Not Another RAC Not Another RAC Presentation!Presentation!

Presented By:Presented By:

Virginia Gleason, JD/MPA, CHC, CPHRMVirginia Gleason, JD/MPA, CHC, CPHRM

MHIMA 2011 Spring MeetingMHIMA 2011 Spring Meeting

Then and NowThen and Now

• • ""They believe we are bounty hunters," N. Lee White, whoThey believe we are bounty hunters," N. Lee White, who

heads U.S operations for PRG-Shultz International, said ofheads U.S operations for PRG-Shultz International, said of

California lawmakers and the California Hospital Association.California lawmakers and the California Hospital Association.

"I don't appreciate the characterization.” November 12, 2007"I don't appreciate the characterization.” November 12, 2007

• • According to the Associated Press, on March 9th 2010,According to the Associated Press, on March 9th 2010,

President Barack Obama said he'll bring in high-tech “bountyPresident Barack Obama said he'll bring in high-tech “bounty

hunters” to help root out health care fraud using data mininghunters” to help root out health care fraud using data mining

and computer programs that looks for fraudulent claims andand computer programs that looks for fraudulent claims and

erroneous data.erroneous data.

RACs Are HereRACs Are Here

RAC Program implemented nationwideRAC Program implemented nationwide Automated and Complex Audits underwayAutomated and Complex Audits underway Started with focus on DRG ValidationStarted with focus on DRG Validation Coding Validations are underwayCoding Validations are underway Medical Necessity Reviews underway Medical Necessity Reviews underway Health Care Reform expands RACs to Health Care Reform expands RACs to

Medicaid and Medicare Parts C and DMedicaid and Medicare Parts C and D

The Alphabet SoupThe Alphabet Soup

Medicare Administrative Contractor (MAC)Medicare Administrative Contractor (MAC) Recovery Audit Contractor (RAC)Recovery Audit Contractor (RAC) Medicare Secondary Payor RAC (MSP RAC)Medicare Secondary Payor RAC (MSP RAC) RAC Validation ContractorRAC Validation Contractor Medicaid Integrity Program Contractor (MIP, MIC)Medicaid Integrity Program Contractor (MIP, MIC) Program Safeguard Contractor (PSC)Program Safeguard Contractor (PSC) Zone Program Integrity Contractor (ZPIC)Zone Program Integrity Contractor (ZPIC) Qualified Independent Contractor (QIC)Qualified Independent Contractor (QIC) Quality Improvement Organization (QIO)Quality Improvement Organization (QIO) Medicaid Payment Error Rate Measurement Medicaid Payment Error Rate Measurement

Contractor (PERM)Contractor (PERM) Medicare Drug Integrity Contractor (MEDIC)Medicare Drug Integrity Contractor (MEDIC) Medicare Demos (DME, HHA)Medicare Demos (DME, HHA)

What does this mean to What does this mean to Providers?Providers?

They perform data mining.They perform data mining.

"This is a new era of using data in the health care"This is a new era of using data in the health care

marketplace," says Larry Vernaglia, an attorneymarketplace," says Larry Vernaglia, an attorney

with Foley & Lardner LLP. "CMS has always hadwith Foley & Lardner LLP. "CMS has always had

access to tons of data, but now they have newaccess to tons of data, but now they have new

ways to slice and exploit this data both internallyways to slice and exploit this data both internally

and through Medicare contractors."and through Medicare contractors."

What is AHA What is AHA RACRACTrac?Trac?

Web-based surveyWeb-based survey to collect RAC experience data to collect RAC experience data from hospitals from hospitals

Unit of analysis is the hospitalUnit of analysis is the hospital General Medical/Surgical Hospitals including Critical Access HospitalsGeneral Medical/Surgical Hospitals including Critical Access Hospitals LTCHLTCH PsychPsych Rehab Rehab

Quarterly data collectionQuarterly data collection Automated DenialsAutomated Denials Complex DenialsComplex Denials Underpayments Underpayments Appeals Appeals Administrative burdenAdministrative burden

Collect both quarterly snapshot and cumulative Collect both quarterly snapshot and cumulative information on RAC experience to date information on RAC experience to date

Review the Review the RACRACTrac Trac Survey Questions and Survey Questions and

Definitions at Definitions at www.aha.org/rac under under

RACRACTrac!Trac!

