What s New with RAC - md aaham by pengxiang


									AR Systems, Inc
Training Library Presents
      What’s New with MAC, RAC, Medicaid
                    and the OIG?
   Audit findings, Updates, and Operational Ideas

Instructor:                     Day Egusquiza, Pres
                                AR Systems, Inc

                                RAC 2012              1
Goal of the Audit Culture
 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.

                                 RAC 2012          2
Outline of Audit Findings

 Common issues:
 ◦ Dept staff not understanding the charge
   capture must match physician order and
 ◦ Lack of ongoing coder education
 ◦ Lack of ongoing dept head ed
 ◦ Lack of physician understanding
 ◦ Creating a culture of audit – time to be pro-

                                    RAC 2012       3
National Error Rate
Summer 2010 - 12.4%; 2011-10.5%-8.5%
 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…

                                       RAC 2012            4
CMS Claim’s Review Entities
Roles of Various Medicare Improper Payment Reviews
Timothy Hill, CFO , Dir of Office on Financial Mgt
9-9-08 presentation

Entity          Type of         How                   Volume of            Purpose of
                claims          selected              claims               review
QIO             Inpt hospital   All claims where      Very small           To prevent
                                hospital submits an                        improper payment
                                adj claim for a                            thru upcoding.
                                higher DRG.                                To resolve disputes
                                Expedited coverage                         between bene and
                                review requested                           hospital
                                by bene
CERT            All             Randomly              Small                To measure
                                                                           improper payments
MAC             All             Targeted              Depends on # of      To prevent future
                                                      claims with          improper payments
                                                      improper payments
RAC             All             Targeted              Depends on the #     To detect and
                                                      of claims with       correct past
                                                      improper payments    improper payments
PSCZPIC         All             Targeted              Depends on the #     To identify
                                                      of potential fraud   potential fraud
OIG             All             Targeted              Depends on the #     To identify Fraud
                                                      of potential fraud
                                                      claims RAC 2012                            5
Updates Impacting the
 Auditing of Claims

               RAC 2012   6
Jan 2012 RAC updates –Building
on 2011 – 3 goals
Demonstration                          Prior authorization of certain
Pre-Payment                               medical equipment.
Review –focused                        (www/cms/gov/apps/media/
 7 states with high fraud and         Press/factsheet.asp?counter
  error prone providers: FL,
  CA, TX, MI, NY, LA, Ill              Part A to Part B Rebilling
 4 states with high volume             380 hospitals /pilot can
  of short stay hospital stays:          sign up to volunteer
  PA, OH, NC. MO                        All hospitals to resubmit
 Does not replace Pre for               claims for 90% of the
  MACs                                   allowable Part B payment
 Should allow for more timely           when RAC, CERT, MAC finds
  rebills of corrected claims while      that a Medicare pt met Part
  catching potential patterns early.   (www/cms/gov/apps/me
                                         B, not Part A.
  REACTIVATED: Go live June            dia/ APPEAL RIGHTS if join
                                        NO
  2012                                   this demonstration project.
                                        Can opt out at any time.
                                                  RAC 2012              7
Pre-Payment Expanded Info
Dec 2011 – Prepayment CMS calls
 Limitations on prepayment       June 1 – 312/Syncope
  won’t exceed current post       Aug 1 – 069/Transcient
  payment ADR limits.              Ischemia; 377/GI
 Medical records provided         hemorrhage w/MCC
  on appeal will be remanded      Sept 1 – 378/GI
  to the RAC for review            Hemorrhage w CC; 379/GI
 Claims will be off limits        Hemorrhage w/o CC/MCC
  from future post payment        Oct 1 – 637/diabetes
  reviews                          w/MCC; 638/diabetes
 ADR letter will advise where     w/CC; 639/diabetes w/o
  to send: RAC or MAC.             CC/MCC
 30 days to reply               RAC @cms.hhs.gov

