Recovery Audit Contractors (RACs)

Published on: June 20, 2013

OIG Report on “Questionable” Prescribing Practices Likely to Lead to Closer Scrutiny of Physicians

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:

Published on: June 18, 2013

New Bill Aims to Ensure Medicare Payment Accuracy and Reduce Red Tape

by Wachler & Associates, P.C.

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,

Published on: June 11, 2013

Auditors Using Sophisticated Data Mining Techniques to Identify Fraud

by Wachler & Associates, P.C.

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.

Published on: June 6, 2013

RACs to Recover Radiation Oncology Treatment Payments

by Wachler & Associates, P.C.

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.

Published on: May 29, 2013

Hospital Lobbying Groups Push Congress to Pass RAC Bill

by Wachler & Associates, P.C.

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.

Published on: May 15, 2013

Recovery Auditors (RACs) target Hospice Face-to-Face Recertifications

by Wachler & Associates, P.C.

Hospice providers must always obtain written certification that a patient meets Medicare’s hospice coverage criteria. Written certification of terminal illness needs to be obtained no later than 2 days after hospice care is initiated, and must be on file in the hospice patient’s record prior to the submission of a claim to the Medicare contractor. Certification must be made by the medical director of the hospice and, if applicable, the patient’s attending physician. Payment for hospice care will begin the date certification is obtained.

This initial certification satisfies the hospice certification requirement for the first 90-day period of coverage. Additional periods require recertification, which can be obtained 15 days prior to the next benefit period, but no later than 2 days after that period begins.

Per the Medicare Benefit Policy Manual, the written certification must include:

Published on: May 14, 2013

Blue Cross Blue Shield of Michigan Auditing Physicians Performing In-Office Drug Screens

by Wachler & Associates, P.C.

Blue Cross Blue Shield of Michigan (BCBSM) is auditing physicians who have conducted in-office Drug of Abuse (DOA) screening test. The purpose of these BCBSM audits is to determine whether the services, treatment, devices, and procedures that the physician billed to BCBSM conformed to Current Procedural Terminology (CPT) codes at the time of billing.

In auditing physicians who billed drug screening procedure codes, BCBSM is alleging that those physicians have incorrectly billed under current CPT codes for dates of services prior to the effective date of the current billing policies. In these cases, BCBSM sent notices to physicians enclosing current copies of the Physician Office Laboratory List (POLL) – a list of payable laboratory services allowed to be performed in the physician office setting – instead of the relevant POLL covering the audited time period. The drug screening procedure code at issue is CPT code 80101 [drug screen, qualitative; single drug class method (e.g., immunoassay, enzyme assay), each drug class], which is not listed on the current POLL. Instead, BCBSM states that codes 80104 and G0434 are the proper and payable drug screening tests when performed in the physician’s office. BCBSM is seeking returns of alleged overpayments from these physicians who billed 80101 in the office setting, as opposed to billing the lesser-paying drug screening procedure codes.

BCBSM may not hold physicians retroactively accountable for recent changes in billing. We are currently representing a number of physicians that have been audited by BCBSM. Based upon our review, we believe these audits can be successfully defended and the amount for overpayment substantially reduced. If you have been audited by BCBSM, we believe we can help, as we are currently representing physicians in similar cases and have been successfully defending providers against BCBSM audits since 1980. For further information on BCBSM audits, please contact an experienced Wachler & Associates healthcare attorney at 248-544-0888.

Published on: May 6, 2013

Therapy Providers Face Manual Review of Outpatient Therapy Claims, CMS Releases FAQ

by Wachler & Associates, P.C.

As mandated by the American Taxpayer Relief Act of 2012, Medicare Part B outpatient therapy providers now face manual medical review of claims at or above a $3700 statutory cap. Due to some confusion in the provider community, the Centers for Medicare and Medicaid Services (CMS) published a Frequently Asked Questions to clarify the new therapy manual medical review process.

In the FAQ, CMS explains that the manual medical review process is triggered when a beneficiary’s services for that year exceed one of two threshold caps dictated in Section 603 of the Act. The cap for Occupational Therapy (OT) services is $3700 per year, per beneficiary. Separately, the combined cap for Physical Therapy (PT) and Speech Language Pathology (SLP) is $3700 per year, per beneficiary. CMS also points out that although physical therapy and speech language pathology services are combined to trigger the cap, the medical review of those claims will be conducted separately.

