racs, zpics, oig, cert: are you safe?
DESCRIPTION
RACs, ZPICs, OIG, CERT: Are You Safe?. JoNell Moore, Principal [email protected] 701.239.8690 Eide Bailly LLP. Agenda. RAC activity Items under review by RACs Impact of ZPIC, OIG, CERT reviews Items to consider for successful appeals Miscellaneous issues Q & A. RAC Race. - PowerPoint PPT PresentationTRANSCRIPT
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Agenda
• RAC activity• Items under review by RACs• Impact of ZPIC, OIG, CERT reviews• Items to consider for successful appeals• Miscellaneous issues• Q & A
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RAC Race
• 1,631 PPS hospitals have reported RAC activity through March 2013
• 81% of hospitals less than 200 beds reported RAC activity
• 96% of hospitals with more than 200 beds reported RAC activity
• Record requests have increased by 47% since 4th quarter 2012
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RAC Race
• From RAC website:• Question: Will Critical Access Hospitals (CAH) be
subject to Recovery Audit Contractors (RAC) review? If so, how will the funds be recouped?
• Answer: Yes, Critical Access Hospitals are subject to RAC review. Any adjustments will be reflected on the final PS&R. If the cost report has already had a final settlement, the amount will be demanded and then offset against future claims if not paid in full by the provider.
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RAC Race
• 278 CAHs nationwide have reported RAC activity (automated reviews)
For both PPS and CAH:• Nearly 2/3 of records reviewed did not include an
overpayment• Nearly 3/4 of hospitals with RAC activity reported
receiving at least one underpayment determination
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RAC Race
• 62% of medical necessity denials were for 1 day stays where “the care was provided in the wrong setting, not because the care was medically unnecessary”
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RAC Race
• Automated review – computer determines• Complex review – human review of a medical
record• Semi-automated review – 1) use the computer
to detect errors; 2) notification letter sent to provider but allows 45 days to submit records
• Individual claim determination – complex review performed by RAC in the absence of a written Medicare policy, article, or coding statement
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RAC Race
• 40% of RAC denials were appealed with 72% success rate in overturning the appeal
• However, nearly 3/4 of all appealed claims are still sitting in the appeal process
• Most of these appeals are for short stay medically unnecessary denials
• Value of appealed claims is $1.1 billion
• $169.4 million overturned denials
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RAC Race
• Average dollar value of an automated denial was $576
• Average dollar value of a complex denial was $5,704
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RAC Race
RAC’s focusing on:•CAHs & PPS
• Short stays• Telemetry documentation• Medical necessity for joint replacements• Medical necessity for CTs• Drug units• Lumbar facet blockades• Incorrect place of service• Global surgery periods• Billing the correct units of drugs
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RAC Race
Skilled Nursing Facilities• RAC’s reviewing:
• “unbundling errors”---specifically the billing of therapy
• high utilization of “ultra-high therapy” RUGs• three-day qualifying stays• SNF consolidation requirements• physician certifications• billing of CT scans • ambulance transports during SNF stays
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RAC Race
RAC’s Reviewing:• Stents and Syncope & Collapse (top MS-
DRG’s denied in terms of dollar impact)
• 59% of hospitals with underpayment determinations due to incorrect MS-DRG’s
• 20% due to incorrect discharge disposition
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RAC Race
• RAC’s to review first Home Health claims• Automated review of partial episode payments
(PEP’s)• New issues proposed for RAC reviews include:
• Low utilization payment adjustments (LUPA’s)• High rates of therapy utilization episodes• High number of subsequent episodes
(recertifications)
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RAC Race
• For smaller facilities they are allowed to request up to 35 records per 45 days
• For larger facilities they are allowed to request 400 records per 45 days
• CMS reserves the right to exceed the limits at their discretion
• For Skilled Nursing Facilities - a “record request” is for the full EPISODE of care - all medical records for all claims for services from admission to discharge
• Starting to see physician payment denied if hospital payment is denied (Trailblazer, Highmark, First Coast)
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RAC Race
• Congressmen Sam Graves (R-MO) and Adam Schiff (D-CA) re-introduced the Medicare Audit Improvement Act
• Written to rectify problems identified with RACs
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ZPICs
• Zone Program Integrity Contractor• Program Safeguard Contractors• Medicare Integrity Program Contractors
• Identify potential fraud pre- or post- pay• Medicare Parts A, B, C, D – currently, a focus
on physicians, DME suppliers, physical therapy, Long Term Care
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ZPICs
