1. Medicare Claims Review Audits What you need to know …

2. Presidents Goals for 2012 Reduce overall payment errors by $50 billion Reduce overall payment errors by $50 billion Cut fee-for-service error rate in half Cut fee-for-service error rate in half Recover $2 billion in improper payments Recover $2 billion in improper payments

3. Rapidly Changing Environment New Medicare audit programs, including prepayment audits, seek reduction of overall payment error rates

4. Webinar goals How did we get here? How did we get here? How to document medical necessity to avoid audits ! How to document medical necessity to avoid audits ! AAOS/AAHKS advocacy activities … AAOS/AAHKS advocacy activities …

5. Audit Webinar Panel David Halsey, MD David Halsey, MD AAOS Board of Specialty Societies AAOS Board of Specialty Societies AAOS Coverage Determinations Project Team AAOS Coverage Determinations Project Team AAHKS Health Policy Chair AAHKS Health Policy Chair Brian Parsley, MD Brian Parsley, MD AAHKS 2 nd VP AAHKS 2 nd VP David Templeman, MD David Templeman, MD AAOS Coverage Determination Project Team, Chair AAOS Coverage Determination Project Team, Chair AAOS Board of Specialty Societies AAOS Board of Specialty Societies AAOS Board of Directors AAOS Board of Directors

6. Audit Webinar Staff Matt Twetten AAOS Sr. Manager, Regulatory, Quality & Medical Affairs AAOS Sr. Manager, Regulatory, Quality & Medical Affairs Ashlen Strong AAOS Manager, State Government Relations AAOS Manager, State Government Relations

7. Medicare Auditing Environment 7

8. Alphabet soup MACCERTLCD

9. Medicare Administrative Contractor (MAC) MACs are private companies that serve as contractors performing claims administration MACs do not work on contingency basis

10. Medicare Auditing Environment: Operations Receive and process Medicare A and B claims Receive and process Medicare A and B claims o Computer systems o EDI o Front-end claim review o Pricing o Enrollment Customer Service Call Center Customer Service Call Center Appeals and Redeterminations Appeals and Redeterminations 10

11. Medicare Auditing Environment: Integrity Program Data analysis Data analysis Medical review Medical review Local coverage policy Local coverage policy Provider education Provider education

12. CMS definition: Medical Necessity Safe and effective Safe and effective Meets, but does not exceed the patients Meets, but does not exceed the patients medical need medical need Performed in accordance with accepted Performed in accordance with accepted standards of practice standards of practice 12

13. Comprehensive Error Rate Testing (CERT) Designed to monitor performance of MACs and to ensure claims administered properly Designed to monitor performance of MACs and to ensure claims administered properly Audits result in annual reports of rate of improper payments made to hospitals Audits result in annual reports of rate of improper payments made to hospitals High payment error rates Part A claim review (hospital) Part B claim review (physician) High payment error rates Part A claim review (hospital) Part B claim review (physician)

14. What is a CERT error? No documentation No documentation Insufficient documentation Insufficient documentation Medically unnecessary service Medically unnecessary service IN THE HOSPITAL CHART !!

15. How did we get here?

16. MAC-Generated Prepayment Audits MACs authorized by law to reduce payment error rates MACs authorized by law to reduce payment error rates 3 MACs initiated audits targeting procedures with high error rates 3 MACs initiated audits targeting procedures with high error rates High error rates shown for TKA/THA (DRG 470) High error rates shown for TKA/THA (DRG 470)

17. MAC-Generated Prepayment Audits Begins with prepayment audit of hospital claim (Part A) Begins with prepayment audit of hospital claim (Part A) If problematic, then hospital payment is denied If problematic, then hospital payment is denied Contractor looks to physician claim (Part B) related to problematic hospital claim Contractor looks to physician claim (Part B) related to problematic hospital claim If problematic, then money already paid to physician is recouped If problematic, then money already paid to physician is recouped

19. MLN Matters SE1236: Published by CMS in September, 2012 Described by CMS as an educational guide to improve compliance with documentation requirements for major joint replacement surgery. To avoid denials, records should contain enough detailed information to support the medical necessity of the procedure. Painful DJD unresponsive to conservative treatment is not enough.Painful DJD unresponsive to conservative treatment is not enough. Documenting Medical Necessity for Major Joint Replacement (Hip and Knee) 19

20. Description of pain ADL limitations Safety Contraindications to non-surgical treatments Failed conservative treatments, e.g., Meds (e.g., NSAIDs) Meds (e.g., NSAIDs) Weight loss Weight loss Physical Therapy Physical Therapy Intra-articular injections Intra-articular injections Braces, orthotics or assistive devices. Braces, orthotics or assistive devices.HistoryHistory 20

21. Deformity Range of Motion CrepitusEffusionsTenderness Gait description Physical Examination 21

22. Results of applicable investigations Plain films Plain films MRI MRIInvestigationsInvestigations 22

23. Reasons for deviating from a stepped- care approach Intolerant of NSAIDs Intolerant of NSAIDs Refused injections Refused injections Joint damage too severe to respond (e.g., AVN femoral head) Joint damage too severe to respond (e.g., AVN femoral head) Must be clearly documented Clinical Judgment 23

24. Simple game … Documentation is the key … in your office note, op note and discharge summary How do you reach the decision for surgery? Remember your chief resident or fellowship presentations to your attending staff !!

25. Reliable Resources www.paymentaccuracy.gov www.aaos.org/medicare101 www.ahhks.org/