Transcript Slide 1

FY 2011:The MACs, RACs, Rules,
and Tools
Disclaimer
Audits from federal and states are changing daily.
 Consult your RAC Issues site for more information. This
is changing daily.
 Every practice needs to be responsible for internal
compliance.

2
Agenda
This presentation will focus on a variety of audits planned
(and anticipated) for FY 2011 and beyond.
How We Got Here
 OIG FY 2011 Work Plan
 The RAC
 The MIC
 Others
 Minimizing Your Risk

3
Disclaimer 2
If this presentation does not make you totally paranoid,
you either are doing something very wrong or very
right!!!

4
Fraud Waste & Abuse Defined
Fraud: an intentional act of deception, misrepresentation, or concealment in
order to gain something of value.
Waste: over-utilization of services (not caused by criminally negligent
actions) and the misuse of resources.
Abuse: excessive or improper use of services or actions that are
inconsistent with acceptable business or medical practice.
Refers to incidents that, although not fraudulent, may directly
or indirectly cause financial loss.
Examples include:
 Charging in excess for services or supplies.
 Providing medically unnecessary services.
 Billing for items or services that should not be paid for by Medicare.
 Billing for services that were never rendered.
 Billing for services at a higher rate than is actually justified.
 Misrepresenting services resulting in unnecessary cost to the Medicare program,
improper payments to providers, or overpayments.
5
The Big Picture
Timothy Hill, Chief Financial Officer and Director Office of Financial Management CMS
September 9, 2008 RAC Presentation: http://www.gha.org/Regulatory/Sept9Update.pdf
6
The OIG FY 2011 Work Plan

Released October 1, the Plan describes the OIG’s new
and ongoing projects. It is often used by providers to
develop compliance activities.

The Plan includes new priorities relating to the American
Recovery and Reinvestment Act of 2009.

