What’s New with RAC 2 & Other Govt Fun?Audit findings, Updates, and Operational

Ideas

Instructor: Day Egusquiza, Pres

AR Systems, Inc

RAC 2011 1

To ensure billed services are reflected in the documentation in the record

To ensure billed services are in the medically correct setting for the pt’s condition

To ensure billed service reflect the ‘rules’ regarding billing for the specific service

To ensure documentation can support all billed services according to the payer rules.

2RAC 2011

Common issues:◦Dept staff not understanding the charge

capture must match physician order and documentation.

◦Lack of ongoing coder education◦Lack of ongoing dept head ed◦Lack of physician understanding◦Creating a culture of audit – time to be

pro-active

RAC 2011 3

Commitment to Reduce the Error President Obama recently announced the

government’s commitment to reduce the error rate by 50% (using a baseline of 12.4%) by 2012 (2008 3.6% $10.3 Billion )

– 9.5% for November 2010 Report – 8.5% for November 2011 Report – 6.2% for November 2012 Report Thru MAC, CERT, ZPIC, RAC, MIC, OIG, HEAT auditing… Funding PPACA by eliminating fraud, waste and

abuse…

4RAC 2011

Entity Type of claims

How selected

Volume of claims

Purpose of review

QIO Inpt hospital All claims where hospital submits an adj claim for a higher DRG.Expedited coverage review requested by bene

Very small To prevent improper payment thru upcoding.To resolve disputes between bene and hospital

CERT All Randomly Small To measure improper payments

MAC All Targeted Depends on # of claims with improper payments

To prevent future improper payments

RAC All Targeted Depends on the # of claims with improper payments

To detect and correct past improper payments

PSCZPIC All Targeted Depends on the # of potential fraud claims

To identify potential fraud

OIG All Targeted Depends on the # of potential fraud claims

To identify FraudRAC 2011 5

Updates Impacting the Auditing of Claims

6RAC 2011

• Focusing on curbing fraud, waste and abuse in the Medicare program.

• Time period for filing Medicare FFS claims in Section 6404 of the PPACA amended the timely filing requirements to reduce the maximum time period for submission of all Medicare FFS claims to one calendar year after the date of service.

• Under the new law, claims for services furnished on or after Jan 1, 2010 must be filed within 1 calendar year after date of service. In addition, mandates that claims for services furnished before Jan 1, 2010 must be filed no later than Dec 31, 2010.

• The following rules apply to claims with dates of service prior to Jan 1, 2010: claims with dates of service before Oct 1, 2009 must follow the pre-PPACA timely filing rules. Claims with dates of service Oct 1-Dec 31, 2009 must be submitted by Dec 31, 2010.

• Impact on denied claims with rebill potential with the RAC and MIC?

• MESSAGE: GET IT RIGHT THE FIRST TIME.

RAC 2011 7

Requires report and repayment of overpayments.

“Overpayment’ = funds a person receives or retains to which person is not entitled after reconciliation.

Providers and suppliers must: Report and return overpayments to HHS, the state or contractor by the later of:◦ 60 days after the date the overpayment was identified or◦ The date the corresponding cost report is due.Provide a written explanation of the reason for

overpayment (PPACA 6402)Retaining overpayments after the deadline for reporting is

subject to False Claims Act and Civil Monetary Penalties law.

8RAC 2011

SE1024 “RAC: High Risk Vulnerabilities- No documentation or insufficient documentation submitted” (July 2010)

Two areas of high risk were identified from the demonstration project:

No reply to request/timely submission (1 additional attempt must be made prior to denial)

Incomplete or insufficient documentation to support billable services

RAC 2011 9

SE1024/July     No documentation or insufficient documentation submitted

SE1027/Sept    Medical necessity vulnerabilities for inpt hospitals

 SE1028/Sept    DRG coding vulnerabilities for inpt hospitals

SE1036/Dec Physician RAC vulnerabilities SE1037 /Jan 11 Guidance on Hospital Inpt

Admission (referencing CMS guidelines, does not mandate Interqual/Milliman, RAC judgment allowed)

SE1104/Mar 11 Correct Coding POS/Physicians Special Edition #SE1121/June 11 RAC DRG

Vulnerabilities –coding w/o D/C summary

10RAC 2011

CMS refers hospitals to Medicare Program Integrity Manual and reiterates that CMS requires contractor staff to use a screening tool as part of their medical review process of inpt hospital claims. While there are several commercially available screening tools…such as Milliman, Interqual and other PROPRIETARY systems… CMS does not endorse any particular brand.

CMS repeats that contractors are not required to automatically pay a claim even if screening indicates the admission was appropriate and conversely,

contractors are not automatically to deny claims that do not meet screening tool guidelines

“In all cases, in addition to the screening instruments, the reviewer shall apply his/her own clinical judgment to make a medical review determination based on the documentation in the record.”

The guidance restates that the Medicare Benefit Policy Manual, Chpt 1, instructions that a physician is responsible for deciding whether the pt should be admitted as inpt.

RAC 2011 11

2-11 CMS announced a revised threshold for hospitals with $100 million in Medicare payments. The cap was raised to 500 per 45 day period, up from the 300 cap. AHA expressed concern over the 87 hospitals that will be impacted by this change.

It is happening. 3-17-11 Region A/DCS hospital had 498 records requested.

RAC 2011 12

All RACs have begun doing (4-11) Using the automated review/data mining to

identify billing abnormalities with a high potential for improper payment.

This is followed by a request for records/complex to audit to determine if an error did occur in charge capture or claim’s submission.

