Articles Posted in Recovery Audit Contractors (RACs)

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In the recently issued Hospital Outpatient Prospective Payment System (OPPS) Proposed Rule for 2013, CMS is soliciting comments regarding policy changes that could be made on the issue of inpatient versus outpatient admission. (To view the CMS factsheet please click here.) CMS is seeking comments on potential changes which could provide some clarity for providers and hospitals regarding inpatient versus outpatient status for purposes of Medicare payment. Comments are due by September 4, 2012.

Currently, when a patient presents to the hospital in a short-stay case, the hospital must decide whether to admit the patient as an inpatient or treat him/her as an outpatient. This decision is not always clear in light of existing Medicare guidance, and the wrong choice can have severe repercussions for the hospital. If the provider orders an inpatient stay, and later, the Recovery Audit Contract (RAC) concludes that the care should have been provided at an outpatient level, the care is deemed not medically reasonable and necessary. Under the current system for reimbursement, the hospital is not reimbursed under Part B for the outpatient services provided unless the hospital undertakes an appeal of the claim denial and is successful before an Administrative Law Judge (ALJ).

Hospitals, in an effort to mitigate costs, err on the side of outpatient care. CMS notes that this practice has doubled in the last four years and that it has a detrimental effect on Medicare beneficiaries.
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CGI has added a new issue to its approved issues list for Region B:

Outpatient Bevacizumab (Avastin) services: Bevacizumab (Avastin) represents 10mg per unit and should be billed one (1) unit for every 10mg per patient. Claims for J9035 should be submitted so that the billed units represent the administered units, not the total number of milligrams.

HealthDataInsights has posted a new issue to its approved issues list:

Multi-use vial wastage: Herceptin (Trastuzumab). Multi-use vials are not subject to payment for discarded amounts of drug or biological. Per, the manufacturer label, J9355 Injection, Trastuzumab, 10mg (Herceptin) is only supplied in a multi-use vial. Providers should only bill the units associated with the dose administered to the patient.
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Members of the United States House Energy and Commerce Committee sent a request on June 26, 2012 to the Government Accountability Office (GAO) requesting a study of redundancy in Centers for Medicare and Medicaid Services (CMS) contractor audits. The request included four specific questions that, at a minimum, the committee wants studied:

1. What process does CMS use to determine whether the contractors’ audit criteria and methodologies are valid, clear, and consistent?

2. How does CMS coordinate among these contractors to ensure that their interactions with providers are not duplicative? Is there any evidence of providers being subjected to multiple overlapping audits on the same topic? If so, how frequently does this occur? Is there any justification for a single provider being audited by multiple contractors at the same time?

3. What are the reasons for requesting that similar information be submitted to multiple contractors? Are there steps CMS is taking to limit duplicative audits, while still ensuring contractors have the tools necessary to pursue program integrity efforts?

4. Does CMS have a strategic plan to coordinate and oversee all of its audit activities and, if so, how is that plan implemented and overseen?

The request asks that all Centers for Medicare and Medicaid Services contractors be studied, including Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs), Zone Program Integrity Contractors (ZPICs), Program Safeguard Contractors (PSCs), and Comprehensive Error Rate Testing Review contractors (CERTs).

The request asks that the GAO, “undertake a study that focuses on coordination among contractor efforts and CMS efforts to oversee these contractors to ensure that they are working efficiently and effectively while guaranteeing that beneficiaries are receiving care to which they are entitled.”
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On May 29, 2012, Connolly added new approved issues to its Approved Issues List for providers in Region C states. The new approved issues are across five categories and include:

• Medical Necessity: Other O.R. Procedure of the Blood & Blood Forming Organs MS-DRG 802, 803, 804 W/MCC, W/CC, w/o CC/MCC CMS Issue Number: C000672012. RACs will review documentation to validate the medical necessity of short stay, uncomplicated admissions. Medicare only pays for inpatient hospital services that are medically necessary for the setting billed and that are coded correctly. Medical documentation will be reviewed to determine that the services were medically necessary and were billed correctly for MS-DRG 802, 803 and 804.

• Medical Necessity: Disease and Disorders of the Female Reproductive System MS-DRG 750, w/o CC/MCC CMS Issue Number: C000642012. RACs will review documentation to validate the medical necessity of short stay, uncomplicated admissions. Medicare only pays for inpatient hospital services that are medically necessary for the setting billed and that are coded correctly. Medical documentation will be reviewed to determine that the services were medically necessary and were billed correctly for MS-DRG 750.

