Articles Posted in Audit

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On Wednesday, February 12, at 10:00 am EST, the U.S. Department of Health & Human Services, Office of Medicare Hearings and Appeals (OMHA) will hold a Medicare Appellant Forum in the Cohen Auditorium of the Wilbur J. Cohen building at 330 Independence Ave. SW, Washington DC, 20024. The purpose of the forum will be to:

  • Inform OMHA appellants on the status of OMHA operations;
  • Discuss a number of initiatives designed to mitigate the growing backlog of OMHA-level appeals; and
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On November 12, 2013, CMS held a third open door forum (ODF) discussing the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F). As of November 4, 2013, the patient status probe review period that was previously applicable through December 31, 2013 has been extended through March 31, 2014. CMS has issued helpful guidance on questions and answers relating to patient status reviews, selecting hospital claims for patient status reviews, and reviewing hospital claims for patient status.

These “probe and educate” reviews will be conducted on a prepayment basis to assess whether hospitals are in compliance with the admission order requirements and 2-midnight benchmark. Because these reviews will be conducted on a prepayment basis, the MACs will deny any claims not meeting these three requirements. The initial sample probe reviews will consist of 10-25 claims per hospital with dates of admission from October 1 through December 31, 2013.

MAC review of the inpatient hospital claims will provide outreach and education about the inpatient rule and will help ensure that hospitals understand and comply with the Medicare requirements. Upon completion of the 10-25 claim reviews, if the MACs do not find any issues with the particular hospital’s claim documentation then further probes will not be conducted for that hospital (unless there are significant changes in billing patterns for admissions).

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Tomorrow from 1:00-2:00 pm Eastern Time, the Centers for Medicare & Medicaid Services (CMS) will hold a third open door forum (ODF) to discuss the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F).

On August 2, 2013, CMS issued the FY 2014 IPPS/LTCH Final Rule (final rule) which finalized proposals related to patient status during short-stay hospital cases, including the new standards for inpatient admission and the medical review criteria for payment of hospital short-stay inpatient services under Medicare Part A. On September 5, 2013, CMS issued sub-regulatory guidance regarding the final rule’s requirements for hospital inpatient admission order and certification, which are conditions of payment under Medicare Part A. This sub-regulatory guidance was issued in part as a result of the significant confusion surrounding CMS’s requirements for inpatient admission orders and physician certifications of inpatient services. CMS also posted subregulatory instructions and frequently asked questions, relating to the claim selection process and preliminary review guidelines, for conducting patient status reviews of claims with dates of admission beginning in October 2013.

Questions on the two midnight provision for admission and medical review may be sent to CMS before the ODF begins via email to IPPSAdmissions@cms.hhs.gov. Questions on Part B inpatient billing and clarifications regarding physician order and certification can be sent to Section3133DSH@cms.hhs.gov.

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The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently issued a report addressing increased Medicare spending on polysomnography services. The OIG initiated this study in response to growing concerns of Medicare prescriber fraud.

A polysomnography is a type of sleep study that diagnoses sleep disorders such as sleep apnea. The claims submitted by sleep centers that conduct these studies have been under serious scrutiny by fraud investigators in recent years. In January 2013, American Sleep Medicine LLC, a sleep testing center operator based in Florida, agreed to pay $15.3 million to resolve allegations of false polysomnography claims submitted to Medicare, TRICARE, and the Railroad Retirement Medicare Program in violation of the False Claims Act (FCA).

According to the OIG’s report, Medicare spending for polysomnography services rose 39 percent between the years 2005 and 2011. The OIG analyzed Medicare claims from hospital outpatient departments, as well as non-hospital providers such as independent diagnostic testing facilities and physician-owned sleep laboratories, starting in 2011. The OIG found that almost $17 million in Medicare claims for polysomnography services were inappropriate, meaning the claims did not meet one or more of three requirements for Medicare reimbursement, including claims that had inappropriate diagnosis codes, were same-day duplicate claims or were submitted with an invalid NPI. In addition, the report stated that out of 6,339 providers of polysomnography services, 180 providers exhibited patterns of questionable billing. “Questionable billing” patterns included providers that billed an unusually high percentage of: (1) same-day duplicate claims, beneficiaries who had polysomnography claims from one or more other providers in 2011, (3) diagnostic polysomnography claims with a titration claim for the same beneficiary on the following day, or (4) claims in which there was no visit note from the ordering provider in the preceding year.

