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Preparing for the Future: Audit Risk Areas, Successful Appeal Strategies and Compliance Andrew B. Wachler, Esq. Wachler & Associates, P.C. 210 E. Third.

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Presentation on theme: "Preparing for the Future: Audit Risk Areas, Successful Appeal Strategies and Compliance Andrew B. Wachler, Esq. Wachler & Associates, P.C. 210 E. Third."— Presentation transcript:

1 Preparing for the Future: Audit Risk Areas, Successful Appeal Strategies and Compliance Andrew B. Wachler, Esq. Wachler & Associates, P.C. 210 E. Third St., Ste. 204 Royal Oak, MI 48067 (248) 544-0888 awachler@wachler.comwww.wachler.comwww.racattorneys.com MGMA 2013 Annual Conference October 6-9, 2013 San Diego, California

2 2 Learning Objectives Understand key audit risk areas for physician group practices. Integrate successful strategies into Medicare appeals to defend against claim denials. Identify specific compliance measures to implement before a Medicare audit.

3 Current Audit Landscape CMS contractors in the current audit landscape CMS contractors in the current audit landscape Medicare Administrative Contractors (MACs) Medicare Administrative Contractors (MACs) Zone Program Integrity Contractors (ZPICs) Zone Program Integrity Contractors (ZPICs) Medicaid Integrity Contractors (MICs) Medicaid Integrity Contractors (MICs) Recovery Audit Contractors (RACs) Recovery Audit Contractors (RACs) Medicare RACs & Medicaid RACs Medicare RACs & Medicaid RACs Office of Inspector General (OIG) audits Office of Inspector General (OIG) audits 3

4 Medicare Administrative Contractors (MACs) Statistically Projected Audit Statistically Projected Audit Statistical sampling is used to calculate and project (i.e., extrapolate) the amount of overpayment(s) made on claims. Statistical sampling is used to calculate and project (i.e., extrapolate) the amount of overpayment(s) made on claims. Claims are reviewed from a statistical random sample, the results of which are then extrapolated to the universe of claims during a given time period to determine the overpayment amount. Claims are reviewed from a statistical random sample, the results of which are then extrapolated to the universe of claims during a given time period to determine the overpayment amount. Focus/Target Review Focus/Target Review Contractors conduct targeted reviews, focusing on specific program vulnerabilities inherent in the PPS, as well as provider/service specific problems. The reviews should be conducted based on data analysis and prioritization of vulnerabilities. Contractors conduct targeted reviews, focusing on specific program vulnerabilities inherent in the PPS, as well as provider/service specific problems. The reviews should be conducted based on data analysis and prioritization of vulnerabilities. Additional Document Requests (ADRs) Additional Document Requests (ADRs) When a claim is selected for medical review, an ADR is generated requesting medical documentation be submitted to ensure payment is appropriate. Documentation must be submitted in a timely manner for review and payment determination. When a claim is selected for medical review, an ADR is generated requesting medical documentation be submitted to ensure payment is appropriate. Documentation must be submitted in a timely manner for review and payment determination. 4

5 Zone Program Integrity Contractors (ZPICs) Focus on detection & prevention of Medicare fraud Focus on detection & prevention of Medicare fraud Different from the Medical Review program, which is primarily concerned with preventing and identifying errors Different from the Medical Review program, which is primarily concerned with preventing and identifying errors ZPICs request medical records and conduct medical review to evaluate the identified potential fraud ZPICs request medical records and conduct medical review to evaluate the identified potential fraud ZPICs may also refer to the OIG and the Department of Justice (DOJ) for further investigation ZPICs may also refer to the OIG and the Department of Justice (DOJ) for further investigation Prepayment reviews Prepayment reviews 5

6 Two Recent ZPIC Post-Payment Review Results Letters “The ZPIC has determined that it is likely you have been overpaid for the services provided from the end of the audit period through the current date based on the documentation submitted for the medical review. Section 1833(e) of the Social Security Act places the burden on the provider to furnish information necessary to determine the amount due to the provider.” “The ZPIC is requesting that the provider conduct an internal audit of its claims to determine the accuracy of the claims billed. If research determines the claim/payment is incorrect, please process claim adjustments and arrange repayment with the claims processing contractor. Please provide the ZPIC with the results of this audit within 90 days.” 6

