process ICD-10 - Effective 10/1/15
Two midnight rule Effective 10/1/2013 Currently in a “Probe and educate” review process through 3/31/15 Based on reviews – provide education MACs will conduct prepayment reviews Assumption is that if a patient is in the hospital over the span of 2-midnights they qualify as an inpatient Documentation will be important!! RACs are not allowed to audit these claims with admission dates between 10/1/13 and 3/31/15
ALJ Appeal process Problem: 24 month suspension on assigning claims to judges Over 357,000 claims waiting to be assigned 72% overturn rate at ALJ Proposed Solutions: OMHA- Appeal Demonstration Programs Settlement Conference Facilitation (SCF) Pilot Mediation for ALJ appeals filed in 2013 Group all claims appealed for same issue 68% Hospital Settlement – one time offer
68% Hospital Settlement Facility types ELIGIBLE to submit a settlement request –Acute Care Hospitals, including those paid via Prospective Payment System (PPS), Periodic Interim Payment (PIP), and Maryland waiver; –Critical Access Hospitals (CAH) Criteria for claims –Claim pending appeal or within the timeframe to request appeal review –Denial based on the appropriateness of the inpatient admission (patient status review) –Date of Admission prior to 10/1/2013 –Not previously withdrawn/ billed for Part B payment Initial settlement requests are due to CMS on or before October 31, 2014
If recoupment was taken and provider paid interest, interest is included in the net payable amount and paid back at 68% If recoupment has not occurred and interest is accrued, interest is waived Website: http://go.cms.gov/InpatientHospitalReviewhttp://go.cms.gov/InpatientHospitalReview Settlement Process
What have we learned? Audits are costly and constantly changing Monitor RAC websites for current activity RAC and other auditors are here to stay 471 million recovered in 2 nd quarter 2014 Impacting Healthcare Facility’s cash flow and profitability Reviewing data, education and documentation are key Align clinical documentation with known targets/issues An audit management system is a necessity Be prepared!