Transcript Saving for College

Understanding the Medicare Recovery Audit
Contractor (RAC) Program for
Part B Providers
Donna Gilley
Practice Leader, Healthcare Consulting
Lattimore Black Morgan & Cain, PC
MORE THAN YOU EXPECT...
EVERYTHING YOU NEED
What is the RAC Program?
• The RAC (Recovery Audit Contractor) program is charged
with identifying improper over and under payments for
Medicare fee-for-service claims on a post payment basis
• CMS will accomplish this through third-party contractors (paid
on contingency) hired to analyze post payment Medicare feefor-service claims and in some cases the associated medical
record(s) in an attempt to detect and correct past improper
payments
• The Tax Relief and Healthcare Act of 2006 (section 302)
requires a permanent and nationwide RAC program be
implemented no later than January 1, 2010
What is the RAC Program?
CMS has divided the country into four geographic
locations and awarded contracts to different
organizations for each of these locations
Region A
12.45% contingency rate
Region B
12.50% contingency rate
Diversified Collection Services, Inc. (DCS)
333 North Canyons Parkway, Suite 100
Livermore, CA 94551-7661
CGI Technologies and Solutions, Inc. (CGI)
11325 Random Hills Road
Fairfax, VA 22030-6051
Region C
Region D
9% contingency rate
Connolly Consulting Associates, Inc. (Connolly)
50 Danbury Road
Wilton, CT 06897
9.49% contingency rate
HealthDataInsights, Inc. (HDI)
7501 Trinity Peak Street, Suite 120
Las Vegas, NV 89128-6896
Why RAC?
• One billion Medicare claims are processed each
year
• Unintentional errors account for billions of
dollars in improper payments each year
• 3-year RAC demonstration in 3 (expanded to 6)
states from 2005-2008 yielded 992M in
overpayment findings
• A GAO Report (CY2008) estimates that
Improper Medicare FFS Payments are equal to
$10.4 billion
Why RAC?
Findings from the Demonstration
• Identified $992.7 million in overpayments
• Identified $37.8 million in underpayments
Overpayment Collections:
Less Underpayments Repaid:
Less $ Overturned on Appeal:
Less PRG IRF Re-Reviews:
Less Costs to Run Demo:
BACK TO TRUST FUND →
$992.7 m
($37.8 m)
($46.0 m)
($14.0 m)
($201.3 m)
$693.6 m
RAC FAQ’s
• The RACs will use data-mining techniques to identify
claims for review
– Two types of review
• Automated ( no medical record required)
• Complex ( medical record required)
• New areas targeted by RACs must be approved by CMS
in advance
– Issues must be posted to the RACs website prior to review (more
about this later)
• RAC reviews must follow the same Medicare policies as
carriers, fiscal intermediaries, and MACs
How this will affect you?
• Providers may receive ongoing requests
for medical records
• Providers may receive demand for
payment letters on automated reviews
• Provider will likely need to conduct more
vigorous and more focused reviews of
internal coding and documentation
How long will this be in effect?
The RAC audit program is a
permanent program with a 3-yr
rolling look-back period
beginning Oct 1, 2007.
Preparing for a RAC Audit
• Assemble a team of representatives from compliance,
legal, medical services, patient financial services and
other areas potentially impacted by a RAC audit.
• The team should establish an action plan for
responding to a RAC audit
• The team should include the necessary expertise for
handling a RAC audit as well as designating a single
point person to ensure a single line of communication
between the provider and the RAC.
You Have a Letter, Now What?
It is crucial that providers have an internal process
developed to immediately identify any correspondence
from a recovery audit contractor as every letter has a
specific set of timelines.
Two types of RAC letters with specific timelines
• Request(s) for Medical Records
• Demand Letter(s) (Automated or Complex)
You Have a Letter, Now What?
Requests for medical records
• A hard deadline of 45 calendar days FROM THE
DATE OF THE LETTER (not date of receipt)
• If not received by 45 days, RACs are authorized to
begin recoupment
• Providers may request an extension of time by
contacting the RAC
• Of the 992M overpayments found in the
demonstration project, 74.3M was due to No
documentation received OR Insufficient
documentation received to bill for any service
You Have a Letter, Now What?
Demand Letters
– Automated - These are typically black and
white issues, but if you have properly
documented circumstances which explain or
warrant the original coding & billing as
accurate, you should appeal.
– Complex - These will follow the RACs
“review results letter” and request refund amts
based on the medical records submitted to
them. Providers must decide quickly how
they will respond.
You Have a Letter, Now What?