7 Medicaid Integrity Contractors (MICs) Creation of Medicaid Integrity Program (MIP) mandated by Deficit Reduction Act of 2005 Creation of Medicaid Integrity Program (MIP) mandated by Deficit Reduction Act of 2005 MICs hired to perform review, audit, and education functions MICs hired to perform review, audit, and education functions 5 year look-back period 5 year look-back period 3 types of MIC contractors 3 types of MIC contractors Review MICs Review MICs Audit MICs Audit MICs 30 days to provide records 30 days to provide records All audit finding must be supported by adequate documentation All audit finding must be supported by adequate documentation Auditors are not paid on a contingency fee basis and are not responsible for collecting overpayments from providers Auditors are not paid on a contingency fee basis and are not responsible for collecting overpayments from providers Education MICs Education MICs 7

8 MICs Continued MIC Fraud Referrals MIC Fraud Referrals If an Audit MIC identifies potential Medicare or Medicaid fraud, it must simultaneously and immediately make a fraud referral to the Medicaid Integrity Group (MIG) or the Office of Inspector General for the Department of Health and Human Services (OIG). If an Audit MIC identifies potential Medicare or Medicaid fraud, it must simultaneously and immediately make a fraud referral to the Medicaid Integrity Group (MIG) or the Office of Inspector General for the Department of Health and Human Services (OIG). Medicaid Program Integrity Manual, 100-15, Ch. 10, § 10020. The OIG has 60 days to determine whether to accept the referral. The OIG has 60 days to determine whether to accept the referral. 8

9 Looking Forward: UPICs In, MACs & ZPICs Out Unified Program Integrity Contractor (UPIC) Unified Program Integrity Contractor (UPIC) CMS will be combining integrity responsibilities of ZPICs and MACs into one integrity contractor  UPIC CMS will be combining integrity responsibilities of ZPICs and MACs into one integrity contractor  UPIC MICs will be phased out MICs will be phased out Focus on both Medicare & Medicaid integrity issues Focus on both Medicare & Medicaid integrity issues CMS will be consolidating Medicare and Medicaid data into one unified database CMS will be consolidating Medicare and Medicaid data into one unified database 9

10 Medicare Recovery Audit Contractors (RACs) Private companies contract with Medicare Private companies contract with Medicare Identify Medicare overpayments and underpayments Identify Medicare overpayments and underpayments Paid on a contingency fee basis Paid on a contingency fee basis Started as a demonstration project in 2005 Started as a demonstration project in 2005 Section 302 of the Tax Relief and Health Care Act of 2006 made the RAC program permanent Section 302 of the Tax Relief and Health Care Act of 2006 made the RAC program permanent Required nationwide expansion by 2010 Required nationwide expansion by 2010 The Patient Protection and Affordable Care Act (PPACA) expanded the RAC program to Medicaid and Medicare Parts C and D The Patient Protection and Affordable Care Act (PPACA) expanded the RAC program to Medicaid and Medicare Parts C and D 10

11 Who are the RACs? Region A: Performant Recovery Region A: Performant Recovery Working in CT, DE, D.C., MA, MD, MA, NH, NJ, NY, PA, RI and VT Working in CT, DE, D.C., MA, MD, MA, NH, NJ, NY, PA, RI and VT www.dcsrac.com www.dcsrac.com Region B: CGI Technologies and Solutions, Inc. Region B: CGI Technologies and Solutions, Inc. Working in KY, IL, IN, MI, MN, OH and WI Working in KY, IL, IN, MI, MN, OH and WI http://racb.cgi.com http://racb.cgi.com Region C: Connolly Consulting, Inc. Region C: Connolly Consulting, Inc. Working in AL, AR, CO, FL, GA, LA, MS, NC, NM, OK, SC, TN, TX, VA and WV Working in AL, AR, CO, FL, GA, LA, MS, NC, NM, OK, SC, TN, TX, VA and WV www.connollyhealthcare.com/RAC www.connollyhealthcare.com/RAC Region D: HealthDataInsights, Inc. Region D: HealthDataInsights, Inc. Working in AK, AZ, CA, IA, KS, MO, MT, ND, NE, NV, OR, SD, UT, WA, WY, Guam, American Samoa and Northern Marianas Working in AK, AZ, CA, IA, KS, MO, MT, ND, NE, NV, OR, SD, UT, WA, WY, Guam, American Samoa and Northern Marianas http://racinfo.healthdatainsights.com/home.aspx http://racinfo.healthdatainsights.com/home.aspx 11

