The Centers for Medicare & Medicaid Services is proposing changes to Part B inpatient billing in hospitals.
CMS issued a notice of ruling March 13, that establishes a policy revising the current policy on Part B billing following the denial of a Part A inpatient hospital claim that a Medicare review contractor has deemed to be not reasonable or necessary.
The revisions are intended as an interim measure until CMS can finalize an official policy to address the issues raised by the Administrative Law Judge and Medicare Appeals Council decisions going forward.
This temporary ruling is effective until CMS finalizes the accompanying proposed rule, which proposes a permanent policy that would apply on a prospective basis. Specifically, CMS is proposing the following:
When a Part A claim for inpatient hospital services is denied because the inpatient admission was deemed not to be reasonable or necessary, or when a hospital determines under § 482.30(d) or § 485.641 after a beneficiary is discharged that his or her inpatient admission was not reasonable and necessary, the hospital may be paid for all the Part B services (except for services that specifically require an outpatient status) that would have been reasonable and necessary had the beneficiary been treated as a hospital outpatient rather than admitted as an inpatient, if the beneficiary is enrolled in Medicare Part B.
While the CMS ruling acquiesces to the current ALJ and Appeals Council rulings to award Part B payment as timely if the original Part A claim was timely, the proposed rule would reverse this ruling and require inpatient Part B claims be filed within the one-year timely filing period.
Providers have an opportunity comment to CMS on the impact of this policy and the operational difficulty that it may present. In the meantime, they may avail themselves of the CMS ruling before it is superseded by a final rule that again requires inpatient Part B claims to be submitted within timely filing.
If CMS does not extend the timely filing provisions of this ruling when it issues a final rule, it may circumvent CMS's objective. With no relief from timely filing, providers may post discharge utilization reviews and elect to bill close cases as outpatient first, rather than risk losing all payment after a later denial of the inpatient that can't be re-billed, according to Kimberly Hoy, JD, CPC,director of Medicare and compliance for HCPro, Inc., in Danvers, MA.
"If they don't fix the timely filing issues, they are simply moving the problem from conservative decisions to keep patients outpatient while in the hospital to conservative decisions to bill patients' care as outpatient following post discharge review. And CMS will not have accomplished their goal of reducing inappropriate outpatient cases that could and should have been inpatient cases," Hoy says.
Hoy adds that close reviews after discharge will be of the utmost importance because under the proposed rule, timely filing is still in place, and some post-payment reviews—especially Recovery Auditors—go back three years, which is prior to the one-year timely filing.
"If this goes through, providers won't be able to just wait for post-payment denials and rebill as they would under the ruling; they will have to be on top of their utilization review (UR) processes to take advantage of this."
On the other hand, these new instructions may provide some financial relief for facilities receiving Part A stay denials, says Valerie A. Rinkle, MPA, vice president of Revenue Integrity Informatics with HRAA, in Plantation, FL.
"CMS has provided needed relief with this ruling and proposed rule, which allows hospitals to receive legitimate Part B payment for medically necessary services provided to patients during a Part A stay found post discharge to not meet the narrow medical necessity requirements for Part A coverage," she says.
"Hospitals will need to make a decision after each Medicare contractor (RAC or MAC) denial of a Part A stay to either appeal or accept the denial and rebill under these new instructions."
It is important for providers to be aware of the fact that CMS is soliciting comments on the patient liability issues their instructions create. Providers should take particular notice of the issues around non-covered self-administered drugs and the fact that the Part B liability could exceed the patient's original Part A deductible liability, says Rinkle.
"I encourage hospitals to provide comment to CMS on any ideas to limit patient liability and exposure because we all know this is often a patient and public relations concern," she says.
On October 16, Representative Sam Graves (R-MO) introduced a bill that essentially aims to reform Recovery Auditors (RA) through various financial penalties and program limitations.
Two weeks later, the American Hospital Association and four health system filed suit in the U.S. District Court in Washington, DC, against the U.S. Department of Health and Human Services (HHS) for unfair Medicare practices pertaining to the Recovery Auditor program.