EX) Tx hospital: Cataract removal can occur once per eye for the same date of service. 66984/removal with insertion of lens AND 67010-59 removal with mechanical vitrectomy) created the edit. 59 overrode edits = 2 payments.

RAC 2011 13

Connolly, 5-11 Remicade billed

w/chemo drug adm CPT codes

Letter says: “Data analysis showed an aberrant billing pattern inconsistent with a policy. “

Unknown limit, not subject to complex limits

Connolly, 5-11 Letter for at least 100

claims. Infliximab –is a

monoclonal antibody agent. Drugs “may’ be administered using the chemo therapy CPTs.

Reply with records within 45 days, same penalities

RAC 2011 14

As of 2-14-11, modified changes Limits based on physician or non PP’s billing Tax

ID # as well as the first three positions of the ZIP code where that physician/non PP is physically located.

EX: Group ABC has TIN 12345 and two physical locations in ZIP code 4567 and 4568. This group qualifies as a single entry for additional documentation requests/ADR.

Ex: Group XYZ has TIN 12345 and two physical locations in ZIP 4556 and 5566. This group would qualify as two unique entities for ADR

RAC 2011 15

ADR limits will be based on the # of individual rendering physician/non-PP reported under each TIN/ZIP combination in the previous calendar year. Reserves the right to exceed the cap if indicated.

RAC 2011 16

Group/Office Size Maximum # of requests per /each 45 days

50 or more 50 records

25-49 40 records

6-24 25 records

Less than 5 10 records

Place of Service – outpt hospital vs office (SE1104 Med Learn)

Separate E&M leveling within the surgical/CPT bundle period New vs Established Level of service conflicts with the hospital – doc /inpt;

hospital/OBS Based on CERT audit results/ West coast, the following was

targeted for audit: (2011)◦ 99214◦ 99223 (Initial day)◦ 99233 (Subsequent hospital visit)◦ Cert audits can trigger requests for records if provider history

shows an abnormal volume/risk for targeted CPT codes Office E&M leveling is not a focus of the RAC audits..yet

RAC 2011 17

Region Overpaymts($ in millions)

Underpaymt

Total 3rd Q Corrections(Based on actual collections

FY to DateCorrectionsData thru June 30, 2011)

Region ADCS

$40.4 $5.0 $45.4 $98.2

Region BCGI

$33.9 $9.8 $43.7 $118.5

Region CConnolly

$46.9 $7.4 $54.3 $133.3

Region DHDI

$112.2 $33.7 $145.9 $242.5

TOTALS $233.4 $55.9 $289.3 $592.5

RAC 2011 18

Region A: Renal and Urinary Tract Disorders (Not medically appropriate for inpt status)

Region B: Extensive Operating room procedures unrelated to principal dx (DRG validation – primary and 2nd dx errors)

Region C: Durable Medical Equipment/Prosthetics/DMEPOS (Automated review – no separate payment when inpt.)

Region D: Minor surgery and other treatment billed as an inpt (Not medically appropriate for an inpt status.)

RAC 2011 19

After many confusing/delayed RAC recovery and demand letters, CMS has made the following change.

“Effective Jan 3, 2012, CMS is transferring the responsibility for issuing demand letters to providers from its Recovery Auditors to its claims processing contractors. This change was made to avoid any delays in demand letter issuance. As a result, when a Recovery Auditor finds that improper payments have been made to you, they will submit claim adjustments to your Medicare contractor. Your Medicare contractor will then establish receivables and issue automated demand letters for any RAC identified overpayment. The Medicare contactor will follow the same process as is used to recover other overpayments. The Medicare contractor will then be responsible for fielding any administrative concerns you may have with timelines, appeals, etc.”

RAC 2011 20

…can be the same material as the RACs. Ex. Az hospital had a ST MUE error. They

received automated demand letters from HDI; however, they also received ‘first notice’ from WPS on the same issue. Per WPS, the site has 30 days from receipt of the WPS letter without interest to repay or be recouped on the 41st day with interest.

No published items; no limits on requests, same appeal rights.

WA state = all 1 & 2 day stays for CAH. (3-11)

21RAC 2011

DRG Description 2009 Error Rate

2010 Error Rate

313 Chest pain 55.16% 76.71%

552 Medical back pain w/o MCC

70.92% 71.25%

392 Gastro & misc disorders w/o MCC

49.08% 41.93%

641 Nutrition misc metabolic disorder w/o MCC

49.27% 48.43%

227 Cardiac defib w/o cath lab w/o MCC

20.65% 45.43%

22RAC 2011

“Louisville, KY based Norton Healthcare agreed to pay the federal govt $782,842 in March to settle allegations that it overbilled Medicare for wound care, infusion and cancer radiation services by adding a separate E&M charge that should have been included in the basic rate. The alleged overbilling, which occurred between Jan 2005-Feb 2010 involved outpt care. The settlement is twice the amt Norton allegedly overbilled.”

ISSUE: Transmittal A-00-40, A-01-81 indicate that there is inherent nursing in all CPT codes. Therefore, the facility must ‘earn an E&M when done with a procedure.’ Unlikely events, other medical conditions being treated, new pt=examples.

RAC 2011 23

2-1-11 CMS Bulletin RAC for Medicaid postponed

“Out of consideration for State operational issues….we have determined that States will not be required to implement RAC by April , 2011. We anticipate the final rule will be issued later this year.

HDI is KS ‘s RAC for Medicaid.