The Obama administration has previously indicated that
funding for health care reform will come, in part, from
recoveries of alleged Medicare and Medicaid
overpayments. So, enforcement is going to be more
vigorous!
http://oig.hhs.gov/publications/docs/workplan/2011/Work_Plan_FY_2011.pdf
7
OIG Mission
Protect US Department of Health and Human
Services (HHS) program integrity and beneficiary
wellbeing by:
- detecting and preventing waste, fraud and abuse
- identifying to Congress, HHS and the public
opportunities to improve program economy,
efficiency and effectiveness
- holding accountable those who violate Medicare
requirements
8
Work Activities
OIG mission accomplished by:
- conducting audits, investigations and inspections
- providing industry guidance
- imposing civil monetary penalties, assessments and
sanctions
- work with DOJ
9
OIG Components
OIG components:
Office of Audit Services (OAS)
- performs independent assessments of HHS programs and
operations
Office of Investigations (OI)
- conducts investigations of fraud and misconduct
Office of Evaluation & Inspections (OEI)
- conducts national evaluations to provide HHS and Congress
w/information and recommendations to improve program
Office of Counsel to the Inspector General (OCIG)
- provides general legal services to OIG, represents OIG in fraud
and abuse cases, negotiates and monitors corporate integrity
agreements, renders advisory opinions, publishes fraud alerts
10
OIG Workplan
Workplan identifies and prioritizes OIG’s projects for
future implementation
- identifies risk areas OIG will study, audit and/or
investigate
2011: Looks at many of the projects in the Patient
Protection and Accountable Care Act (PPACA)
11
Physicians: Place Of Service Errors
Background: Medicare pays physicians a higher amount
when a service is performed in a non-facility setting,
than when it is performed in a hospital or ASC
Review: whether physicians properly coded the places
of service on claims for services provided in ASCs
and hospital outpatient departments
(OAS work in progress, FY 2011)
12
Physicians: Evaluation And Management Services
(E/M)
Review:
Do E/M codes represent the type, setting and
complexity of services provided, and patient status
(new or established)
Trends in coding for E/M services (MACs have noted
increased frequency of medical records w/identical
documentation across services)> “Boilerplate”
Multiple E/M services for same providers and/or
patients to identify EHR documentation practices
13
Physicians: Medicare Payments For Imaging
Services
Background: Medicare fee schedule covers physician
cost component, malpractice costs and practice
expense (includes equipment utilization rate)
Review: whether Medicare payments reflect expenses
incurred (focus on practice expense component and
equipment utilization rate)
(OAS, new start, FY 2011)
14
All Providers: Excluded Providers
Background: no payment made be made for
items or services furnished, ordered or
prescribed by an excluded individual or
entity
Review: were Medicare payments made for
services ordered or referred by excluded
providers
OEI, new start, FY 2012
15
All: “Error Prone” Providers
Background: CMS’ Comprehensive Error Rate Testing
(CERT) program identified providers that consistently
submit claims w/errors
Review: select top error-prone providers based on
dollar error amounts and match against National
Claims History file to determine dollar amounts paid,
then conduct a medical review on a sample of claims,
project results to population and request refunds
OAS new start FY 2011
16
Medicare Incentive Payments For Electronic
Health Records
Background: ARRA authorizes Medicare incentive
payments over 5 years to providers that demonstrate
meaningful use of certified EHR technology
(scheduled to begin 2011-2016, w/reductions in 2015
for providers who fail to become meaningful users)
Review: of Medicare incentive payments from 2011 to
identify payments to providers who should not have
received payment
17
Information Data Privacy
Review:
Have Medicare and Medicaid providers implemented
privacy standards of HIPAA as strengthened by HITECH
Adequacy of OCR’s oversight of HIPAA privacy rule
OEI work in progress FY 2012
18
Medicare Billings With Modifier GY
Background: Modifier GY is to be used to code
services not covered under Medicare, and patients
are responsible
- but providers are not required to provide patients
with advance notice of charges for services excluded
from Medicare by statute
Review: whether providers have appropriately used
modifier GY on claims for services not covered by
Medicare
(OEI work in progress)
19
Medicare Part D Prescription Drug
Program
Review:
 Duplicate drug claims to hospice patients
 Duplicate payment when patients change plans
 Part A and B claims included with Part D claims
 Out of pocket costs
 Administrative costs included in bid submissions
 Audits of pharmacies
 Internal controls for fraud, waste and abuse
 P&T Committee Conflicts of Interest
20
RACs
What Are They Up To?
21
What is a RAC?
RAC Program Mission
 The
RACs will detect and correct past improper
payments so that CMS and the Carriers/FIs/MACs
can implement actions that will prevent future
improper payments



Providers can avoid submitting claims that don’t comply
with Medicare rules
CMS can lower its error rate
Taxpayers and future Medicare beneficiaries are protected
22
22
2
RAC Legislation
 Tax


23
Relief and Healthcare Act of 2006, Section 302:
requires a permanent and nationwide RAC program by no later
than 2010
gave CMS the authority to pay RACs on a contingency fee basis
23
Demonstration Results
RACs collected $980 million dollars, March 2005 – March 2008
Overpayments Collected by Provider Type
Outpatient Hosp/IRF/SNF
14%
DME
1%
Inpatient
Hospital
84%
SOURCE: RAC Data Warehouse
24
Physician/A
mbulance/
Lab/Other
1.5%
Overpayments Collected by Error Type
Other
17%
Incorrectly
Coded
35%
No/Insufficient
Documentation
8%
Medically
Unnecessary
40%
CMS has not updated the figure of $980 million to
reflect successful appeals through 6/30/08
Source of Majority of
Overpayments in the Project
Inpatient Hospitals—84% of overpayments collected
 Why?