The plaintiffs, which include Missouri Baptist Sullivan Hospital (Sullivan, MO), Munson Medical Center (Traverse City, MI), Lancaster General Hospital (Lancaster, PA), and Trinity Health Corporation (Livonia, MI) claim that the Medicare program has been "refusing to pay hospitals for hundreds of millions of dollars' worth of care provided to patients, even though all agree that the care provided was reasonable and medically necessary as the Medicare Act requires."
They further allege that the government's refusal to pay is harming hospitals and patients, violates the Medicare Act, and is unlawful. They want the court to overrule HHS' policy and order the department to reimburse hospitals that have been denied payment.
Facilities need to constantly balance quality of care and financial concerns when dealing with Recovery Auditors, suggests Jonathan G. Wiik, director of admissions and case management at Boulder Community Hospital in Boulder, CO.
"It is a danger to our patients in that we are spending resources on bureaucratic and administrative costs versus clinical costs," Wiik says. "However, we will deliver the care necessary to our patient in the highest quality form regardless of the funding mechanism; you can't let the governmental administrative costs reduce the quality of care given."
"That said, we need to receive every dollar in which we are legally entitled to ensure that we keep our doors open operationally by balancing these two things the best we can."
In a press release issued November 1, the AHA states specifically that it is contesting HHS's denial of reimbursement for reasonable and medically necessary cases that the government believes should have been provided in an outpatient facility or department instead of the inpatient section of the hospital.
"When a patient needs treatment, the first step is for a doctor to decide whether to admit the person to the hospital or to provide care in an outpatient facility. The decision is often complicated for Medicare patients because of advanced age and the presence of other ailments, such as diabetes or high blood pressure, which makes the physician's decision as to where best to treat them more difficult," the AHA states in the letter.
As a result, RAs are reviewing and denying cases from hospitals and physicians years after the care was provided without ever seeing or talking to the patient. Not surprisingly, the press release states that hospitals appeal these "questionable decisions," they prevail at least 75% of the time.
Something is terribly wrong with the RA program when the appeals success rate is that high on the providers side, says Debbie Mackaman, a regulatory specialist for HCPro, Inc., in Danvers, MA.
"By the time providers appeal and win, they have often times exceeded the actual reimbursement that was originally recouped by the RA," she says. "There is a cry across the country that the providers have to get control of the skyrocketing healthcare costs, but when you look at the administrative burdens placed on them—and some of those programs are not being adequately policed, like the RAs—how can this happen?"
While the administrative and financial burden that the appeals process can put on a hospital is strenuous, appeal is a necessary step, suggests Wiik.
"Our counsel, our RAC committee, our regulatory and compliance department, and our physician advisor all agree that we do not want to send the message that Medicare, Connolly, or other RACs are right in determining that these are really outpatient claims. That sets a precedent that you can never come back from, and that scares us."
Herein lies another problem for providers: When the RA determines that the patient should have been an outpatient, hospitals must return the reimbursement for inpatient services. The hospitals then receive little to no money back for the "outpatient" services provided, even though the RA does not dispute that the hospital provided reasonable and necessary care. According to the AHA, that practice is inherently flawed.
"What the federal government is doing is wrong, unfair, and a clear violation of federal law," Rich Umbdenstock,president and CEOof the AHA, stated in the AHA letter. "Doctors and nurses provide the best care possible using their medical judgment and training. Allowing government auditors to second-guess these difficult medical decisions about where to best treat a patient years later based on a cold record and then refuse to pay for that care is indefensible."
While this is arguably the biggest RA-related news to surface in the past few weeks, it's not the news worth only noting. The AHA is also urging the Office of the Inspector General to examine the inaccuracies of the Recovery Auditors.
In a letter issued October 24 to HHS Inspector General Daniel Levinson, AHA Executive Vice President Rick Pollack recommends halting inappropriate payment denials by RAs, streamlining CMS' integrity programs to eliminate duplicative audits, and investing in provider education and payment system fixes to prevent payment mistakes.