                                         RAC 2012            8
Updated Statement of Work 9-11
 Highlights
 ◦ Allows /outlines Semi Automated Reviews
 ◦ RAC decisions beyond 60 days = no payment to the
   RAC but can request an extension.
 ◦ Discussion period continues but no timelines for
   replies from the RAC. Should be in writing and
   responded to within 30 days of receipt. If appeal is
   filed, discussion period ends.
 ◦ Posting of new issues still a problem with HDI and
   Connolly. But no new guidelines for the RACs
 ◦ Timely period between results letter and demand
   letter . (Estimated at 2 weeks)
 (CMS’s website, posted 9-1-11)
                                     RAC 2012             9
New 45 day record count

 Effective March 15, 2012, calculation for record count has
 “The limit is equal to 2% (use to be 1%) of all claims submitted
  for the previous calendar year divided by 8. EX) billed
  156,253 claims, 2% = 3125 /8 = 390 every 45 days”
 “RAC can request up to 35 records per 45 days for providers
  whose calculated limit is 34 or less”
 “Maximum # of records per 45 is 400” (was 300)
 “Providers with over $100,000,000 in MS-DRG payments who
  had the 500 requests cap will now have a 600 record cap”
 Hospital feedback on 3-16: GA “went up 118%; Al doubled,
  Texas up by 100 records each 45 days, NC up by 87 records,
  IN 300-400 between our 3 hospitals.”

                                             RAC 2012                10
Updated SOW –Semi
 Semi-automated reviews are a two-part
  review that is now being used in the Recovery
  Audit Program. The first part is the
  identification of a billing aberrancy through
  an automated review using claims data. This
  aberrancy has a high index of suspicion to be
  an improper payment. The second part
  includes a Notification Letter that is sent to
  the provider explaining the potential billing
  error that was identified.
 Still no limit on requests; in addition to
  complex record requests.
                                   RAC 2012        11
CMS Quarterly Newsletter, June 2011
Region     Overpaymts   Underpaymt   Total 3 rd Q    FY to Date
           ($ in                     Corrections     Corrections
           millions)                 (Based on       Data thru
                                     actual          June 30,
                                     collections     2011)
Region A   $40.4        $5.0         $45.4           $98.2
Region B   $33.9        $9.8         $43.7           $118.5
Region C   $46.9        $7.4         $54.3           $133.3
Region D   $112.2       $33.7        $145.9          $242.5
TOTALS     $233.4       $55.9        $289.3          $592.5

                                          RAC 2012                 12
Top Issues per Region, CMS, 3Q 2011

 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.)
 HDI purchased by NY based HMS Holdings $400M. 11-11
                                      RAC 2012          13
CMS Quarterly Newsletter –
*Based on collected amts thru Sept 30,
Region       Overpaymts   Underpaymt   Total 3 rd Q    FY to Date
             ($ in                     Corrections     Corrections
             millions)                 (Based on       Data Oct
                                       actual          2010-Sept
                                       collections     30, 2011)
Region       $ 43.3       $ 5.8        $ 49.1          $146.3
Region       $ 60.4       $ 3.2        $ 63.6          $170.3
Region       $ 65.2       $ 60.7       $125.9          $260.9
Region       $108.2       $ 6.9        $115.1          $361.8
Nationwide   $277.1       $ 76.6       $353.7          $939.4

                                            RAC 2012                 14
Top Issues per Region/9-
 Region A: Renal & Urinary Tract Disorders
  (medically necessary/incorrect setting)
 Region B: Surgical Cardiovascular
  Procedures (medically necessary)
 Region C: Acute inpt admission neurological
  disorders (medically necessary)
 Region D: Minor surgeries and other
  treatment billed as an inpt (medically
  necessary ) *When pts with known dx enter a hospital for a specific
  minor surgical procedure and is expected to keep them les than 24 hrs, they
  are considered outpt regardless of the hour they present to the hospital,
  whether a bed was used or whether they remain after midnight.

                                                    RAC 2012                    15
Change with Demand letters-
CR 7436, MM Matters7436 demand
 After many confusing/delayed RAC recovery and
  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.”
 Messy: Letter to MAC/FI’s contact, not the RAC contact. Yell !
 Details as to the reason/pt identifier are missing. Not required.

