On August 15, 2012 the Recovery Audit Contractor (RAC) for Region A changed its name from Diversified Collection Services (DCS) to Performant Recovery, Inc.
According to the website, processes, people, and contact information will remain the same.
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On September 12, 2012, the Centers for Medicare and Medicaid Services (CMS) released a national provider Comparative Billing Report (CBR) targeting podiatry services. The CBRs will be released to a maximum of 5,000 podiatry service providers. This is the second time in which podiatry services have been the focal point of a CBR.
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 assist providers in reviewing their coding and billing practices and utilization patterns, and take proactive compliance measures by conducting self-audits through meaningful comparisons to other podiatry providers billing similar codes. 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. CMS suggests that providers should view CBRs as an educational tool, rather than a warning, to help aid them in properly complying with Medicare billing rules. However, based upon our experience, it is clearly an indication that individuals receiving CBRs are prospective audit targets because their utilization of these codes exceeds their peers.
The recently released podiatry services CBRs are to serve as a follow up to the CBRs previously received by providers in April 2011. This repeat study is intended to serve the same educational and compliance goals as the prior study; however the newly issued CBRs provide more recent billing data–billed Medicare Part B claims data with service dates from May 1, 2011 through April 30, 2012 that were processed by July 27, 2012. Furthermore, the POS and CPT codes addressed in the recently released CBRs are identical to the codes utilized in the prior study; which include POS codes 11 (office) and 31 (skilled nursing facility), and the following CPT codes:
On September 4, 2011, the Office of Inspector General (“OIG”) issued an unfavorable advisory opinion (Advisory Opinion No. 12-11), which addressed an ambulance supplier’s proposed agreement with a municipality to waive cost-sharing amounts for emergency medical services (“EMS”). The requestor of the opinion, a for-profit provider of basic life support ambulance services (“BLS Supplier”), proposed to provide part-time EMS services for a municipality that currently enlists volunteer first aid squads as its majority provider of ambulance services. These volunteer providers generally do not charge residents cost-sharing amounts for the services rendered. In instances where volunteer squads are incapable of responding to emergency calls, other ambulance suppliers, such as BLS Supplier, may provide the services. Some of these instances are attributable to a volunteer squad’s inability to respond to a particular call, while other situations are due to volunteer squads dispatching in that they are unavailable to cover a service area during certain blocks of time.
The proposed arrangement in question involves BLS Supplier entering into agreements with municipalities to provide EMS on a part-time basis for the aforementioned situations. BLS Supplier would use insurance-only billing, in which it would bill Medicare and other third-party payors, but would agree to allow the municipality to waive all cost-sharing amounts.
In issuing its opinion, the OIG determined that the proposed agreement could potentially violate the anti-kickback statute because such waivers of Medicare cost-sharing amounts may constitute prohibited remuneration to induce referrals. The OIG went on to state that municipalities must pay the owed amounts to an independent ambulance supplier if municipalities seek to assume the cost-sharing obligations. The anti-kickback statute is implicated in the proposed arrangement if the municipalities either fail to make the payments to BLS Supplier or fail to permit BLS Supplier to directly bill the residents for the services provided. The OIG emphasized that this is especially true when a municipality enters into an agreement with an independent ambulance provider, such as BLS Supplier, to be its primary supplier of emergency ambulance services during designated time slots, even when only provided part-time. This opinion was distinguished with a prior OIG opinion (Advisory Opinion 99-1) where an independent ambulance supplier merely provided services during isolated and unanticipated circumstances in which the volunteer squad was currently preoccupied with another emergency response.
The Centers for Medicare and Medicaid Services (CMS) recently released Comparative Billing Reports (CBRs) to Skilled Nursing Facility (SNF) providers. The CBRs are released to a maximum of 5,000 providers. CBRs can be an effective way to identify potential audit weaknesses and take corrective action before an audit.
SNFs that receive CBRs will see their rehabilitation plus extensive services category RUG code billings broken down by therapy level grouping and compared to regional and national averages. The CBRs are a response to increases in ultra high therapy RUG billings nationwide. Providers with higher than average ultra high therapy RUG billings are encouraged to examine their procedures and compliance plans to determine that therapy level RUG codes are billed appropriately.
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 to aid them evaluating their practices to ensure that they are properly complying with Medicare billing rules. Furthermore, providers should carefully analyze the data in CBRs to evaluate whether the CBR adequately reflects the provider’s billing practices. 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.
In addition to skilled nursing facilities, provider types that have been identified to receive, or have already received, CBRs include: podiatry services, home oxygen services, evaluation and pain management services, cardiology services, advanced diagnostic imaging, electrodiagnostic studies, sleep study, hospice, ambulance services, chiropractic services, physical therapy, and durable medical equipment.
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On August 22, 2012 the American Hospital Association (AHA) published the results of a survey which indicates that Recovery Audit Contractor (RAC) claim denials were up in the second quarter of 2012 from the first quarter. The results of the survey include data collected from more than 2,000 hospitals nationwide.
The survey reveals that hospitals saw an increase in RAC denials in the second quarter of 2012 of 24%. Additionally, medical record requests rose 22% and the dollar value of claims denied increased 21%. Hospitals reported Short Stay Medically Unnecessary as the most common reason for denial. According to the survey 70% of denials were listed as Short Stay Medically Unnecessary, which is a rise of 1% from the first quarter of 2012.