Pollack cites AHA RACTrac data, which verifies that hospitals reported appealing more than 40% of all Recovery Auditor denials with a 75% success rate in the appeals process. He urged the OIG to review of the effectiveness of the auditors and CMS-related oversight efforts and to pay particular attention to how often RA determinations result in inappropriate denials of payment for medically necessary and reasonable services, not only on whether RAs identify improper payments and refer potential fraud cases to law enforcement.
Mackaman agrees, adding that an OIG review of the RAs is appropriate.
"Currently the OIG is reviewing the Medicare and Medicaid contractors, so why not the RAs, who are in effect a contractor under CMS—both reviewing pre-and post-payments?" she says. "Any entity that is charged with paying, auditing, or recovering Medicare funds should be scrutinized for how well they are complying with the program's regulations.
"Without being under the watchful eye of the OIG, we enter into a ‘wild west' state where the providers and Medicare contractors are under review but the RAs can do as they please, only to be challenged by providers [willing to appeal], which is very costly endeavor even when the providers are winning 75% of the appeals."
With the pressure now put onto the federal government and the RAs, it is unclear what their next move will be, but certainly these efforts have garnered national attention. If nothing else, the totality of the AHA's actions has highlighted the fact that RAs cause significant administrative and financial strain on facilities—whose main objective is to provide quality patient care—and that some modification of the existing programs would only benefit providers, says Mackaman.
"Healthcare is probably the only business I am aware of that is getting paid less today with more overhead costs to operate an increase in business while still managing to keep their doors open," she says. "Under the current system, we are dealing with a house of cards and the RAs are adding to that tremulous structure."
Proposed legislation before Congress aims to improve the performance of Medicare audit programs and calls for financial penalties for certain compliance failures. The bill also contains a number of significant potential reforms.
Representative Sam Graves (R-MO) introduced the Medicare Audit Improvement Act of 2012 (H.R. 6575) October 16.
Financial penalties One focus of the bill is on improvement of Recovery Auditor operations. Specifically, the legislation would impose financial penalties—which would go to the Medicare trust fund—on the contractors that fail to meet the requirements for the following:
Audit deadlines Completing a determination of each audit of a hospital the Recovery Auditor conducts within the applicable timeframe.
Timely communication If a claim is denied, the Recovery Auditor must sent a demand letter to the hospital in a timely fashion.
Overturned appeals Recovery Auditors must pay a fee to the prevailing party in the case of an overturned appeal. The HHS Secretary will establish a fee schedule to determine the amount of the fee
Postpayment and prepayment audits In addition, the bill would require a targeted focus on widespread payment errors in postpayment and prepayment audits. It states that the "Secretary shall not approve the conduct of a postpayment or prepayment medical necessity audit by a Recovery Auditor unless such review addresses a widespread payment error rate."
In addition, the bill would require a Recovery Auditor to stop any audit if the applicable payment rate error were no longer widespread. The HHS Secretary sets the error rate at 40% using a statistically significant sampling of claims submitted by hospitals in the Recovery Auditor’s jurisdiction. The rate also takes into account claim denials overturned on appeal.
The Secretary would evaluate this rate annually and reduce it as necessary to account for changes in payment error rates to improving billing practices.
The legislation also lays out guidelines for the newly launched prepayment review program. Specifically, it states that the Secretary shall "establish guidelines under which consistent criteria for minimum payment error rates or improper billing practices occasion prepayment review by contractors."
In addition, the Secretary will not approve the conduct of a postpayment of prepayment medical necessity audit by a Medicare administrative contractor (MAC) unless it also meets the aforementioned error rate requirement.
Recovery Auditor transparency The reform bill also introduces something that providers nationwide have been calling for—greater transparency. If passed, the Secretary would publish on the Internet information about:
Audits
Denials
Denial rates
Appeals
Appeal rates
Appeals outcomes at each of the five stages of appeal
Net denials
In addition, the Secretary will publish results of any performance evaluation of the Recovery Auditor conducted by independent entities selected by the Secretary.
