Articles Posted in Medicare

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The Centers for Medicare & Medicaid Services (CMS) is issuing demand letters seeking recoupment of reimbursement from medical providers and suppliers for Medicare beneficiaries that, according to data from the Social Security Administration (SSA), were allegedly “incarcerated” at the time services were provided. According to the Code of Federal Regulations (42 CFR 411.4) and Section 1862(a)(2) of the Social Security Act, with limited exceptions, Medicare does not make payments under Medicare Part A or Part B for incarcerated beneficiaries’ medical services. The SSA uses the Prisoner Update Processing System (PUPS) to notify CMS contractors to stop Medicare payment for patients in custody of penal authorities.

CMS considers a beneficiary “incarcerated” in circumstances that do not only involve physical confinement. Commentary on 42 CFR 411.4 explains that this definition of “custody” is consistent with the Federal courts’ definition of custody for the purpose of habeas corpus protections of the Constitution. According to commentary on 42 CFR 411.4, as well as the related CMS bulletin, individuals in “custody” include those who are:

• Under arrest

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On June 27, 2013, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule which would cut payments to home health agencies (HHA) by 1.5 percent, or $290 million, in calendar year (CY) 2014.

Home health agencies serve approximately 3.5 million beneficiaries, which cost Medicare about $18.2 billion in 2012. The proposed rule is designed to cut spending by updating the Home Health Prospective Payment System (HH PPS) rates. As mandated by the Affordable Care Act (ACA) the rule proposes a 4-year phase-in adjustment to the HH PPS rate updates starting in CY 2014. The payments will be adjusted by rebasing the rates to the national standardized 60 day rates, the national per visit rates, a new non-routine supplies (NRS) conversion factor, and updating the LUPA (an episode consisting of four or fewer visits within 60 days) add-on amounts.

Furthermore, the rule proposes many ICD-9-CM codes should be deleted in order to limit the eligibility of patients with less serious diseases, such as uncomplicated diabetes. This proposed rule defines CMS’s transition to ICD-10-CM coding, and states that a draft ICD-10-CM HH PPS Grouper should be on the CMS website today. The proposed rule also adds two new claims-based measures for recently hospitalized patients, as these patients are at an increased risk of further acute hospital care.

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The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently announced that it expects to recover an estimated $3.8 billion in overall recoveries for the first half of fiscal year 2013. This report covers October 1, 2012 through March 31, 2013.

The OIG’s semiannual report is released every 6 months to keep Congress and the HHS Secretary Kathleen Sebelius informed of the OIG’s important findings, recommendations, and activities. In connection with its Medicare and Medicaid investigations, audits, and reviews, the OIG anticipates $521 million in audit receivables and $3.28 billion in investigative receivables.

In the report’s introductory message, Inspector General Daniel R. Levinson attributed the department’s success to the OIG’s cooperative activities and effective partnerships with organizations such as the Health Care Fraud Prevention and Enforcement Action Team (HEAT). The OIG featured the following items in its semiannual report:

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The Recovery Audit Contractors (RACs) have issued a complex review targeting intensity-modulated radiation therapy (IMRT). IMRT has been used in radiation oncology to treat many different types of cancer by modulating high intensity X-ray beams directed at a tumor and thus minimizing the amount of radiation to healthy tissue. In the aggregate, IMRT uses significantly lower doses of radiation than traditional treatment.

Beginning July 18, 2013, the RACs will be looking more carefully at the medical necessity of IMRT treatment as well as whether the diagnoses listed on claims for reimbursement are also listed in the local coverage determination (LCD). Practitioners should review the coding and medical necessity sections in the LCD to determine whether the patient’s condition meets these standards. The LCD also sets forth strong documentation requirements for IMRT that should be carefully reviewed, including, among other items, the need for performing IMRT, prescription of a treatment plan, target verification methodology and documentation, an approved IMRT inverse plan (PTV), immobilization and positioning documentation, fluence distribution in the phantom, monitor units, and respiratory motion.

If you need assistance defending a Medicare audit or need help creating a compliance plan, please contact an experienced health care attorney at 248-544-0888.

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This morning, the Senate Finance Committee, a committee responsible for the oversight of Medicare, met with providers to discuss their experience with the Medicare Recovery Audit Contractors (RACs). The Centers for Medicare & Medicaid Services (CMS) contract RACs to detect and recuperate improper Medicare program payments.

At the hearing, Chairman Max Baucus (D-Mont.) and Ranking Member Orrin G. Hatch (R- Utah) urged the seriousness of the improper Medicare payments problem. The senators issued statements stressing the importance of RACs working efficiently to ensure the best use of the Medicare trust fund. They voiced their concerns at the high numbers of RAC decisions which are overturned on appeal and the senseless red tape which frustrates providers.

Two providers and one prominent contractor gave witness testimonies to the Committee. Jennifer J. Carmody, CPA, Director of Reimbursement Services for the Billings Clinic of Billing, Montana, discussed the time and expense her organization has incurred appealing inappropriate payment denials. In her witness testimony, she disclosed, “… the combined audit activity becomes overwhelming. In total, we are currently being audited by the Medicare RAC, Medicaid, Medicare Advantage, commercial payers and others.” The Billings Clinic pays an outside contractor, EHR, to assist the clinic with their overflow of audits and appeals. Amongst other recommendations, Ms. Carmody told the Finance Committee that clearer guidance, a limit to the number of record requests, and more effective supervision of the RACs’ performance would help improve the overall RAC process.

