What’s New with MAC, RAC, Medicaid and the OIG? Audit findings, Updates, and Operational Ideas Instructor:Day Egusquiza, Pres AR Systems, Inc RAC 20121

 To ensure billed services are reflected in the documentation in the record  To ensure billed services are in the medically correct setting for the pt’s condition  To ensure billed service reflect the ‘rules’ regarding billing for the specific service  To ensure documentation can support all billed services according to the payer rules. 2RAC 2012

 Common issues: ◦ Dept staff not understanding the charge capture must match physician order and documentation. ◦ Lack of ongoing coder education ◦ Lack of ongoing dept head ed ◦ Lack of physician understanding ◦ Creating a culture of audit – time to be pro-active RAC 20123

 Commitment to Reduce the Error  President Obama recently announced the government’s commitment to reduce the error rate by 50% (using a baseline of 12.4%) by 2012 ( % $10.3 Billion )  – 9.5% for November 2010 Report  – 8.5% for November 2011 Report  – 6.2% for November 2012 Report  Thru MAC, CERT, ZPIC, RAC, MIC, OIG, HEAT auditing…  Funding PPACA by eliminating fraud, waste and abuse… 4RAC 2012

EntityType of claims How selected Volume of claims Purpose of review QIOInpt hospitalAll claims where hospital submits an adj claim for a higher DRG. Expedited coverage review requested by bene Very smallTo prevent improper payment thru upcoding. To resolve disputes between bene and hospital CERTAllRandomlySmallTo measure improper payments MACAllTargetedDepends on # of claims with improper payments To prevent future improper payments RACAllTargetedDepends on the # of claims with improper payments To detect and correct past improper payments PSCZPICAllTargetedDepends on the # of potential fraud claims To identify potential fraud OIGAllTargetedDepends on the # of potential fraud claims To identify Fraud RAC 20125

Updates Impacting the Auditing of Claims 6RAC 2012

(www/cms/gov/apps/me dia/ Demonstration Pre-Payment Review –focused  7 states with high fraud and error prone providers: FL, CA, TX, MI, NY, LA, Ill  4 states with high volume of short stay hospital stays: PA, OH, NC. MO  Does not replace Pre for MACs  Should allow for more timely rebills of corrected claims while catching potential patterns early. REACTIVATED: Go live June 2012 Prior authorization of certain medical equipment. (www/cms/gov/apps/media/ Press/factsheet.asp?counter Part A to Part B Rebilling  380 hospitals /pilot can sign up to volunteer  All hospitals to resubmit claims for 90% of the allowable Part B payment when RAC, CERT, MAC finds that a Medicare pt met Part B, not Part A.  NO APPEAL RIGHTS if join this demonstration project.  Can opt out at any time. RAC 20127

 Limitations on prepayment won’t exceed current post payment ADR limits.  Medical records provided on appeal will be remanded to the RAC for review  Claims will be off limits from future post payment reviews  ADR letter will advise where to send: RAC or MAC.  30 days to reply  June 1 – 312/Syncope  Aug 1 – 069/Transcient Ischemia; 377/GI hemorrhage w/MCC  Sept 1 – 378/GI Hemorrhage w CC; 379/GI Hemorrhage w/o CC/MCC  Oct 1 – 637/diabetes w/MCC; 638/diabetes w/CC; 639/diabetes w/o CC/MCC //go.cms.gov/cert-demos RAC 20128

 Highlights ◦ Allows /outlines Semi Automated Reviews ◦ RAC decisions beyond 60 days = no payment to the RAC but can request an extension. ◦ Discussion period continues but no timelines for replies from the RAC. Should be in writing and responded to within 30 days of receipt. If appeal is filed, discussion period ends. ◦ Posting of new issues still a problem with HDI and Connolly. But no new guidelines for the RACs ◦ Timely period between results letter and demand letter. (Estimated at 2 weeks) (CMS’s website, posted ) RAC 20129

 Effective March 15, 2012, calculation for record count has increased.  “The limit is equal to 2% (use to be 1%) of all claims submitted for the previous calendar year divided by 8. EX) billed 156,253 claims, 2% = 3125 /8 = 390 every 45 days”  “RAC can request up to 35 records per 45 days for providers whose calculated limit is 34 or less”  “Maximum # of records per 45 is 400” (was 300)  “Providers with over $100,000,000 in MS-DRG payments who had the 500 requests cap will now have a 600 record cap”  Hospital feedback on 3-16: GA “went up 118%; Al doubled, Texas up by 100 records each 45 days, NC up by 87 records, IN between our 3 hospitals.” RAC

 Semi-automated reviews are a two-part review that is now being used in the Recovery Audit Program. The first part is the identification of a billing aberrancy through an automated review using claims data. This aberrancy has a high index of suspicion to be an improper payment. The second part includes a Notification Letter that is sent to the provider explaining the potential billing error that was identified.  Still no limit on requests; in addition to complex record requests. RAC

RegionOverpaymts ($ in millions) UnderpaymtTotal 3 rd Q Corrections (Based on actual collections FY to Date Corrections Data thru June 30, 2011) Region A DCS $40.4$5.0$45.4$98.2 Region B CGI $33.9$9.8$43.7$118.5 Region C Connolly $46.9$7.4$54.3$133.3 Region D HDI $112.2$33.7$145.9$242.5 TOTALS$233.4$55.9$289.3$592.5 RAC

 Region A: Renal and Urinary Tract Disorders (Not medically appropriate for inpt status)  Region B: Extensive Operating room procedures unrelated to principal dx (DRG validation – primary and 2 nd dx errors)  Region C: Durable Medical Equipment/Prosthetics/DMEPOS (Automated review – no separate payment when inpt.)  Region D: Minor surgery and other treatment billed as an inpt (Not medically appropriate for an inpt status.)  HDI purchased by NY based HMS Holdings $400M RAC

RegionOverpaymts ($ in millions) UnderpaymtTotal 3 rd Q Corrections (Based on actual collections FY to Date Corrections Data Oct 2010-Sept 30, 2011) Region A/DCS $ 43.3$ 5.8$ 49.1$146.3 Region B/CGI $ 60.4$ 3.2$ 63.6$170.3 Region C/Connolly $ 65.2$ 60.7$125.9$260.9 Region D/HDI $108.2$ 6.9$115.1$361.8 Nationwide Totals $277.1$ 76.6$353.7$939.4 RAC