Results of AHA RACTrac SurveyResults of AHA RACTrac Survey

44thth Quarter, 2010 Quarter, 2010

Let’s look at some dataLet’s look at some data

http://www.aha.org/aha/content/2011/pdf/Q4ractracresults.pdfhttp://www.aha.org/aha/content/2011/pdf/Q4ractracresults.pdf

The Big PictureThe Big Picture

79 percent of the 1850 hospitals surveyed have had 79 percent of the 1850 hospitals surveyed have had RAC activity through the fourth quarter of 2010 RAC activity through the fourth quarter of 2010

Of this 79 percent, nearly four out of five reported Of this 79 percent, nearly four out of five reported complex RAC reviews which involve the review of complex RAC reviews which involve the review of medical records and other documentation to identify medical records and other documentation to identify improper payments improper payments

Majority (90 percent) of denials that hospitals are Majority (90 percent) of denials that hospitals are receiving from RACs are for complex reviews, totaling receiving from RACs are for complex reviews, totaling over $78 million dollars over $78 million dollars

Hospitals are appealing only 23 percent of the denied Hospitals are appealing only 23 percent of the denied claimsclaims

Of the claims that have completed the appeals Of the claims that have completed the appeals process, 85 percent were overturned in favor of the process, 85 percent were overturned in favor of the providerprovider

Where does that leave us?Where does that leave us?

RAC to accept records electronicallyRAC to accept records electronically CMS refines guidance regarding inpatient CMS refines guidance regarding inpatient

admissionsadmissions Increase in records request limit for certain Increase in records request limit for certain

hospitalshospitals CMS announces RAC Medical Records Request CMS announces RAC Medical Records Request

Limits for PhysiciansLimits for Physicians Medicaid RAC Program UpdateMedicaid RAC Program Update

RAC Accepting Electronic RAC Accepting Electronic Records?Records?

Announced February, 2011Announced February, 2011 Electronic Submission of Medical Documentation Electronic Submission of Medical Documentation

(“esMD”) pilot. (“esMD”) pilot. http://www.cms.gov/ESMD/ http://www.cms.gov/ESMD/

Two Phases:Two Phases: Phase 1 – anticipated July 2011Phase 1 – anticipated July 2011

RACs will send requests via paper lettersRACs will send requests via paper letters Providers will have the option to electronically submit Providers will have the option to electronically submit

documentationdocumentation RAC Regions A, B and D “anticipate” participating in RAC Regions A, B and D “anticipate” participating in

Phase 1Phase 1 Phase 2 – Beginning 2012Phase 2 – Beginning 2012

RACs will electronically send documentation requestsRACs will electronically send documentation requests RAC Region C will participate by Phase 2RAC Region C will participate by Phase 2

What Constitutes an What Constitutes an Inpatient?Inpatient?

During the demonstration project, 85% of During the demonstration project, 85% of claims denied were inpatient hospital claims.claims denied were inpatient hospital claims. Routinely denied for lack of medical necessity to Routinely denied for lack of medical necessity to

support inpatient level of caresupport inpatient level of care

““High Risk” medical necessity denials – MLN High Risk” medical necessity denials – MLN Matters revised November, 2010Matters revised November, 2010

Guidance on Hospital Inpatient Admissions – Guidance on Hospital Inpatient Admissions – MLN Matters January, 2011MLN Matters January, 2011

CMS Podcast – March 9, 2011CMS Podcast – March 9, 2011http://www.cms.gov/MLNProducts/MLM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=3&sortOrder=ascending&itemID=CMS1245720&intNumPerPage=10%20

Interqual vs. Milliman vs. Interqual vs. Milliman vs. CMS Regulations and CMS Regulations and

ManualsManuals Guidance on Hospital Inpatient Admissions – Guidance on Hospital Inpatient Admissions –

MLN Matters January, 2011MLN Matters January, 2011 Acknowledged “commerically available Acknowledged “commerically available

screening tools”screening tools” Supported RACs ability to use these toolsSupported RACs ability to use these tools

Cited: Medicare Program Integrity Manual (CMS Pub. 100-08), Cited: Medicare Program Integrity Manual (CMS Pub. 100-08),

Chapter 6, Section 6.5.1 Chapter 6, Section 6.5.1

When reviewing claims, a medical reviewer When reviewing claims, a medical reviewer “shall use a screening tool” as part of their “shall use a screening tool” as part of their reviewreview CMS “screening tool” is its published criteriaCMS “screening tool” is its published criteria Medicare Benefit Policy Manual (CMS Pub. 100-02), Chapter 1, Section Medicare Benefit Policy Manual (CMS Pub. 100-02), Chapter 1, Section

10 10

Contractors “may” use proprietary criteria when Contractors “may” use proprietary criteria when reviewing medical necessity of inpatient admissions.reviewing medical necessity of inpatient admissions.