Rebilling: A/B demonstration and accurate payment for rebilled claims The bill also contains a section on the Medicare Part A/B rebilling demonstration. According to the bill, the Secretary may not prohibit any hospital appeal for the inpatient hospital services provided when the Recovery Auditor denies the admission as not reasonable and medically necessary.
The bill also states that the resubmission of a specified claim shall be deemed to be an original claim for purposes of payment under Part B and provisions under this title relating to:
The authority of a hospital to resubmit a claim for payment under the appropriate section of this title
Requirements for the timely submission of claims, including under sections 1814(a), 1842(b)(3), and 1835(a)
Annual limits The bill includes a combined additional documentation request limit. It would establish annual limits that may not exceed 2% of all prepayment audit requests or complex postpayment audit requests in a year and 500 additional documentation requests during any 45-day period at a given facility.
This section of the bill would take effect on the date the act passes and would apply to claims submitted for payment under title XVIII of the Social Security Act for items or services furnished by providers of services or suppliers on or after January 1, 2013.
Physician validation of medical necessity denials The last item in the legislation will likely be a popular one among providers. It would require a physician review each claim denial for medical necessity when the person who performed the review and issued the denial for a medical necessity is not a physician. In particular, a physician reviewing a claim would make a determination whether:
The denial of the claim under the medical necessity review by the non-physician employee is appropriate
Sign and certify such determination
Append such signed and certified determination to the claim file
This proposal that a physician validate medical necessity denials will apply to Recovery Auditors, Medicare administrative contractors, and the Comprehensive Error Rate Testing (CERT) contractors.
Industry reaction Following the release of the bill, the American Hospital Association (AHA) issued a letter of support, stating that "the Medicare Audit Improvement Act of 2012 provides much needed guidance for medical necessity audits, keeping auditors out of making medical decisions that should be between patients and their physicians. In addition, Recovery Auditors are not targeting widespread payment errors and are making subjective decisions on short-stay cases; their operational problems are persistent and widespread."
On the flip side, others, including Nancy Beckley, MS, MBA, CHC, president, Nancy Beckley & Associates, LLC, in Milwaukee, Wis. are more apprehensive about the legislation.
"My concern is that Congress may balance the behavior of the RACs and those inherent program problems with all the money that it returns to the Trust Fund," she says. "The proliferation of Medicare and Medicaid Integrity Programs has continued to drain resources from providers, many of whom can no longer afford to launch efforts to appeal."
Many in the provider community believe the Recovery Auditor program is being implemented and operated without regard to patient care, most notably in the denial of Part A claims and the ability to at least bill Part B claims, which is addressed in this legislation, says Beckley.
"For providers that are participating in the Part A to Part B billing demonstration, they had to give up their Part A appeal rights. My guess is that some providers/hospitals are doing this just for cash flow, yet have no appeal rights, and through this potential legislation their appeal rights will be reinstated," Beckley says.
She continues, "It may be that the whole RA [Recovery Auditor] program is fatally flawed but the misaligned incentives (contingency fees) may not allow putting this on the right course."
The Centers for Medicare & Medicaid Services held its first Hospital Outpatient Payment Panel meetings this year and has issued proposals on the changes to current supervision levels for the following categories:
Influenza, pneumococcal, and hepatitis B vaccine administration
Trimming of nails
Venipuncture via vein, VAD, or central catheter
Foley catheter insertion
Changing of cystostomy tube
Bladder scan for residual urine measurement
Refilling portable pump
Irrigation of implanted VAD
IV hydration, initial hour and each additional hour
The last item, IV hydration, had been previously identified by CMS as a "non-surgical extended duration service," in the CY 2011 OPPS final rule. These types of services must be provided under direct supervision during the initiation of the service, followed by general supervision for the remainder of the service, says Debbie Mackaman, RHIA, CHCO,regulatory specialist for HCPro, Inc.
Initiation of this service is defined as the beginning portion of the service until the supervising physician or non-physician practitioner determines the patient is stable and the remainder of the service can be delivered safely under general supervision, she adds.