 Region A: Renal & Urinary Tract Disorders (medically necessary/incorrect setting)  Region B: Surgical Cardiovascular Procedures (medically necessary)  Region C: Acute inpt admission neurological disorders (medically necessary)  Region D: Minor surgeries and other treatment billed as an inpt (medically necessary ) *When pts with known dx enter a hospital for a specific minor surgical procedure and is expected to keep them les than 24 hrs, they are considered outpt regardless of the hour they present to the hospital, whether a bed was used or whether they remain after midnight. RAC

 After many confusing/delayed RAC recovery and demand letters, CMS has made the following change.  “ Effective Jan 3, 2012, CMS is transferring the responsibility for issuing demand letters to providers from its Recovery Auditors to its claims processing contractors. This change was made to avoid any delays in demand letter issuance. As a result, when a Recovery Auditor finds that improper payments have been made to you, they will submit claim adjustments to your Medicare contractor. Your Medicare contractor will then establish receivables and issue automated demand letters for any RAC identified overpayment. The Medicare contactor will follow the same process as is used to recover other overpayments. The Medicare contractor will then be responsible for fielding any administrative concerns you may have with timelines, appeals, etc.”  Messy: Letter to MAC/FI’s contact, not the RAC contact. Yell !  Details as to the reason/pt identifier are missing. Not required. RAC

Focusing on curbing fraud, waste and abuse in the Medicare program. Time period for filing Medicare FFS claims in Section 6404 of the PPACA amended the timely filing requirements to reduce the maximum time period for submission of all Medicare FFS claims to one calendar year after the date of service. Under the new law, claims for services furnished on or after Jan 1, 2010 must be filed within 1 calendar year after date of service. In addition, mandates that claims for services furnished before Jan 1, 2010 must be filed no later than Dec 31, The following rules apply to claims with dates of service prior to Jan 1, 2010: claims with dates of service before Oct 1, 2009 must follow the pre-PPACA timely filing rules. Claims with dates of service Oct 1-Dec 31, 2009 must be submitted by Dec 31, Impact on denied claims with rebill potential with the RAC and MIC? MESSAGE: GET IT RIGHT THE FIRST TIME. RAC

 Requires report and repayment of overpayments.  “Overpayment’ = funds a person receives or retains to which person is not entitled after reconciliation.  Providers and suppliers must: Report and return overpayments to HHS, the state or contractor by the later of : ◦ 60 days after the date the overpayment was identified or ◦ The date the corresponding cost report is due. Provide a written explanation of the reason for overpayment (PPACA 6402) Retaining overpayments after the deadline for reporting is subject to False Claims Act and Civil Monetary Penalties law. 18RAC 2012

 SE1024 “RAC: High Risk Vulnerabilities- No documentation or insufficient documentation submitted” (July 2010)  Two areas of high risk were identified from the demonstration project: No reply to request/timely submission (1 additional attempt must be made prior to denial) Incomplete or insufficient documentation to support billable services RAC

 SE1024/July No documentation or insufficient documentation submitted  SE1027/Sept Medical necessity vulnerabilities for inpt hospitals  SE1028/Sept DRG coding vulnerabilities for inpt hospitals  SE1036/Dec Physician RAC vulnerabilities  SE1037 /Jan 11 Guidance on Hospital Inpt Admission (referencing CMS guidelines, does not mandate Interqual/Milliman, RAC judgment allowed)  SE1104/Mar 11 Correct Coding POS/Physicians  Special Edition #SE1121/June 11 RAC DRG Vulnerabilities –coding w/o D/C summary  SE1210/Mar 12 RAC with MN of Renal & Urinary Tract Disorders 20RAC 2012

 CMS refers hospitals to Medicare Program Integrity Manual and reiterates that CMS requires contractor staff to use a screening tool as part of their medical review process of inpt hospital claims. While there are several commercially available screening tools…such as Milliman, Interqual and other PROPRIETARY systems… CMS does not endorse any particular brand.  CMS repeats that contractors are not required to automatically pay a claim even if screening indicates the admission was appropriate and conversely, contractors are not automatically to deny claims that do not meet screening tool guidelines  “In all cases, in addition to the screening instruments, the reviewer shall apply his/her own clinical judgment to make a medical review determination based on the documentation in the record.”  The guidance restates that the Medicare Benefit Policy Manual, Chpt 1, instructions that a physician is responsible for deciding whether the pt should be admitted as inpt. RAC

 Determining correct status  Clarifying order of the status ◦ Examples of weak orders: Admit to Dr Joe, Admit to tele, Transfer to the floor, admit to 23:59, admit to medical service, admit to FIT. None clearly define : Admit to inpt status and why –add (intent of the order)  Directing the clinical team as to the intensity of services that need provided when the pt ‘hits the bed’ as well as thru the course of treatment.  42 CFR (c) (2) “Patients are admitting to the hospital only on a recommendation of a licensed practitioner permitted by the state to admit pts to the hospital. “  Medicare State Operations Manual “In no case may a non- physician make a final determination that a pt’s stay is not medically necessary or appropriate.” Case Mgt protocol can ‘recommend’ to the providers but only takes effect when the provider has authenticated it. RAC

 Many facilities are using outside physician advisors or are growing their own advisors – many times the UR physician.  Ensure that any 2 nd opinion by a non- treating provider is ‘validated’ and used for directing care by the attending/admitting. Otherwise it is just another non-treating opinion. Additionally, look for educational opportunities thru patterns --dx, documentation, doctor.  Double check with the QIO for their opinion during audit. 23RAC 2012

 2-11 CMS announced a revised threshold for hospitals with $100 million in Medicare payments. The cap was raised to 500 per 45 day period, up from the 300 cap. AHA expressed concern over the 87 hospitals that will be impacted by this change. (New #, 3-12, 600)  PIP hospitals will begin to have records requested 2 nd Q Many PIP hospitals are large hospitals who could easily have their first record request be 500 records. RAC