2-16-11 CMS proposes Medicaid payment reductions for provider-preventable conditions

Follow Medicare’s hospital acquired conditions

Allow for additional conditions for reduction, state specific

RAC 2011 24

Medicaid integrity contractors – CMS has established a 5 year look back period with 30 days to reply to requests for record (10-1-10)

RAC for Medicaid – state Medicaid units are to identify a RAC auditor by Dec 2010, implemented by April 2011. (on hold)

State Medicaid – state fraud units are auditing

Concern – avoid duplication! 3 unique groups.

25RAC 2011

N432 = means 2 different things on the RAs.◦ Pending recoupment, should coincide with the

Demand letter◦ Actual recoupment, 41 days after the demand

letter which should include interest from the 31-41st days

◦ Remark codes from transmittal 659 clarify N469 = CERT and MAC denials (Per MAC/NGS

training on 3-11) Also used when postponing recoupment/Transmittal 141.

MAC accepted the payment (within 30 days) and did the recoupment on the 41st day too! (GA)

26RAC 2011

Transmittal 659/CR 6870. “Reporting of recoupment for overpayment on the remittance advice/RA”◦ Effective date 7-1-10◦ CMS acknowledges that the current HIPAA 835 RA does not properly at both

the claim and provider level to meet the requirements of Section 935 of MMA 2003.

◦ MM6870 describes the manner in which CMS will now record RAC overpayments.

◦ Step 1: Records the reversal and correction to report the new payment and negate the original payment at the claim. Actual recoupment of funds does not occur at this step.

◦ Step 2: Reports the actual recoupment at the provider level of the 835. There is no entry at the claim level.

◦ More detail will be added to the remittance: N432 –both pending and actual recoupment; N469 –accts impacted by appeal filed within 30 days/recoupment held/interest begins (Transmittal 141) Step 2: PLB reason code (FB ) forward balance. Demand letter is also sent at this time. Step 2: PLB reason code (WO) overpayment recovery. http://cms.gov/transmittals/downloads/R6590TN.pdf

RAC 2011 27

Transmittal 47, Interpretive Guidelines for Hospitals June 5, 2009 www.cms.hhs.gov/transmittals/downloads/R47SOMA.pdf

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

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

“All entries must be legible. Orders, progress notes, nursing notes, or other entries ….. (Also CMS covers in SE1024 MedLearn release)

28RAC 2011

Provide a legible full signature (a readable first name and last name)

Provide a legible first initial and last name

Write an illegible signature over a typed or printed name.

Write an illegible signature on letterhead with information indicating the identity of the signer. (EX: a prescription has an illegible signature but the letterhead of the prescription lists three physician names.

Circle the name of the physician who wrote the prescription.

Use an illegible signature accompanied by a signature log or attestation statement.

Write initials over a typed or printed name.

Write initials not over a typed or printed name, but accompanied by a signature log or attestation statement.

Neglect to sign a portion of a handwritten note, but other entries on the same page in the same handwriting are signed.

RAC 2011 29

Heart Failure (MS DRG 291, 292, 293)Physician documentation must include the ‘type ‘ of CHF in order to capture this diagnosis as either being a CC or a MCC condition.

Excisional Debridement (MS DRG 463, 464, 465)

Medical record documentation must support the code assignment of 86.22 and must meet the definition of ‘excisional debridement.” …involves the surgical removal or cutting away as opposed to mechanical removal, i.e. brushing, scrubbing and/or washing.

30RAC 2011

CERT audits have continued to identify weakness in the use of Protocols.

EX) Lab urine test ordered but culture done as 2nd test due to protocol. (Noridian/Nov 2009)

EX) Without contrast but 2nd one done with contrast based on protocols.

Ensure the order is either updated or the initial order clearly states ‘with protocol as necessary.”

YEAH – how about including the protocols that are referenced in the record when submitting for audit?

31RAC 2011

Hybrid records present extreme challenges in identifying the skilled care/handoffs of intensity of service between the care areas.

EMRs tend to present the patient’s history in a ‘cookie cutter’ concept without pt specific issues.

Treatment/outcomes/results of ordered services are often omitted from the clinical/nursing record.

32RAC 2011

Living with

RAC

33RAC 2011

1850 reporting, 1400 had activity

RAC denied $86M, up from $42 in 3rd Q

Of the $86M, 23% were appealed, 77% was not appealed

Of the 23% that was appealed, 85% were overturned in favor of the providers.

Medically unnecessary 57% of denials, 33% were short stays

Ave automated : $399

Ave complex : $5281 with a growing amt in medically unnecessary

Will expand the tracking of administrative burden

RAC 2011 34

Released by CMS in 3-11 as part of FFS update on its RAC website

Represents $313M in overpayments; $52 M in underpayments.

Represents 50% more than was reported in the demo RACs. (Note: Demo RAC = 4 states, slow start up, limited focus)

These numbers do not reflect any appeal activity.

RAC 2011 35

#ID 10007   4/13/2010 updated on 11/2/2010     "Can the RAC do a medical necessity review on a claim that

they originally reviewed for DRG validation?" A: Beginning  Nov 1, 2010, if the RAC has already requested

documentation and issued a review results letter to the provider for a DRG validation, the RAC will be allowed to re-review the claim again for medical necessity.  However, if both issues are approved (DRG validation and medical necessity) prior to the request of the additional documentation, the RAC may also conduct both reviews simultaneously.  Each additional documentation request (ADR) is subject to the same review timeframes and counts toward the provider's ADR limit.

 

36RAC 2011

#ID10239  11/2/10 "Can a RAC review a claim more than

once?" A: The RAC can review a claim either

through automated or complex review more than once.  The exact claim line cannot be reviewed more than once but the RAC may review different claim lines in separate reviews. In addition, the RAC may conduct a DRG validation review and then separately request documentation to complete a medical necessity review.

