Articles Posted in Audit

The Centers for Medicare and Medicaid Services (CMS) has posted a summary of the Medicare Fee for Service RAC recoveries for the 3^rd quarter of fiscal year 2011. The summary displays the amount of each region’s overpayments, underpayments and total corrections, as well as the nationwide totals. In addition to these quantitative findings, CMS has also identified the top issues for each region.

Click here to view the summary posted by CMS.

Review of these issues is helpful for providers wishing to develop a compliance program that will alert them to potential RAC issues prior to a RAC audit. The issues identified by CMS should be a key focus area for providers developing compliance programs to prepare for and hopefully avoid RAC audits. If you need assistance in preparing for, or defending against a RAC audit through the Medicare appeals process, or for assistance implementing a compliance program geared toward identifying and correcting potential risk areas related to RAC audits, please contact a Wachler & Associates attorney at 248-544-0888.

Despite the large number of Medicare and Medicaid audits and investigations currently being conducted by government contractors, the Government Accountability Office (GAO) recently released a report stating that the federal government’s systems for analyzing Medicare and Medicaid data to detect fraud are “inadequate and underused.”

In 2009, CMS enacted new $150 million systems intended to be a one-stop database accessible to all CMS staff and contractors, law enforcement, and state agencies. However, the report finds that the “share systems data” and other tools to identify and prevent payment of fraudulent claims are still missing. The federal government believes the technology is crucial to curtailing the $60 billion to $90 billion in fraudulent claims paid each year.

The GAO report noted that the current systems don’t even include Medicaid data. Further, only 41 of the 639 analysts charged with using the new detection system have been trained so far. The systems are meant to replace CMS’ “pay and chase” method, which allows criminals to flea before CMS can analyze their claim. The new systems detect fraudulent Medicare and Medicaid claims in real time and deny the claim prior to payment.

The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) this July. CMS will release 5,000 CBRs to physicians ordering spinal orthotic devices billed to Medicare. The CBRs are produced by Safeguard Services under contract with CMS and will provide comparative data to help show how these individual providers compare to other providers within the same field. These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. Providers should view CBRs as a tool, rather than a warning, as a way to aid them in properly complying with Medicare billing rules. It is also important to understand that CBRs do not contain patient or case-specific data, but rather only summary billing information as a method of ensuring privacy.

If you are a recipient of a spinal orthotic CBR or are among the other provider types that have been identified to receive CBRs (i.e. physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact a Wachler & Associates attorney at 248-544-0888 to discuss evaluating the CBR analysis and development of an appropriate compliance plan that will reduce audit risks.

Click Here to view a Spinal Orthotic CBR sample

DCS Healthcare (RAC for Region A) added a new issue for medical necessity claims to its CMS-approved issues list for providers in Maryland.

• APR-DRG 204-Syncope (All severity and risk of mortality levels). Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of APR-DRG 204-Syncope.

CGI (RAC for Region B) added three new issues to its CMS-approved list issues for providers in all Region B states.

The Centers for Medicare and Medicaid Services (CMS) released a MLN Matters article this week discussing Diagnosis Related Group (DRG) Coding vulnerabilities for inpatient hospitals. DRG validation review, executed by Recovery Audit Contractors (RACs), focuses on the hospital’s selection of principal and secondary diagnoses and procedures for a claim. The recent MLN Matters article notes that auditors in the RAC program have discovered coding errors that may result in RAC overpayment demands in connection with DRG validation reviews.

The MLN Matters article reminds inpatient hospitals of the risks associated with coding a record prior to receiving the complete medical record. For example, the article identifies the situation where the emergency room report, History and Physical, and early progress notes identify one condition, where continued evaluation reveals an entirely different condition. This practice may mean that the reported codes do not accurately portray a patient’s conditions and procedures throughout the course of treatment. The recovery auditors, however, will review the entire medical record during DRG validation review and may discover another more accurate code exists for the services provided.

In addition, the article noted that if there is conflicting or contradictory information in the record, the coder should ask the attending physician for clarification to identify the correct principal and secondary diagnoses.

The Centers for Medicare & Medicaid Services (CMS) intends to reduce the Comprehensive Error Rate Testing (CERT) error rate by correcting vulnerabilities identified by Recovery Auditors and other Medicare contractors during DRG Validation reviews. DRG Validation review focuses on the hospital’s selection of principal and secondary diagnoses and procedures on a claim. Recovery Auditors found that a significant amount of claims contain incorrect principal diagnoses.

The Uniform Hospital Discharge Data Set (UHDDS) defines principal diagnoses as the condition responsible for occasioning the patient’s admission to the hospital. UHDDS Guidelines for coding and reporting secondary diagnoses allow the reporting of “any condition that is clinically evaluated, diagnostically tested for, therapeutically treated, or increases nursing care or the length of stay of the patient.”

CMS found that hospitals often code patient records prior to receiving the complete medical record. As Recovery Auditors review the entire medical record when performing DRG validation reviews, hospitals that code prior to receiving the entire report, e.g. without the discharge summary or operative reports, increase their chance of coding errors. Early progress notes may indicate that the patient has one condition, but continuing workup and evaluation determines something entirely different. Therefore, coders must have access to the complete record in order to assign accurate codes. Coders must also clarify any conflicting diagnoses by attending physicians and consultants in order to limit their exposure to Recovery Auditors, who will review data from the entire medical record.

The Centers for Medicare and Medicaid Services (“CMS”) are using Comparative Billing Reports as a tool to educate providers about their individual billing practices. Comparative Billing Reports (“CBRs”) show individual providers how their billing patterns for various codes and procedures compare to the state average and the national average for providers within the same field (e.g. physical therapists and chiropractors). These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. CMS has stated that “the CBR is not intended to be punitive or sent as an indication of fraud. Rather it is intended to be a proactive statement that will help the provider identify potential errors in their billing practice.”

CMS awarded Safeguard Services, LLC the contract for producing the CBRs and has recommended that CBRs be sent out to certain provider types that have been identified as a vulnerability in the Medicare Program. As of now, the provider types that have been identified to receive CBRs are physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies. A maximum of 5,000 providers will be selected to receive CBRs in each provider class.

CBR data analysis involves the same data-mining tools used by Medicare audit contractors to identify candidates for audit. If you have received a CBR or are a possible candidate to receive a CBR in the future, CMS may consider you a statistical outlier in comparison to your peers, subjecting you to an increased risk of audits. It is important to review the information provided, ensure the data reported is accurate and integrate any necessary compliance measures. CBRs are to be used as a tool for providers to look at their individual billing patterns in comparison to peers in their specialty, identify any potential errors and take proactive compliance efforts. Upon receiving a CBR, it is vital that providers evaluate the information and design a proper compliance plan to address any vulnerabilities and prepare for or defend against potential future audits. If you are a recipient of a CBR or are among the provider types that have been identified to receive CBRs (i.e. physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact a Wachler & Associates attorney at 248-544-0888 to discuss evaluating the CBR analysis and development of an appropriate compliance plan that will reduce audit risks.

DCS Healthcare added 11 new approved issues for medical necessity reviews for providers in Region A states. The recently approved new issues may be reviewed for providers in Pennsylvania, the District of Columbia, New Jersey, Delaware, New York, Connecticut, Vermont, Maine, Massachusetts, New Hampshire, and Rhode Island, excluding Maryland. The new issues include:

• MS-DRG 885 psychoses

• MS-DRG 188 pleural effusion without CC-MCC