The Decision Seems Easy…The Decision Seems Easy…

Presents

Patient

Admit as Inpatient

Treat as Outpatient

But It’s Much More But It’s Much More ComplicatedComplicated

Admit as Inpatient

Office Follow-

up

Outpatient Procedure

Observation

Diagnostic Testing

SNF Follow-

up

Specialty Clinic

Follow-up

Treat as Outpatient

Patient Status OptionsPatient Status Options

Admit as Inpatient

Outpatient Observation

Outpatient Procedure

and/or Followup

Presents

Patient

Medicare’s Definition of Medicare’s Definition of InpatientInpatient

Medicare benefit policy manual chapter 1 sec. Medicare benefit policy manual chapter 1 sec. 1010

An inpatient is a person who has been admitted to a hospital for An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital bed occupancy for purposes of receiving inpatient hospital services. Generally, a patient is considered an inpatient if services. Generally, a patient is considered an inpatient if formallyformally admitted as inpatient with the expectation that he or she admitted as inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight.”another hospital and not actually use a hospital bed overnight.”

“ “However, the decision to admit a patient is a complex medical However, the decision to admit a patient is a complex medical judgment which can be made only after the physician has judgment which can be made only after the physician has considered a number of factors, including the patient's medical considered a number of factors, including the patient's medical history and current medical needs, the types of facilities available history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital's by-laws and to inpatients and to outpatients, the hospital's by-laws and admissions policies, and the relative appropriateness of treatment admissions policies, and the relative appropriateness of treatment in each setting. Factors to be considered when making the in each setting. Factors to be considered when making the decision to admit include such things as:decision to admit include such things as:

– – The severity of the signs and symptoms exhibited by the patient;The severity of the signs and symptoms exhibited by the patient; – – The The medical predictability of something adverse medical predictability of something adverse

happening to the patient…”happening to the patient…”16

Medicare’s Definition of Medicare’s Definition of InpatientInpatient

Admitted to a hospital Admitted to a hospital Bed occupancy for purposes of receiving inpatient hospital Bed occupancy for purposes of receiving inpatient hospital

services. services. FormallyFormally admitted as inpatient admitted as inpatient Expectation Expectation that he or she will remain at least overnight … that he or she will remain at least overnight …

even though it later develops that the patient can be even though it later develops that the patient can be discharged or transferred to another hospital and not actually discharged or transferred to another hospital and not actually use a hospital bed overnightuse a hospital bed overnight

Admit decision is a “complex medical judgment”Admit decision is a “complex medical judgment” patient's medical history patient's medical history current medical needscurrent medical needs the types of facilities available to inpatients and to outpatientsthe types of facilities available to inpatients and to outpatients hospital's by-laws and admissions policieshospital's by-laws and admissions policies

Key Factors:Key Factors:

– – The severity of the signs and symptoms exhibited by the The severity of the signs and symptoms exhibited by the patient;patient;

– – The The medical predictability of something adverse medical predictability of something adverse happening to the patient…”happening to the patient…” 17

Transmittal 47Transmittal 47

Interpretive Guidelines for Interpretive Guidelines for Hospitals June 5, 2009 Hospitals June 5, 2009 www.cms.hhs.gov/transmittals/downloads/R47SOMA.pdfwww.cms.hhs.gov/transmittals/downloads/R47SOMA.pdf

““All entries in the medical All entries in the medical record must be completerecord must be complete. . Defined by: sufficient info to identify the pt; support the Defined by: sufficient info to identify the pt; support the dx/condition; justify the care, treatment, and services; dx/condition; justify the care, treatment, and services; document the course and results of care, treatment and document the course and results of care, treatment and services and promote continuity of care among services and promote continuity of care among providers.providers.

““All entries must be All entries must be dated, timed and authenticateddated, timed and authenticated, , in written or electronic format, by the person responsible in written or electronic format, by the person responsible for providing or evaluating the service providedfor providing or evaluating the service provided.”.”

““All entries must be All entries must be legiblelegible. Orders, progress notes, nursing . Orders, progress notes, nursing notes, or other entries ….. notes, or other entries …..