37RAC 2011

Nov 11, 2010's reply from Scott Wakefield, CMS Project Officer for CGI/ Region B:

    "The 60 day timeframe for a RAC to respond to medical records sent by a provider is a contractual requirement for the RAC National Program, therefore, it is possible that non-compliance by the RAC may result in assessment of a lower score in their annual performance appraisal.  This cumulative results of this appraisal impacts CMS's determination of whether to extend the incumbent RAC's contract for an additional year.  I recommend you contact the RAC directly and inquire about follow up with the remaining records. I have copied certain CGI federal staff on this email and will request that they follow up with me."

No direct penalty, no auto closing/approved of case. 

38RAC 2011

Charged to the provider if demand amt is not paid within 30 days of the letter. 31-41st days of interest, auto recouped on 41st day.

Charged to the provider if an appeal is filed within 30 days (normal is 120) to stop the recoupment.

Paid to the provider if the money was recouped on the 41st day, appeal filed and overturned.

No interest is paid if the money is given back voluntarily, even if over turned on appeal.

Interest is each 30 days, not compounded. 11%

39RAC 2011

Document your waste. Recouped for charging 60 U when only 50 was documented. Used single use vial, but no wastage was documented. (pharmacy? Nursing? Eff 6-10)

Do not use default CPT codes. 99218/initial day OBS has a MUE of 1. However, some hospitals are using for OBS hrs in FL 44. If not required to use G code, leave blank.

40RAC 2011

MAC/NGS has an LCD (L25820) with document expectations for drugs and biologicals.

“The medical record must include the following information:◦ The name of the drug or biological administered◦ The routing of the administration◦ The dosage (e.g. mgs, mcgs, cc’s or ICUs)◦ The duration of the administration◦ When a portion of the drug or biological is discarded, the medical record

must clearly document the amt administered and the amount wasted or discarded.”

Policies on how this will be done – as other payers may not acknowledge the billing of wastage.

41RAC 2011

19 inpts ADRs in 6 week period All 1 day or very short stay on inpt

surgeriesAcute appy- day

CVA/TIA-1 day

Hypokalemia/Acute Renal failure – 2 days

Total shoulder – 1 day

HypotensivePt/readmit

GI bleed-2 days

Below knee amputation-1 day

Breast Reduction-1 day

Carbon monoxide-1

Pneumonia-2 days

Seizures/PNA-expired-1 day

Hemo cath placement-1

Total knee replacements – 2 days

Obstructivehepatisis-transferred

Non-union malleolus (surgery) -1 day

Panyctopenia – 1 day (?comfort care)

42RAC 2011

Closely watch the RAC’s portal. Historical information disappears! Monitor receipt of records/completeness of records.

Discussion period has no mandated response time from the RAC. Do not wait to start appeal activity while you are waiting for the RAC to reply/defend their position.

12 cents per page for copying if mailed –except critical access. (CD w/23 records, $4.95) PLUS Look at the CD closely before submittingNEW: Not paying for nursing note pages..with DRG or at all (5-11)

43RAC 2011

Medically unlikely edits have resulted in charge capture errors. Many MUEs are unknown to the providers.

Examples:◦ 4 ST/92507 treated as per 15 instead of per

encounter. Only 1 is allowed◦ 4 EKG/93005 MUE is 3 in a given 24 hr outpt

day. Would have to appeal that the 4th one was medically necessary to the uniqueness of the pt’s needs.

44RAC 2011

No auto crossovers/Medigap for pt portion. All pt portions are due to the pt or their supplement.

MAC can override the DRG that the RAC assigned. (Connolly/Cahaba) Which one is appealed?

Time gap between when the complex letter was mailed by the RAC and the receipt. Date of the letter begins the 45 day count with 10 mail days.

Big delays between RESULTS and DEMAND letters

45RAC 2011

Underpayments are occurring too. EX) IA hospital billed transfer DRG – pt was

to have had HH or SNF care post inpt. Facility was paid a per diem vs DRG.RAC identified the underpayment as there were no claims from HH or SNF for the post care. Repaid full DRG for 7 accounts, $13,000.

Better practice idea: D/C planning verifies in the 3 day hold that the pt had above services. Revised discharge disposition.

46RAC 2011

More Underpayments: MAC had mis-paid the multiple CPTs on an outpt APC claim. (71 accts/WA)

Rescinded after records sent! All 4 RACs are now doing this with no explanation for why! Huge cost to providers

CGI is auditing Oxaliplatin/unit errors PLUS documentation of wastage (with or w/o JW)

50 bed Ark hospital lost 1 ‘no inpt order’ in a Connolly audit. “ Per CMS publication 100-02, Chpt 1, section 10 and CMS pub 100-4 Chpt 3, section 10 & 40.2.2, this claim cannot be billed as an inpt hospital stay because documentation does not contain the necessary physician’s order. This resulted in a retraction of $14,592. “ Appealing

47RAC 2011

Why us? There does not appear to be any patterns to the requests. They are one of 3 hospitals in the area. Only one to be hit with audits.

Max # of records per 45 days: 48. Have had 143 in last 12 mon High DRG: 69/Transient Ischemia, 312/syncope & collapse,

101/seizures w/o MCC Complex:

◦ Sept, 2010 – 1st medically necessary audits. 48 had both DRG and MN. All 48 had 0-2 day LOS

◦ Appears Connolly is targeting the 2nd diagnosis that make up the CC or MCC◦ RAC Target DRGs: 981/982/983 Extensive & non-extensive OR procedures

unrelated to principle Dx. Also 330/sm & lg bowel procedures237/major cardiovascular w/MCC; 242/permanent cardiac pacemaker implant w/MCC.