12 Medicaid RACs States were required to have implemented their Medicaid RAC programs by January 1, 2012 States were required to have implemented their Medicaid RAC programs by January 1, 2012 Medical necessity reviews for Medicaid RAC Medical necessity reviews for Medicaid RAC ● CMS will not issue oversight provisions ● Reviews will be performed within scope of state laws and regulations ● The Medicaid RAC Final Rule does not require Medicaid RACs to receive prior approval for medical necessity reviews. The The ACA requires states to contract with RACs, but states are free to contract with any RAC. As a result, there is significant variability between the states - there are 50 different sets of rules, and 50 different appeal processes. 12

13 Physician Audit Risk Areas Home Services – Care Plan Oversight (CPO) Home Services – Care Plan Oversight (CPO) Focus on overutilization of Care Plan Oversight (CPO) Services. Focus on overutilization of Care Plan Oversight (CPO) Services. Provided by a physician to a patient under home health agency or hospice care that requires complex and multidisciplinary modalities involving regular physician development and/or revision of care plans, review of subsequent reports of status, etc. Provided by a physician to a patient under home health agency or hospice care that requires complex and multidisciplinary modalities involving regular physician development and/or revision of care plans, review of subsequent reports of status, etc. Time spent for services is 30 minutes or more per calendar month. Time spent for services is 30 minutes or more per calendar month. 13

14 Physician Audit Risk Areas Emergency Department Services Emergency Department Services Denial reasons for services include: Denial reasons for services include: Failure to submit physician’s notes documenting component work with medical record; Failure to submit physician’s notes documenting component work with medical record; Key work was not performed by the physician or mid- level provider; Key work was not performed by the physician or mid- level provider; Documentation failed to meet the key components for the level of coding. Documentation failed to meet the key components for the level of coding. 14

15 Physician Audit Risk Areas Physician Audit Risk Areas “Incident-to” Services “Incident-to” Services The OIG assesses whether “incident-to” services have a higher error rate The OIG assesses whether “incident-to” services have a higher error rate The OIG stated that “incident-to” services represent a program vulnerability that does not appear in claims data The OIG stated that “incident-to” services represent a program vulnerability that does not appear in claims data Can be identified only by reviewing the medical record Can be identified only by reviewing the medical record 15

16 Physician Audit Risk Areas Physician Responsibilities for DME and Home Health Providers Physician Responsibilities for DME and Home Health Providers Physicians are required to retain documentation for diagnostic or specialist services they order for patients (i.e. DME, home health, and IDTF) Physicians are required to retain documentation for diagnostic or specialist services they order for patients (i.e. DME, home health, and IDTF) CMS or a Medicare contractor may request this documentation from a provider. (42 C.F.R. 424.516) CMS or a Medicare contractor may request this documentation from a provider. (42 C.F.R. 424.516) 16

17 Physician Audit Issues E/M coding E/M coding Documentation does not support the level of service billed (i.e., upcoding or downcoding of services) Documentation does not support the level of service billed (i.e., upcoding or downcoding of services) Required components are not documented in the medical record Required components are not documented in the medical record The historical component is incomplete or absent The historical component is incomplete or absent The medical decision-making documented is inappropriate or incomplete The medical decision-making documented is inappropriate or incomplete 17