• Responding to a demand letter
– 15 day discussion period - DOES NOT
IMPACT the appeal timeline AND;
– Within 30 days* of the demand letter, file a
formal Level 1 appeal; OR
– Pay by check; OR
– Allow recoupment from future payments; OR
– Request an extended payment plan
* You actually have 120 days to appeal, however if the appeal is not received
within 30 days, recoupment begins on the 41st day.
Can You Prepare Now? YES!
• It is important for each healthcare entity to understand:
– Who needs to be involved in the process
– Develop policies and procedures and education initiatives to support
your internal program
– Become familiar with the different types of RAC communication and the
timelines for each
– Prepare internal review to determine compliance with Medicare
Requirements
– Use your own data-mining techniques to identify any patterns similar to
issues identified by past RAC reviews – learn from the mistakes of
others
– Develop tracking and appeal processes
• Create a test process by sending a request letter to your facility
and track it to see how it is handled by staff, how quickly they are
able to respond to the request, and if they are prepared to send the
correct information
How to Survive the Audits?
• The OIG and GAO issue many reports each year, some of which
highlight specific Medicare services that are vulnerable to improper
payments. The RACs utilize recent and past OIG, CERT, and GAO
reports in their efforts to identify claims most likely to contain
improper payments
• Know where previous improper payments have been found (OIG,
CERT, and Demo RAC Reports)
• Learn from past results and pay attention to the CMS approved
issues posted on the Connolly website.
• BE PREPARED
How many medical records can the
RAC request?
The answer to this question depends on
the type and sometimes the size of the
provider. CMS had indicated that they are
revised the medical records request limits;
however the following link indicates the
current maximum limitations.
http://www.cms.hhs.gov/RAC/Downloads/RAC%20Medical%20Record%20Request%20Limits.pdf
Learning from the Past
Overpayments by Error Type
No or Insufficient
Documentation, 9%
Medically Unnecessary
Service or Setting, 32%
Other, 17%
Incorrectly Coded, 42%
CMS RAC Status Document FY 2007. February 2008
Learning from the Past
Maximum Look Back Date – In the
demonstration, CMS did not give a maximum
look back date. In the permanent program, the
RACs will not be able to look for any improper
payments on claims paid before October 1,
2007.
Hint: Frame your internal audits from
Oct 1, 2007 paid dates forward.
Learning from the Past
Medically Unnecessary – Payments are made for
services that were not medically necessary or
did not meet the Medicare medical necessity
criteria for the setting where the service was
rendered (e.g., a claim from a hospital for three
colonoscopies for the same beneficiary on the
same date of service. Only one colonoscopy per
day is medically necessary.)
Learning from the Past
Incorrectly Coded – Payments are made for
services that are incorrectly coded (e.g., the
provider submits a claim for a certain procedure
but the medical record indicates that a different
procedure was actually performed.)
Insufficient/No Documentation – Providers fail to
submit documentation requested or fail to submit
enough documentation to support the claim
Other type – Other errors are made such as the
claim is paid using an outdated fee schedule or
the provider is paid twice because duplicate
claims were submitted.
Learning from the Past
• During the demonstration RAC project
Part B findings contained the following
Physicians
All other
physician
overpayments
41%
Excessive/Mult
iple Units
54%
Duplicate
Claims
5%
CMS Evaluation of RAC 3-yr demonstration June 2008
Learning from the Past
• During the demonstration RAC project
Part B findings contained the following
Durable Medical Equipment
All other DME
overpayments
21%
DME claim
after date of
death
9%
DME items
during an
inpatient stay
70%
CMS Evaluation of RAC 3-yr demonstration June 2008
Learning from the Past
• During the demonstration RAC project
Part B findings contained the following
Ambulance/Lab/Other
All other
Ambulance/La
b/other
overpayments
22%
Other services
during an
inpatient stay
15%
Excessive/Mul
tiple units
10%
CMS Evaluation of RAC 3-yr demonstration June 2008
Ambulance
Services
during
inpatient or
SNF stay
53%
Top Services with Overpayments
Medically Unnecessary
• Neulasta
Physician
• Pharmaceutical
injectables
Physician
Top Services with Overpayments
Other Error Type
• Vestibular function
testing
• Duplicate claims
Physician
• Ambulance services
during a hospital
inpatient stay
Lab/Ambulance/
Other
• Items during a hospital
inpatient stay or SNF
stay
Durable Medical
Equipment
Do You Appeal? What Will That Look Like?
• Once an initial claim determination is
made, providers, participating physicians
and other suppliers have the right to
appeal
• It is important for providers to know:
– Who will submit the appeal letter
– Where to save appeal information
Do You Appeal? What Will That Look Like?