 All RACs have begun doing (4-11)  Using the automated review/data mining to identify billing abnormalities with a high potential for improper payment.  This is followed by a request for records/complex to audit to determine if an error did occur in charge capture or claim’s submission.  EX) Tx hospital: Cataract removal can occur once per eye for the same date of service /removal with insertion of lens AND removal with mechanical vitrectomy) created the edit. 59 overrode edits = 2 payments. RAC

 Connolly, 5-11  Remicade billed w/chemo drug adm CPT codes  Letter says: “Data analysis showed an aberrant billing pattern inconsistent with a policy. “  Unknown limit, not subject to complex limits  Connolly, 5-11  Letter for at least 100 claims.  Infliximab –is a monoclonal antibody agent. Drugs “may’ be administered using the chemo therapy CPTs.  Reply with records within 45 days, same penalities RAC

 As of , modified changes  Limits based on physician or non PP’s billing Tax ID # as well as the first three positions of the ZIP code where that physician/non PP is physically located.  EX: Group ABC has TIN and two physical locations in ZIP code 4567 and This group qualifies as a single entry for additional documentation requests/ADR.  Ex: Group XYZ has TIN and two physical locations in ZIP 4556 and This group would qualify as two unique entities for ADR RAC

 ADR limits will be based on the # of individual rendering physician/non-PP reported under each TIN/ZIP combination in the previous calendar year. Reserves the right to exceed the cap if indicated. RAC Group/Office SizeMaximum # of requests per /each 45 days 50 or more50 records records records Less than 510 records

 Place of Service – outpt hospital vs office (SE1104 Med Learn; 11 vs 22 or 23)  Separate E&M leveling within the surgical/CPT bundle period  New vs Established  Level of service conflicts with the hospital – doc /inpt; hospital/OBS  Based on CERT audit results/ West coast, the following was targeted for audit: (2011) ◦ ◦ (Initial day) ◦ (Subsequent hospital visit) ◦ Cert audits can trigger requests for records if provider history shows an abnormal volume/risk for targeted CPT codes  Office E&M leveling is not a focus of the RAC audits..yet RAC

 …can be the same material as the RACs.  Ex. Az hospital had a ST MUE error. They received automated demand letters from HDI; however, they also received ‘first notice’ from WPS on the same issue. Per WPS, the site has 30 days from receipt of the WPS letter without interest to repay or be recouped on the 41 st day with interest.  No published items; no limits on requests, same appeal rights. Letters SOMETIMES explain..  WPS – Prepayment 310, 313, 192, 690  NHIC – Prepayment auditing of Chest pain, syncope and collapse, CHF. 30RAC 2012

 Noridian/ J3 has announced Probe audits for AZ, MT, ND, SD, UT, WY  Probe for 1 day stays, 2 day stays, 3 day stays and high dollar (w/o definition of $)  Noridian was awarded JF MAC on Includes ID, ND, Alaska, WA, Ore, SD, MT, WY, UT and AZ. Look for more wide spread auditing. Using CERT data for more probes  NGS – Mobile CMS audits/NY & Prepayment (2012) No letters with reasons. RAC

 Highmark (Now Novitas Solutions) ◦ Probe for DRG 470/Major Joint Replacement or reattachment of lower extremity w/MCC. Need to document 6 months of failed conservative therapy!! ◦ Probe for DRG 244 Permanent Cardiac Pacemaker implant w/o CC or MCC. ◦ NEW: 313, 392, 292 (2012) ◦ Msg from provider: Have been having 100% prepayment audit payment for DRG 313/chest pain for almost 2 years now. The site indicates they are being successful around 90% of time at the 3 rd level appeal/ALJ but it is taking about 18 months. There does not appear to be a change with the pre-payment review even with the overturn rate. (per PA facility history 9-11) RAC

 Trailblazer/TX highlights ◦ Developed LCD 41-96SAB for Hydration ( ) ◦ Reviewing DRG appeals and determining patient status was incorrect. Denied entire inpt stay. ◦ Issued 5 DRGs that will be on prepayment review: 243, 246, 247, 460, 470 (Ex: Stents, pacemaker) ◦ Lost MAC bid. Highmark awarded. 1/12 – Highmark ‘s Medicare Division, MAC J12, was sold to BC/BC of FL (BCBSF) with their subsidiary, First Coast who is a MAC J9. RAC

 Trailblazer: to increase consistency in Medicare reimbursement, effective 11-11, Trailblazer will begin cross-claim review of these services. The related Part B service (E&M, procedures) reported to Medicare will be evaluated for reimbursement on a post payment basis. Overpayments will be requested for services related to the inpt stay that are found to be in error.  First Coast & HighMark/Novitas– similar RAC

 Palmetto, Pre Payment Auditing  Began early 2012  DRGs focus: ◦ 871Septicemia/Sepsis ◦ 641Misc disorders of nutrition ◦ 690Kidney / UTI ◦ 470Joint replacement Site: CA site. Prior to Feb, 2012 – never had a pre- payment audit request. Had 12 in 1 st request. RAC

Cahaba – Pre-Auditing of the below DRGs. (2-12)  069 (Transient Ischemia)  191 (Chronic Obstructive Pulmonary Disease w CC)  195 (Simple Pneumonia & Pleurisy w/o CC/MCC)  247 (Percutaneous Cardiovascular Procedure w Drug-Eluting Stent w/o MCC)  287 (Circulatory Disorders Except AMI, w Cardiac Cath w/o MCC)  313 (Chest Pain)  392 (Esophagitis, Gastroenteritis & Misc Digestive Disorders /o MCC)  552 (Medical Back Problems w/o MCC)  641 (Nutritional & Misc Metabolic Disorders w/o MCC)  945 (Rehabilitation w CC/MCC)  470 (Joint replacement) RAC

DRGDescription2009 Error Rate2010 Error Rate 313Chest pain55.16%76.71% 552Medical back pain w/o MCC 70.92%71.25% 392Gastro & misc disorders w/o MCC 49.08%41.93% 641Nutrition misc metabolic disorder w/o MCC 49.27%48.43% 227Cardiac defib w/o cath lab w/o MCC 20.65%45.43% 37RAC 2012