                                                 RAC 2012                 16
Patient Protection and Affordable Care
Act, March 23, 2010
• Focusing on curbing fraud, waste and abuse in the Medicare
• 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?

                                                 RAC 2012                  17
More Pt Protection and Affordable Act
“Most of the healthcare reform can be paid for by
finding savings within the existing health care system, a
system that is currently full of waste and abuse.” Pres.
 Requires report and repayment of
 “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.

                                            RAC 2012                18
CMS series w/ MedLearn
 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
     Incomplete or insufficient
  documentation to support billable services

                              RAC 2012          19
Additional CMS/MedLearn
 SE1024/July     No documentation or insufficient documentation
 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
 SE1210/Mar 12       RAC with MN of Renal & Urinary Tract Disorders

                                              RAC 2012                  20
CMS reiterates guidance on inpt admission
determinations SE 1037, 2-3-11
 CMS refers hospitals to Medicare    contractors are not automatically
  Program Integrity Manual and          to deny claims that do not meet
  reiterates that CMS requires          screening tool guidelines
  contractor staff to use a            “In all cases, in addition to the
  screening tool as part of their       screening instruments, the
  medical review process of inpt        reviewer shall apply his/her own
  hospital claims. While there are      clinical judgment to make a
  several commercially available        medical review determination
  screening tools…such as               based on the documentation in
  Milliman, Interqual and other         the record.”
  PROPRIETARY systems… CMS             The guidance restates that the
  does not endorse any particular       Medicare Benefit Policy Manual,
  brand.                                Chpt 1, instructions that a
 CMS repeats that contractors are      physician is responsible for
  not required to automatically pay     deciding whether the pt should
  a claim even if screening             be admitted as inpt.
  indicates the admission was
  appropriate and conversely,

                                                 RAC 2012                   21
Only physician’s can ….
 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
 42 CFR 482.12 (c) (2) “Patients are admitting to the hospital only on
  a recommendation of a licensed practitioner permitted by the state
  to admit pts to the hospital. “
 Medicare State Operations Manual “In no case may a non-physician
  make a final determination that a pt’s stay is not medically necessary
  or appropriate.” Case Mgt protocol can ‘recommend’ to the
  providers but only takes effect when the provider has authenticated it.

                                                 RAC 2012                    22
If a non-attending/admitting…
 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.

                                                RAC 2012      23
ADR plus PIP hospitals
 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. (New #, 3-12, 600)
 PIP hospitals will begin to have records
  requested 2nd Q 2012.. Many PIP hospitals are
  large hospitals who could easily have their
  first record request be 500 records.

                                    RAC 2012            24
Semi –Automated Claims Review
 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 2012             25
More Semi Automated Examples
 Connolly, 5-11              Connolly, 5-11
 Remicade billed             Letter for at least 100
  w/chemo drug adm             claims.
  CPT codes                   Infliximab –is a
 Letter says: “Data           monoclonal antibody
  analysis showed an           agent. Drugs “may’ be
  aberrant billing pattern     administered using the
  inconsistent with a          chemo therapy CPTs.
  policy. “                   Reply with records
 Unknown limit, not           within 45 days, same
  subject to complex           penalities

                                     RAC 2012            26
Physician/Non PP Additional
Documentation Limits
 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 2012             27
More on Physician ADR
 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.
      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

                                       RAC 2012        28
Physician Focus Areas
 Place of Service – outpt hospital vs office
  (SE1104 Med Learn; 11 vs 22 or 23)
 Separate E&M leveling within the surgical/CPT bundle period
 New vs Established
 Level of service conflicts with the hospital – doc /inpt;
 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 2012              29
MACs are auditing … w/CMS
moving from 15 to 11 MACS
 …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. Letters SOMETIMES explain..
 WPS – Prepayment 310, 313, 192, 690
 NHIC – Prepayment auditing of Chest pain,
  syncope and collapse, CHF.
                                    RAC 2012             30
More MAC audits
Noridian /J3 has announced Probe audits
  for AZ, MT, ND, SD, UT, WY
 Probe for 1 day stays, 2 day stays, 3 day stays
  and high dollar (w/o definition of $)
 Noridian was awarded JF MAC on 8-22-11
  Includes ID, ND, Alaska, WA, Ore, SD, MT, WY,
  UT and AZ. Look for more wide spread
  auditing. Using CERT data for more probes
 NGS – Mobile CMS audits/NY & Prepayment
 (2012) No letters with reasons.