Hospitals are spending an increasing amount on RAC issues. In the second quarter of 2012, 55% of the hospitals in the survey indicated they spent more than $10,000 on RAC issues. Hospitals also spent an average of $24,064 on external legal counsel in the same quarter.
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The Department of Justice (DOJ) reportedly set an email to hospitals nationwide on August 30, 2012 instructing them to examine implantable defibrillator surgeries covered by Medicare to determine if they were improperly billed to Medicare. The email, as reported by modernhealthcare.com, included a “resolution model” with instructions for hospitals to self-audit, and estimate monetary penalties under the False Claims Act.
The DOJ has been conducting an investigation into improperly billed implantable defibrillator surgeries for more than two years, and the resolution model sent to hospitals is the first attempt by the DOJ to come to a settlement resolution for these instances.
The investigation centers around a National Coverage Determination (NCD) set by the Centers for Medicare and Medicaid Services (CMS) which establishes the instances in which an implantable defibrillator is covered by Medicare.
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In a press release on August 15, 2012 Congressman Dan Boren, who represents Oklahoma’s second Congressional District, announced that letters have been sent to Secretary of Health and Human Services, Kathleen Sebelius; U.S. Congressman Dave Camp, Chairman of the House Ways and Means Committee; and U.S. Congressman Fred Upton, Chairman of the House Energy and Commerce Committee urging a congressional investigation into the Centers for Medicare and Medicaid Services (CMS) Recovery Audit Contractor (RAC), Connolly, Inc.
Congressman Boren accuses Connolly of, “overzealous predatory tactics against several…hospitals with their aggressive, overly critical approach.” He further states that, “[t]hese practices have the potential to create a life-threatening situation for patient care in impoverished rural communities….”
While speaking on a webcast on August 27, 2012, the Congressman said that Connolly treats rural hospitals more harshly than larger urban hospitals. As a result, rural hospitals, that frequently have a much smaller cash flow than their urban counterparts, are faced with a financial situation that could put patient care at risk. He indicated that if Connolly continues to put unnecessary financial strain on rural hospitals, some will be forced to shut down, leaving some rural areas without access to critical care facilities and putting residents in life threatening situations.
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On August 9, 2012, CGS, the MAC for J15, announced that it will begin complex medical review MS-DRG 312, syncope and collapse, based on findings that the claim denial rate for MS-DRG 312 during a probe conducted in Ohio was 79.9%. This means that providers in Ohio could see MS-DRG 312 claims audited as part of the prepayment review demonstration program and in post-payment reviews conducted by the MAC.
The potential for a double audit faced by providers in Ohio is contrary to statements made by CMS during the special open door forum on August 9, 2012. During the forum, CMS stated that a provider may hear from both a RAC and a MAC for claim review but it should not be on the same MS-DRG or the same claim. So far it is unclear how CMS will address this issue.
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On August 27, 2012 the Centers for Medicare and Medicaid Services (CMS) began the Recovery Auditor Prepayment Review Demonstration Program. The program includes prepayment reviews of certain types of claims with high rates of improper payments in eleven states. The states included in the program are Florida, California, Michigan, Texas, New York, Louisiana, Illinois, Pennsylvania, Ohio, North Carolina, and Missouri. Currently, the only claim type being reviewed by the program is MS-DRG 312: Syncope and Collapse. CMS anticipates adding additional claims for review as the program gets underway.
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The Department of Health and Human Services Office of Inspector General (OIG) released a report on July 31, 2012 which indicates that Medicare contractors made overpayments to providers for the breast cancer drug Herceptin. In an audit of Medicare contractor Novitas Solutions, Inc.‘s (Novitas), formerly Highmark Medicare Services, activities from January 2008 through December 2010, the OIG found that incorrect payments were made to providers in four states for full multiuse vials of Herceptin. States included in the audit were Delaware, the District of Columbia, New Jersey, and Pennsylvania.
Herceptin is a breast cancer treatment drug that comes in a multiuse vial containing 44 billable units of the drug. When properly reconstituted and stored, it is viable for 28 days. The OIG audit found that in many cases the vials were used for a single administration and then discarded, with charges entered for the entire vial which included the unused discarded portions. The Medicare Claims Processing Manual states that while single use vials may be charged for any unused or discarded amounts of drugs or biologicals, multiuse vials are only subject to payment for the portions used. The OIG identified overpayments in the amount of $1,576,374.00 for unused and discarded portions of multiuse vials of Herceptin.
The OIG made the following recommendations to Novitas:
1. That Novitas recover the $1,576,374 in identified overpayments;
2. That Novitas implement a system edit that identifies for review line items for multiuse-vial drugs with units of service equivalent to one or more entire vials;
3. That Novitas use the results of the audit in provider education activities.
Novitas concurred with all three recommendations, and commented that claims history adjustments will be initiated.
The OIG audit is part of a national review of the use of Herceptin, which started with a pilot audit, the results of which were released July 10, 2012. Providers can expect a review of this drug in every state. Recovery Audit Contractors (RACs) in two regions have already put Herceptin multiuse vials on their approved issues lists. Connolly in Region C and HealthDataInsights in Region D have approved issues posted for Herceptin. Providers should anticipate that RACs in Regions A and B may follow.
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