25
Certain claims such as physician visits excluded from
demonstration project
RACs target high dollar improper payments to maximize
contingency fees
RAC Jurisdictions
A
D
B
March 1, 2009
C
26
26
3
Differences Between Demonstration
and Permanent RACs
Strategy
Demonstration RACs
Permanent RACs
RAC Medical Director
Not Required
Mandatory
Coding Experts
Optional
Mandatory
Validation Process
Optional
Mandatory
RAC must payback the
contingency fee if the claim
overturned at any level of
Appeal
RAC must pay back contingency
fee if the claim is overturned on
the first level of appeal
RAC must pay back if the claim
is overturned on any level of
appeal
Claims Reviewed
Records from three prior fiscal
years
Claims with initial determination
on or after October 1, 2007
Number of Records Requested
No limit per SOW
To be set by CMS
27
Know your enemy
(oops, I meant RAC)
 From

Connolly’s website:
“Connolly is now the healthcare industry's largest data
mining recovery audit firm, reviewing over $120 billion in
paid medical claims annually.”
 All
RACs are paid on a contingency basis
 In FY 2007, payments for contingency fees and other
administrative expenses totaled $77.7 million
 Good news: Connolly’s contingency only 9% (lowest
of all national RACs)—others are 12%
28
RAC Review Process
 RACs review claims on a post payment basis
 RACs use the same Medicare policies as FIs, Carriers and MACs
 NCDs, LCDs & CMS manuals
 Two types of review:
 Automated (no medical record needed)
 Complex (medical record required)
 RACs will NOT be able to review claims paid prior to October 1, 2007
 RACs will be able to look back three years from the date the claim was
paid
 RACs are required to employ a staff consisting of nurses, therapists,
certified coders & a physician CMD
29
29
5
RAC Program’s
Three Keys to Success
1.
2.
3.
Minimize Provider Burden
Ensure Accuracy
Maximize Transparency
30
30
6
Minimize Provider Burden

Limit the RAC “look-back period” to three years

Maximum look back date is October 7, 2007
RACs will accept imaged medical records on CD/DVD
 Limit the number of medical record requests (based

on previous year Medicare volume)—We’ll talk
about this in a minute…
31
31
7
Ensure Accuracy
 Each


RAC employs:
A physician medical director
Certified coders
 CMS’
New Issue Review Board provides greater
oversight
 RAC Validation Contractor provides annual accuracy
scores for each RAC
 If a RAC loses at any level of appeal, the RAC must
return the contingency fee
32
32
8
Maximize Transparency
 New
issues are posted to the web
 Major Findings are posted to the web
 RAC claim status web interface
 Detailed Review Results Letter following all
Complex Reviews
33
33
9
Contact Information
[email protected]
CMS Website
www.cms.hhs.gov/RAC
34
34
11
Automated Reviews (Part B 2010)

RAC makes a claim determination at the system level without human review of
the medical record
 Coverage / coding determination made through automated review when the
following applies:

Certainty the service is not covered or is incorrectly coded, AND




35
Written Medicare policy
Medicare article
or Medicare sanctioned coding guidelines exist
 CPT Statements
 CPT Assistant Statements
 Coding Clinic Statements
Other determinations made through automated reviews

Duplicate Claims

Pricing mistakes

Units

Discharge Disposition / Transfer DRG
Complex Reviews
• Reviews requiring human review of the medical record
• Where there is a high probability that the service is not
covered
• Copies of medical records will be needed to support
overpayment
• Use of proprietary data scrubber identifying cases with
highest probability of DRG changes
Medical Necessity
1 Day Stays
OBS
Incorrect coding
3 day qualifying stay
36
Record Reviews Starting 2/14/2011
37
RAC Updates Through COA
 Go to CAN web site http://communityoncology.info
 Select your RAC Region
 Then, you can click on your RAC Issues by STATE
38
Oncology Specific: Region A (Check Individual States)

DCS








39
Multiple DME Rentals
CSW Services During Inpatient
Pharmacy Supply dispensing Fee:
Orals
Date of Death vs. DME
-TC During Inpatient
IV Hydration Units
TC/PC Issues
Claims overpaid for add-on
codes when the required
primary procedure is not billed
on any claim (same or different)
for the same date of service.