The supervising physician must document the transition from direct to general supervision in the patient's medical record.
CMS also detailed the services for which CMS did not accept the panel's recommendations that they be furnished under general supervision.
These services were denied because they either involve assessment by a physician or include a significant potential for patient complications or reactions that would require the supervising physician or appropriate non-physician practitioner to be immediately available, explains Mackaman. These services are:
IV infusions and injections that are currently designated as non-surgical extended duration services
H1N1 vaccine administration with family counseling
Bladder irrigation
Two casting/strapping procedures
Direct admission for observation and observation per hour
"CMS announced in the 2013 OPPS proposed rule that they are considering giving critical access hospitals and small rural hospitals one more year of non-enforcement for meeting supervision rules and also stated that it would most likely be the last year for that waiver," Mackaman said.
"Based on CMS' position that there is a significant potential for patient complications in regards to observations services, it is highly unlikely that we will see this move to a general supervision category any time soon, so CAHs and the small rural hospitals should begin to prepare now."
This was the first year that CMS asked representatives from CAHs to sit on the panel to help make these recommendations on supervision requirements for certain services.
"Safe quality care is an expectation that CMS has for all hospitals, regardless of how they are paid – cost vs. prospective payment," Mackaman said.
These recommendations are open for public comment through October 24 and the final decisions will become effective on January 1, 2013. Hospitals that may have a stake in loosening the supervision requirements for the delivery of these outpatient services may submit their comments via email to: HOPSupervisionComments@cms.hhs.gov.
With the close of the fiscal year quarter, the Centers for Medicare & Medicaid Services has again released statistics for the amount of overpayments and underpayments. The latest report shows that the trend continues to point upward, as CMS has once again corrected more improper payments than the previous quarter, this time to the tune of $701.3 million.
In the latest quarter, CMS collected $657.2 million in overpayments and $44.1 million in underpayments. In the previous quarter, CMS identified $588.4 million in overpayments and $61.5 million in underpayments for a total of $649.9 million in corrections. Since October 2009, CMS has corrected a grand total of $2.8 billion in improperly billed Medicare claims.
The upward trend continues to show that providers must get their billing and documentation shored up on the front end, says Elizabeth Lamkin, MHA, CEO, Pace Healthcare Consulting, LLC, in Hilton Head, S.C. "Put the bulk of your care management staff and resources on the front end with bed status determination [inpatient or observation], use second-level physician advisor reviews, and have a clinical documentation improvement specialist reviewing concurrently," she says.
The correction amounts for each quarter of the program are as follows:
October 2009 – September 2010: $92.3 million
October 2010 – December 2010: $94.3 million
January 2011 – March 2011: $208.9 million
March 2011– June 2011: $289.3 million
July 2011 – September 2011: $353.7 million
October 2011 – December 2011: $422.7 million
January 2012 –March 2012: $649.9 million
April 2012 – June 2012: $701.3 million
Accompanying the CMS release was a report that detailed the amount of improper payments collected in each individual Recovery Auditor region. Region C, Connolly Healthcare, corrected the most, in dollars, from previous quarter, having identified a total of $229.1 million in improper payments. The figures for all four Recovery Auditors are as follows (figures provided in millions):
Viewing these statistics through another lens, however, illustrates that the Recovery Auditor program has been very good to the Recovery Auditors, says Stacey Levitt RN, MSN, CPC, senior administrative director of patient care management at Lenox Hill Hospital in New York City.
"It would be really interesting if CMS also showed the overturned appeal dollars against these numbers," she says. "Granted, not everyone is appealing their RAC demands (sadly); but those that do are usually successful."
"Unfunded government mandates, such as RACs, deplete sorely-needed hospital resources during a time when hospitals are seeing very slight margins of earnings," she said.
William Malm, ND, RN, CMAS, senior data projects manager for revenue integrity software company Craneware, Inc., with U.S. offices in Atlanta, Boston, Nashville and Phoenix, shared a similar sentiment, while also suggesting that CMS needs to provide additional guidance when it comes to compliant billing.