18 Examples of New RAC Approved Issues Affecting Physicians Incorrect Billed Drug and Biological HCPCS Code Incorrect Billed Drug and Biological HCPCS Code Providers are required to report appropriate HCPCS codes for the drugs and biologicals administered and billed. Medical documentation will be reviewed to determine that the appropriate HCPCS code was billed. (At this time, Medical Necessity will be excluded from this review.) Providers are required to report appropriate HCPCS codes for the drugs and biologicals administered and billed. Medical documentation will be reviewed to determine that the appropriate HCPCS code was billed. (At this time, Medical Necessity will be excluded from this review.) Blepharoplasty – eyelid lifts Blepharoplasty – eyelid lifts When done for cosmetic purposes, it does not meet the criteria of the functional visual impairment parameters and is considered not reasonable and medically necessary. When done for cosmetic purposes, it does not meet the criteria of the functional visual impairment parameters and is considered not reasonable and medically necessary. Intensity-Modulated Radiation Therapy (IMRT) Intensity-Modulated Radiation Therapy (IMRT) IMRT is only covered for certain diagnosis and when certain conditions are met IMRT is only covered for certain diagnosis and when certain conditions are met Excessive Units of Multiple Drug Class Screenings Excessive Units of Multiple Drug Class Screenings Effective January 1, 2011, HCPCS codes G0431 and G0434 for multiple drug class screenings may only be reported once per patient encounter regardless of the number of drug classes tested. Effective January 1, 2011, HCPCS codes G0431 and G0434 for multiple drug class screenings may only be reported once per patient encounter regardless of the number of drug classes tested.

19 Other Physician Audit Issues Extended Services Extended Services Oncology/Hematology Oncology/Hematology Computed Tomography Angiographies Computed Tomography Angiographies Medical necessity Medical necessity Surgical procedures Surgical procedures Cataract surgeries Cataract surgeries Cardiology procedures Cardiology procedures Cardiac testing Cardiac testing 19

20 Other Physician Audit Issues Pain management Pain management EPO: medical necessity and LCD requirements EPO: medical necessity and LCD requirements Urological procedures: medical necessity and LCD requirements Urological procedures: medical necessity and LCD requirements Home physician services Home physician services 20

21 21 Medicare & Medicaid Overpayments PPACA Section 6402(d) PPACA Section 6402(d) Requires providers and suppliers receiving funds under the Medicare program to report and return overpayments by the later of (1) the date which is 60 days after the date on which the overpayment was identified or (2) the date any corresponding cost report is due, if applicable. Requires providers and suppliers receiving funds under the Medicare program to report and return overpayments by the later of (1) the date which is 60 days after the date on which the overpayment was identified or (2) the date any corresponding cost report is due, if applicable. Expands liability to include knowing failure to repay Expands liability to include knowing failure to repay “…knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” “…knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” Proposed Rule (77 Fed. Reg. 9179) Proposed Rule (77 Fed. Reg. 9179) 10-year look-back period 10-year look-back period Recent case law: United States and State of Wisconsin ex rel. Keltner v. Lakeshore Medical Clinic, LTD Recent case law: United States and State of Wisconsin ex rel. Keltner v. Lakeshore Medical Clinic, LTD

22 22 Successful Audit Appeals Strategies: Overview Rebuttal and Discussion Period Rebuttal and Discussion Period Redetermination Redetermination Appeal deadline: 120 days (30 days to avoid recoupment) Appeal deadline: 120 days (30 days to avoid recoupment) Reconsideration Reconsideration Appeal deadline: 180 days (60 days to avoid recoupment) Appeal deadline: 180 days (60 days to avoid recoupment) Administrative Law Judge Hearing Administrative Law Judge Hearing Appeal deadline: 60 days Appeal deadline: 60 days CMS will recoup the alleged overpayment during this and following stages of appeal CMS will recoup the alleged overpayment during this and following stages of appeal Medicare Appeals Council (MAC) Medicare Appeals Council (MAC) Appeal deadline: 60 days Appeal deadline: 60 days Federal District Court Federal District Court Appeal deadline: 60 days Appeal deadline: 60 days