• Medical Necessity: Diseases and Disorders of the Kidney and Urinary Tract MS-DRG’S 656,659,662,665,671,686,687,709,710 and 711 W/CC, W/MCC, w/o CC/MCC CMS Issue Number: C000622012. RACs will review documentation to validate the medical necessity of short stay, uncomplicated admissions. Medicare only pays for inpatient hospital services that are medically necessary for the setting billed and that are coded correctly. Medical documentation will be reviewed to determine that the services were medically necessary and were billed correctly for MS-DRG’S 656, 659, 662, 665, 671, 686, 687, 709, 710 and 711.

For a full list of Approved Issues in RAC Region C, visit the Connolly website.
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CMS (Centers for Medicare & Medicaid Services) expects to publish Comparative Billing Reports (CBRs) on Evaluation and Management (E/M) Services on June 4, 2012.

Since 2010, CMS, through Safeguard Services (SGS), has produced national comparative billing reports in select fields. These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. A CBR outlines the provider’s billing patterns and compares those patterns to other similar entities. Pursuant to Safeguard Services website, E/M services CBRs will be given to providers that meet the following criteria:

  • Filed Medicare Part B final claims with dates of service from January 1 to December 31, 2011;
  • Claims were retrieved from the Integrated Data Repository (IDR) on April 13, 2012;
  • The provider is a specialty primary care provider (General Practice, Family Practice, Internal Medicine, Nurse Practitioner, Multispecialty Clinic or Group Practice, Preventive Medicine, or Physician Assistant);
  • Billed CPT codes 99201, 99202, 99203, 99204, 99205, 99211, 99212, 99213, 99214, and 99215;
  • Place of service was in the office (11);
  • Allowed charges greater than $0; and
  • Provided greater than or equal to 100 total units for the combination of the aforementioned CPT codes.

The sole intent of conducting CBRs is to educate providers as to potential fraud and abuse; they are not punitive. 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.

E/M services are specifically targeted because they are susceptible to fraud and abuse. From 2001 to 2010 Medicare payments for E/M Services increased by 48 percent. CMS will publish CBRs that analyze Medicare Part B final claims data from January 1, 2011 through December 31, 2011. Collective trends in the individual CBRs will be published for the nation to inspect.
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Recently, a group of 35 health care organizations wrote a letter to the Centers for Medicare and Medicaid Services (CMS) expressing their concerns regarding CMS’ new demonstration programs. The organizations requested that CMS rescind the Recovery Audit Prepayment Demonstration and revise the Prior Authorization Demonstration for power mobility devices. Both demonstrations were scheduled to begin on January 1, 2012, but were subsequently delayed due to the concerns expressed by numerous health care organizations. The revised scheduled start date for the demonstration programs is now on or after June 1, 2012.

In regards to the Recover Audit Contractors (RAC) prepayment demonstration, the organizations have requested that CMS rescind the program in its entirety. The reasons for this request include:

  • The demonstration would threaten patient access to care because patients who have the conditions under the targeted prepayment code sets may be inappropriately turned away due to the high level of cost-related scrutiny prescribed by the hospital’s policies and procedures. The organizations believe that physicians, when making potentially life-threatening diagnoses, should not be influenced by the hospital’s reservations that stem from increased government scrutiny and the risk of losing payments.
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On April 2, 2012 DCS Healthcare posted new approved issues to its approved issues list for some Region A states. Among them were two issues for skilled nursing facilities:

· CT Scans, Head and Neck, Incorrect Billing: Potential incorrect billing of CT scans not supported by medical necessity (NGS LCD 28516 (A48015))

· CT Scans, Trunk and Extremities, Incorrect Billing: Potential incorrect billing of CT scans not supported by medical necessity (NGS LCD 28516 (A48015))

In late March 2012, CGI posted a new approved issue to its approved issues list for Region B states. The new issue involves a complex medical necessity review:

· Minor Musculoskeletal Procedures ; MS-DRGs 479, 484, 494, 497, 499, 502, 508, 509, 512, 517 (Medical Necessity): The purpose of this complex review is to identify claims that have been reviewed validating medical necessity in short stay, uncomplicated admissions. This review will identify if medical necessity was met per Medicare guidelines.