"These are all gross numbers that do not show the amount of money that was overturned in appeals," he says. "While reporting over- and under-payment information is important, it contributes to confusion in the industry over the appropriateness of billing. Not to mention that the cost of managing these audits and appeals is taking away taxpayer dollars from the delivery of healthcare."
"To take money back when the standards are clear is appropriate, but to take money back when there isn't clear guidance from the beginning is inappropriate and doesn't take into account the significant administrative and operational burden these audits and appeals place on healthcare organizations."
Healthcare providers in some regions are bracing for a twist to DRG 312 : Syncope and collapse have been listed for review by more than one auditor, and at more than one point in the payment process.
DRG 312, the first issue approved for prepayment auditing, was also announced by the Medicare Recovery Audit Contractors (MAC) CIGNA Government Services (CGS) as an issue subject to complex medical review for J15 providers.
Ohio and Kentucky make up the J15 states. Ohio is also one the states in the prepayment review demonstration program. Although CMS stated in a December open door forum that claims subject to prepayment review would be off-limits from future postpayment reviews from MACs and Recovery Auditors, it still remains to be seen how this will be done.
This puts providers in a difficult position, according to Nancy Beckley, MS, MBA, CHC, president, Nancy Beckley & Associates, LLC, in Milwaukee, WI.
"If you're in Ohio, you could potentially have your records requested by the MAC for a complex medical review, or you could have your records referred to the RAC [Recovery Auditor] for a prepayment review," she says. "This will put providers in a squeeze…the [CGS] error rate for DRG 312 is 79.9%."
She adds that providers can't do anything about what happened prior to the record requests aside from organizing those records, checking them for completeness, and sending them in. However, they can use the information and results moving forward to prepare for possible prepayment review.
Providers should take notice of this example and any others when it comes to high error rates found in postpayment claims audits and prepare themselves proactively to defend against prepayment reviews. If not, it will be like "shooting fish in a barrel" for the Recovery Auditors, suggests Beckley.
In addition, states that are not subject to the demonstration project should also take notice, even though it does not yet apply to them. Recovery Auditors are set to gain a lot of knowledge in terms of provider weaknesses and high denial rates, much like they did in the original [RAC] Demonstration Project, such as in the case of inpatient rehabilitation facility claims in California, according to Tanja Twist,director of patient financial services at Methodist Hospital of Southern California.
"With rehab claims [during the demonstration] we lost the whole payment and were only able to recoup the ancillary services—they took back $11,000 to $15,000 and we were able to rebill for only hundreds—and there was no downcoding of the CMG (case-mix group) either; they either met criteria or did not," she says. "I fear the same is true with this new round of PPR [prepayment review] because their focus is on the short stay (1–2 day) admits, looking to see if patients met inpatient criteria."
She continued, "If not, they won't downgrade the DRG, they will deny the entire DRG payment."
What should providers do? First, they need to pay close attention to what the Kentucky and Ohio probe shows, says Beckley. CGS explains in its notice the reason for denials for DRG 312, and also presents some advice going forward. Of the 79.9% denial rate, a significant percent (73.2%) is made up of denial code 5J504. The CGS notice states the following about 5J504:
Reason for denial
Documentation did not support medical necessity
Denial code 5J503 (3.7%),
Denial code 56900 (2.7%),
5CHGE – DRG up code/down code (0.1 %).
Avoiding denials
Ensure that all services were medically necessary on an impatient basis instead of a less intensive setting
Documentation should include dates of service billed such as physician progress notes, physical examinations, assessments, diagnostic tests and laboratory test results, history and physical, nurse's notes, consultations, surgical procedures, orders and discharge summary and any other documentation to support the inpatient admission
Include documentation of services, medication and medical interventions performed in the emergency department
For elective surgical procedures, include documentation to support the necessity of the procedure including pre-surgical interventions and outcomes
Hospitals should also run a risk analysis for not only the first approved DRG (i.e., MS-DRG 312), but for all eight of the approved DRGs, looking specifically at their average length-of-stay to find their weaknesses and help assess the additional documentation request (ADR) rate, suggests Twist. The remaining approved DRGs are as follows; no dates have been announced:
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
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 cycleintegrityatKentucky'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."