23 23 Successful Appeals Strategies: Arguing the Merits Merit-based arguments: Merit-based arguments: Medical necessity of the services provided Medical necessity of the services provided Appropriateness of the codes billed Appropriateness of the codes billed Frequency of services Frequency of services To effectively argue the merits of a claim: To effectively argue the merits of a claim: Draft a position paper laying out the proper coverage criteria Draft a position paper laying out the proper coverage criteria Summarize submitted medical records and documentation Summarize submitted medical records and documentation If relying on medical records in an ALJ hearing: If relying on medical records in an ALJ hearing: Organize using tabs, exhibit labels and color coding Organize using tabs, exhibit labels and color coding Use graphs and medical summaries to assist in the presentation of evidence Use graphs and medical summaries to assist in the presentation of evidence Use of past Medicare Appeals Council cases Use of past Medicare Appeals Council cases http://www.hhs.gov/dab/divisions/medicareoperations/macdecisions/mac _decisions.html http://www.hhs.gov/dab/divisions/medicareoperations/macdecisions/mac _decisions.html http://www.hhs.gov/dab/divisions/medicareoperations/macdecisions/mac _decisions.html http://www.hhs.gov/dab/divisions/medicareoperations/macdecisions/mac _decisions.html http://www.hhs.gov/dab/macdecision/ http://www.hhs.gov/dab/macdecision/ http://www.hhs.gov/dab/macdecision/

24 24 Successful Appeals Strategies: Use of Experts Experts such as physicians, registered nurses, coding experts, and inpatient rehabilitation specialists may be helpful in appealing a contractor determination Experts such as physicians, registered nurses, coding experts, and inpatient rehabilitation specialists may be helpful in appealing a contractor determination Experts can : Experts can : Assess strength of a case early on and help develop a strategic plan Assess strength of a case early on and help develop a strategic plan Assist with the interpretation and organization of medical records Assist with the interpretation and organization of medical records Provide testimony regarding appropriateness and/or necessity of services Provide testimony regarding appropriateness and/or necessity of services Affidavit at redetermination and reconsideration levels Affidavit at redetermination and reconsideration levels Live testimony at ALJ hearing Live testimony at ALJ hearing

25 25 Successful Appeals Strategies: Audit Defenses Provider Without Fault Provider Without Fault Waiver of Liability Waiver of Liability Treating Physician’s Rule Treating Physician’s Rule Challenges to Statistics Challenges to Statistics

26 26 Successful Appeals Strategies: Provider Without Fault Section 1870 of the Social Security Act Once an overpayment is identified, payment will be made to a provider if the provider was without “fault” with regard to billing for and accepting payment for disputed services Once an overpayment is identified, payment will be made to a provider if the provider was without “fault” with regard to billing for and accepting payment for disputed services Definition of fault Definition of fault 3 Year Rule 3 Year Rule

27 27 Successful Appeals Strategies: Waiver of Liability Section 1879(a) of the Social Security Act Under waiver of liability, even if a service is determined not to be reasonable and necessary, payment may be rendered if the provider or supplier did not know, and could not reasonably have been expected to know, that payment would not be made. Under waiver of liability, even if a service is determined not to be reasonable and necessary, payment may be rendered if the provider or supplier did not know, and could not reasonably have been expected to know, that payment would not be made.

28 Successful Appeals Strategies: Challenges to Statistics Section 935 of the MMA Limitations on Use of Extrapolation – A Medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise, unless the Secretary determines that Limitations on Use of Extrapolation – A Medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise, unless the Secretary determines that There is a sustained or high level of payment error; or There is a sustained or high level of payment error; or Documented educational intervention has failed to correct the payment error. Documented educational intervention has failed to correct the payment error. Cannot challenge the substance of the finding of “ sustained or high rate of error, ” but can challenge whether a finding was made Cannot challenge the substance of the finding of “ sustained or high rate of error, ” but can challenge whether a finding was made Guidelines for conducting statistical extrapolations are set forth in the Medicare Program Integrity Manual (CMS Pub. 100-08), Chapter 3, §§ 3.10.1 - 3.10.11.2 Guidelines for conducting statistical extrapolations are set forth in the Medicare Program Integrity Manual (CMS Pub. 100-08), Chapter 3, §§ 3.10.1 - 3.10.11.2 See also MAC case See also MAC case Transyd Enterprises, LLC d/b/a Transpro Medical Transport Transyd Enterprises, LLC d/b/a Transpro Medical Transport 28