                                   RAC 2012         31
And more MAC auditing
 Highmark (Now Novitas Solutions)
 ◦ Probe for DRG 470/Major Joint Replacement or
   reattachment of lower extremity w/MCC. Need to document
   6 months of failed conservative therapy!!
 ◦ Probe for DRG 244 Permanent Cardiac Pacemaker implant
   w/o CC or MCC.
 ◦ NEW: 313, 392, 292 (2012)
 ◦ Msg from provider: Have been having 100% prepayment
   audit payment for DRG 313/chest pain for almost 2 years
   now. The site indicates they are being successful around
   90% of time at the 3rd level appeal/ALJ but it is taking about
   18 months. There does not appear to be a change with the
   pre-payment review even with the overturn rate. (per PA
   facility history 9-11)

                                           RAC 2012                 32
And more MAC
 Trailblazer/TX highlights
 ◦ Developed LCD 41-96SAB for Hydration (96360-
 ◦ Reviewing DRG appeals and determining patient
   status was incorrect. Denied entire inpt stay.
 ◦ Issued 5 DRGs that will be on prepayment review:
   243, 246, 247, 460, 470 (Ex: Stents, pacemaker)
 ◦ 2011- Lost MAC bid. Highmark awarded. 1/12 –
   Highmark ‘s Medicare Division , MAC J12, was sold
   to BC/BC of FL (BCBSF) with their subsidiary, First
   Coast who is a MAC J9.

                                     RAC 2012            33
MACs are beefing up prepayment
auditing –with physician impact
 Trailblazer : to increase consistency in
  Medicare reimbursement, effective 11-11,
  Trailblazer will begin cross-claim review of
  these services. The related Part B service
  (E&M, procedures) reported to Medicare will
  be evaluated for reimbursement on a post
  payment basis. Overpayments will be
  requested for services related to the inpt stay
  that are found to be in error.
 First Coast & HighMark/Novitas – similar

                                 RAC 2012           34
More MAC auditing
 Palmetto , Pre Payment Auditing
 Began early 2012
 DRGs focus:
 ◦   871   Septicemia/Sepsis
 ◦   641   Misc disorders of nutrition
 ◦   690   Kidney / UTI
 ◦   470   Joint replacement

 Site: CA site. Prior to Feb, 2012 – never had a pre-
   payment audit request. Had 12 in 1st request.

                                     RAC 2012           35
And more MAC – AL hospital
Cahaba – Pre-Auditing of the below DRGs                          . (2-12)
   069      (Transient Ischemia)
   191      (Chronic Obstructive Pulmonary Disease w CC)
   195      (Simple Pneumonia & Pleurisy w/o CC/MCC)
   247      (Percutaneous Cardiovascular Procedure w Drug-Eluting Stent w/o
   287      (Circulatory Disorders Except AMI, w Cardiac Cath w/o MCC)
   313    (Chest Pain)
   392    (Esophagitis, Gastroenteritis & Misc Digestive Disorders /o MCC)
   552    (Medical Back Problems w/o MCC)
   641      (Nutritional & Misc Metabolic Disorders w/o MCC)
   945      (Rehabilitation w CC/MCC)
   470       (Joint replacement)

                                                      RAC 2012                 36
 The Florida Experience
 MAC /FSCO Focused Probe, 2009 & 2010
 Preliminary results , FHA, RAC summit 9-10
 Common w/all: No Physician order for inpt
 Update: 2011/moved to pre-payment for                       313, 552
 3-12: 6 new prepayment DRGs -153, 328,357,455,473,517
DRG    Description                  2009 Error Rate        2010 Error Rate

313    Chest pain                   55.16%                 76.71%
552    Medical back pain w/o        70.92%                 71.25%
392    Gastro & misc disorders      49.08%                 41.93%
       w/o MCC
641    Nutrition misc metabolic     49.27%                 48.43%
       disorder w/o MCC
227    Cardiac defib w/o cath lab   20.65%                 45.43%
       w/o MCC