 “ Louisville, KY based Norton Healthcare agreed to pay the federal govt $782,842 in March to settle allegations that it overbilled Medicare for wound care, infusion and cancer radiation services by adding a separate E&M charge that should have been included in the basic rate. The alleged overbilling, which occurred between Jan 2005-Feb 2010 involved outpt care. The settlement is twice the amt Norton allegedly overbilled.”  ISSUE: Transmittal A-00-40, A indicate that there is inherent nursing in all CPT codes. Therefore, the facility must ‘earn an E&M when done with a procedure.’ Unlikely events, other medical conditions being treated, new pt=examples. RAC

 Outpt claims pd greater than charges. (APC methodology)  Inpt claims pd greater than chgs  Inpt $ greater $  Outpt $ greater $25,000  One day stays at acute care  Major complications /comorb  Payments for septicemia servs  Payments for inpt same day discharges and readmissions  Outpt claims billed during the DRG payment window  Payments for hemophilia  Payments for outpt surgeries w/units greater than 1  Inpt and outpt claims /manufacturer credits for replacement of devices  Post –acute transfers to SNF/HHA/another acute care inpt facility  SNF/HHA consolidated billing- separate outpt services  Outpt claims with 59 modifier  Inpt claims pd greater than chgs 39

 CMS Bulletin RAC for Medicaid postponed  CMS issued new RAC for Medicaid final rules  Patterned after Medicare RAC – 3 yr look back, prohibits auditing done by another group, set limits on medical record requests, notify of overpayment in 60 days and coordinate.  PI.pdf  CMS proposes Medicaid payment reductions for provider-preventable conditions  Follow Medicare’s hospital acquired conditions  Allow for additional conditions for reduction, state specific RAC

 1) Medicaid integrity contractors – CMS has established a 5 year look back period with 30 days to reply to requests for record ( )  2) RAC for Medicaid – Final rule out Sept 14, To have in place by Jan 1, Target: $2.1B, with $900M to the states  3) State Medicaid – state fraud units are auditing and coordinating all data for audits.  Concern – avoid duplication! 3 unique groups. Track and watch each one separately.  NOTE: Medicare RACs are also becoming Medicaid RACs. (HDI-Ks) 41RAC 2012

 OB – protocols  Physicians/extended must order/direct pt care, pt specific.  Protocols are excellent clinical pathways, but the physician must order the protocol.  EX) Pt is 26 weeks. Nursing implements protocol for under 27 weeks. Doesn’t call the provider until results from first items on the protocol. Not billable. Must contact the provider to initiate protocol, then follow protocol. Billable. RAC

 CERT audits have continued to identify weakness in the use of Protocols.  EX) Lab urine test ordered but culture done as 2 nd test due to protocol. ( Noridian/Nov 2009 )  EX) Without contrast but 2 nd one done with contrast based on protocols.  Ensure the order is either updated or the initial order clearly states ‘with protocol as necessary.”  YEAH – how about including the protocols that are referenced in the record when submitting for audit? 43RAC 2012

 N432 = means 2 different things on the RAs. ◦ Pending recoupment, should coincide with the Demand letter ◦ Actual recoupment, 41 days after the demand letter which should include interest from the st days ◦ Remark codes from transmittal 659 clarify  N469 = CERT and MAC denials (Per MAC/NGS training on 3- 11) Also used when postponing recoupment/Transmittal 141.  MAC accepted the payment (within 30 days) and did the recoupment on the 41 st day too! (GA)  Transmittal 659/CR  PLB reason code (FB ) forward balance. Demand letter is also sent at this time.  PLB reason code (WO) overpayment recovery. 44RAC 2012

 Transmittal 47, Interpretive Guidelines for Hospitals June 5,  “ All entries in the medical record must be complete. Defined by: sufficient info to identify the pt; support the dx/condition; justify the care, treatment, and services; document the course and results of care, treatment and services and promote continuity of care among providers.  “All entries must be dated, timed and authenticated, in written or electronic format, by the person responsible for providing or evaluating the service provided.”  “ All entries must be legible. Orders, progress notes, nursing notes, or other entries ….. (Also CMS covers in SE1024 MedLearn release) 45RAC 2012

 Provide a legible full signature (a readable first name and last name)  Provide a legible first initial and last name  Write an illegible signature over a typed or printed name.  Write an illegible signature on letterhead with information indicating the identity of the signer. (EX: a prescription has an illegible signature but the letterhead of the prescription lists three physician names. Circle the name of the physician who wrote the prescription.  Use an illegible signature accompanied by a signature log or attestation statement.  Write initials over a typed or printed name.  Write initials not over a typed or printed name, but accompanied by a signature log or attestation statement.  Neglect to sign a portion of a handwritten note, but other entries on the same page in the same handwriting are signed.  SEND the LOG WITH AUDIT MATERIAL. RAC

 Heart Failure (MS DRG 291, 292, 293) Physician documentation must include the ‘type ‘ of CHF in order to capture this diagnosis as either being a CC or a MCC condition.  Excisional Debridement (MS DRG 463, 464, 465) Medical record documentation must support the code assignment of and must meet the definition of ‘excisional debridement.” …involves the surgical removal or cutting away as opposed to mechanical removal, i.e. brushing, scrubbing and/or washing. 47RAC 2012

 Hybrid records present extreme challenges in identifying the skilled care/handoffs of intensity of service between the care areas.  EMRs tend to present the patient’s history in a ‘cookie cutter’ concept without pt specific issues.  Treatment/outcomes/results of ordered services are often omitted from the clinical/nursing record. 48RAC 2012

Living with RAC 49RAC 2012

 1850 reporting, 1400 had activity/2000 hospitals  RAC denied $86M, up from $42 in 3 rd Q  Of the $86M, 23% were appealed, 77% was not appealed/ 75% (4Q 2011)  Of the 25% that was appealed, 85% were overturned in favor of the providers.  Medically unnecessary 57% of denials, 33% were short stays  Ave automated : $399  Ave complex : $5281 with a growing amt in medically unnecessary  Will expand the tracking of administrative burden RAC

 “Implementation of Recovery Auditing at the CMS. FY 2010 Report to Congress as required by 6411 of Affordability Act.  Accuracy rate by the RACs: Low to high: DCS/98.6 –HDI/ 99.2%  $75 M in overpayments. 82% of all activity  16 M in underpayments. 18% of all activity  Reasons: ◦ Not coded correctly ◦ Not meeting Medicare’s guideline for an inpt ◦ Supporting documentation does not match the order. RAC