• Divided into 7 zones • Review claims, conduct data analysis• Patient phone interviews, questionnaires• Unannounced visits• Physician licensure validation• Review of cost reports• Target providers with prior infractions
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ZPICs
• Audits can also be triggered by:• Complaints reported to the OIG, hotline or by fraud
alerts• Referrals from MACs, other contractors or law
enforcement
• Review a small number of claims and extrapolate the amount of overpayment
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ZPICs
• No time limit on how far they can go back to audit
• Often go back multiple years• Often considered the “most dangerous weapon
in the Medicare arsenal” by the legal community
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CMS Proposed UPIC’s
• Proposed new integrity contractor• Folds ZPIC’s and MAC’s into UPIC’s (Unified
Program Integrity Contractor)• Both Medicaid and Medicare integrity activities• RAC’s will remain in place
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OIG Activity
• Office of Inspector General• Established 1976 • Protects the integrity of the Department of Health &
Human Services• Protects the health and welfare of beneficiaries• Largest inspector general’s office in the Federal
Government with 1,700 employees
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OIG Activity
• Oversight of Medicare and Medicaid• Along with oversight of:
• Centers for Disease Control and Prevention• National Institutes of Health• Food and Drug Administration
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OIG Activity
• 6 components• Immediate Office of Inspector General• Office of Audit Services• Office of Evaluation and Inspections• Office of Management and Policy• Office of Investigations• Office of Counsel to the Inspector General
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OIG Workplan
• Released each fall (October typically)• Swingbed analysis comparing reimbursement in a
CAH versus a SNF• Review of hospices (82% of hospice claims for
beneficiaries in nursing facilities did not meet coverage requirements)
• Review of physician E&M codes, global surgery periods, modifiers
• Review of sleep studies
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CERT Reviews
• Comprehensive Error Rate Testing Contractors• Randomly selects claims submitted for payment each
day (post pay only)• Requests medical records to identify billing patterns• Categorizes errors as: insufficient documentation,
medical necessity, incorrect coding, or other
Continued…
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CERT Reviews
• Improves system edits• Updates coverage policies and manuals• Conducts provider education
•Used by CMS and the RACs to determine what areas to review
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Cases
• Harmon County Healthcare Authority (HCHA) and Dr. Abraham, Hollis, OK• Submitted claims that violated Anti-kickback Statute
and Stark due to a contract with Dr. Abraham that provided “excess and unreasonable payment” that included”
• Free rent for office space• Free billing and staff personnel• Reimbursement of uncollected accounts receivable• Duplicative per encounter payments for ER services• Improper payment of locum tenens physician services
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Cases
• HCHA agreed to pay $550,000• Dr. Abraham agreed to pay $1,000,000
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Cases
• Coon Rapids, MN man charged with stealing prosthetics and medical supplies from Minnesota Medical Center Fairview
• Stole the prosthetics and supplies to sell on eBay
• “Used false pretenses” to persuade patients to give him prosthetics they were not using
• Not sentenced yet
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Cases
• Last 4 months the OIG has released 11 audit reports regarding hospital billing patterns for outpatient drugs • $12 million in overpayments• Related to incorrect application and reporting of
billing unit multipliers (billable units)• Herceptin, Remicade, Lupron
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Cases
• Yennier Capote Gonzalez convicted of 5 counts of fraud, 2 counts of aggravated identity theft, and 1 count of money laundering
• Used the address of a Tennessee barn to bill claims after stealing the identify of a physician
• Restitution of $19,296 and 5 ½ years in prison
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Cases
• Optometrist Jeffrey Sponseller, Augusta, GA billed $800,000 in fraudulent claims
• Claimed he saw 177 patients for 45 minutes each in a day
• Five years in prison, $250,000 fine, and restitution of the $800,000
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Cases
• Illinois physician, Mahmoud Yassin, altered a progress note to show an in-office exam that had not taken place after an FBI agent subpoenaed patient records
• 10 years in prison, fine of $250,000 and a “special assessment” of $100
• 3 years of ‘supervised release’ after prison
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Cases
• Fairfax Nursing Center, Fairfax, VA (SNF)• Violated False Claims Act by submitting claims for
non-reimbursable therapy (excessive, not necessary, duplicative, performed without clear goals)
• Two therapists were whistleblowers• SNF agreed to pay $700,000 to resolve• Whistleblowers received $122,500 collectively