DCS









Transfusions
Neulasta
Once In A Lifetime
New vs Established patients
Duplicate Claims
CCI Edits
Add-on Codes With No
Qualifying
Place of service codes
Identification of overpayments associated
with providers billing 'initial' intravenous
infusion (90765 and 96365), and
subcutaneous infusion (90769 and 96369)
with more than 1 unit per day
Oncology Specific Region B
Blood Transfusions
 Hydration
 Neulasta
 Once In A Lifetime
 Add-on codes without the primary procedure

40
RAC Issues—Region C

Part B Offices

Dose versus billed









41
Fulvestrant
Palonosetron
Filgrastim 480 mcg
Dolasetron
Rituximab
Leuprolide
Paclitaxel
Cetuximab
Abraxane
RAC Issues—Region C

Hospital Outpatient

Units Billed versus Dose









42
Tenecteplase
Pamidronate sodium
Adenosine
Zoledronic Acid
Irinotecan
Docetaxel
Carboplatin
Bevacizumab
Darbepoetin
RAC Issues-Region C

Both Settings







43
CSW During Hospital Stay
Admit Order for Admission
Blood Transfusions
IV Hydration
Pegfilgrastim Units of Service
Billing the pharmacy supplier fee in error
Duplicate claims
Region D Oncology Specific Issues
Place of Service
 Once In A Lifetime
 Transfusion
 Pegfilgrastim
 TC vs. PC
 CSW During Inpatient
 Hydration
 SNF vs Part B
 A4221 units of service
 Hospice vs. Part B

44
Date of Death
 Infusion Pump vs. Supplies
 MUEs
 DME Duplicate Claims
 New vs. Established
Patient
 NCCI Edits
 DME In Hospice
 Part B Duplicate Claims

Timeline – Receipt of Initial Request
45
Timeline - Receipt of Demand Letter to Appeal
46
Levels of Appeal
Must be filed within
60 days
Must be filed within
60 days
Must be filed within
60 days
Must be filed within
180 days
Must be filed within
120 days
Note:
47
Level 5
Court
Level 4
MAC Review
Level 3
Administrative Law
Judge
Level 2
Reconsideration
Level 1
Re-determination appeal to
FI/MAC
Appeals Board has
90 days for
determination
ALJ has 90 days for
determination
QIC has 60 days for
determination
MAC / FI has 60 days
for redetermination
Medicaid Integrity Contractors
Review Medicaid claims for inappropriate payments or
fraud. Similar to the RACs, the MICs will use a data-driven
approach to focus efforts on aberrant billing practices.
Three Types:




Review MIC
Audit MIC
Education MIC
Contracting Right Now!
http://www.cms.hhs.gov/medicaidintegrityprogram/
http://www.tha.org/HealthCareProviders/Advocacy/FederalIssues/MedicaidRA
CAudits/hms%20%20Medicaid%20Integrity%20Audit%20Overview.ppt#931,11,Audit MIC
Contractors
48
Medicaid Integrity Contractors

MICs are paid a fee for their services; plus a bonus tied to
quality of work, not quantity of recoupment
http://www.ipro.org/index
http://www.ipro.org/index/news-app/story.27/title.ipro-awarded-medicaid-integrityprogram-task-order-by-cms
49
Medicaid Integrity Contractors
Possible Targets Include:
 Services Provided After the Death of a Beneficiary
 Duplicate Claims
 Unbundling of Services
 OP Claims That Overlap With IP Stay
 Unlikely Services
 Excluded Individuals
Possible Medical record reviews:
 Documentation and Medical Necessity
 Diagnosis and Procedure Coding
 Covered Services
 Appropriate Billing and Reimbursement
50
Medicaid Integrity Contractors
The MIC Program is Based on State Guidelines, Not the
Same as RAC:
Look-back Period
 After the audit providers deal with their state
 Medical Record Request Limits
 Medical Record TAT (MA is 30 Days)
 MICs will not review every claim; instead, they will select
a sample and then extrapolate the results over the
universe of claims

51
Medicaid Integrity Contractors
Nearly 750 medical record audits are under way in 25 states,
with the help of an additional 3,800 state program integrity
officials.