18

More Transmittal 47More Transmittal 47

Timing establishes when an Timing establishes when an order was given, when an order was given, when an activity happened or when an activity happened or when an activity is to take place. Timing activity is to take place. Timing and dating establishes a baseline and dating establishes a baseline for future actions or assessments for future actions or assessments and establishes a timeline of and establishes a timeline of events. (71 FR 68687)events. (71 FR 68687)

19

Increased Record LimitIncreased Record Limit

CMS increase in records request limit for CMS increase in records request limit for certain hospitalscertain hospitals

Hospitals with more than $100 Million in Hospitals with more than $100 Million in annual Medicare reimbursementannual Medicare reimbursement

500 records allowed per 45-day period500 records allowed per 45-day period

AHA estimates this will impact 87 hospitalsAHA estimates this will impact 87 hospitals

Physicians Are a TargetPhysicians Are a Target

CMS announces RAC Medical Records Request CMS announces RAC Medical Records Request Limits for PhysiciansLimits for Physicians

February 14, 2011February 14, 2011 Based on number of physician / non-physician Based on number of physician / non-physician

practitioners reported under the Tax ID Numberpractitioners reported under the Tax ID Number CMS reserves the “right” to exceed the capsCMS reserves the “right” to exceed the caps

Group / Office Size Max Number of Records Every 45 Days

50 or more 50 records

25 – 49 40 records

6 – 24 25 records

Less than 5 10 records

Medicaid RACsMedicaid RACs Section 6411 of the Patient Protection and Affordable Care Act (“Affordable Care Act”) requires each State Section 6411 of the Patient Protection and Affordable Care Act (“Affordable Care Act”) requires each State

to establish a Medicaid RAC program similar to the existing Medicare RAC programto establish a Medicaid RAC program similar to the existing Medicare RAC program New implementation deadline will be announced in the publication of the Final Rule anticipated “later” in New implementation deadline will be announced in the publication of the Final Rule anticipated “later” in

2011.2011.

CMS Medicaid RAC Website http://www.cms.gov/medicaidracs/CMS Medicaid RAC Website http://www.cms.gov/medicaidracs/

“Out of consideration for State operational issues and to ensure States comply with the provisions of the Final Rule, we have determined that States will not be required to implement their RAC programs by the proposed implementation date of April 1, 2011.”http://www.cms.gov/MedicaidIntegrityProgram/Downloads/6411racdelay.pdf

More CMS More CMS CommunicationsCommunications

Medicare Quarterly Provider Medicare Quarterly Provider Compliance NewsletterCompliance Newsletter ““Help” providers understand audit findings of Help” providers understand audit findings of

Medicare contractorsMedicare contractors MAC, RAC, PSCs, ZPICs etcMAC, RAC, PSCs, ZPICs etc

Newsletter describes problems, the Newsletter describes problems, the issues that may occur and steps CMS issues that may occur and steps CMS has taken.has taken.

Important resourceImportant resource http://www.cms.gov/MLNProducts/downloads/http://www.cms.gov/MLNProducts/downloads/

MedQtrlyComp_Newsletter_ICN905712.pdfMedQtrlyComp_Newsletter_ICN905712.pdf

February 2011February 2011

February 2011 Newsletter HighlightsFebruary 2011 Newsletter Highlights Coding of tracheostomy procedures Coding of “new patients” Coding of chemotherapy administration and non-chemotherapy injections

and infusions Coding of excisional debridement E/M billing during a global surgery period DME provided to hospice beneficiaries Billing of Budensonide

Funding Healthcare Funding Healthcare ReformReform

The Reform of HealthcareThe Reform of Healthcare To be funded through “fraud, waste and To be funded through “fraud, waste and

abuse” detection and recoveryabuse” detection and recovery What does Medicare’s audit strategies What does Medicare’s audit strategies

have to do with “fraud, waste and have to do with “fraud, waste and abuse”?abuse”? Wasteful spending = paying for care Wasteful spending = paying for care

that is not supported by the that is not supported by the documentation in the record and in documentation in the record and in compliance with Medicare laws, rules compliance with Medicare laws, rules and regulations.and regulations.

Questions and AnswersQuestions and Answers

Contact Information:Contact Information:

Virginia Gleason, JD/MPA, CHC, LPNVirginia Gleason, JD/MPA, CHC, LPN

Senior ConsultantSenior Consultant

Quorum Health ResourcesQuorum Health Resources

Virginia.gleason@QHRconsulting.com