Though the Centers for Medicare & Medicaid Services website lists the start date as "Summer of 2012," the delayed launch of the Centers for Medicare & Medicaid Services Recovery Auditor prepayment review demonstration has had no official announcement yet.
With temperature records being broken by the hundreds, there's no question that summer is in full swing. So where is the launch of the Centers for Medicare & Medicaid Services Recovery Auditor prepayment review demonstration?
Last November, CMS unveiled three demonstration projects aimed at reducing improper payments in the Medicare program. A few months later on February 3, 2012, CMS announced that it would be delaying two of the three of these demonstrations, one of which is the Recovery Auditor prepayment review demo.
Though the CMS website lists the start date as "Summer of 2012," the delay—which came as a result of comments and concerns from providers—originally pushed the official launch to June 1, 2012. If we are, in fact, in the midst of the Recovery Auditor prepayment review demonstration, there has been no official announcement.
Despite this fact, if providers have not already begun doing so, they should take action, according to Sharon Easterling, MHA, RHIA, CCS, CDIP,CEO of Recovery Analytics in Charlotte, N.C.
"With the shift of the RAC to up-front documentation review, providers should implement concurrent processes in their case management and utilization review areas," she says. "From there, you should have second level review done by a physician for these particular DRGs."
"Facilities may also want to consider educating their physicians on these particular DRGs to identify key documentation points that help to meet medical necessity," she continued.
When it comes to physician education, all doctors are different, and some are more receptive than others. In situations where it requires a bit more effort, Easterling suggests using a physician advisor.
"Having a physician that speaks with the other physicians about the required documentation for medical necessity—and the translation of that information—is very important."
Other staff members to consider when ramping up efforts against prepayment reviews are clinical documentation improvement nurses and professionals. In some cases, patients come in with more than one condition, so assigning the correct DRG becomes imperative, so these CDI nurses and professionals should—in addition to staying up to date on CMS guidance related to the program—be involved in the process of concurrent review as well.
In addition, coders should be educated and confirm the order and patient type prior to billing, suggests Easterling.
Though it may surprise no one to hear it, providers need to make sure that medical records are as complete as possible before they go out the door. 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; as these are the most important aspects of the record, explains Easterling.
In addition, she says, if providers see denials come into their facility as a result of these prepayment reviews, 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."
For more information on the prepayment review demonstration program, click here.
In the last month, the Centers for Medicare & Medicaid Services posted two separate sets of data that provide nationwide statistics on its Recovery Auditor program. The first update contains improper payment figures and top Recovery Auditor issues per region. In the second update, CMS provides appeals statistics for fiscal year 2011.
Improper payment figures and top issues Recovery Auditor activity saw a huge spike in the latest quarter, as statistics for overpayments and underpayments both saw significant increases. For the time period January 2012 through March 2012, CMS identified $588.4 million in overpayments and $61.5 million in underpayments for a total of $649.9 million in corrections. These numbers are up from $397.8 million and $24.9 million from last quarter, respectively. They have climbed considerably since the start of the permanent program.
In total, CMS has identified $1.86 billion in overpayments and $245.2 million in underpayments for a sum of $2.1 billion in total corrections since the beginning of the Recovery Auditor program.
The correction amounts of each quarter of the program are as follows:
October 2009–September 2010: $92.3 million
October 2010–December 2010: $94.3 million
January 2011–March 2011: $208.9 million
March 2011–June 2011: $289.3 million
July 2011–September 2011: $353.7 million
October 2011–December 2011: $422.7 million
January 2012–March 2012: $649.9 million
As in the previous report, medical necessity issues remain the top target of each individual Recovery Auditor, three of which are cardiovascular procedures:
Region A: Cardiovascular procedures (Medical necessity)
Region B: Cardiovascular procedures (Medical necessity)
Region C: Cardiovascular procedures (Medical necessity)
Region D: Minor surgery and other treatments billed as inpatient stay (Medical necessity)
Also released by CMS in the past month is a report on appeals statistics for fiscal year 2011. The number of claims with overpayment determinations in 2011 was 903,372, but providers only appeal 56,620 of these claims. Of these appeals, 24,548 or 43.4% were reversed in the provider's favor. Considering the relative success of providers in their appeal efforts, the fact that 846,752 claims did not get appealed comes as a bit of a surprise.
