Medicare

Published on: September 18, 2013

OIG Releases Report on RACs and the Actions Taken by CMS to Address Improper Payments, Fraud Referrals, and Performance

In August 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a study addressing problems and vulnerabilities in Recovery Audit Contractor (RAC) activities, as well as their oversight by Centers for Medicare & Medicaid Services (CMS). RACs are tasked with identifying improper payments and are paid on a contingency fee basis according to their findings. RACs are also obligated to refer potential fraud to CMS.

The report addresses RACs’ efforts at identifying improper payments and potential fraud for the fiscal years (FYs) 2010-2011 and emphasizes the importance of effective CMS oversight over the RACs. The OIG set out to discover and report on four main objectives, including the extent to which:

1. RACs identified improper payments for services billed to the Medicare program;

Published on: August 7, 2013

CMS Issues Much Anticipated Final Rules on Payment of Medicare Part B Inpatient Services and Payment of Hospital Inpatient Services under Medicare Part A

by Wachler & Associates, P.C.

On August 2, 2013, the Centers for Medicare & Medicaid Services (“CMS”) released its much-anticipated final rules, CMS-1455-F and CMS-1599-F, finalizing two previously issued proposals that addressed payment policies related to patient status in short-stay hospital cases: (1) payment of Medicare Part B inpatient services; and (2) admission and medical review criteria for payment of hospital inpatient services under Medicare Part A. The effective date of the final rule is October 1, 2013.

Notwithstanding these final rules, CMS stated that hospitals will be permitted to follow the Part B billing timeframes established in CMS-1455R Ruling regarding appeals and the submission of Part B claims after the effective date of the final rule, provided (1) the Part A inpatient claim denial was one to which the Ruling originally applied; or (2) the Part A inpatient claim has a date of admission before October 1, 2013, and is denied after September 30, 2013, on the grounds that the medical care was reasonable and necessary, but the inpatient admission was not.

Payment of Medicare Part B Inpatient Services

Published on: July 31, 2013

The Medicare Appeals Process Is Overburdened

by Wachler & Associates, P.C.

Healthcare and healthcare law professionals across the country are noticing that as Medicare audit numbers are climbing, so too is the length of the Medicare appeals process. Once a provider or healthcare entity receives a denial from a Medicare contractor, the Medicare appeals process consists of five stages:

• Redetermination, which is filed with a Medicare Administrative Contractor (MAC)

• Reconsideration, which is filed with a Qualified Independent Contractor (QIC)

Published on: July 23, 2013

CMS Issues Demand Letters to Providers and Suppliers with Claims for Services Provided to Allegedly Incarcerated Beneficiaries

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) is issuing demand letters seeking recoupment of reimbursement from medical providers and suppliers for Medicare beneficiaries that, according to data from the Social Security Administration (SSA), were allegedly “incarcerated” at the time services were provided. According to the Code of Federal Regulations (42 CFR 411.4) and Section 1862(a)(2) of the Social Security Act, with limited exceptions, Medicare does not make payments under Medicare Part A or Part B for incarcerated beneficiaries’ medical services. The SSA uses the Prisoner Update Processing System (PUPS) to notify CMS contractors to stop Medicare payment for patients in custody of penal authorities.

CMS considers a beneficiary “incarcerated” in circumstances that do not only involve physical confinement. Commentary on 42 CFR 411.4 explains that this definition of “custody” is consistent with the Federal courts’ definition of custody for the purpose of habeas corpus protections of the Constitution. According to commentary on 42 CFR 411.4, as well as the related CMS bulletin, individuals in “custody” include those who are:

• Under arrest

Published on: July 1, 2013

CMS to Cut Payments to HHA by 1.5%

by Wachler & Associates, P.C.

On June 27, 2013, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule which would cut payments to home health agencies (HHA) by 1.5 percent, or $290 million, in calendar year (CY) 2014.

Home health agencies serve approximately 3.5 million beneficiaries, which cost Medicare about $18.2 billion in 2012. The proposed rule is designed to cut spending by updating the Home Health Prospective Payment System (HH PPS) rates. As mandated by the Affordable Care Act (ACA) the rule proposes a 4-year phase-in adjustment to the HH PPS rate updates starting in CY 2014. The payments will be adjusted by rebasing the rates to the national standardized 60 day rates, the national per visit rates, a new non-routine supplies (NRS) conversion factor, and updating the LUPA (an episode consisting of four or fewer visits within 60 days) add-on amounts.

Furthermore, the rule proposes many ICD-9-CM codes should be deleted in order to limit the eligibility of patients with less serious diseases, such as uncomplicated diabetes. This proposed rule defines CMS’s transition to ICD-10-CM coding, and states that a draft ICD-10-CM HH PPS Grouper should be on the CMS website today. The proposed rule also adds two new claims-based measures for recently hospitalized patients, as these patients are at an increased risk of further acute hospital care.

Published on: June 27, 2013

OIG Announces $3.8 Billion in Expected Recoveries

by Wachler & Associates, P.C.

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:

Published on: June 27, 2013

RACs to Carefully Review IMRT Treatment Claims

by Wachler & Associates, P.C.

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.

Published on: June 25, 2013

Senate Finance Committee Discusses Medicare RAC Program with Providers

by Wachler & Associates, P.C.

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.

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 17, 2013

DME Competitive Bidding Program Round Two Begins July 1, 2013

by Wachler & Associates, P.C.

As of July 1, 2013, 799 suppliers will participate in Round 2 of the Competitive Bidding Program (CBP) for Medicare Durable Medical Equipment Prosthetics, Orthotics, and Supplies (DMEPOS), offering medical equipment and supplies to Medicare beneficiaries in the United States. The CBP has been in effect for one year in nine areas, and, according to the Centers for Medicare & Medicaid Services (“CMS”), has already resulted in $202 million in savings.

The CBP was established under Section 302 of the Medicare Modernization Act of 2003. Section 302 requires all DMEPOS entities within selected areas to compete to become Medicare suppliers by submitting bids to furnish equipment and supplies. The lower bids resulting from the competition replace the old Medicare DMEPOS fee schedule amounts for the bid items. Under the Act, the CBP must be phased in. Round 1 of the CBP occurred in 10 areas in 2007. The program was then implemented on July 1, 2008 for two weeks until the contracts were terminated by the Medicare Improvements for Patients and Providers Act of 2008. The program began again in 2009, as the Round 1 Rebid.

CMS granted 13,126 Round 2 DMEPOS CBP contracts to 799 suppliers, which collectively have 2,988 locations in 91 established communities across the United States. In addition to the 2,988 locations, the National Mail-order Program suppliers have 52 locations and have been contracted to serve the entire country by delivery. All suppliers must comply with Medicare standards. The Affordable Care Act expanded the program to require that all areas of the country are subject either to DMEPOS competitive bidding or payment rate adjustments using competitively bid rates by 2016.