                                                RAC 2012                     37
False Claims and Kickback Lawsuits
Involving Hospitals and Health Systems” –
Becker’s Hospital Review, 7-11
 “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-01-80 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

                                            RAC 2012              38
OIG’s 2011-12 Work Plan – Risk Areas
for Hospitals
 Outpt claims pd greater than      Payments for hemophilia
  charges. (APC methodology)        Payments for outpt surgeries
 Inpt claims pd greater than        w/units greater than 1
  chgs                              Inpt and outpt claims
 Inpt $ greater $150.000            /manufacturer credits for
 Outpt $ greater $25,000            replacement of devices
 One day stays at acute care       Post –acute transfers to
 Major complications /comorb        SNF/HHA/another acute care
                                     inpt facility
 Payments for septicemia servs
                                    SNF/HHA consolidated billing-
 Payments for inpt same day
                                     separate outpt services
  discharges and readmissions
                                    Outpt claims with 59 modifier
 Outpt claims billed during the
  DRG payment window                Inpt claims pd greater than

Quick Updates - Medicaid
 2-1-11 CMS Bulletin                2-16-11 CMS
  RAC for Medicaid
  postponed                           proposes Medicaid
 9-14-11 CMS issued                  payment reductions for
  new RAC for Medicaid                provider-preventable
  final rules                         conditions
 Patterned after Medicare
  RAC – 3 yr look back,              Follow Medicare’s
  prohibits auditing done             hospital acquired
  by another group, set
  limits on medical record            conditions
  requests, notify of                Allow for additional
  overpayment in 60 days              conditions for reduction,
  and coordinate.
 www.ofr.gov/ORFUpload/OFRdata/2     state specific
  011-23695 PI.pdf

                                            RAC 2012              40
Medicaid is auditing
 1) Medicaid integrity contractors – CMS has
  established a 5 year look back period with 30 days
  to reply to requests for record (10-1-10)
 2) RAC for Medicaid – Final rule out Sept 14, 2011.
  To have in place by Jan 1, 2012. Target: $2.1B,
  with $900M to the states
 3) State Medicaid – state fraud units are auditing
  and coordinating all data for audits.
 Concern – avoid duplication! 3 unique groups.
  Track and watch each one separately.
 NOTE: Medicare RACs are also becoming
  Medicaid RACs. (HDI-Ks)
                                    RAC 2012            41
Medicaid Hot Exposure Area

OB – protocols
 Physicians/extended must order/direct pt
  care, pt specific.
 Protocols are excellent clinical pathways, but
  the physician must order the protocol.
 EX) Pt is 26 weeks. Nursing implements
  protocol for under 27 weeks. Doesn’t call the
  provider until results from first items on the
  protocol. Not billable. Must contact the
  provider to initiate protocol , then follow
  protocol. Billable.
                                RAC 2012           42
Protocols- Challenges with Fixes
 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
 YEAH – how about including the protocols that are
  referenced in the record when submitting for audit?

                                       RAC 2012         43
Remittance/Payment Anguish
 N432 = means 2 different things on the RAs.
  ◦ Pending recoupment, should coincide with the Demand
  ◦ 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)
 Transmittal 659/CR 68709
   PLB reason code (FB ) forward balance. Demand letter is also sent at this time.
   PLB reason code (WO) overpayment recovery.

                                                                         RAC 2012     44
Powerful transmittal
 Transmittal 47, Interpretive Guidelines for
  Hospitals June 5, 2009
 “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)

                                                 RAC 2012                 45
More on Signature Transmittal
8 ways CMS can meet requirements (3/10)
 Provide a legible full signature (a   Circle the name of the physician
  readable first name and last             who wrote the prescription.
  name)                                  Use an illegible signature
 Provide a legible first initial and      accompanied by a signature log
  last name                                or attestation statement.
 Write an illegible signature over      Write initials over a typed or
  a typed or printed name.                 printed name.
 Write an illegible signature on        Write initials not over a typed or
  letterhead with information              printed name, but accompanied
  indicating the identity of the           by a signature log or attestation
  signer. (EX: a prescription has an       statement.
  illegible signature but the            Neglect to sign a portion of a
  letterhead of the prescription           handwritten note, but other
  lists three physician names.             entries on the same page in the
                                           same handwriting are signed.
                                         SEND the LOG WITH AUDIT

                                                   RAC 2012                    46
DRG High at Risk
 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
 Excisional Debridement (MS DRG 463, 464,
   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.

