Wachler & Associates Health Law Blog

Published on: November 30, 2011

CMS Releases Last Quarter’s Data on Medicare RAC Collections

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.

Published on: November 29, 2011

CMS Releases Part A to B Rebilling Demonstration Program Enrollment Application

by Wachler & Associates, P.C.

This week CMS released more information regarding the Part A to Part B Rebilling Demonstration Program. Now available on CMS’ website is the enrollment application for hospitals to complete to seek to participate in the program. The enrollment application includes language which reiterates that participation in the Demonstration Program is based on a first-come first-served process and applications will be classified based on facility size. According to the application, 80 large facilities (300+ Beds), 120 moderate facilities (100-299 Beds), and 180 small facilities (fewer than 100 Beds) will be allowed to participate.

In addition to the enrollment application, CMS published a 14-page document which outlines some of the Demonstration Program’s details. The document, which may have been released in anticipation of the upcoming Open Door Forums, includes four requirements that participating providers must follow: (1) Not file an appeal; (2) Not bill the beneficiary more than any Part A inpatient deductible already collected from the beneficiary; (3) Refund to the beneficiary the difference between any Part A deductible/coinsurance and Part B deductible/coinsurance; (4) Not bill observation services (G0378). The requirement that participants do not file an appeal still evokes questions, specifically whether the bar on filing an appeal prevents participants from appealing a medical necessity determination for inpatient services if they volunteer for the demonstration program.

For more information on the AB Demonstration Program or assistance with determining a hospital’s eligibility to participate in the program, please contact a Wachler & Associates attorney at 248-544-0888.

Published on: November 22, 2011

OIG Releases Report Highlighting ZPIC Oversight Issues

by Wachler & Associates, P.C.

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:

Published on: November 22, 2011

CMS to Release Comparative Billing Reports for Nerve Conduction Studies

by Wachler & Associates, P.C.

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.

Published on: November 21, 2011

CMS Announces Special Open Door Forum for Part A to Part B Rebilling Demonstration Program

by Wachler & Associates, P.C.

On Friday, November 18, CMS released a Q&A about the Part A to Part B Rebilling Demonstration Program. Although the Q&A does not answer many of the questions that arose from the Fact Sheet released on November 15, it does give insight into when those answers could be provided. CMS will hold two special Open Door Forums, one on November 30, 2011 and another on December 8, 2011. Both will be conducted at 2pm EST.

In addition, the Q&A announced that enrollment for the Demonstration Program will begin on December 12, 2011 at 2pm EST and some hospital facilities will be ineligible to participate in the program. For instance, facilities that receive periodic interim payments from CMS and do not participate in Medicare, will not be able to participate. In addition, psychiatric hospitals paid under the Inpatient Psychiatric Facilities Prospective Payment System, Inpatient Rehabilitation Facilities, Long-Term Care Hospitals, cancer hospitals, Critical Access Hospitals, and children’s hospitals all are ineligible to participate.

Finally, the Q&A provided an email for additional questions regarding the Demonstration Program to be sent to CMS. This email is ABRebillingDemo@cms.hhs.gov.

Published on: November 17, 2011

HHS’ OCR Set to Begin HIPAA Audit Pilot Program

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) is required by the American Recovery and Reinvestment Act of 2009 to provide periodic audits to ensure covered entities are in compliance with the privacy and security rules of HIPAA. To satisfy the requirements under the Act, HHS’ Office for Civil Rights (OCR) initiated its pilot program to perform HIPAA audits of covered entities. OCR has awarded KPMG with the contract to conduct the audits. The audits under the pilot program are scheduled to begin this month and continue until the end of 2012. HHS believes that these audits “present a new opportunity to examine mechanisms for compliance, identify best practices and discover risks and vulnerabilities that may not have come to light through OCR’s ongoing complaint investigations and compliance reviews”

The first round of the pilot program will consist of 20 audits targeting covered entities of various sizes and specialties throughout the healthcare industry. The selected entities will be notified, in writing, by OCR that they have been selected for an audit. The written notification will explain the audit process and will also ask the entity to provide OCR with documentation of their privacy and security compliance efforts. The time allotted for the selected entities to satisfy the initial documentation request is 10 days. After OCR receives the requested documentation, entities will be notified that an onsite visit will be conducted. The onsite visit will likely take place between 30 and 90 days after the entity has been notified of the visit. Upon completion of the visit, the entity will be provided with a draft final report. Once received, the entity is given the opportunity to provide the auditor with written comments. After reviewing the entity’s comments, the auditor will submit a final audit report to OCR.