To further reinforce the decision to appeal an overturned case, consider the fact that of the 24,458 cases that were successfully appealed cases, that $37.9 million, or approximately $1,550 per case, was overturned in 2011.
Overall, providers should consider the fact that there is a large amount of claim denials that should be appealed, according to Deborah Hale, CCS, CCDS, president and CEO of Administrative Consultant Service, LLC, in Shawnee, OK.
"I'm surprised at the low appeal rate given the volume of denials that I see that clearly warrant appeals," says Deborah Hale. "This may be in part due to frustration with the process, an increased workload for hospitals associated with ICD-10 preparation and training, implementation of electronic health records, and the multitude of other high-priority projects, such as patient care, that hospitals are facing this year."
To view the latest Recovery Auditor report, click here. To view the previous report, click here. To view the June 2012 appeals update, click here. To stay on top of the latest RAC-approved issues in your state, visit the Revenue Cycle Institute website.
For the first time since it began publishing a quarterly Medicare compliance newsletter, the Centers for Medicare & Medicaid Services has released CERT findings on problematic billing errors.
Unlike all of the preceding releases, the April issue of the Medicare Quarterly Provider Compliance Newsletter, CMS's seventh issue, contains comprehensive error rate testing (CERT) findings in addition to recovery auditor findings.
Find the strengths of your organization and develop a strategic marketing plan that promotes strong service lines to new and existing patients. According to Donna Wilson, RHIA, CCS, CCDS, senior director at Compliance Concepts in Wexford, PA., the inclusion of this new information should prove beneficial to providers.
"Including CERT findings is an added bonus to this priceless resource tool from Medicare," she said. "Providers should consider adding these issues to their internal compliance monitoring. Governmental auditing agencies use CERT, RAC, PEPPER, and OIG studies to detect suspicious billing practices."
As has been the case, these documents are provided in order to propagate information on understanding claims submission problems while also providing guidance on avoiding such errors and improper billing activities moving forward. As auditing bodies continue to grow and evolve, the addition of CERT findings only makes sense.
In the report, CMS identified the following findings. affected provider types are in parentheses:
CERT findings
Three-day qualifying hospital stay for skilled nursing facility stays (Inpatient hospitals, SNFs)
Kidney and urinary tract disorder - incorrect principal diagnosis (Inpatient hospitals)
Transient ischemic attack - services rendered in a medically unnecessary setting (Inpatient hospitals)
Craniotomy and endovascular intracranial procedures (Inpatient hospitals)
Small and large bowel procedures (Inpatient hospitals)
Spinal fusion (Inpatient hospitals)
One finding providers should take note of is the three-day qualifying hospital stay required for skilled nursing facilities, according to William Malm, ND, RN, CMAS, senior data projects manager at Craneware.
"It is unclear what CMS will do with this information in the longer term. In 2011, CMS conducted a number of conference calls on the impact of observation at facilities and part of that discussion was on the three-day inpatient requirement for SNF admission for a covered stay," he said.
"CMS indicated that they were aware of the concern and would monitor it, and we now have CERTs stating this is an issue and that physicians are trying to admit to ensure covered stays for SNFs. Clearly the regulation is a challenge to patients and facilities. We would hope that CMS would review this and amend the process for SNF admission to include the most appropriate settings including observation."
As a result, providers should take a closer look at their records, says Malm.
"Providers should take a look at each record in which there was a discharge to a SNF and the transfer should be reviewed by at least two people—perhaps a coder and someone from internal audits, quality review or a physician advisor—to make sure it is compliant."