4 highest MDCs: Respiratory, circulatory, digestive and Musculoskeletal & connective

48RAC 2011

Automated◦ MUEs – lab/80053 comprehensive metabolic profile &

83880 BNP◦ CPT 62311/lumbar injection. MUE only looks for the

correct modifier w/no considerations for distinct locations.

QUIRKY:◦ MAC assigns the overpayment amt for the demand letter. 1

demand letter where the demand was more than submitted.◦ On at least 2 claims, the MAC approved a RAC denial and gave

the RAC permission to send out a demand letter. The RAC failed to do so. The MAC assumed we had not responded to a letter so they went ahead and recouped the payment.

◦ NUTS!

49RAC 2011

If a provider performs a self audit, how should they notify the RAC?

A: If a provider does a self audit and identifies improper payment, the provider should report the improper payments to the appropriate MAC, FI or carrier. The exact information necessary for the self referral can be determined by contacting your Medicare claims processing contractor.

There are two types of self audits: 1) Commonly called a voluntary refund and is claim based. If the required claim information is included along with the amt of the improper payment, the claim will be adjusted. The RAC will be aware of the adjustment, but the refund does not preclude future review. 2) Involves extrapolation. If extrapolation is used, the claim processing contractor will review the case file to determine if it is acceptable. The MAC can accept or deny the extrapolation for the issue identified by the provider. If the claim MAC accepts the extrapolation, these claims will be excluded from the RAC review.

RAC 2011 50

Initial claim submission of Part B on a Part A claim is allowed. No Obs, no surgery, no anesthesia, no recovery. Ancillary only.

Rebilling of a denied inpt claim within the timely rebilling requirements is a Part B on a Part A claim. Bill type 12x. Ancillary only.

HOPE: AHA continues to champion trying to get CMS to allow bill type 131/regular outpt for a rebilled denied claim.

51RAC 2011

These revenue codes/department charges are billable on a Part B claim of a denied Part A service. 12x (Benefit Policy Manual, Chpt 6, section 10)

27x/supplies; 30x/lab;32x/imaging; 331 & 335/chemo; 333/Radiation therapy; 34x/nuc med; 35x/CT; 379/anesthesia; 401/dx mammo; 402/ultrasound;403/screening mammo; 404/PET; 42x/PT; 43x/OT; 44x/ST; 46x/pulmonary; 48x/cardio, cath lab, cardiac stress test; 540-45/ambulance; 61x/MRI;634/Epo under 10,000 U; 635/Epo over 10,000 W;636/pharmacy;730-1/EKG & ECG tele;732/tele;739/EKG cardio lab;74x/EEG;77x/Vaccination adm;790/litho;920/other dx services; 921/vascular lab; 922/EMG;923/pap smear;929/invitro fertilization; 985/non-invasive physician. NO Surgery!

RAC 2011 52

Can I rebill or must I file an appeal? Call with CMS/HDI/WPS J5, a MAC 7-8-10 If RAC has identified a MUE due to a charge

capture error and there was an accurate CPT that should have been used, an appeal & corrected UB must be filed to get the money for the corrected CPT.

If the facility did data mining and found that the same issue had occurred on other claims, a corrected claim should be submitted.

Discuss with the MAC prior to either to ensure it is done correctly.

53RAC 2011

If an inpt/outpt is denied and the facility determines a misunderstanding of a Medicare regulation occurred, to get the correct CPT code/corrected amt, the facility must appeal. Additionally, the RAC team should immediately discuss the need to continue to data mine similar issues.◦ Internal cost as manual rebill.◦ Only ancillary services can be rebilled◦ Pt had refund for inpt deductable; now will owe outpt coinsurance.◦ Perception to public◦ Real C A S H◦ Track and trend any recoupments with rebills separate from recoupments

with 100% absorbed losses◦ Timeline for rebills must be followed

RAC 2011 54

• If the inpt is denied, the pt (and Medigap supplements) will be informed they don’t owe the inpt deductible. Refund to pt and/or supplement or auto recoupment.

• If the facility determines they would like to do a corrected claim submission once a decision is made not to appeal – the pt will receive notice they owe a new outpt deductible/coinsurance.

• If the outpt claim is denied payment, the pt will be informed they don’t owe the outpt portion.

• HINT: Develop scripts for the PFS staff to explain.• NOTE –all activity/recoupments can go back 3 years

beginning with 10-1-07 PD dates rolling forward.

RAC 2011 55

Dear pt As part of ABC hospital’s commitment to compliance, we

are continuously auditing to ensure accuracy and adherence to the Medicare regulations.

On (date), Medicare and ABC hospital had a dispute regarding your (type of service). Medicare has determined to take back the payment and therefore, we will be refunding your payment of $ (or indicate if the supplemental insurance will be refunded.)

If you have any questions, please call our Medicare specialist, Susan Jones, at 1 -800-happy hospital. We apologize for any confusion this may have caused.

Thank you for allowing ABC hospital to serve your health care needs.

RAC 2011 56

57RAC 2011

New issue: Inpt Admissions without a Physician’s Inpt Admit Order.

Description: Admissions to the inpt setting require a physician’s order in order to qualify and be paid as an inpt stay.

Inpt hospital 10-01-07 open Reference info: CMS pub 100-02, Chpt 1,

section 10 and pub 100-4 Chpt 4, section 10 and 40.2.2

RAC 2011 58

Addition documentation letter received read:

“Good Cause for Issue: Chronic Obstructive Pulmonary Disease DRG 88 MS-DRG 190, 191 (Medical Necessity Review and MS-DRG Validation). During the course of the DRG validation, the RAC will also review the record for inpt admission order.