Audits Targets Involve: Hospitals, SNF/NH, Home Health,
Hospice, ESRD, Labs, Radiology, DME, Pharmacies, Ambulance
and Physicians/Practitioners.

$24M in overpayments identified.
Robb Miller, Director, Division of Field Ops, CMS Medicaid Integrity Group
November 3, 2009, Audio Conference (HCCA)
52
Others: ZPICs
Zone Program Integrity Contractors - formerly
known as Program Safeguard Contractors (PSCs), serve
the same jurisdictions as the Medicare Administrative
Contractors.
The ZPICs are authorized to conduct investigations,
provide support to law enforcement and conduct audits
of Medicare advantage plans.
Some ZPICs will concentrate
on various Medicare billing
"hot" targets.
53
Others: ZPICs
Provide data analysis program are to identify provider
billing practices and services that pose the greatest
financial risk to the Medicare program. Specifically:

Coverage and Coding Errors

Establish baseline data to enable the contractor to
recognize unusual trends, changes in utilization over
time or schemes

Identify where there is a need for LCD

Identify claim review strategies that efficiently
prevent or address potential errors (e.g.
prepayment edit specifications or parameters)
54
Others: ZPICs

Produce innovative views of utilization or billing patterns
that illuminate potential errors

Identify high volume or high cost services that are being
widely over-utilized. Otherwise these services do not
appear as an outlier and may be overlooked when, in fact,
they pose the greatest financial risk

Identify and target program areas and/or specific
providers for possible fraud investigations
55
Others: MACs

Medicare Administrative Contractors process claims for
both Part A and Part B services. They are charged with
overseeing claim completion and accuracy in addition to
determining correct payments for services.

Since MACs review both facility Part A claims and the
professional provider Part B claims related to the same
beneficiaries and services, CMS feels that the MACs will be
able to review discrepancies between the two sets of claims,
revise payments and/or increase denials.

MACs have revived the Comprehensive Error Rate Testing
(CERT) program.
56
Particularly Nasty

WPS:




99211 with warfarin/anti-coagulant reviews
“High dollar” claims
CERT by specialty
Highmark

57
99204, 99205 review
Highmark 99204, 99205





A recent widespread post payment audit performed by Highmark Medicare Services’ Medical Review Department
revealed that 73% of new patient office or outpatient visits, procedure codes 99204 and 99205, were billed
incorrectly. While the number one error was incorrectly coding the level of service, other issues were identified. The
issues included the lack of an accepted form of provider signature, the documentation did not support incident to
guidelines as there was no evidence of the physician initiating the plan of care, and no documentation was received to
support the services billed. In order to bill a new patient office or outpatient visit, the patient must not have received
any professional service from any physician in the group of the same specialty within the last three years.
As a result of these review findings, a prepayment edit will be implemented on procedure codes 99204 and 99205 for
physicians and non-physician practitioners (NPP) of all specialties.
Medicare requires that medical record entries for services provided/ordered be authenticated by the author. The
method used shall be a hand written or an electronic signature. Stamp signatures are not acceptable. Patient
identification, date of service, and provider of the service should be clearly identified on the submitted
documentation.
If you question the legibility of your signature, you may submit an attestation statement with the documentation. A
suggested format for attestation statements can be found on our website. The signature attestation statement must
be signed by the provider. If the signature requirements are not met, the reviewer will conduct the review without
considering the documentation with the missing or illegible signature. This could lead the reviewer to determine that
the medical necessity for the service billed has not been substantiated.
In order to bill the services of an NPP such as a physician assistant or a nurse practitioner incident to a physician,
there must have been a direct, personal, professional service furnished by the physician to initiate the course of
treatment of which the service being performed by the NPP is an incidental part, and there must be subsequent
services by the physician of a frequency that reflects the physician’s continuing active participation in and
management of the course of treatment. In addition, the physician must be physically present in the same office suite
and be immediately available to render assistance if that becomes necessary. If services are rendered to a new
patient, there is no course of treatment already initiated by the physician, therefore, the service provided by the NPP
may not be billed under the physician’s rendering provider number.
58
Others: HEAT
The Healthcare Fraud Prevention and Enforcement Action
Team (HEAT) combats Medicare fraud. An interagency
effort and the expansion of Strike Force team operations
to Detroit and Houston including the expansion of joint
DOJ-HHS Medicare Fraud Strike Force teams that have
been fighting fraud in south Florida and Los Angeles.
Established in 2007, the teams have used a “data-driven”
approach to identify unexplainable billing patterns and
investigating these providers for possible fraudulent
activity.
59
PPCA Revised Compliance Requirements