CGI has started complex requests for OUTPT services. So far all outpt have been automated -most MUE problems. (Sept 2010)  Basic Radiation Dosimetry Calculation - Outpt- CPT  Comparison will be made in regards to units of Dosimetry calculations reported in the medical record versus those units of dosimetry calculation reported on the claim, to establish whether a difference inn reported units compared to those documented resulted in an overpayment for CPT HDI has issued “minor surgery and other treatment billed as an inpt stay” Claims billed for minor surgery or other treatment are identified for medical review based on risk of inpt improper payment.” (Oct 2010)  Involve surgery scheduling/surgery director and UR to review all cases. 52RAC 2012

 June, 2010 Connolly posted new issues relative to drug /J code accuracy. Tying the J code and the units/multiplier on the UB.  Paclitaxel  Cetuximab  Paclitaxel protein –bound particles  Tenectplase  Pamidronate disodium  Adenosine  Zoledronic acid (reclast) 1 mg 53RAC 2012

54 From Cmdr Casey, RN, CMS Summary: Review & Collection Process If no findings STOP Complex Review Provider has calendar days to respond Providers may request an extension Claim is denied if no response RAC has 60 calendar days from receipt of medical record to send the Review Results Letter Automated Review RAC makes a claim determination 2 Day 1 RAC issues Demand Letter to Provider (includes $$$ and appeal rights) INTEREST BEGINS TO ACCRUE AFTER 30 DAYS FROM DETERMINAT ION 4 Day 41 Carrier/FI/ MAC recoups by offset 5 New Complex Review Issue Posted to RAC’s Website 6 RAC issues Medical Record Request Letter to provider 7 Provider submits medical records 8 RAC clinician reviews medical records; makes a claim determination 9 RAC issues Review Results Letter to provider (does NOT include $$$ or appeal rights) 10 Carrier/ FI/MAC issues Remittance Advice (RA) to provider N432: “Adjustment based on a Recovery Audit” 3 New Automated Review Issue Posted to RAC’s website 1 Recoupment will NOT occur if: provider has paid in full; or provider filed an appeal BY day 30 The Collection Process RAC

 Charged to the provider if demand amt is not paid within 30 days of the letter st days of interest, auto recouped on 41 st day.  Charged to the provider if an appeal is filed within 30 days (normal is 120) to stop the recoupment.  Paid to the provider if the money was recouped on the 41 st day, appeal filed and overturned.  No interest is paid if the money is given back voluntarily, even if over turned on appeal.  Interest is each 30 days, not compounded. 11%  Reference: CR7688 /July 12, updates CR683/Sept 08 55RAC 2012

 HDI and CGI have started sending their ‘New Issue Validation’ sample letters.  Statement of Work allows sampling of up to 10 claims (in addition the 45 day limit) to prove a vulnerability with a new issue. Results will be issued on the findings with data submitted to the New Issue Board/CMS.  HOT: Share what was requested so potential new items are know; preventive work.  EX) Readmission within 30 days for AMS. 56RAC 2012

 Document your waste. Recouped for charging 60 U when only 50 was documented. Used single use vial, but no wastage was documented. (pharmacy? Nursing? Eff 6-10)  Do not use default CPT codes /initial day OBS has a MUE of 1. However, some hospitals are using for OBS hrs in FL 44. If not required to use G code, leave blank. 57RAC 2012

 MAC/NGS has an LCD (L25820) with document expectations for drugs and biologicals.  “The medical record must include the following information: ◦ The name of the drug or biological administered ◦ The routing of the administration ◦ The dosage (e.g. mgs, mcgs, cc’s or ICUs) ◦ The duration of the administration ◦ When a portion of the drug or biological is discarded, the medical record must clearly document the amt administered and the amount wasted or discarded.” Policies on how this will be done – as other payers may not acknowledge the billing of wastage. 58RAC 2012

 Nov 11, 2010's reply from Scott Wakefield, CMS Project Officer for CGI/ Region B:  "The 60 day timeframe for a RAC to respond to medical records sent by a provider is a contractual requirement for the RAC National Program, therefore, it is possible that non- compliance by the RAC may result in assessment of a lower score in their annual performance appraisal. This cumulative results of this appraisal impacts CMS's determination of whether to extend the incumbent RAC's contract for an additional year. I recommend you contact the RAC directly and inquire about follow up with the remaining records. I have copied certain CGI federal staff on this and will request that they follow up with me."  No direct penalty, no auto closing/approved of case.  UPDATE with new SOW: No payment to the RAC (9-11) 59RAC 2012

 19 inpts ADRs in 6 week period  All 1 day or very short stay on inpt surgeries Acute appy- day CVA/TIA- 1 day Hypokalemia/ Acute Renal failure – 2 days Total shoulder – 1 day Hypotensiv e Pt/readmit GI bleed- 2 days Below knee amputation-1 day Breast Reduction- 1 day Carbon monoxide- 1 Pneumoni a-2 days Seizures/PNA -expired-1 day Hemo cath placement- 1 Total knee replacemen ts – 2 days Obstructi vehepatis is- transferre d Non-union malleolus (surgery) -1 day Panyctopeni a – 1 day (?comfort care) 60RAC 2012

 Medically unlikely edits have resulted in charge capture errors. Many MUEs are unknown to the providers. (Automated)  Examples: ◦ 4 ST/92507 treated as per 15 instead of per encounter. Only 1 is allowed ◦ 4 EKG/93005 MUE is 3 in a given 24 hr outpt day. Would have to appeal that the 4 th one was medically necessary to the uniqueness of the pt’s needs. 61RAC 2012

 No auto crossovers/Medigap for pt portion. All pt portions are due to the pt or their supplement.  MAC can override the DRG that the RAC assigned. (Connolly/Cahaba) Which one is appealed?  Site prepares record so a “kindergartener’ can find the pertinent info prior to submission. (AK)  Upon receipt of the ADR, a letter is sent to the impacted physicians informing them of the request. Generates excellent conversation.. (NJ hospital) 62RAC 2012