The documentation is being requested because COPD is one of CMS’s top volume DRGs. Therefore, DRG 88, currently MS-DRG 190 and 191 was selected to determine if the principle and secondary diagnoses were assigned inappropriately resulting in overpayments to the hospitals. An analysis of your billing data indicates that a potential aberrant billing practice may exist for these MS-DRGs.”

59RAC 2011

Dec 9, 2010 letter from Region A/DCS outlining rationale for why they were requesting medical records for numerous DRGs. They also gave a great outline of inpt vs obs.

“Inpt care rather than OBS is required only if the pt’s medical condition, safety or health would be significantly and directly threatened if care was provided in a less intensive setting. A patient must demonstrate signs and/or symptoms severe enough to warrant the need for medical care and must receive services of such intensity that they can be furnished safely and effectively only on an inpt basis.”

When auditing for ‘what does severity and intensity look like- look for the above issues to be addressed in the physicain admit note/order and the nursing bedside documentation.

60RAC 2011

1st MN request, 90 records, DX listed below for the 6 MN new issues

Had DRG, MN and inpt accuracy listed on allCOPD Cardiac

ArrhythmiaExcisional debridement

Heart failure and shock

Renal failure Extensive OR procedure unrelated to principal Dx

Disease/disorder of the respiratory system

Kidney & UTI

Espohagitis/gastronenteritis

Aneurysm repair Coronary bypass w/PTCA

Tracheostomy

Perc Cardiovasc procedures w/stent

GI Disorders Other circulatory system dx

Other vascular dx

Syncope and collapse

Red blood cell disorders

Atheroscleroris with MCC

Nervous system disorders

61RAC 2011

Rural Critical Access hospital. Ave Census 2 HDI “short stay change notification”. “After

our review, it is our determination that the claims listed should have been outpt OBS vs inpt.” 8-18-10

Direct admit from a clinic. HDI findings: “Pt chief complaint was hypoxia. The pt presented to

ED for acute bronchitis, severe COPD – admitted as an inpt. Past medical hx and the pre-existing conditions are stable. The medical records did not document pre-existing medical conditions or extenuating circumstances that make the acute inpt admission medically necessary. The med record document services that could be provided as an outpt service.”

62RAC 2011

“RAC will review documentation to validate the medical necessity of short stay, uncomplicated admissions of MS DRG (XXX). Medicare only pays for inpatient hospital services that are medically necessary for the setting billed and that are coded correctly. Medical documentation will be reviewed to determine that the services were medically necessary and were billed correctly.”“RACs will also review documentation for DRG Validation requiring that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary’s medical record. Reviewers will validate for MS-DRG, principal diagnosis, secondary diagnoses and procedures affecting or potential affecting the DRG.” (Aug 2010)

63RAC 2011

CGI has started complex requests for OUTPT services.  So far all outpt have been automated -most MUE problems. (Sept 2010)

Basic Radiation Dosimetry Calculation - Outpt- CPT 77300 Comparison will be made in regards to units of Dosimetry

calculations reported in the medical record versus those units of dosimetry calculation reported on the claim, to establish whether a difference inn reported units compared to those documented resulted in an overpayment for CPT 77300.

HDI has issued “minor surgery and other treatment billed as an inpt stay” Claims billed for minor surgery or other treatment are identified for medical review based on risk of inpt improper payment.” (Oct 2010)

Involve surgery scheduling/surgery director and UR to review all cases.

64RAC 2011

HDI and CGI have started sending their ‘New Issue Validation’ sample letters.

Statement of Work allows sampling of up to 10 claims (in addition the 45 day limit) to prove a vulnerability with a new issue. Results will be issued on the findings with data submitted to the New Issue Board/CMS.

HOT: Share what was requested so potential new items are know; preventive work.

EX) Readmission within 30 days for AMS.

65RAC 2011

June, 2010 Connolly posted new issues relative to drug /J code accuracy. Tying the J code and the units/multiplier on the UB.

Paclitaxel Cetuximab Paclitaxel protein –bound particles Tenectplase Pamidronate disodium Adenosine Zoledronic acid (reclast) 1 mg

66RAC 2011

A)  When validating all information prior to submission, be sure to specifically address any issues outlined in the letter. This applies to appeal or discussion periods or any communication.  Simply stating that our patient was very sick -although accurate - the audit is auditing billed services (as reflected on the UB and 1500 forms) are accurately reflected in the medical record. 

B)  Do you have a clinical documentation improvement program?  EXPAND It beyond typical physician documentation to clarify DRG issues to SEVERITY of illness/docs and INTENSITY of services /nursing.   Grow the documentation to support the level of care billed..   

C) Track and trend your own vulnerabilities thru the validation prior to submission process. The opportunities are endless for our records to be improved -including revising EMR documentation. Patterns of risk are excellent tools for ongoing education , process changes, form development and overall cohesive pt care.  Charting by exception is the worst type of charting to show intensity of care.  Tell the pt's story and outline the interventions, results, handoffs, etc that occurred.

67RAC 2011

D) ALWAYS print off the EMR (even if you have an release of information vendor, especially if you have a hydrid record ) and closely audit the handoffs between the departments - closely looking for intensity of care, clarity in interventions (what we did about results, tele strips) and how the pt's condition continued to warrant an acute level of care.  