• Medicare offers five levels in the Part B
appeal process, the levels are:
– Redetermination by an FI, carrier or MAC
– Reconsideration by a Qualified Independent
Contractors (QIC)
– Hearing by an Administrative Law Judge (ALJ)
– Review by the Medicare Appeals Council within
the Departmental Appeals Board
– Judicial review in US District Court
AHA “Recovery Audit Program”
RAC Appeals
• In the demonstration process, RACs corrected
over $1 billion of Medicare improper payments
from 2005 through march 2008.
• Of this $1 billion, providers chose to appeal only
14% of the RAC decisions.
• Of all the RAC overpayment determinations,
only 4.6% were overturned on appeal.
• Throughout the demonstration, the RAC
program has cost only 20 cents for each dollar
collected.
How to Stay Up to Date
• CMS
https://subscriptions.cms.hhs.gov/service/s
ubscribe.html?code=USCMS_542
• Connolly Consulting – REGION C
http://www.connollyhealthcare.com/RAC/P
ages/cms_RAC_Program.aspx
Connolly Issues Approved for Review to Date
• Outpatient Hospital Claims & Physician Claims
– Blood Transfusions
– Untimed Codes - (NOTE: Associated CMS publication as listed
with the issue indicates Physical Therapy/Occupational
Therapy/Speech Language Pathology
– IV Hydration Therapy
– Bronchoscopy
– Once in a lifetime procedures
– Pediatric Codes exceeding age parameters
– Injection of Pegfilgrastim
• Durable Medical Equipment Claims
– Wheelchair Bundling
– Urological Bundling
• Clinical Social Worker Claims
– Clinical Social Worker Claims
Table 9a: Top 20 Service Types with Highest Improper Payments: Carriers and MACs
Service Type Billed to Carriers Projected Improper
(BETOS codes)
Payment
Paid Claims
Error Rate
No Documentation
Type of Error
Medically
Insufficient
Unnecessary
Documentation
Services
Incorrect
Coding
Other
Office visits - established
$622,528,034
6.00%
4.40%
14.80%
1.20%
79.40%
0.30%
Hospital visit - subsequent
$602,033,573
12.20%
9.20%
33.80%
0.10%
55.20%
1.70%
Consultations
$516,912,824
16.60%
3.00%
10.20%
0.00%
86.40%
0.40%
All Other Codes
$346,805,535
1.20%
23.10%
43.70%
5.20%
23.50%
4.40%
Hospital visit - initial
Minor procedures - other
(Medicare fee schedule)
$211,886,063
17.60%
1.10%
25.70%
0.00%
68.70%
4.50%
$172,040,758
6.90%
4.70%
68.40%
11.50%
10.60%
4.80%
Nursing home visit
$159,919,505
14.20%
10.10%
17.40%
0.80%
71.70%
0.00%
Office visits - new
$156,017,076
15.50%
1.20%
8.00%
0.00%
90.80%
0.00%
Ambulance
$85,194,498
2.20%
17.60%
26.80%
39.90%
14.90%
0.90%
Emergency room visit
$80,316,367
5.30%
9.40%
5.30%
0.00%
85.30%
0.00%
Standard imaging - nuclear
medicine
$56,886,773
3.10%
61.10%
7.50%
6.60%
24.80%
0.00%
Ambulatory procedures - other
$56,649,382
7.60%
74.10%
8.20%
0.90%
16.30%
0.50%
Chiropractic
$55,126,448
10.20%
2.40%
56.30%
23.80%
16.50%
1.10%
Eye procedure - other
$37,708,628
6.80%
0.00%
100.00%
0.00%
0.00%
0.00%
Hospital visit - critical care
$36,045,736
5.00%
4.40%
33.60%
0.00%
62.00%
0.00%
Other tests - other
$31,878,027
2.70%
29.60%
52.50%
0.10%
14.90%
2.80%
Other drugs
$31,758,233
0.60%
57.60%
15.30%
1.20%
25.80%
0.00%
Lab tests - other (non-Medicare
fee schedule)
$30,070,017
1.40%
11.90%
38.70%
13.50%
30.80%
5.00%
Dialysis services (Non MFS)
$28,735,555
4.90%
29.50%
40.60%
0.00%
29.80%
0.00%
Echography - heart
$25,197,633
1.80%
47.70%
52.10%
0.10%
0.00%
0.00%
Oncology - radiation therapy
All Type of Services (Incl.
