Medicare Claims Review “Audits”What you need to know …

President’s Goals for 2012

• Reduce overall payment errors by Reduce overall payment errors by $50 billion$50 billion

• Cut fee-for-service error rate in halfCut fee-for-service error rate in half• Recover $2 billion in improper Recover $2 billion in improper

payments payments

Rapidly Changing Environment

New Medicare audit New Medicare audit programs, including programs, including prepaymentprepayment audits, audits, seek reduction of seek reduction of overall payment overall payment error rateserror rates

Webinar goals

• How did we get here?How did we get here?

• How to document medical necessity How to document medical necessity to avoid audits !to avoid audits !

• AAOS/AAHKS advocacy activities …AAOS/AAHKS advocacy activities …

Audit Webinar Panel

• David Halsey, MDDavid Halsey, MD• AAOS Board of Specialty SocietiesAAOS Board of Specialty Societies• AAOS Coverage Determinations Project TeamAAOS Coverage Determinations Project Team• AAHKS Health Policy ChairAAHKS Health Policy Chair

• Brian Parsley, MDBrian Parsley, MD• AAHKS 2AAHKS 2ndnd VP VP

• David Templeman, MDDavid Templeman, MD• AAOS Coverage Determination Project Team, ChairAAOS Coverage Determination Project Team, Chair• AAOS Board of Specialty SocietiesAAOS Board of Specialty Societies• AAOS Board of DirectorsAAOS Board of Directors

Audit Webinar Staff

Matt TwettenMatt Twetten AAOS Sr. Manager, Regulatory, AAOS Sr. Manager, Regulatory,

Quality & Medical AffairsQuality & Medical Affairs

Ashlen StrongAshlen Strong AAOS Manager, State AAOS Manager, State

Government RelationsGovernment Relations

Medicare Auditing Environment

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Medicare Administrative

Contractors (MACs)

ZPICsZone Program Integrity

Contractors

Qualified Independent

Contractors (QICs)

Enterprise Data

Centers (EDCs)

Medicare Secondary Payer

Recovery Contractor (MSPRC)

Beneficiary Contact

Center (BCC)

Administrative Qualified

Independent Contractors (Ad QICs)

Healthcare Integrated General Ledger

Accounting System (HIGLAS)

Recovery Audit Contractors

Comprehensive Error Rate Testing Contractors (CERT)

“Alphabet soup”

MACMAC

CERT CERT

LCD LCD

Medicare Administrative Contractor (MAC)

MACs are private companies that serve as MACs are private companies that serve as contractors performing contractors performing claims claims administrationadministration

MACs MACs do not do not work on contingency basiswork on contingency basis

Medicare Auditing Environment: Operations

Receive and process Medicare A and B Receive and process Medicare A and B claimsclaimso Computer systemsComputer systemso EDIEDIo Front-end claim reviewFront-end claim review o PricingPricingo Enrollment Enrollment

Customer Service Call CenterCustomer Service Call Center Appeals and RedeterminationsAppeals and Redeterminations

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Medicare Auditing Environment: Integrity Program

Data analysisData analysis

Medical reviewMedical review

Local coverage policy Local coverage policy

Provider educationProvider education

CMS definition:Medical Necessity

Safe and effectiveSafe and effective

Meets, but does not exceed the patient’s Meets, but does not exceed the patient’s medical needmedical need

Performed in accordance with acceptedPerformed in accordance with accepted standards of practicestandards of practice

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Comprehensive Error Rate Testing (CERT)

• Designed to Designed to monitor performance of monitor performance of MACsMACs and to ensure claims administered and to ensure claims administered properlyproperly

• Audits result in Audits result in annual reports annual reports of rate of of rate of improper payments made improper payments made to hospitalsto hospitals

• High payment error rates High payment error rates Part A claim Part A claim review (hospital) review (hospital) Part B claim review Part B claim review (physician)(physician)

What is a CERT error?

• No documentationNo documentation

• Insufficient documentationInsufficient documentation

• Medically unnecessary serviceMedically unnecessary service

IN THE HOSPITAL CHART !!IN THE HOSPITAL CHART !!

How did we get here?

MAC-Generated Prepayment Audits

• MACs authorized by law to reduce MACs authorized by law to reduce payment error ratespayment error rates

• 3 MACs initiated audits targeting 3 MACs initiated audits targeting procedures with high error ratesprocedures with high error rates

• High error rates shown for TKA/THA High error rates shown for TKA/THA (DRG 470)(DRG 470)

MAC-Generated Prepayment Audits

• Begins with prepayment audit of Begins with prepayment audit of hospital hospital claim (Part A)claim (Part A)

• If problematic, then hospital payment is If problematic, then hospital payment is denieddenied

• Contractor looks to Contractor looks to physicianphysician claim (Part claim (Part B) related to problematic hospital claimB) related to problematic hospital claim

• If problematic, then money already paid If problematic, then money already paid to physician is to physician is recoupedrecouped

MLN Matters SE1236: Published by CMS in September, MLN Matters SE1236: Published by CMS in September, 2012 2012

Described by CMS as “an educational guide to improve Described by CMS as “an educational guide to improve compliance with documentation requirements for compliance with documentation requirements for major joint replacement surgery.”major joint replacement surgery.”

To avoid denials, records should contain enough detailed To avoid denials, records should contain enough detailed information to support the medical necessity of the information to support the medical necessity of the procedure.procedure.

““Painful DJD unresponsive to conservative treatment” Painful DJD unresponsive to conservative treatment” is is not enough.not enough.

Documenting Medical Necessity for Documenting Medical Necessity for Major Joint Replacement (Hip and Knee)Major Joint Replacement (Hip and Knee)Documenting Medical Necessity for Documenting Medical Necessity for Major Joint Replacement (Hip and Knee)Major Joint Replacement (Hip and Knee)

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Description of painDescription of painADL limitationsADL limitationsSafetySafetyContraindications to non-surgical treatmentsContraindications to non-surgical treatmentsFailed conservative treatments, e.g.,Failed conservative treatments, e.g.,

Meds (e.g., NSAIDs)Meds (e.g., NSAIDs) Weight lossWeight loss Physical TherapyPhysical Therapy Intra-articular injectionsIntra-articular injections Braces, orthotics or assistive devices.Braces, orthotics or assistive devices.

HistoryHistoryHistoryHistory

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DeformityDeformity

Range of MotionRange of Motion

CrepitusCrepitus

EffusionsEffusions

TendernessTenderness

Gait descriptionGait description

Physical ExaminationPhysical ExaminationPhysical ExaminationPhysical Examination

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Results of applicable Results of applicable

investigationsinvestigations Plain filmsPlain films MRIMRI

InvestigationsInvestigationsInvestigationsInvestigations

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Reasons for deviating from a stepped-Reasons for deviating from a stepped-care approachcare approach Intolerant of NSAIDsIntolerant of NSAIDs Refused injectionsRefused injections Joint damage too severe to respond Joint damage too severe to respond

(e.g., AVN femoral head)(e.g., AVN femoral head)

Must be clearly documentedMust be clearly documented

Clinical JudgmentClinical JudgmentClinical JudgmentClinical Judgment

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Simple game …

Documentation is the key Documentation is the key … in your office … in your office note, op note and discharge summarynote, op note and discharge summary

How do you reach the How do you reach the decision for surgerydecision for surgery??

Remember your Remember your chief resident or fellowship chief resident or fellowship presentationspresentations to your attending staff !! to your attending staff !!

Reliable Resources

www.paymentaccuracy.gov

www.aaos.org/medicare101

www.ahhks.org/