                                          RAC 2012               47
EMR Challenges
 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
 Treatment/outcomes/results of ordered
  services are often omitted from the
  clinical/nursing record.

                                RAC 2012          48
               A C
         i th
      g w
 iv in

                  RAC 2012   49
2010/updated 2 Q 2011 w/4Q
 1850 reporting, 1400      Medically unnecessary
  had activity/2000          57% of denials, 33%
  hospitals                  were short stays
 RAC denied $86M, up       Ave automated : $399
  from $42 in 3rd Q         Ave complex : $5281
 Of the $86M, 23% were      with a growing amt in
  appealed, 77% was not      medically unnecessary
  appealed/ 75% (4Q         Will expand the
  2011)                      tracking of
 Of the 25% that was        administrative burden
  appealed, 85% were
  overturned in favor of
  the providers.
                                  RAC 2012           50
First report to Congress –FY 2010
 “Implementation of Recovery Auditing at the
  CMS. FY 2010 Report to Congress as
  required by 6411 of Affordability Act.
 Accuracy rate by the RACs: Low to high:
  DCS/98.6 –HDI/ 99.2%
 $75 M in overpayments. 82% of all activity
 16 M in underpayments. 18% of all activity
 Reasons:
 ◦ Not coded correctly
 ◦ Not meeting Medicare’s guideline for an inpt
 ◦ Supporting documentation does not match the order.

                                       RAC 2012         51
Outpt Complex Reviews
 CGI has started complex requests for OUTPT services.  So far
  all outpt have been automated -most MUE problems. (Sept
 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.

                                           RAC 2012                52
Connolly – Drug dosages
/multiplier issues
 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

                                   RAC 2012           53
    Summary: Review & Collection Process
1       Automated Review
   New                                 2
                                               RAC makes a
                                                   claim                             The Collection Process
                                                                                     3                4
Posted to                                      determination
  RAC’s                                                                                                    Day 1
                                                                                        Carrier/       RAC issues
                                                                                        FI/MAC          Demand
                                                                                        issues                          5
                                                                                                        Letter to
                                                                                     Remittance        Provider               Day 41
                                                                                     Advice (RA)    (includes $$            Carrier/FI/
                                                                                      to provider                 $           MAC
                                                                                                      and appeal
                                                     From Cmdr Casey, RN, CMS                                               recoups
                                                                                         N432:                              by offset
            7   Complex Review                                  10
                                                                                       based on a
                                                                                                    BEGINS TO
6                                                                                                    ACCRUE           • Recoupment
                                           9                                            Recovery
                                                                    RAC issue            Audit”     AFTER 30            will NOT
   New                     8               RAC clinician                       s
             RAC issues                                         Review Re                          DAYS FRO             occur if:
Complex                                      reviews                         sults                              M
              Medical       Provider                                  Letter                      DETERMIN             üprovider
 Review                                      medical                                                           AT
              Record        submits                                to provider                         ION              has paid in
  Issue                                      records;
              Request       medical                               (does NOT
Posted to                                                                                                               full; or
               Letter       records        makes a claim        include $$                                             üprovider
 RAC’s                                                                     $ or
            to provider                    determination        appeal righ
Website                                                                     ts)                                         filed an
                                                                                                                        appeal BY
                                                                                                                        day 30
             • Provider has 45 + 10        • RAC has 60
               calendar days to              calendar days                If no
               respond                       from receipt of            findings
                                             medical record to           STOP
             • Providers may
               request an extension          send the Review
                                             Results Letter
             • Claim is denied if no
               response                                         54                       RAC 2012                                      54
How does that interest work?
 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
 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%
 Reference: CR7688 /July 12, updates
  CR683/Sept 08

                                   RAC 2012            55
Additional Documentation
Request “Sample”
 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.