29 Compliance Comparative Billing Reports Comparative Billing Reports Snapshot of utilization data for an individual provider Snapshot of utilization data for an individual provider Provider’s billing pattern for a given code or group of codes is compared to the state average and the national average Provider’s billing pattern for a given code or group of codes is compared to the state average and the national average Mailed to the top 5,000 billers Mailed to the top 5,000 billers CBR examples: CBR examples: E/M services E/M services Podiatry: nail debridement Podiatry: nail debridement Cardiology services Cardiology services Compliance Policy on Investigations Compliance Policy on Investigations Compliance and Organizational Tips to Prepare for an Audit Compliance and Organizational Tips to Prepare for an Audit 29

30 Compliance Policy on Investigations 30 Have policies on cooperation and coordination with government investigations in place Have policies on cooperation and coordination with government investigations in place If an employee receives any inquiry, subpoena, or other legal document relating to the employer’s business: If an employee receives any inquiry, subpoena, or other legal document relating to the employer’s business: Notify the Compliance Officer immediately, who will contact legal counsel Notify the Compliance Officer immediately, who will contact legal counsel Never provide false or inaccurate information to a government investigator Never provide false or inaccurate information to a government investigator On-Site Government Inquiries On-Site Government Inquiries Obtain “initial contact” information Obtain “initial contact” information Contact Compliance Officer Contact Compliance Officer Draft memorandum regarding information obtained from the investigator and provide to Compliance Officer Draft memorandum regarding information obtained from the investigator and provide to Compliance Officer Search Warrants Search Warrants Notify the Compliance Officer immediately, who will contact legal counsel Notify the Compliance Officer immediately, who will contact legal counsel Employees speaking with government investigators: Employees speaking with government investigators: Cannot be prohibited from speaking with government investigators, but may politely decline Cannot be prohibited from speaking with government investigators, but may politely decline May request legal counsel to be present during an interview May request legal counsel to be present during an interview

31 31 Compliance and Organizational Tips to Prepare for an Audit Be aware of your RAC’s new approved issues Be aware of your RAC’s new approved issues Designate a person to check the approved issues lists on a regular basis Designate a person to check the approved issues lists on a regular basis Be aware of improper payments that have been identified in OIG and CERT reports Be aware of improper payments that have been identified in OIG and CERT reports OIG: www.oig.hhs.gov/oas/cms.asp OIG: www.oig.hhs.gov/oas/cms.aspwww.oig.hhs.gov/oas/cms.asp CERT: www.cms.hhs.gov/cert/ CERT: www.cms.hhs.gov/cert/www.cms.hhs.gov/cert/ Implement proactive compliance measures Implement proactive compliance measures Self audits (prospective vs. retrospective) Self audits (prospective vs. retrospective) Documentation Documentation

32 32 Compliance and Organizational Tips to Prepare for an Audit Availability of internal experts Availability of internal experts Determine who could act as an expert for the different specialties in your institution Determine who could act as an expert for the different specialties in your institution Appeals – how will you handle? Appeals – how will you handle? Learn from past appeal experiences Learn from past appeal experiences Keep track of denied claims Keep track of denied claims Look for patterns of denials Look for patterns of denials Develop necessary corrective action Develop necessary corrective action

33 Call to Action Outline the audit landscape and stay current with new developments Outline the audit landscape and stay current with new developments Identify key audit risk areas that affect your practice Identify key audit risk areas that affect your practice Develop proactive compliance measures that will help your practice prepare for and mitigate the impact of an audit Develop proactive compliance measures that will help your practice prepare for and mitigate the impact of an audit 33

34 QUESTIONS? Andrew B. Wachler, Esq. Wachler & Associates, P.C. 210 E. Third St. Ste. 204 Royal Oak, Michigan 48067 (248) 544-0888 awachler@wachler.comwww.wachler.comwww.racattorneys.com


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