Mandatory Compliance Program for All Providers




HHS Secretary authorized to require as a condition of enrollment in the
Medicare program that classes of providers and suppliers implement compliance
programs
Secretary has discretion to dictate the timelines for implementation of
compliance programs, as well as the types of providers and suppliers who will be
required to adopt compliance programs
Law directs the Secretary to develop core elements of compliance programs for
each class of provider or supplier required by the Secretary to adopt them
RAC Program Expansion to Medicaid
 Effective December 31, 2010, States must establish contracts with one or more
RAC contractors
 Will identify underpayments and overpayments and recoup overpayments
60
Physician Practice Compliance Program
1.
2.
3.
4.
5.
6.
7.
Foundation for an Effective Compliance &
Ethics Program (OIG’s 7 Elements)
Standard Policies & Procedures
Oversight & Documentation Responsibility
Education & Training
Lines of Communication
Audit & Monitoring
Enforcement & Discipline
Response & Prevention
To see the whole thing: oig.hhs.gov/authorities/docs/physician.pdf
61
Mandatory Reporting & Repayment Of
Overpayments
PPACA 6402(d): “If a person has received an
overpayment, the person shall –
(A) report and return the overpayment to the
Secretary, the State, an intermediary, a carrier, or a
contractor, as appropriate, at the correct address;
(B) Notify the Secretary, State, intermediary or
carrier to whom the overpayment was returned in
writing of the reason for the overpayment.”
62
When Must The Overpayment Be Reported/Returned?
An overpayment must be reported and returned the later
of –
(A) the date which is 60 days after the date on which the
overpayment was identified; or
(B) the date any corresponding cost report is due, if
applicable
63
Failure To Return Money Is A False Claim
“Any overpayment retained by a person after the deadline
for reporting and returning the overpayment is an
obligation as defined in Section 3729(b)(3) of title 31 USC
(False Claims Act).
64
What Is An Overpayment?
“The term ‘overpayment’ means any funds that a person
receives or retains under title XVIII or XIX to which the
person, after appropriate reconciliation, is not entitled.”
65
Kickback As An Overpayment
PPACA 6402(g): “ . . . A claim that includes items or services
resulting from a violation of this section (a kickback)
constitutes a false or fraudulent claim for purposes of”
the False Claims Act”
66
To Do’s



Have a compliance plan and make it a priority.
From your RAC issues, identify areas of risk in your region.
Audit these areas that I have identified as high risk for almost
everybody:








Consults and New Patients
“Incident to”
Drug units
New versus established patients
Nursing drug administration documentation
If you are at risk for whistle blower(s), hire and attorney to
implement your compliance program.
GIVE THE $$ BACK!
Educate! Educate! Educate!
67
68