Topics. Overview of the Medicare Recovery Audit Contractor (RAC) Understanding Medicaid Integrity Contractor
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1 RACS, ZPICS & MICS John Falcetano, CHC-F, CCEP-F, CHPC, CHRC, CIA Chief Audit and Compliance Officer University Health Systems of Eastern Carolina
2 Topics Overview of the Medicare Recovery Audit Contractor (RAC) Understanding Medicaid Integrity Contractor (MIC) Implementation of the Zone Program Integrity Contractor (ZPIC)
3 (Source: CMS - Improper Medicare FFS Payments Report November 2009)
4 Recovery Audit Contractors Independent contractors Medicare Secondary Payer RAC Medicare Claim RAC Paid on contingency basis
5 Purpose Detect and correct Medicare improper payments Refund overpayments Collect underpayments (recoupment) 3 Year Demonstration Permanent Program (2010)
6 Types of RAC Reviews AUTOMATIC Obvious improper payment Duplicate claims Medicare Policy NCD/LCD Automatic refund request COMPLEX Chart Request Medical necessity Claim review & determination (overpayment) (underpayment)
7 RAC Demonstration Project March 2008 $1.03 billion improper payments $992.7 million overpayments $37.8 million underpayments Overpayments Inpatient Hospitals 85% Inpatient Rehabilitation 6% Outpatient Hospital 4%
8 RAC Focus Areas 1. One-Day stays for medical necessity and coding 2. Acute rehab for medical necessity and coding 3. Inpatient care for medical necessity and coding 4. Outpatient claims for incorrect number of billing units 5. Selected DRG
9 RAC Examples 1. Excessive units 2. Very short stay hospital 3. DRG improper up-coding for hospital care 4. Patient discharged from hospital with improper discharge status on claim 5. Duplicate claims
10 Review Process Medical Record Request RAC Provider Response within 45 days (or automatic denial) RAC determination (60 days) RAC
11 RAC Jurisdictions HDI What color is your state? CGI DCS CCG
12
13 Top Issue Per Recovery Auditor National Recovery Audit Program FY 2010 March 2011
14 Region A: Diversified Collection Services Ventilator Support of 96 + Hours Ventilation hours begin with the intubation of the patient (or time of admittance if the patient is admitted while on mechanical ventilation) and continue until the endotracheal tube is removed, the patient is discharged/transferred, or the ventilation is discontinued after a weaning period. Providers are improperly adding the number of ventilation hours resulting in higher reimbursement. Incorrect Coding
15 Region B: CGI, Inc. Extensive Operating Room Procedure Unrelated to Principal Diagnosis The principal diagnosis and principal procedure codes for an inpatient claim should be related. Errors occur when providers bill an incorrect principal and/or secondary diagnosis that results in an incorrect Medicare Severity Diagnosis-Related Group assignment. Incorrect Coding
16 Region C: Connolly, Inc. Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay Medicare does not make separate payment for DMEPOS when a beneficiary is in a covered inpatient stay. Suppliers are inappropriately receiving separate DMEPOS payment when the beneficiary is in a covered inpatient stay. Billing for Bundled Services Separately
17 Region D: HealthData Insights Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay Medicare does not make separate payment for DMEPOS when a beneficiary is in a covered inpatient stay. Suppliers are inappropriately receiving separate DMEPOS payment when the beneficiary is in a covered inpatient stay. Billing for Bundled Services Separately
18
19 Region A: Diversified Collection Services Renal and Urinary Tract Disorders Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients with renal and urinary tract disorders needs to be complete and support all services provided. Medical Necessity
20 Region B: CGI, Inc. Extensive operating room procedure unrelated to principal diagnosis: (DRG validation) Principal diagnosis and principal procedure codes for an inpatient claim should be related. Errors occur when providers bill an incorrect principal and/or secondary diagnosis that results in an incorrect Medicare Severity Diagnosis Related Group assignment.