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Cases
• GlaxoSmithKline paid more than $3 billion for unlawful promotion of drugs, failure to report safety data, and false pricing
• Merck Sharp & Dohme paid $950 million for unlawful promotion and marketing of the pain killer Vioxx
• McKesson Corporation paid $190 million for inflation of pricing information resulting in Medicaid overpaying for these drugs
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Appeals
• Administrative Law Judge (ALJ) level of appeal (3rd
level) is the best level at which to receive a favorable decision
• Very unlikely to get a favorable decision at the Redetermination level or the Reconsideration level
• Overturn rate at the ALJ level may be due to: a) it operates independently from CMS; b) there is an independent review of each case; c) the provider has the opportunity to present live testimony
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Appeals
• A provider should request from the ALJ a copy of the “Medical Panel Review Form” that the QIC created during the reconsideration denial
• This document will contain the rationale of the denial by the QIC as well as their credentials
• Recent development: Medical Directors are allowed to participate in the ALJ hearings although cannot ‘act as a physician and render clinical opinion’
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Appeals
• ALJ has the discretion to render a favorable decision “on the record” without a hearing
• Therefore, very important to have a complete record, solid medical and regulatory arguments documented
• If there is a hearing, the provider submits a hearing memorandum (all the documentation, arguments, rationale, medical reasoning, regulations, etc.)
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Appeals
• RAC Informational Letters----informs you they intend to pursue an overpayment or underpayment
• Need to research and determine if you agree• Gather information to defend the claim• Wait to receive a RAC demand letter from your
FI/MAC
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Appeals
• New study by OIG stated that ALJs are overturning too many appeals which resulted in a crackdown by CMS
• ALJs are now being rotated• Statistical arguments by the providers are very
effective• Appeals must be signed or thrown out
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Appeals
• Effective argument includes “how could we have known”
• Need to document impact of chronic illnesses to justify therapy or for an inpatient admission
• Appeals for Medicare Advantage claims go to different department in CMS
• ALJs have the discretion to stray from the NCDs, LCDs for “good cause”
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Appeals
David Glaser of Fredikson & Bryon states:•Be careful with verbiage in appeal letters•Refer to “reviews” versus “audits”•Refer to “failing to support the code billed” versus “overcoded”•Do not use the words “abuse” or “fraud”•Refer to “refund” versus “overpayment” •Refer to specific education in corrective action plan without making promises
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Survival
• Top tips for surviving RAC reviews:• Clean up your electronic and hybrid records before
submitting to the RACs• Review your standing orders to ensure compliance• Number the pages, highlight pertinent areas when
submitting for review• Understand the internal cost for managing the RAC
process – depending on health system size, may range from $10,000 to $100,000 plus
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Survival
• Education, Education, Education (include physicians)
• Monitor what is happening in the ‘RAC attack’, websites, articles
• Conduct some internal reviews on billing, coding, documentation, payments, ‘paperwork’ requirements
• Review your compliance plan, policies, procedures
• Learn about the appeals process
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Survival
• Watch for association updates• Engage some external reviews of the coding
and documentation• Review denial process and subsequent claim
submission• Review documentation for both nursing and
practitioners individualized documentation
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Survival
• Review of policy and adherence to policy for appropriate patient status
• Track denials and review causes• Review the work of the Utilization Review
staff/case management/discharge planners--software, criteria
• Is Emergency Dept criteria for selecting E&Ms being followed
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Survival
• Review forms and completion of the forms (admissions, HIPAA, therapy certifications)
• Review discharge status• Perform self reviews of billing, coding,
documentation• Monitor PEPPER reports • Review physician documentation to support
medical necessity• Review physician orders
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Survival
• Review criteria for 1-day stays• Review criteria for observation stays• Review Medicaid denials• Treat weekend days just like any other• Avoid copying and pasting templates• Begin discharge planning ASAP• Use the word “because” in documentation
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Miscellaneous Issues
• Supervision Ruling• Therapy Caps• Cyber Insurance• RAC Insurance• Senior Medicare Patrol
Questions?