                                 RAC 2012           56
Messages from Providers
 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.

                               RAC 2012          57
 Reference on documentation of
 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

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

                                                       RAC 2012                   58
60 day response from RAC
 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. 
 UPDATE with new SOW: No payment to the RAC (9-11)

                                           RAC 2012               59
Messages from Providers
Critical Access Hospital/HDI
 19 inpts ADRs in 6 week period
 All 1 day or very short stay on inpt surgeries
    Acute appy    CVA/TIA      Hypokalemia    Total
    - day         -1 day       /              shoulder –
                               Acute Renal    1 day
                               failure – 2
    Hypotensiv    GI bleed-    Below knee   Breast
    e             2 days       amputation-1 Reduction-
    Pt/readmit                 day          1 day
    Carbon        Pneumoni Seizures/PNA       Hemo cath
    monoxide-     a-2 days -expired-1         placement-
    1                      day                1
    Total knee    Obstructi    Non-union      Panyctopeni
    replacemen    vehepatis    malleolus      a – 1 day
    ts – 2 days   is-          (surgery) -1   (?comfort
                  transferre   day            care)
                                               RAC 2012     60
Message from Providers
 Medically unlikely edits have resulted in
  charge capture errors. Many MUEs are
  unknown to the providers. (Automated)
 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.

                                    RAC 2012             61
More Messages from Providers
 No auto crossovers/Medigap for pt portion. All
  pt portions are due to the pt or their
 MAC can override the DRG that the RAC
  assigned. (Connolly/Cahaba) Which one is
 Site prepares record so a “kindergartener’ can
  find the pertinent info prior to submission.
 Upon receipt of the ADR, a letter is sent to the
  impacted physicians informing them of the
  request. Generates excellent conversation.. (NJ

                                  RAC 2012           62
Message from Providers
 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,
Better practice idea: D/C planning verifies in
  the 3 day hold that the pt had above services.
  Revised discharge disposition.

                                 RAC 2012           63
   Why us? A 300 not-for profit
           Texas story
 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
 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 procedures
    237/major cardiovascular w/MCC; 242/permanent cardiac pacemaker implant
  4 highest MDCs: Respiratory, circulatory, digestive and Musculoskeletal &

                                                      RAC 2012                    64
More from Texas
 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.

 ◦ 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.

 Update 10-11
   44 complex requested each 45 days. 26% of all claims submitted results in
   denials. Each results letter is evaluated to determine to appeal or not. Overall,
   15% denial rate. Considerable focus on education to prevent future denials.

                                                         RAC 2012                      65
RAC FAQ update #9503
 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 2012                     66
If the inpt is lost or no ability to
bill for an inpt – then what
 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.

                                 RAC 2012          67
Revenue Codes for Part B on a
Part A claim
 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; Claims
  billing manual 100-04, Chpt 4, section 240)
 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 2012                 68
Message from CMS/HDI/WPS
  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.

                                  RAC 2012           69
To rebill or not to rebill –
to appeal or not to appeal
 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 2012                    70
What will the pt impact be?
• 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 2012             71
Sample letter communication
 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

                                            RAC 2012                72
Payment recoupment impact
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 2012        73
    Medical Necessity “Setting” Has
Started… Connolly, HDI, CGI , DCS
                        a little more

                 Value Added

                        RAC 2012        74
The beginning of the
Patient’s Story
 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 2012         75
Ill hospital example/CGI
 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.”

                                           RAC 2012               76
Read the ADR’s – excellent
teaching opportunity
 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
 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

                                                 RAC 2012                  77
Ill Hospital Makes It Real/CGI
 1st MN request, 90 records, DX listed below for the 6 MN new
 Had DRG, MN and inpt accuracy listed on all
      COPD               Cardiac           Excisional           Heart failure and
                         Arrhythmia        debridement          shock

      Renal failure      Extensive OR      Disease/disorder     Kidney & UTI
                         procedure         of the respiratory
                         unrelated to      system
                         principal Dx
      Espohagitis/       Aneurysm repair   Coronary bypass      Tracheostomy
      gastronenteritis                     w/PTCA

      Perc Cardiovasc    GI Disorders      Other circulatory    Other vascular dx
      procedures                           system dx
      Syncope and        Red blood cell    Atheroscleroris      Nervous system
      collapse           disorders         with MCC             disorders

                                                                RAC 2012            78
All size hospitals are being
 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-
 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.”