Codes Not Listed)
$22,698,932
1.60%
1.80%
98.20%
0.00%
0.00%
0.00%
$3,366,409,599
4.50%
10.70%
27.00%
3.10%
57.70%
1.50%
2008 Midyear CERT report
Preparing for a RAC Audit
• Appoint or hire if necessary a RAC
coordinator/RAC analyst to act as a single line of
communication between the provider and the
RAC
• Communicate the appointee’s information to the
RAC
• Establish a consistent action plan for responding
to a RAC communications
Preparing for a RAC Audit
• Determine your organization’s risk areas
• Review pertinent Medicare coding policies and medical
necessity guidelines - making sure you utilize the correct
documents for the date(s) in question
• Conduct internal or external audits of key risk areas and
correct any non-compliant coding practices prior to a
RAC audit
• Voluntarily self-report any major findings – this will
specifically exclude them from a RAC review
• Review medical documentation policies as well as any
physician/staff training needed to ensure ongoing
compliance with Medicare requirements
Preparing for a RAC Audit
• Determine how you will store copies of documents that
are sent upon request
• Decide what electronic solutions or tool(s) you will use
for tracking of deadlines and request limitations
• Partner with a firm (consulting and/or legal) for external
assistance when/if you need it
• Plan for the tracking of any recoupment should appeals
not be prepared within the 30 day time frame
• Always follow-up on the appeals submitted
How LBMC Can Help
RAC Specific Services
•
•
•
•
•
•
Planning & conducting an internal RAC risk assessment.
RAC readiness evaluation (mock RAC audit).
Assistance with risk remediation.
Clinical documentation improvement training.
Data workflow and project management.
RAC coordinator training program (1-day RAC Boot
Camp at LBMC).
• Consulting services to assist navigating the appeals
process.
How LBMC Can Help
• LBMC can assist providers in developing an
internal process that enables them to respond
effectively and efficiently to audits and to meet
the necessary timetables for responding to RAC
requests and filing appeals.
– This process should include reviewing all medical
records and other documentation submitted to RACs
to ensure that they are complete and accurate.
– This process should also take into consideration all of
the provider’s rights during an audit, including time
extensions and contesting excessively burdensome
RAC requests
How LBMC Can Help
• Fee Schedule/Encounter Form(Super-bill) Review
– Fee schedule/encounter form review of CPT-4 & HCPCS codes
along with associated descriptions. Part B providers depend on
the accuracy of the encounter forms & associated descriptions.
If it’s incorrect, their documentation will not likely match.
• Validation of billed units for outpatient injected or infused
medications (J Codes)
– One of the largest Part B RAC issues is related to a code
description change to a J Code.
– Common patient doses do not necessarily match the billable
dose amt.
OnBase RAC Solution
Designed to manage the provider’s appeal
process to the RAC auditor and the denial of
medical claims
- CRM and Task Management
- Configurable Parameters
- Upload Claim History
•
•
•
•
Administration Dashboard
Financial Dashboard
Risk Analysis Dashboard
Process Improvement Dashboard
OnBase RAC Solution - Claim Level
Management
For each claim under audit:
•
•
•
•
•
•
•
Track responsible employee assigned to each task
Track appeal timelines
Manage tasks and expected completion dates
CRM to track communication with RAC personnel
Track shipping information
Track medical record request costs
Track interest due on recovered funds
Donna Gilley, CPC, CPC-I, CHC, CCS, CCS-P
Practice Leader – Healthcare Consulting
Donna Gilley is a healthcare professional with over 20 years experience in medical
operations and financial consulting services, and she leads the Healthcare
Regulatory Compliance practice at Lattimore Black Morgan & Cain. Her areas of
expertise span the healthcare Revenue Cycle including billing office assessment
and redesign, patient access policy and re-engineering, Federal, state, and local
compliance initiatives, HIPAA privacy, medical coding and billing, Stark & antikickback regulations, and reimbursement methodologies including Medicare’s
Resource Based Relative Value System (RBRVS). With a background including
medical practice administrator and director level positions with several of the
nation’s largest hospital corporations, she has experience in multiple disciplines of
medicine in the physician clinic, ambulatory surgery, and hospital settings. By
focusing her practice on healthcare compliance, Donna has become a sought after
professional on a number of healthcare legal issues. She has served as an expert
compliance witness in a high-profile federal litigation case regarding improper coding
practices, and most recently served as the expert witness in a case involving federal
reimbursement of medical devices and associated rebates. She serves on several
healthcare editorial advisory boards (including Cigna Medicare) and is a well known
speaker on a variety of topics at local and national healthcare conferences annually.
Donna Gilley
[email protected]
Direct dial: 615.309.2376
THANK YOU!
www.lbmc.com