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Congressman Adrian Smith (R-NE), along with 13 co-sponsors, introduced a new bill on June 12, 2013, titled the Administrative Relief and Accurate Medicare Payments Act of 2013. This initiative, House Rule (H.R.) 2329, aims to ease administrative burdens on healthcare providers and efficiently allocate energy and resources related to Medicare payment and audits.

In addition to addressing the concerns of administrative burdens and short timeliness-of-filing requirements, the bill also seeks to improve payment accuracy. By increasing the filing period for claims and making other changes to streamline the appeals process, the Act is designed to ease the burden on hospitals.

In a press release, Congressman Smith announced,

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As of July 1, 2013, 799 suppliers will participate in Round 2 of the Competitive Bidding Program (CBP) for Medicare Durable Medical Equipment Prosthetics, Orthotics, and Supplies (DMEPOS), offering medical equipment and supplies to Medicare beneficiaries in the United States. The CBP has been in effect for one year in nine areas, and, according to the Centers for Medicare & Medicaid Services (“CMS”), has already resulted in $202 million in savings.

The CBP was established under Section 302 of the Medicare Modernization Act of 2003. Section 302 requires all DMEPOS entities within selected areas to compete to become Medicare suppliers by submitting bids to furnish equipment and supplies. The lower bids resulting from the competition replace the old Medicare DMEPOS fee schedule amounts for the bid items. Under the Act, the CBP must be phased in. Round 1 of the CBP occurred in 10 areas in 2007. The program was then implemented on July 1, 2008 for two weeks until the contracts were terminated by the Medicare Improvements for Patients and Providers Act of 2008. The program began again in 2009, as the Round 1 Rebid.

CMS granted 13,126 Round 2 DMEPOS CBP contracts to 799 suppliers, which collectively have 2,988 locations in 91 established communities across the United States. In addition to the 2,988 locations, the National Mail-order Program suppliers have 52 locations and have been contracted to serve the entire country by delivery. All suppliers must comply with Medicare standards. The Affordable Care Act expanded the program to require that all areas of the country are subject either to DMEPOS competitive bidding or payment rate adjustments using competitively bid rates by 2016.

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Auditing entities are utilizing more sophisticated electronic data mining methods than ever before. Today’s sophisticated data mining techniques enable auditors to identify greater cost recoveries, making auditing activities both more efficient and more effective.

Auditors utilize statistical data mining testing to determine whether a provider’s billing practices are statistically different from their peers’. If data patterns from a provider’s utilization rates are significantly different from that of their peers’, auditors are able to identify situations where a provider’s practices may be improper. By mining data on a regular basis, healthcare auditors isolate potential fraud and abuse.

Comparative Billing Reports (CBRs), a tool used by CMS to educate providers about their individual billing practices, detail complex statistical analysis in the form of charts and graphs and show how a practices’ utilization rates compare to those of their peer group. Safeguard Services, LLC, a company contracted by CMS, produces and sends out CBRs to certain provider types. CBRs compare both state and national standards and may help a provider detect possible billing and coding problems for their practice.

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Earlier this year, Connolly, Inc., the Recovery Audit Contractor (RAC) for Region C, posted a new issue to its CMS-Approved Issues List targeting Stereotactic Radiation Therapy (SBRT) and Stereotactic Radiosurgery (SRS) services for providers in the following states: Arkansas, Colorado, Delaware, District of Columbia, Florida, Louisiana, Maryland, Mississippi, New Jersey, New Mexico, Oklahoma, Pennsylvania, and Texas.

According to the issue’s description, CMS has approved auditing providers who have incorrectly billed for SBRT and SRS procedures found to be, upon review, “not medically appropriate.” Connolly will be able to audit the billed SBRT/SRS claims as far back as three years from the initial determination date of the procedures, and will be focusing its audit efforts on the outpatient hospital setting. Consequently, this Connolly initiative may affect radiology oncology providers that have performed SRS and SBRT procedures in the states mentioned above.

In response to this news, providers must ensure they are keeping accurate records regarding the rationale and medical necessity for these treatment procedures, as well as maintaining and following effective compliance plans. If you need assistance in preparing for, or defending against RAC audits, or implementing a compliance program geared towards identifying and correcting potential risk areas related to RAC audits, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.

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Hospital lobbying groups are pushing for Congress to pass the Medicare Audit Improvement Act of 2013, which would put a cap on the amount of document requests that Recovery Audit Contractors (RAC) may demand from providers. Specifically, the bill would limit RAC document requests to 2% of hospital claims and a maximum of 500 additional document requests over 45 days.

The legislation was introduced in the House on March 19, 2013 by Representatives Sam Graves (R-MO) and Adam Schiff (D-CA); and was introduced two months later in the Senate by Senators Roy Blunt (R-MO) and Mark Pryor (D-AK). On March 19, 2013, Graves stated in a press release that “[d]octors and nurses should be focused on caring for patients, not trying to comply with the ever-increasing requests for documents.” Graves also stated that small, rural hospitals will benefit from this new legislation the most, since they are often ill-equipped to handle extensive document requests.

The American Hospital Association (AHA) endorsed both bills, and since the new year, has spent $4.3 million thus far in lobbying efforts. In addition, the Federation of American Hospitals and six state hospital associations also joined the AHA in its lobbying efforts. Despite this significant lobbying, neither bill has gained momentum. The same bill was also introduced last year by Graves, but failed to move out of committee. A spokeswoman for the AHA stated that the House bill was not expected to move soon. As a result, lobbying efforts have been placed on increasing the number of co-sponsors of the bill. Last year, only 26 members of Congress co-sponsored the bill, whereas the current legislation has 70 co-sponsors.

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