E) Major focus on nursing's canned documentation with EMRs..    Number the pages; create a cover letter that CLEARLY shows the doc's order for inpt with WHY he wanted them in an acute care setting with a defined course of treatment plus highlights of test results, intensity of the condition, etc.   The lack of this type of validation can easily result in a fragmented record with very difficult severity and intensity of care identified.   (HOT SPOT:  ER = paper; floor nursing = electronic. How many admits come thru the ER?  Huge area of audit and focused documentation improvement.)

68RAC 2011

69

From Cmdr Casey, RN, CMS

Summary: Review & Collection Process

If no findingsSTOP

Complex Review

• Provider has 45 + 10 calendar days to respond

• Providers may request an extension

• Claim is denied if no response

• RAC has 60 calendar days from receipt of medical record to send the Review Results Letter

Automated Review

RAC makes a claim

determination

2

Day 1RAC issues Demand Letter to

Provider (includes $$$ and appeal

rights)INTEREST

BEGINS TO ACCRUE

AFTER 30 DAYS FROM DETERMINA

TION

4

Day 41

Carrier/FI/MAC

recoups by offset

5

New Complex Review Issue

Posted to RAC’s

Website

6

RAC issues Medical Record

Request Letter

to provider

7

Provider submits medical records

8 RAC clinician reviews medical records;

makes a claim determination

9RAC issues Review Results

Letter to provider (does NOT include $$$ or appeal rights)

10

Carrier/ FI/MAC issues

Remittance Advice (RA)

to provider

N432: “Adjustment based on a Recovery

Audit”

3

New Automated

Review Issue

Posted to RAC’s

website

1

• Recoupment will NOT occur if:

provider has paid in full; or

provider filed an appeal BY

day 30

The Collection Process

RAC 2011 69

Which option should I use?

Discussion Period

Rebuttal Redetermination

The discussion period offers the opportunity to provide additional information to the RAC to indicate why recoupment should be initiated. It also offers the RAC opportunity to explain the rationale for the overpayment decision.

A rebuttal should be submitted only on rare occasions of extreme financial hardship. The rebuttal process allows the provider the opportunity to provide a statement and accompanying evidence indicating why the overpayment would cause extreme financial hardship.A rebuttal is not intended to review supporting medical documentation. A rebuttal should not duplicate the redetermination process.

A redetermination is the first level of appeal. A provider may request a redetermination when they are dissatisfied with the overpayment decision. A redetermination must be submitted within 30 days to prevent offset on the 41st day.

RAC 2011 70

Discussion period

Rebuttal Redetermination

Who do I Contract

RAC Contractor/MAC Contractor/MAC

Timeframe Day 1-40 Day 1-15 Day 1-120; must be submitted within 120 days of demand letter. To prevent offset on day 41; file within 30 days but interest will accrue (Transmittal 141)

Timeframe begins Automated review-upon demand letter:Complex-upon results letter

Date of demand letter

Upon receipt of demand letter

Timeframe ends Day 40 (offset begins on day 41)

Day 15 Day 120RAC 2011 71

June 26, 2009/CMS Website CMS reversed earlier decision to AUTO

recoupment SNF payment if the hospital is denied/recouped its 3 day qualifying stay.

If the hospital is recouped for any activity, Part B/physician will be evaluated, but not auto recouped.

Will look but not auto recoup in both.

RAC 2011 72

Audit Results and Better Practice Ideas

To Reduce Risk

73RAC 2011

“HDI has signed a 5 year license with Milliman Care Guidelines. HCI will use the care guidelines content and software to review Medicare claims.

HDI will use the annually updated evidence based care guidelines products.

The Care Guidelines promote healthcare quality by providing clinical guidelines based on the best available clinical evidence.”

CMS does not mandate or endorse any specific guidelines or criteria for utilization review.”

Feb 25, 2009 “Evidence-based care guidelines will be used to combat waste in Medicare program.”

RAC 2011 74

An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight.” “However, the decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient's medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital's by-laws and admissions policies, and the relative appropriateness of treatment in each setting. Factors to be considered when making the decision to admit include such things as:– The severity of the signs and symptoms exhibited by the patient;

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

RAC 2011 75

…direct pt care …thru Determining correct status Clarifying order of the status

◦ Examples of weak orders: Admit to Dr Joe, Admit to tele, Transfer to the floor, admit to 23:59, admit to medical service, admit to FIT. None clearly define : Admit to inpt status and why –add (intent of the order)

Directing the clinical team as to the intensity of services that need provided when the pt ‘hits the bed’ as well as thru the course of treatment.

RAC 2011 76

Many facilities are using outside physician advisors or are growing their own advisors – many times the UR physician.

Ensure that any 2nd opinion by a non-treating provider is ‘validated’ and used for directing care by the attending/admitting. Otherwise it is just another non-treating opinion. Additionally, look for educational opportunities thru patterns --dx, documentation, doctor.

Double check with the QIO for their opinion during audit.

77RAC 2011

Trailblazer/MAC Jurisdiction 4, 8-30-10 “Inappropriate Hospital Admission vs Outpt Observation”

Medicare requirements that the inpt admission begins when the admission order is written. Additionally, all physician orders must have a date and a legible signature.

Physician’s decision to treat the pt as an outpt or inpt are reflected in the physician’s orders. The pt’s condition, history and current dx test results, along with the physician’s medical judgment, availability of treatment modalities and hospital admission policies should be considered when making a decision to provide inpt level of care. If a physician determines additional information is making a medical decision for inpt admission, the physician may elect to place in OBS outpt status.