On March 23, 2012, Connolly added new approved issues to its approved issues list for Region C states:

· Hospice Related Services -Outpatient CMS Issue Number: C000162012: Services related to a Hospice terminal diagnosis provided during a Hospice period are included in the Hospice payment and are not paid separately.

· Excessive Drug Units Billed – Carrier (At this time, Medical Necessity will be excluded from this review) CMS Issue Number: C001562011: Drugs and Biologicals should be billed in multiples of the dosage specified in the HCPCS code long descriptor. The number of units billed should be assigned based on the dosage increment specified in that HCPCS long descriptor, and correspond to the actual amount of the drug administered to the patient, including any appropriate, discarded drug waste. If the drug dose used in the care of a patient is not a multiple of the HCPCS code dosage descriptor, the provider rounds to the next highest unit. Drug waste should be coded according to the requirements of the local contractor. Claims billed with excessive units will be reviewed to determine the correct number of billable/payable units.

On March 19, 2012, HealthDataInsights added several new issues to its approved issues list for Region D states:

· Acute Inpatient Hospitalization – Major Male Pelvic Procedures with CC/MC (DRG 707): 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.

· Acute Inpatient Admission – OR Procedure with Principal Diagnosis of Mental Illness (DRG 876): 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.
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The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) targeting Cardiology Services. The CBRs will be released to a maximum of 5,000 providers on April 23, 2012.

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.
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CMS recently released the results of its Medicare Fee-for-Service Recovery Audit Program (RAC) for fiscal year 2012. Once again, improper payment numbers have increased from the year before. For the period from October 2011 – December 2011 the audit program collected $397.8 million in overpayments and returned $24.9 million in underpayments. This is a total of $422.7 million in corrections identified by the audit program, with the vast majority of those improper payments coming from Medicare overpayment to providers. The RAC program has collected $1.27 billion in overpayments since 2010, and has returned $187.7 million during that same timeframe. Not surprisingly, RACs have found far more overpayments to providers than they have found underpayments.

A related CMS Quarterly Newsletter indicates that Regions C and D RACs, Connolly and HealthData Insights (HDI) collected the most in overpayments, while Regions A and B RACs, Diversified Collection Services (DCS) and CGI Federal, collected the least.

The report also identified the top recovery issue by region. All issues were medical necessity issues. The top overpayment issues were:

  • Region A: Neurological Disorders- Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients with neurological disorders needs to be complete and support all services provided in the setting billed.
  • Region B: Cardiovascular Procedures- Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients undergoing cardiovascular procedures needs to be complete and support all services provided in the setting billed.
  • Region C: Neurological Disorders- Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients with neurological disorders needs to be complete and support all services provided in the setting billed.
  • Region D: Minor Surgery and Other Treatment Billed as an Inpatient Stay- When beneficiaries with known diagnoses enter a hospital for a specific minor surgical procedure or other treatment that is expected to keep them in the hospital for less than 24 hours, they are considered outpatient for coverage purposes regardless of the hour they presented to the hospital, whether a bed was used, and whether they remained in the hospital after midnight.

The yearly report can be found here, while a report on the individual RAC contractors by region can be found here.
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On February 13, 2012 DCS Healthcare added a new CMS approved issue to its approved issues list for DME supplier claims:

• Knee orthosis bundling: Payments for knee orthoses additions, as specified in NHIC’s LCD for knee orthoses, #L27263, are bundled into the payment for specific base knee orthoses, and should be recouped if paid separately.

On February 13 and 15, 2012 Connolly added new CMS approved issues to its approved issues list:

• Therapeutic footwear utilization CMS issue number: C005392010. The LCD and policy article for therapeutic shoes for diabetics limit the use of shoes and inserts as follows: For patients meeting these criteria, coverage is limited to one of the following within one calendar year (January – December): One pair of custom molded shoes (A5501) (which includes inserts provided with these shoes) and two additional pairs of inserts; or one pair of depth shoes (A5500) and three pairs of inserts.

• Rituximab – Non-covered/non-allowed service-Part B CMS issue number: C001442011. An overpayment exists when a provider bills for a service of J9310/Rituximab with an ICD-9 code that is not included in the list of covered ICD-9 codes for J9310/Rituximab with the applicable local coverage determination document(s).
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