                                      RAC 2012            79
Language with Connolly’s Notice
 “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

                                                 RAC 2012                   80
Submission of Complex Hints
 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
 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.

                                                    RAC 2012                   81
More submission hints
 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.)

                                                  RAC 2012                  82
Provider Options – RAC overpayment
(Noridian Medicare Part A contractor, 3-10)
Which option    Discussion           Rebuttal                    Redeterminatio
should I use?   Period                                           n
                The discussion       A rebuttal should be        A
                                     submitted only on
                period offers the    rare occasions of
                opportunity to       extreme financial           is the first level
                provide              hardship. The               of appeal. A
                additional           rebuttal process            provider may
                                     allows the provider
                information to       the opportunity to          request a
                the RAC to           provide a statement         redetermination
                indicate why         and accompanying            when they are
                                     evidence indicating
                recoupment           why the overpayment
                                                                 dissatisfied with
                should be            would cause extreme         the overpayment
                initiated. It also   financial hardship.         decision. A
                offers the RAC       A rebuttal is not           redetermination
                                     intended to review
                opportunity to       supporting medical          must be
                explain the          documentation. A            submitted within
                rationale for the    rebuttal should not         30 days to
                                     duplicate the
                overpayment          redetermination
                                                                 prevent offset
                decision.            process.
                                                      RAC 2012   on the 41st day.     83
More on Provider Options
                   Discussion          Rebuttal               Redeterminatio
                   period                                     n
Who do I           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    Date of demand         Upon receipt of
                   -upon demand        letter                 demand letter
                   results letter
Timeframe ends     Day 40 (offset      Day 15                 Day 120
                                                   RAC 2012                          84
                   begins on day 41)
 Audit Results and
Better Practice Ideas
  To Reduce Risk

          RAC 2012      85
RAC HealthDataInsights licenses
Milliman Care guidelines
 “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

                                                            RAC 2012                    86
Medicare’s Inpt definition
Medicare benefit policy manual chpt 1 10
 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
   “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

                                                   RAC 2012                     87
Physician and Hospital Shared
Risk – Pt Status
 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.

                                            RAC 2012                 88
More from Trailblazers
 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
    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

                                                     RAC 2012                    89
1 day stays
 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 2012              90
More inpt status challenges
 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 2012                91
Observation is not a mini-inpt
 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
 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 bed
 Highmark/MAC , new inpt/OBS

                                              RAC 2012                 92
3 Day SNF qualifying stay
• 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
 – Severity of illness/1st day; intensity of service/all 3
 – Common weakness: Social admits= TOUGH

                                        RAC 2012             93
WPS Medicare Redetermination
Requests – 1 st level of appeal
• 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

                                     RAC 2012             94
Last thoughts…
 Begin charge capture/charge reconciliation
  audits. Department head ownership!
 Begin ongoing reimbursement education with
  audits of billed services against
 Focus on identified weaknesses from
  benchmark audits, RAC automated results
  and complex reviews – with corrective action

                               RAC 2012          95
Working together to reduce risk
and improve the pt’s story
 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
 Create pre-printed order forms/documentation
  forms. Allows for a standard format for all

                                     RAC 2012              96
CMS Project Officers Contacts
•   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: Olive Taylor, 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.
                                                       RAC 2012   97
Contact Info for RACs (9-10)
• New issues will be posted, RAC specific
• There is a CMS/project officer assigned to each
• New issues 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

                                   RAC 2012         98
  AR Systems’ Contact Info

Day Egusquiza, President
AR Systems, Inc
Box 2521
Twin Falls, Id 83303
208 423 9036

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

                               RAC 2012      99

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