78RAC 2011

Scenario 1 An inpt claim is submitted for medical review

◦ The claim is without a written and signed physician order for admission◦ The documentation is without an admit note describing the reason for

admission to an inpt level of care/LOC◦ The services rendered could have been rendered in an outpt setting◦ The screening tool indicates the intensity of services and the severity of

illness of the pt’s condition as documented did not support the medical necessity for inpt LOC

◦ Medical review decision: Denied because documentation does not support the medical necessity for an acute level of care

◦ IF THE PATIENT’S CONDITION REQUIRES INPT ADMISSION, the physician needs to document an inpt admission order with a progress note describing the medical decision for the inpt admission and the intended treatment plan to address the patient’s condition.

◦ Internet Only Medicare Manual (IOM) Pub 100-04, Medicare Claims Processing Manual; chapter 1, section 50.3; chapter 3, section 40.2.2.k

79RAC 2011

Variance rate: 40% Common findings:

◦ UR/physician dialogue may indicate inpt, but the documentation in the admission order (or subsequent physician documentation) is not sufficient to address the severity of the pt’s condition for today’s condition that warrants an inpt acute level of care.

◦ “Meets or doesn’t meet Interqual” does not make an inpt. Medicare’s definition is not well known.

◦ Weakness in EMRs that do not address the ‘uniqueness’ of the pt’s care and intensity of the service that is being performed. (Nursing documentation- no narrative to support electronic-no ability to expand on the uniqueness of the pt’s story.)

RAC 2011 80

Problematic diagnoses and other risk areas:◦ Rule out – anything! If a physician is not clear as to the

reason for admit/undetermined dx or course of treatment, place in OBS, aggressively work up the pt and rule in= inpt; rule out= discharge safely. (Exceptions do exist)

◦ Using a non-treating physician to confirm inpt status does not replace or supplement the attending/treating physician’s documentation.

◦ Conversations to support “admitting to inpt” is rarely actually documented in the record.

◦ H&Ps and D/C summaries are not consistently present.◦ Normal OUTPT Surgeries being ordered as inpt

surgeries…not on the inpt only list. UR needs to work closely with surgery scheduling.

RAC 2011 81

Definite misunderstanding of what OBS is. Viewed as a time frame rather than a pt’s

condition. (Miracle 23 hr cures = discharge or Monday am quarterbacking to ‘fix weekend.”)

Billable hrs vs hrs in a bed Audit three types of OBS:

◦ ER to OBS – saw provider onsite◦ Post procedure to recovery to OBS◦ Direct from a provider or SNF to a bedHighmark/MAC , new inpt/OBS

www.highmarkmedicareservices.com/bulletins/parta/newsrooms/news09302010

RAC 2011 82

• Variance rate two fold:– To be an inpt 40%– To remain an inpt 60%

• Audit focus:– Medically appropriate to be an inpt– Medically appropriate to remain an inpt for all 3

days.– Severity of illness/1st day; intensity of service/all 3

midnights.– Common weakness: Social admits= TOUGH

RAC 2011 83

• When submitting a request for an appeal, you have different options.

• Submit in writing or via fax. When utilizing the fax, there is no need to follow up with a hard copy of the documentation.

• Submit your request only one time, utilizing only one method.

• Duplicate submissions or following up with hardcopy may delay your appeal.

• If you are bringing attention to a specific item you are faxing, please circle or indicate by asterisk, as highlights do not appear when the fax Is received.

Aug 20, 2010

84RAC 2011

Begin charge capture/charge reconciliation audits. Department head ownership!

Begin ongoing reimbursement education with audits of billed services against documentation.

Focus on identified weaknesses from benchmark audits, RAC automated results and complex reviews – with corrective action plans.

85RAC 2011

Joint audits. Physicians and providers audit the inpt, OBS and 3 day SNF qualifying stay to learn together.

Education on Pt Status. Focus on the ER to address the majority of the after hours ‘problem’ admits.

Identify physician champions. Patterns can be identified with education to help prevent repeat problems.

Create pre-printed order forms/documentation forms. Allows for a standard format for all caregivers.

86RAC 2011

• Region A (DCS)– www.dcsrac.com

– info@dcsrac.com

– 1-866-201-0580

– CMS RAC Contact: Ebony.Brandon@CMS.hhs.gov

• Region B (CGI)– http://racb.cgi.com

– racb@cgi.com

– 1-877-316-7222

– CMS RAC Contact: Scott.Wakefield@CMS.hhs.gov

• Region C (Connolly)– www.connollyhealthcare.com/RAC

– RACinfo@connollyhealthcare.com

– 1-866-360-2507

– CMS RAC Contact: Amy.Reese@CMS.hhs.gov

• Region D (HDI)– http://racinfo.healthdatainsights.com

– racinfor@emailhdi.com

– 1-866-590-5598 Part A

– 1-866-376-2319 Part B

– CMS RAC Contact: Brian. Elza@CMS.hhs.gov

• CMS assigns a project officer to each RAC. Use if abuse of the SOW or other issues are occurring.

• New issues will be posted, RAC specific• There is a CMS/project officer assigned to each RAC• 578 RAC requested for new issues; 498 approved• Some are being added/some are being taken off.

• Region A-DCS Info@dcsrac.com 866 201 0580• Region B-CGI RACB@cgi.com 877 316 7222• Region C-Connolly

www.connollyhealthcare.com/RAC; RAC info@connollyhealthcare.com 8663602507

• Region D-HDI racinfo@emailhdi.com 866590 5598

RAC 2011 88

Day Egusquiza, PresidentAR Systems, IncBox 2521Twin Falls, Id 83303208 423 9036daylee1@mindspring.com

Thanks for joining us!Free info line available.Plus our training website: www.healthcare-

seminar.com

RAC 2011 89