Articles Posted in Recovery Audit Contractors (RACs)

DCS Healthcare, RAC for Region A, added two new issues subject to medical necessity reviews to its CMS-approved issues list for providers in Maryland. DCS Healthcare also added four new issues for providers in all Region A states.

• MS-DRG 286, 287 Cardiac Catheterization for Ischemic Heart Disease (All severity and risk of mortality levels) (Maryland only). 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 MS-DRG 286, 287 cardiac catheterization for ischemic heart disease.
• MS-DRG 149 vertigo and other labyrinth disorders (All severity and risk of mortality levels) (Maryland only). 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 MS-DRG 149 vertigo and other labyrinth disorders.

The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) targeting Independent Physical Therapy Providers who practice in the outpatient setting and bill Medicare with the KX Modifier, which is the billing requirement used to show that the beneficiary has exceeded the therapy cap, but requires additional medically necessary physical therapy services. Last August, physical therapists were the first provider type to receive CBRs. The CBRs currently being issued to physical therapists will be distributed to 5,000 additional or different providers and will be centered on 2010 billing data.

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 Physical Therapy 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.

On July 29, 2011, the Centers for Medicare and Medicaid Services (CMS) issued Change Request 7436 which shifts the duty of issuing demand letters for identified overpayments from the Recovery Audit Contractors (RACs) to the Medicare Administrative Contractors (MACs). RACs will continue to be responsible for determining whether an improper payment has been made to a provider. However, after identifying an overpayment, RACs will now submit the claim to the MACs who will then send the demand letters to the identified providers. All communications regarding payment recovery and appeal process timeframes will be handled by the MACs, but a provider’s questions or concerns relating to audit specificities should be directed towards the RACs.

Providers need to be aware of this recent change in order to prevent any miscommunications that could lead to missing an appeal deadline. A small error such as this could lead to forfeiting any appeal rights that a provider is granted. If you have any questions relating to RAC audits, or any other type of Medicare or Medicaid audit, please contact a Wachler & Associates attorney at 248-544-0888.

According to a new report released by The Department of Health and Human Services Office of the Inspector General (HHS OIG), hospice companies have quickly expanded their services to patients residing in nursing homes. HHS OIG found that total Medicare spending for hospice care for nursing home residents had grown by nearly 70 percent between 2005 and 2009. In addition, the number of hospice beneficiaries in nursing facilities has increased by 40 percent during that same time period. The report also found that 263 hospices (nearly 8 percent of all hospices) had two-thirds or more of their Medicare beneficiaries residing in nursing homes, referred to in the report as “high-percentage hospices.” Moreover, high-percentage hospices were paid an average of $3,182 more per beneficiary by Medicare. Also, high-percentage hospice beneficiaries received hospice services nearly three weeks longer than beneficiaries served by hospices overall, and the costs to high-percentage hospices were much lower due to patients requiring less services because they are already receiving similar services from the nursing facilities.

In connection with the Inspector General’s recommendation, the Centers for Medicare and Medicaid Services (CMS) has announced that it is making an effort to reduce its Medicare payments for hospice patients residing in nursing facilities. As a result, hospice providers will likely see increased audits in this area, with a specific focus on skilled nursing facility referrals. If you are a hospice provider and need assistance in preparing or defending against an audit, or seek assistance with creating a compliance program to minimize audit risk, please contact a Wachler & Associates attorney at 248-544-0888.

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.