 Underpayments are occurring too.  EX) IA hospital billed transfer DRG – pt was to have had HH or SNF care post inpt. Facility was paid a per diem vs DRG. RAC identified the underpayment as there were no claims from HH or SNF for the post care. Repaid full DRG for 7 accounts, $13,000. Better practice idea: D/C planning verifies in the 3 day hold that the pt had above services. Revised discharge disposition. 63RAC 2012

 Why us? There does not appear to be any patterns to the requests. They are one of 3 hospitals in the area. Only one to be hit with audits.  Max # of records per 45 days: 48. Have had 143 in last 12 mon  High DRG: 69/Transient Ischemia, 312/syncope & collapse, 101/seizures w/o MCC  Complex: ◦ Sept, 2010 – 1 st medically necessary audits. 48 had both DRG and MN. All 48 had 0-2 day LOS ◦ Appears Connolly is targeting the 2 nd diagnosis that make up the CC or MCC ◦ RAC Target DRGs: 981/982/983 Extensive & non-extensive OR procedures unrelated to principle Dx. Also 330/sm & lg bowel procedures 237/major cardiovascular w/MCC; 242/permanent cardiac pacemaker implant w/MCC. 4 highest MDCs: Respiratory, circulatory, digestive and Musculoskeletal & connective 64RAC 2012

 Automated ◦ MUEs – lab/80053 comprehensive metabolic profile & BNP ◦ CPT 62311/lumbar injection. MUE only looks for the correct modifier w/no considerations for distinct locations. QUIRKY : ◦ MAC assigns the overpayment amt for the demand letter. 1 demand letter where the demand was more than submitted. ◦ On at least 2 claims, the MAC approved a RAC denial and gave the RAC permission to send out a demand letter. The RAC failed to do so. The MAC assumed we had not responded to a letter so they went ahead and recouped the payment. Update complex requested each 45 days. 26% of all claims submitted results in denials. Each results letter is evaluated to determine to appeal or not. Overall, 15% denial rate. Considerable focus on education to prevent future denials. 65RAC 2012

 If a provider performs a self audit, how should they notify the RAC?  A: If a provider does a self audit and identifies improper payment, the provider should report the improper payments to the appropriate MAC, FI or carrier. The exact information necessary for the self referral can be determined by contacting your Medicare claims processing contractor.  There are two types of self audits: 1) Commonly called a voluntary refund and is claim based. If the required claim information is included along with the amt of the improper payment, the claim will be adjusted. The RAC will be aware of the adjustment, but the refund does not preclude future review. 2) Involves extrapolation. If extrapolation is used, the claim processing contractor will review the case file to determine if it is acceptable. The MAC can accept or deny the extrapolation for the issue identified by the provider. If the claim MAC accepts the extrapolation, these claims will be excluded from the RAC review. RAC

 Initial claim submission of Part B on a Part A claim is allowed. No Obs, no surgery, no anesthesia, no recovery. Ancillary only.  Rebilling of a denied inpt claim within the timely rebilling requirements is a Part B on a Part A claim. Bill type 12x. Ancillary only.  HOPE: AHA continues to champion trying to get CMS to allow bill type 131/regular outpt for a rebilled denied claim. 67RAC 2012

 These revenue codes/department charges are billable on a Part B claim of a denied Part A service. 12x ( Benefit Policy Manual, Chpt 6, section 10; Claims billing manual , Chpt 4, section 240)  27x/supplies; 30x/lab;32x/imaging; 331 & 335/chemo; 333/Radiation therapy; 34x/nuc med; 35x/CT; 379/anesthesia; 401/dx mammo; 402/ultrasound;403/screening mammo; 404/PET; 42x/PT; 43x/OT; 44x/ST; 46x/pulmonary; 48x/cardio, cath lab, cardiac stress test; /ambulance; 61x/MRI;634/Epo under 10,000 U; 635/Epo over 10,000 W;636/pharmacy;730-1/EKG & ECG tele;732/tele;739/EKG cardio lab;74x/EEG;77x/Vaccination adm;790/litho;920/other dx services; 921/vascular lab; 922/EMG;923/pap smear;929/invitro fertilization; 985/non-invasive physician. NO Surgery! RAC

 Can I rebill or must I file an appeal?  Call with CMS/HDI/WPS J5, a MAC  If RAC has identified a MUE due to a charge capture error and there was an accurate CPT that should have been used, an appeal & corrected UB must be filed to get the money for the corrected CPT.  If the facility did data mining and found that the same issue had occurred on other claims, a corrected claim should be submitted.  Discuss with the MAC prior to either to ensure it is done correctly. 69RAC 2012

 If an inpt/outpt is denied and the facility determines a misunderstanding of a Medicare regulation occurred, to get the correct CPT code/corrected amt, the facility must appeal. Additionally, the RAC team should immediately discuss the need to continue to data mine similar issues. ◦ Internal cost as manual rebill. ◦ Only ancillary services can be rebilled ◦ Pt had refund for inpt deductable; now will owe outpt coinsurance. ◦ Perception to public ◦ Real C A S H ◦ Track and trend any recoupments with rebills separate from recoupments with 100% absorbed losses ◦ Timeline for rebills must be followed RAC

If the inpt is denied, the pt (and Medigap supplements) will be informed they don’t owe the inpt deductible. Refund to pt and/or supplement or auto recoupment. If the facility determines they would like to do a corrected claim submission once a decision is made not to appeal – the pt will receive notice they owe a new outpt deductible/coinsurance. If the outpt claim is denied payment, the pt will be informed they don’t owe the outpt portion. HINT: Develop scripts for the PFS staff to explain. NOTE –all activity/recoupments can go back 3 years beginning with PD dates rolling forward. RAC

 Dear pt  As part of ABC hospital’s commitment to compliance, we are continuously auditing to ensure accuracy and adherence to the Medicare regulations.  On (date), Medicare and ABC hospital had a dispute regarding your (type of service ). Medicare has determined to take back the payment and therefore, we will be refunding your payment of $ (or indicate if the supplemental insurance will be refunded.)  If you have any questions, please call our Medicare specialist, Susan Jones, at happy hospital. We apologize for any confusion this may have caused.  Thank you for allowing ABC hospital to serve your health care needs. RAC