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The Centers for Medicare and Medicaid Services (CMS) recently released a national provider Comparative Billing Report (CBR) focused on spinal orthotics and ordering providers. This CBR was conducted in response to an Office of Inspector General (OIG) report on inappropriate Medicare payments for orthotics. The Medicare Durable Medical Equipment (DME) data obtained for this report span from dates of service beginning January 1, 2012 through December 31, 2012. The final data was retrieved on August 15, 2013 from the Integrated Data Repository (IDR).

Under contract by CMS, Safeguard Services LLC is the authorized producer of all CBRs. Safeguard sends CBRs to about 5,000 ordering providers to help providers prevent improper billings. This CBR provides comparative data to orthotic providers across the nation to compare orthotics providers in terms of coding and billing practice, as well as utilization patterns. The sample spinal orthotics CBR may be useful to review if your entity did not receive one from Safeguard.

The following Healthcare Common Procedure Coding System (HCPCS) codes were analyzed in this CBR:

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In August 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a study addressing problems and vulnerabilities in Recovery Audit Contractor (RAC) activities, as well as their oversight by Centers for Medicare & Medicaid Services (CMS). RACs are tasked with identifying improper payments and are paid on a contingency fee basis according to their findings. RACs are also obligated to refer potential fraud to CMS.

The report addresses RACs’ efforts at identifying improper payments and potential fraud for the fiscal years (FYs) 2010-2011 and emphasizes the importance of effective CMS oversight over the RACs. The OIG set out to discover and report on four main objectives, including the extent to which:

1. RACs identified improper payments for services billed to the Medicare program;

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On August 2, 2013, the Centers for Medicare & Medicaid Services (“CMS”) released its much-anticipated final rules, CMS-1455-F and CMS-1599-F, finalizing two previously issued proposals that addressed payment policies related to patient status in short-stay hospital cases: (1) payment of Medicare Part B inpatient services; and (2) admission and medical review criteria for payment of hospital inpatient services under Medicare Part A. The effective date of the final rule is October 1, 2013.

Notwithstanding these final rules, CMS stated that hospitals will be permitted to follow the Part B billing timeframes established in CMS-1455R Ruling regarding appeals and the submission of Part B claims after the effective date of the final rule, provided (1) the Part A inpatient claim denial was one to which the Ruling originally applied; or (2) the Part A inpatient claim has a date of admission before October 1, 2013, and is denied after September 30, 2013, on the grounds that the medical care was reasonable and necessary, but the inpatient admission was not.

Payment of Medicare Part B Inpatient Services

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In 2005, the Centers for Medicare & Medicaid started the Medicare Recovery Audit Contractor (RAC) program in three pilot states, where the program recovered over $900 million dollars during the three-year pilot. Due to the success of the pilot program, CMS expanded the program to all states in 2010, and has since recovered over three billion dollars. The success of the Medicare RACs resulted in the expansion of the current RAC program to Medicaid and Medicare Parts C and D through Section 6411 of the Affordable Care Act (ACA).

The ACA requires states to:

  • Contract with a RAC to ensure that overpayments and underpayments by the state Medicaid agency are identified, and that overpayments are recouped;
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Healthcare and healthcare law professionals across the country are noticing that as Medicare audit numbers are climbing, so too is the length of the Medicare appeals process. Once a provider or healthcare entity receives a denial from a Medicare contractor, the Medicare appeals process consists of five stages:

• Redetermination, which is filed with a Medicare Administrative Contractor (MAC)

• Reconsideration, which is filed with a Qualified Independent Contractor (QIC)

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Last Friday, the vice president of legal affairs for the American Health Care Association (AHCA), Dianna De La Mare, reported that CMS will be combining the integrity responsibilities of the Zone Program Integrity Contractors (ZPICs) and the Medicare Administrative Contractors (MACs) into one integrity contractor. These newly designated integrity contractors, the Unified Program Integrity Contractors (UPIC), will focus on both Medicare and Medicaid integrity issues. Dianna De La Mar also reported that the new UPICs will encompass the MAC integrity responsibilities and will retire the Medicaid Integrity Contractors (MICs).

Follow the Wachler & Associates Health Law Blog for updates on UPICs and other important health law issues. If you have any questions regarding how UPICs may affect your practice, please contact an experienced health care attorney at Wachler & Associates attorney at 248-544-0888.

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