OCR plans to use the findings in the audit report to determine what types of technical assistance should be developed, and which types of corrective actions are most effective. By the end of 2012, OCR plans to conduct as many as 150 audits. The pilot program will be used by OCR to determine the most successful methods for conducting HIPAA audits in the future.

Published on: November 17, 2011

CMS Announces RAC Pre-Payment Review Demonstration Program

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services announced a Recovery Audit Contractor (“RAC”) Pre-Payment Review Demonstration Program on November 15, 2011. The announcement of this program is a major shift in the RAC program because previously RACs were only allowed to conduct post-payment reviews of providers. Although the program is a demonstration and will only affect providers in 11 states, it confirms that CMS policy has shifted from the “pay and chase” model to a more aggressive, proactive and preventative model.

The Pre-Payment Review Demonstration Program (“Demonstration Program”) will be conducted for three years from January 1, 2012 to December 31, 2014. It will be implemented in 11 states. Seven of the states were chosen because of “a high level of fraudulent claims and providers” (MI, FL, CA, TX, NY, LA and IL) and the remaining four states were chosen because of high claims volumes of short inpatient hospital stays (PA, OH, NC and MO). The Demonstration Program will build on the RACs’ existing infrastructure to review claims and will initially focus on inpatient hospital claims, specifically short stays. CMS will choose more specific claim types of reviews as the Demonstration Program continues and RACs will review the claims selected.

The Pre-Payment Review RAC Demonstration Program reflects the ongoing difficulty to balance Medicare program integrity and the detrimental effect a pre-payment review has on Medicare providers. Pre-payment review is an aggressive method for contractors to audit providers and proactively prevent improper payments. However, pre-payment review threatens providers because it significantly impacts cash flow and there are no substantive criteria or procedures in place to determine placement on or removal from pre-payment review. With the harsh impacts of pre-payment review on providers, we also have concerns about RAC auditors being financially incentivized through a contingency fee to place providers on pre-payment review.

Published on: November 16, 2011

CMS Announces Part A to Part B Rebilling Demonstration Program

by Wachler & Associates, P.C.

Yesterday, the Centers for Medicare & Medicaid Services (“CMS”) announced the Part A to Part B Rebilling Demonstration Program (“Demonstration Program”). The Demonstration Program will allow a select number of hospitals to receive 90 percent reimbursement of the Part B payment for Part A inpatient short stay claims that are denied on the basis that an inpatient claim was not medically necessary and reasonable because the services were not provided in the appropriate care setting.

Wachler & Associates, P.C. has been instrumental in the effort to obtain Part B reimbursement for hospitals with Part A claims denied as not medically necessary and reasonable. Along with the American Hospital Association (“AHA”) and other industry leaders, Wachler & Associates has met with CMS three times since 2009 to realize Part B reimbursement for hospitals. From the CMS announcement on November 15, it appears that the persistence has resulted in a Demonstration Program that achieves some, but not all, of the industry’s goals.

The Demonstration Program will be conducted for 3 years, beginning on January 1, 2012 and ending on December 31, 2014. Up to 380 hospitals will be chosen to participate in the Demonstration Program and will be accepted on a first-come, first-served basis. In addition, there will be a maximum amount for small, medium and large facilities.

Published on: November 10, 2011

Recent RAC Activity

by Wachler & Associates, P.C.

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)

Published on: November 8, 2011

Physician Payment Sunshine Act Rules Delayed

by Wachler & Associates, P.C.

HHS this week announced that it would again delay publishing rules implementing the Physician Payments Sunshine Act (“PPSA”), established in last year’s Patient Protection and Affordable Care Act (“PPACA” or “health reform”). PPSA requires drug and medical device manufacturers to publicly report gifts and payments made to physicians and teaching hospitals. While the law requires public disclosure on an annual basis, it does not limit financial relationships between drug and device manufacturers and physicians.

The penalties for non-compliance with this law are fines up to $10,000 per occurrence, not to exceed $150,000 per year, and for each knowing failure to report, the fines are increased to up to $100,000 per occurrence and $1 million aggregate per year.

Beginning January 1, 2012 all drug and device manufacturers must record all gifts and payments to physicians and teaching hospitals. Manufactures must report this information to HHS by March 31, 2013, for HHS publication beginning September 30, 2013.