June 26, 2009/CMS Website  CMS reversed earlier decision to AUTO recoupment SNF payment if the hospital is denied/recouped its 3 day qualifying stay.  If the hospital is recouped for any activity, Part B/physician will be evaluated, but not auto recouped.  Will look but not auto recoup in both. RAC

Value Added Section 74RAC 2012

 New issue: Inpt Admissions without a Physician’s Inpt Admit Order.  Description: Admissions to the inpt setting require a physician’s order in order to qualify and be paid as an inpt stay.  Inpt hospital open  Reference info: CMS pub , Chpt 1, section 10 and pub Chpt 4, section 10 and RAC

 Addition documentation letter received read:  “ Good Cause for Issue: Chronic Obstructive Pulmonary Disease DRG 88 MS-DRG 190, 191 (Medical Necessity Review and MS-DRG Validation). During the course of the DRG validation, the RAC will also review the record for inpt admission order.  The documentation is being requested because COPD is one of CMS’s top volume DRGs. Therefore, DRG 88, currently MS-DRG 190 and 191 was selected to determine if the principle and secondary diagnoses were assigned inappropriately resulting in overpayments to the hospitals. An analysis of your billing data indicates that a potential aberrant billing practice may exist for these MS-DRGs.” 76RAC 2012

 Dec 9, 2010 letter from Region A/DCS outlining rationale for why they were requesting medical records for numerous DRGs. They also gave a great outline of inpt vs obs.  “ Inpt care rather than OBS is required only if the pt’s medical condition, safety or health would be significantly and directly threatened if care was provided in a less intensive setting. A patient must demonstrate signs and/or symptoms severe enough to warrant the need for medical care and must receive services of such intensity that they can be furnished safely and effectively only on an inpt basis.”  When auditing for ‘what does severity and intensity look like- look for the above issues to be addressed in the physicain admit note/order and the nursing bedside documentation. 77RAC 2012

 1 st MN request, 90 records, DX listed below for the 6 MN new issues  Had DRG, MN and inpt accuracy listed on all COPDCardiac Arrhythmia Excisional debridement Heart failure and shock Renal failureExtensive OR procedure unrelated to principal Dx Disease/disorder of the respiratory system Kidney & UTI Espohagitis/ gastronenteritis Aneurysm repairCoronary bypass w/PTCA Tracheostomy Perc Cardiovasc procedures w/stent GI DisordersOther circulatory system dx Other vascular dx Syncope and collapse Red blood cell disorders Atheroscleroris with MCC Nervous system disorders 78RAC 2012

 Rural Critical Access hospital. Ave Census 2  HDI “short stay change notification”. “After our review, it is our determination that the claims listed should have been outpt OBS vs inpt.”  Direct admit from a clinic. HDI findings :  “Pt chief complaint was hypoxia. The pt presented to ED for acute bronchitis, severe COPD – admitted as an inpt. Past medical hx and the pre-existing conditions are stable. The medical records did not document pre- existing medical conditions or extenuating circumstances that make the acute inpt admission medically necessary. The med record document services that could be provided as an outpt service.” 79RAC 2012

 “RAC will review documentation to validate the medical necessity of short stay, uncomplicated admissions of MS DRG (XXX). Medicare only pays for inpatient hospital services that are medically necessary for the setting billed and that are coded correctly. Medical documentation will be reviewed to determine that the services were medically necessary and were billed correctly.” “RACs will also review documentation for DRG Validation requiring that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary’s medical record. Reviewers will validate for MS-DRG, principal diagnosis, secondary diagnoses and procedures affecting or potential affecting the DRG.” (Aug 2010) 80RAC 2012

 A) When validating all information prior to submission, be sure to specifically address any issues outlined in the letter. This applies to appeal or discussion periods or any communication. Simply stating that our patient was very sick -although accurate - the audit is auditing billed services (as reflected on the UB and 1500 forms) are accurately reflected in the medical record.  B) Do you have a clinical documentation improvement program? EXPAND It beyond typical physician documentation to clarify DRG issues to SEVERITY of illness/docs and INTENSITY of services /nursing. Grow the documentation to support the level of care billed..  C) Track and trend your own vulnerabilities thru the validation prior to submission process. The opportunities are endless for our records to be improved -including revising EMR documentation. Patterns of risk are excellent tools for ongoing education, process changes, form development and overall cohesive pt care. Charting by exception is the worst type of charting to show intensity of care. Tell the pt's story and outline the interventions, results, handoffs, etc that occurred. 81RAC 2012

 D) ALWAYS print off the EMR (even if you have an release of information vendor, especially if you have a hydrid record ) and closely audit the handoffs between the departments - closely looking for intensity of care, clarity in interventions (what we did about results, tele strips) and how the pt's condition continued to warrant an acute level of care.  E) Major focus on nursing's canned documentation with EMRs.. Number the pages; create a cover letter that CLEARLY shows the doc's order for inpt with WHY he wanted them in an acute care setting with a defined course of treatment plus highlights of test results, intensity of the condition, etc. The lack of this type of validation can easily result in a fragmented record with very difficult severity and intensity of care identified. (HOT SPOT: ER = paper; floor nursing = electronic. How many admits come thru the ER? Huge area of audit and focused documentation improvement.) 82RAC 2012

Which option should I use? Discussion Period RebuttalRedetermination The discussion period offers the opportunity to provide additional information to the RAC to indicate why recoupment should be initiated. It also offers the RAC opportunity to explain the rationale for the overpayment decision. A rebuttal should be submitted only on rare occasions of extreme financial hardship. The rebuttal process allows the provider the opportunity to provide a statement and accompanying evidence indicating why the overpayment would cause extreme financial hardship. A rebuttal is not intended to review supporting medical documentation. A rebuttal should not duplicate the redetermination process. A redetermination is the first level of appeal. A provider may request a redetermination when they are dissatisfied with the overpayment decision. A redetermination must be submitted within 30 days to prevent offset on the 41 st day. RAC

Discussion period RebuttalRedetermination Who do I Contract RACContractor/MAC TimeframeDay 1-40Day 1-15Day 1-120; must be submitted within 120 days of demand letter. To prevent offset on day 41; file within 30 days but interest will accrue (Transmittal 141) Timeframe beginsAutomated review-upon demand letter: Complex-upon results letter Date of demand letter Upon receipt of demand letter Timeframe endsDay 40 (offset begins on day 41) Day 15Day 120 RAC