The FAQ states that the cap and manual medical review process applies to all Part B Outpatient Therapy settings and providers, including private practices, Part B skilled nursing facilities (SNFs), home health agencies (HHAs), outpatient rehabilitation facilities, rehabilitation agencies and hospital outpatient departments.

Published on: April 29, 2013

CMS Releases Proposed Rule Regarding Hospital Inpatient Admissions

by Wachler & Associates, P.C.

On April 26, 2013, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to clarify when a Medicare beneficiary is appropriately admitted to a hospital as an inpatient and what is required for Medicare Part A payment of hospital inpatient services. In this rule, CMS proposes a time-based presumption of medical necessity for hospital inpatient services based on the beneficiary’s length of stay. More specifically, RACs and other Medicare contractors would presume that hospital inpatient admissions are appropriate for payment under Medicare Part A if the beneficiary is admitted to the hospital pursuant to a physician order and receives care for at least two midnights. Similarly, there would be a presumption that hospital inpatient admissions spanning less than 2 midnights should have been provided on an outpatient basis, unless there is clear documentation in the medical record supporting the physician’s order and expectation that the beneficiary would require care spanning more than 2 midnights or the beneficiary is receiving a service or procedure designated by CMS as inpatient-only. In contrast, CMS’s current manual instructions indicate that physicians should use a 24-hour period and the expectation of a beneficiary’s need for an overnight stay in the hospital as inpatient admission benchmarks. In reviewing inpatient stays that did not reach the 2 midnight threshold, RACS and other Medicare contractors will be instructed to employ factors similar to those currently included in the Medicare Benefit Policy Manual (MBPM) to determine the medical necessity of the inpatient admission. These factors include, for example, the severity of the signs and symptoms exhibited by the patient and the medical predictability of something adverse happening to the patient. Later in the proposed rule, however, CMS indicates that it will codify the general 2 midnight threshold rule at 42 CFR 412.3(c)(1) and that 42 CFR 412.3(c)(2) would include an exception stating that “…if an unforeseen circumstance, such as beneficiary death or transfer, results in a shorter beneficiary stay than the physician’s expectation of at least 2 midnights, the patient may be considered to be appropriately treated on an inpatient basis, and the hospital inpatient payment may be made under Medicare Part A.” This language tends to suggest that a Medicare contractor’s review of an inpatient admission of less than 2 midnights will focus less on the clinical factors listed above, and more on “unforeseen circumstances.” Clarification will likely be sought during the open comment period.

In addition, the proposed rule also clarified the requirement that a patient is admitted as an inpatient only on the recommendation of a physician or licensed practitioner permitted by the State to admit patients to the hospital. The proposed rule explained that this requirement is understood to mean that a patient is admitted through an inpatient admission order given by the practitioner responsible for the care of the patient, provided that the practitioner, either a physician or other licensed practitioner, has been authorized by the State and granted admitting privileges by the hospital. However, CMS clarifies that although the Conditions of Participation (CoPs) do not specifically prohibit the delegation of an inpatient admission to a non-physician practitioner, for payment purposes CMS will clarify in regulation that the authority to admit cannot be delegated to an individual who lacks that authority in his or her own right.

This proposed policy is intended to address longstanding concerns from hospitals that they need more guidance on when a patient is appropriately treated and paid by Medicare as an inpatient. Although CMS’ proposed rule provides some clarity on how a medically necessary inpatient admission would be defined by a Medicare review contractor, it raises other questions, particularly how Medicare review contractors will review inpatient admissions spanning less than 2 midnights. Please note that CMS will accept comments on the proposed rule until 5:00 p.m. EST on June 25, 2013. The comments must be received by that time and date, not postmarked. CMS will respond to comments in a final rule to be issued by August 1, 2013.

Published on: April 24, 2013

CMS Announces Plans to Introduce a Fifth RAC for DME and HHH

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) plans to make significant changes to the Recovery Auditor (RAC) program. In doing so, CMS hopes to address providers’ complaints and improve the RAC program through new Recovery Auditor contracts that will be awarded next year.

The most significant change is the creation of a fifth, nationwide Recovery Audit Contractor that is solely responsible for the identification and correction of improper payments for home health and hospice claims and payments for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The change leaves the existing four regional RACs in place to identify overpayments for all other Medicare A/B claims and provider types.

In the Statement of Work for DME and Home Health Recovery Auditors, CMS claims that the changes will further the Recovery Audit Program’s goal of “efficient detection and correction,” and assist the Agency in “lowering future error rates and identifying improper payments that will have the greatest impact on the [Medicare and Medicaid] Trust Fund.”