Articles Posted in Audit

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Ensuring comprehensive documentation procedures are in place has become increasingly vital for all providers. However, recently compliance plans have become even more important for sleep labs, sleep centers, hospital-based sleep service providers, and non-hospital-based sleep service providers seeking Medicare reimbursement. According to a FY 2013 Department of Health & Human Services (HHS) Office of Inspector General (OIG) report, Medicare payments for sleep study services have dramatically increased since 2001, growing four-fold from $62 million in 2001 to $235 million in 2011. As a result of increased Medicare spending for sleep-related procedures, there is a spotlight on the appropriateness of Medicare-billed services.

Sleep study services encompass issues such as studies for obstructive sleep apnea (the most common sleep disorder), full-night sleep diagnostic studies, split-night studies, and full-night titration studies. Medicare reimburses sleep study providers at prearranged and set rates for polysomnography (the most popular tool utilized to diagnose sleep disorders), applicable services from the inpatient prospective payment system, the outpatient prospective payment system, the Physician Fee Schedule, and a range of sleep studies.

Sleep study service providers receiving Medicare payments should be prepared for the OIG’s scrutiny throughout 2013 by ensuring that claims are made according to Medicare regulations. In order to ensure proper compliance for full Medicare reimbursement, sleep study service providers must follow certain documentation and procedural requirements. Among other requirements, all documentation must provide rationale for services that were provided, as well as rationale for how providers arrived at a billing status. Detailed documentation is more important than ever.

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On June 24, 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued an advisory opinion announcing that by request of a surgical products manufacturer (the “Requestor”), based on the certifications and information provided, a proposed tiered rebate program will meet the requirements of the discount safe harbor of the anti-kickback statute (AKS) and will not generate prohibited remuneration under the AKS. Thus, the OIG concluded that it would not impose administrative sanctions in connection with the proposed arrangement.

The AKS makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. At the discretion of the OIG, a violation of the AKS may constitute a felony punishable by imprisonment fines, or both, possible exclusion from Federal health care programs, and possible administrative proceedings and civil monetary penalties. However, safe harbor protection may be afforded to arrangements that meet all of the conditions set forth in the applicable AKS safe harbor. The regulatory AKS safe harbor for discounts interprets the Social Security Act’s exception for discounts, which protects “a discount or other reduction in price obtained by a provider of services or other entity under a Federal health care program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity under a Federal health care program.”

In this advisory opinion, the Requestor, a corporation that manufactures ophthalmologic products including pharmaceuticals, surgical equipment, and vision aids, sought an advisory opinion on whether a proposed arrangement would generate prohibited remuneration under the AKS. The Requestor’s proposed arrangement involved tiered, percentage-based rebates based on customer purchases of federally reimbursable and non-federally reimbursable surgical products. The rebate would be calculated based on a customer’s total annual purchases of such products regardless of whether such products are reimbursable by Federal health care programs and would not vary based on the volume of Federally reimbursable products purchased. In addition, the Requestor certified the various manners in which it would notify all customers receiving rebates of their obligation to report any rebates received based on sales of Federally reimbursable surgical products. Further, the Requestor certified that it would refrain from doing anything to impede the customer’s ability to meet its obligations under the AKS discount safe harbor.

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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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Today the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a report revealing new data on prescribers with questionable billing patterns under the Medicare Part D program. The OIG conducted this study to investigate rising concerns of Medicare prescriber fraud.

According to the OIG’s report, over 700 of nearly 87,000 general-care providers had “questionable” Part D prescribing patterns. A total of 2,238 general-care providers were labeled as outliers, but 736 doctors had what the OIG considered to be “extreme” prescriber patterns. A majority of these “extreme” outlier physicians ordered what the OIG considered to be extraordinary quantities of Schedule II or III drugs. Other examples of “extreme” patterns included doctors writing over 400 prescriptions for one patient and the number of pharmacies dispensing a single doctor’s orders. The OIG’s report noted that “Although some of this prescribing may be appropriate, such questionable patterns warrant further scrutiny.”

The Centers for Medicare and Medicaid Services (CMS) contracts with sponsors that provide drug coverage to beneficiaries enrolled in Medicare Part D. In addition, CMS contracts with a Medicare Drug Integrity Contractor (MEDIC), a contractor responsible for detecting and preventing fraud and abuse. The OIG recommended that CMS heighten its oversight of the Medicare Part D program by working in conjunction with MEDIC and the private insurers. According to the report, CMS has agreed to the OIG’s following recommendations:

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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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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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