Audit Results and Better Practice Ideas To Reduce Risk 85RAC 2012

 “ HDI has signed a 5 year license with Milliman Care Guidelines. HCI will use the care guidelines content and software to review Medicare claims.  HDI will use the annually updated evidence based care guidelines products.  The Care Guidelines promote healthcare quality by providing clinical guidelines based on the best available clinical evidence.”  CMS does not mandate or endorse any specific guidelines or criteria for utilization review.” Feb 25, 2009 “Evidence-based care guidelines will be used to combat waste in Medicare program.” RAC

 An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight.” “However, the decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient's medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital's by-laws and admissions policies, and the relative appropriateness of treatment in each setting. Factors to be considered when making the decision to admit include such things as: – The severity of the signs and symptoms exhibited by the patient;  – The medical predictability of something adverse happening to the patient…” RAC

 Trailblazer/MAC Jurisdiction 4, “Inappropriate Hospital Admission vs Outpt Observation”  Medicare requirements that the inpt admission begins when the admission order is written. Additionally, all physician orders must have a date and a legible signature.  Physician’s decision to treat the pt as an outpt or inpt are reflected in the physician’s orders. The pt’s condition, history and current dx test results, along with the physician’s medical judgment, availability of treatment modalities and hospital admission policies should be considered when making a decision to provide inpt level of care. If a physician determines additional information is making a medical decision for inpt admission, the physician may elect to place in OBS outpt status. 88RAC 2012

 Scenario 1  An inpt claim is submitted for medical review ◦ The claim is without a written and signed physician order for admission ◦ The documentation is without an admit note describing the reason for admission to an inpt level of care/LOC ◦ The services rendered could have been rendered in an outpt setting ◦ The screening tool indicates the intensity of services and the severity of illness of the pt’s condition as documented did not support the medical necessity for inpt LOC ◦ Medical review decision: Denied because documentation does not support the medical necessity for an acute level of care ◦ IF THE PATIENT’S CONDITION REQUIRES INPT ADMISSION, the physician needs to document an inpt admission order with a progress note describing the medical decision for the inpt admission and the intended treatment plan to address the patient’s condition. ◦ Internet Only Medicare Manual (IOM) Pub , Medicare Claims Processing Manual; chapter 1, section 50.3; chapter 3, section k 89RAC 2012

 Variance rate: 40%  Common findings: ◦ UR/physician dialogue may indicate inpt, but the documentation in the admission order (or subsequent physician documentation) is not sufficient to address the severity of the pt’s condition for today’s condition that warrants an inpt acute level of care. ◦ “Meets or doesn’t meet Interqual” does not make an inpt. Medicare’s definition is not well known. ◦ Weakness in EMRs that do not address the ‘uniqueness’ of the pt’s care and intensity of the service that is being performed. (Nursing documentation- no narrative to support electronic-no ability to expand on the uniqueness of the pt’s story.) RAC

 Problematic diagnoses and other risk areas: ◦ Rule out – anything! If a physician is not clear as to the reason for admit/undetermined dx or course of treatment, place in OBS, aggressively work up the pt and rule in= inpt; rule out= discharge safely. (Exceptions do exist) ◦ Using a non-treating physician to confirm inpt status does not replace or supplement the attending/treating physician’s documentation. ◦ Conversations to support “admitting to inpt” is rarely actually documented in the record. ◦ H&Ps and D/C summaries are not consistently present. ◦ Normal OUTPT Surgeries being ordered as inpt surgeries…not on the inpt only list. UR needs to work closely with surgery scheduling. RAC

 Definite misunderstanding of what OBS is.  Viewed as a time frame rather than a pt’s condition. (Miracle 23 hr cures = discharge or Monday am quarterbacking to ‘fix weekend.”)  Billable hrs vs hrs in a bed  Audit three types of OBS: ◦ ER to OBS – saw provider onsite ◦ Post procedure to recovery to OBS ◦ Direct from a provider or SNF to a bed Highmark/MAC, new inpt/OBS RAC

Variance rate two fold: – To be an inpt40% – To remain an inpt60% Audit focus: – Medically appropriate to be an inpt – Medically appropriate to remain an inpt for all 3 days. – Severity of illness/1 st day; intensity of service/all 3 midnights. – Common weakness: Social admits= TOUGH RAC

When submitting a request for an appeal, you have different options. Submit in writing or via fax. When utilizing the fax, there is no need to follow up with a hard copy of the documentation. Submit your request only one time, utilizing only one method. Duplicate submissions or following up with hardcopy may delay your appeal. If you are bringing attention to a specific item you are faxing, please circle or indicate by asterisk, as highlights do not appear when the fax Is received. Aug 20, RAC 2012

 Begin charge capture/charge reconciliation audits. Department head ownership!  Begin ongoing reimbursement education with audits of billed services against documentation.  Focus on identified weaknesses from benchmark audits, RAC automated results and complex reviews – with corrective action plans. 95RAC 2012

 Joint audits. Physicians and providers audit the inpt, OBS and 3 day SNF qualifying stay to learn together.  Education on Pt Status. Focus on the ER to address the majority of the after hours ‘problem’ admits.  Identify physician champions. Patterns can be identified with education to help prevent repeat problems.  Create pre-printed order forms/documentation forms. Allows for a standard format for all caregivers. 96RAC 2012

Region A (DCS) – – – – CMS RAC Contact: Region B (CGI) – – – – CMS RAC Contact: Region C (Connolly) – – – – CMS RAC Contact: Olive Taylor, CMS.hhs.gov Region D (HDI) – – – Part A – Part B – CMS RAC Contact: Brian. CMS assigns a project officer to each RAC. Use if abuse of the SOW or other issues are occurring. 97RAC 2012

New issues will be posted, RAC specific There is a CMS/project officer assigned to each RAC New issues are being added/some are being taken off. Region A-DCS Region B-CGI Region C-Connolly RAC Region D-HDI RAC

Day Egusquiza, President AR Systems, Inc Box 2521 Twin Falls, Id Thanks for joining us! Free info line available. Plus our training website: seminar.com RAC