Articles Posted in Recovery Audit Contractors (RACs)

The Centers for Medicare and Medicaid Services (CMS) has recently released the Medicare RAC collections data for the last quarter of 2011 fiscal year. Recovery auditors identified $277.1 million in overpayments and $76.6 million in underpayments, for a total claims’ correction of $353.7 million, which was 22 percent higher than the total corrected claims identified in the previous quarter.

CMS also released a supplemental report for the entire 2011 fiscal year. The total identified claim corrections for the fiscal year was $939.4 million in collected overpayments and $141.9 million in returned underpayments. These amounts greatly outnumber the corrected claims identified from 2010 fiscal year.

Currently, CMS’ quarterly reports fail to mention the success rates of appeals, which would decrease the identified claim correction amounts. However, CMS has stated that it will begin to make official appeal rates available in its annual Report to Congress.

Recently, the Department of Health and Human Service’s Office of Inspector General released a report which found that the workload data used by the Centers for Medicare and Medicaid Services (CMS) to oversee its Zone Program Integrity Contractors (ZPICs) were inaccurate and lacked uniformity.

The study was conducted by collecting and reviewing ZPICs’ workload data related to investigations, case referrals, requests for information, and administrative actions between February 1, 2009 and October 31, 2009. The OIG only reviewed the information of the ZPICs for Zones 4 and 7 because they were the only ZPICs who had completed a full contract year at the time the study was conducted.

According to the OIG, one of the study’s major objectives was to describe the extent of ZPICs’ program integrity activities during the first year of operation. However, this objective went unachieved due to the inaccuracies and lack of uniformity which stemmed from system issues in CMS’s Analysis, Reporting, and Tracking System (CMS ARTS), ZPIC reporting errors, ZPICs’ interpretations of workload definitions, and inconsistencies in requests for information reports. The OIG also identified a number of issues inhibiting CMS from successfully overseeing ZPIC activities. The OIG has stressed that it is important that these issues are corrected so that CMS can properly analyze the ZPICs effectiveness and compare the ZPICs to their predecessors (Program Safeguard Contractors). The OIG has made a number of recommendations to CMS, which include that CMS:

The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) addressing Nerve Conduction Studies on December 6, 2011.

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 CBR for Nerve Conduction Studies, or are among the other provider types that have been identified to receive CBRs (i.e. physical therapists, chiropractors, ambulance, hospice, podiatry, ordering DME 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, RAC for Region A, recently added four new issues for providers in Maryland and 16 new issues for providers in all Region A states to its CMS-approved issues list. Listed below are 6 examples of approved issues. Please visit DCS Healthcare’s website to view the remaining issues.

• Musculoskeletal disorders MS-DRGs: 542-566. 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. MS-DRG: 542-566 (Maryland)
• Infections MS-DRG: 094-096;177-179;488-489;539-41;602-603;689-690;856-858;862-9;871-872;977. 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. (Maryland)

CGI Federal, RAC for region B, has recently added a new issue to its CMS-approved issue list for providers in all region B states.

• Pharmacy Supply Dispensing Fee. Medicare pays pharmacy supply/dispensing fees for immunosuppressive, oral anti-cancer, chemotherapeutic, and oral anti-emetic drugs as well as drugs used as part of an anti-cancer chemotherapeutic regimen when they are submitted on the same claim as the drug being billed. A claim submitted with a pharmacy supply/dispensing fee in the absence of any of the previously mentioned drugs represents an overpayment and will be denied as not medically reasonable and necessary.

Connolly Healthcare, RAC for region C, added two new issues to its CMS-approved issue list for suppliers that bill CIGNA Government Services.

On October 7, 2011, the United States District Court of New Jersey, made a ruling denying an ambulance services’ request for a preliminary injunction against a Medicare program safeguard contractor (PSC). National Ambulance Services, Inc. (“Nationwide”) sought a preliminary injunction to restrain SafeGuard Services, LLC (“Safeguard”) from continuing its pre-payment audit of the ambulance service Part B claims for non-emergency ambulance transportation to patients. On January 13, 2011, the Centers for Medicare and Medicaid Services (CMS) had notified Nationwide that the PSC for its district would conduct a pre-payment process to ensure that all payments to Nationwide were consistent with Medicare policies. Subsequently, Safeguard conducted a pre-payment audit and recommended that 92.1% of Nationwide’s claims should be denied Medicare reimbursement. At the time of the request for preliminary injunction, Nationwide had only appealed a portion of the total claims to an Administrative Law Judge and none of the claims had reached the Medicare Appeals Counsel level of appeal.

The district court began its analysis by holding that it does not have the authority to make a ruling that involves the interpretation of the Medicare statute in regards to the evidentiary standard for coverage. Judicial review over matters arising under the Medicare statute was not available to the plaintiff until all available administrative remedies were exhausted. The court stated that without a final judgment of the Medicare Appeals Council, the plaintiff had not exhausted its administrative remedies, and consequently, the court lacked the authority to review any claims arising under the Medicare statute.

The court next moved to the issue of awarding Nationwide a preliminary injunction. In order to issue this type of emergency relief, the court stated it must consider the following four factors: (1) the likelihood that Nationwide would succeed on the merits; (2) the extent to which Nationwide will suffer irreparable harm without injunctive relief; (3) the extent to which SafeGuard will suffer irreparable harm if the injunction is issued; and (4) the public interest in the matter.