Recovery Auditor Prepayment Review Demos Imminent

The Recovery Auditor prepayment review demonstration, announced last fall and delayed for months, will launch on August 27, the Centers for Medicare & Medicaid Services has announced.

In this demonstration, Recovery Auditors will conduct prepayment reviews on certain types of claims that historically result in high rates of improper payments. The following seven states, home to high populations of fraud- and error-prone providers, will be subject to the demonstration: Florida, California, Michigan, Texas, New York, Louisiana, and Illinois.

Four additional states with high claims volumes for short inpatient stays will also be subject to the program: Pennsylvania, Ohio, North Carolina, and Missouri.

Target areas and focus
In addition to short hospitals stays as a target of the comprehensive error rate testing (CERT) report, CMS identified three specific areas of focus in the prepayment review demonstration:

• Incorrectly coded claims
• Patients who came through the emergency department but should have subsequently gone to observation rather than being admitted
• Patients who received elective surgery during short-day stays when they should have been outpatient procedures

CMS released further details on the areas of focus for the program in December.

Diving further into possible target areas, CMS extracted a number of short-stay DRGs from data in the CERT report that present billing problems for providers. These DRGs represent the first group of DRGs that will be held for prepayment reviews. CMS previously announced the schedule for 2012 reviews:

• January 1: MS-DRG 312, syncope and collapse
• March 1: MS-DRG 069, transient ischemia and MS-DRG 377, gastrointestinal (GI) hemorrhage with MCC
• May 1: MS-DRG 378, GI hemorrhage with CC and MS-DRG 379, hemorrhage without a CC or MCC
• July 1: MS-DRG 637, diabetes with MCC, MS-DRG 638, diabetes with CC, and MS-DRG 639, diabetes without a CC or MCC

Operational details
As previously stated, this program will not replace ongoing MAC prepayment reviews, but will serve as a separate entity that aims to help lower the error rate. Providers will not be subject to review for the same topic or issue by two different contractors, according to CMS.

Speaking from experience, Yvonne Focke, RN, BSN, MBA, director of revenue cycle integrity at Kentucky's St. Elizabeth Healthcare, says that prepayment reviews, of which she has received 186 this year from her MAC (CGS), place an added burden on providers.

"Our challenge," says Focke, "is to ensure that all physician documentation has been completed before sending the record," she says. "We are currently reviewing our internal medical staff rules and regulations regarding documentation time frames. If the record is not complete, we experience a delay and our cash flow may be compromised".

As far as the issues for which her facility has received additional documentation requests (ADRs), Focke says that it has predominantly been short-day stays and cardiac procedures, and that these issues and more should be monitored closely.
"Kentucky is not included in the RAC prepayment demonstration program, but as of now, our MAC is taking on this role," she says. "One thing we found difficult is that prepayment record requests do not always arrive timely. Every Monday we look at the Medicare online system to see if there have been suspended claims (SB6001) for pre-payment review. We compare this suspend list with the letters received and if there are letters missing, we print them from the system and process accordingly."

From an operational standpoint, ADR will come from the FI/MAC and will contain specific details regarding where providers should submit documentation. From here, providers will have 30 days to submit and the claim will automatically be denied if documentation isn't received within 45 days.

Once the Recovery Auditor receives the documentation, it will then review the claim and communicate its determination back to the FI/MAC, according to CMS. Providers will then receive the payment determination on the remittance advice within 45 days.

Further clarification
CMS also clarified a number of details during the aforementioned open door forum:

• Limits on prepayment reviews won't exceed current post-payment ADR (additional documentation request) limits.
• Providers may appeal the denial and have the same appeal rights as with other denials. Appeal time frames start on the date of the denial as indicated in the remittance advice.
• Medical records provided on appeal will be remanded to the recovery auditor for review. (This only applies to claims that were denied as a result of nonreceipt of medical records).
• Claims will be off-limits from future post-payment reviews from MACs and recovery auditors.

For those states that are involved in the demonstration program, or for those providers who may want to get a head start on preparing for a possible full-time prepayment review process, it may be a prudent move to start ensuring the completeness of medical records before they go out of the door, says Sharon Easterling, MHA, RHIA, CCS, CDIP, CEO of Recovery Analytics in Charlotte, N.C.
Make sure that the records do not have any signature issues, make sure that they have been pre-reviewed, and make sure that they contain all the necessary documentation; these are the most important aspects of the record, explaines Easterling.

She goes on to mention that if providers receive prepayment review denials, they should look into appealing that determination. "Appeal, appeal, appeal; when you read that [the recent CMS update that came out on appeals], you tend to think that providers aren't appealing enough," she says. "Continue to appeal and work on documentation efforts."

See more information on the prepayment review demonstration program.