21 Region C: Connolly, Inc. Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) provided during an inpatient stay Medicare does not make separate payment for DMEPOS when a beneficiary is in a covered inpatient stay. DMEPOS Automated Review
22 Region D: HealthData Insights Minor surgery and other treatment billed as inpatient When beneficiaries with known diagnoses enter a hospital for a specific minor surgical procedure or other treatment that is expected to keep them in the hospital for less than 24 hours, they are considered outpatient for coverage purposes regardless of the hour they presented to the hospital, whether a bed was used, and whether they remained in the hospital after midnight. Medical Necessity
23 Region D posted new issues Medical necessity: Diseases and disorders of the digestive system DRGs - 347,348, 349, 350, 351, 352, 353, 354, 355, 356, 357, 358, 368, 369, 370, 371, 372, 373, 374, 375, 376, 377, 378, 379, 380, 381, 382, 383, 384, 385, 386, 387, 388, 389, 390, 391, 392, 393, 394, 395 Medical necessity: Acute inpatient admission respiratory conditions DRGs , , Medical necessity: Conditions of the circulatory system DRGs 286, 287, 288, 289, 290, 291, 292, 293, 299, 300, 301, 302, 303, 304, 305, 308, 309, 310, 311, 312, 313, 314, 315, 316
24 Provider Options RAC Overpayment Determination
25 Option: Discussion Period The discussion period offers the opportunity for the provider to provide additional information to the RAC to indicate why recoupment should not be initiated. It also offers the opportunity for the RAC to explain the rationale for the overpayment decision. After reviewing the additional documentation submitted the RAC could decide to reverse their decision. A letter will go to the provider detailing the outcome of the discussion period. Contact: Recovery Audit Contractor (RAC) Timeframe: Day 1-40 Timeframe Begins: Automated Review: Upon receipt of Demand Letter Complex Review: Upon receipt of Review Results Letter Timeframe Ends: Day 40 (offset begins on day 41)
26 Option: Rebuttal The rebuttal process allows the provider the opportunity to provide a statement and accompanying evidence indicating why the overpayment action will cause a financial hardship and should not take place. A rebuttal is not intended to review supporting medical documentation nor disagreement with the overpayment decision. A rebuttal should not duplicate the redetermination process. (See 42 CFR ) Contact: Claim Processing Contractor Timeframe: Day 1-15 Timeframe Begins: Date of Demand Letter Timeframe Ends: Day 15
27 Option: Redetermination A redetermination is the first level of appeal. A provider may request a redetermination when they are dissatisfied with the overpayment decision. A redetermination must be submitted within 30 days to prevent offset on day 41. Contact: Claim Processing Contractor Timeframe: Day Must be submitted within 120 days of receipt of Demand Letter Timeframe Begins: Upon receipt of Demand Letter Timeframe Ends: Day 120
28 Recoupment deferred if appeal within 30 days
29 Causes of Improper Payments Physician orders missing Illegible/missing signatures National policy or local policy requirements not met Medical record does not support medical necessity
30 RAC Team Multi-disciplinary committee HIMS (medical records) CBO (billing) Medical Staff Nursing Case Management (utilization review) Compliance Legal Others
31 RAC Response Plan Standardized process Coordinate all RAC activities Each facility has RAC point of contact and response team Special fax cover sheets to identify RAC correspondence Dedicated and phone number for RAC correspondence and follow-up RAC Policies and Procedures Appeal templates/forms developed Education sessions
32 Tracking RAC RAC Tracking Software Add-on feature to our existing financial software Software Training Compliance staff Facility representatives Reports and Alerts Streamline the RAC Process User-friendly
33 ZPICS Zone Program Integrity Contractors
34 Zone Program Integrity Contractor (ZPIC) Program Safeguard Contractor (PSC) transitioned to Zone Program Integrity Contractor (ZPIC) Data analysis Evaluation of complaints Referrals (law enforcement, fraud alerts, RACs, MACs etc.) Support for law enforcement during investigation and prosecution of healthcare fraud cases Medical review, data analysis, overpayment determination, subject matter expert testimony
35 Zone Program Integrity Contractor (ZPIC) Identify actual payment errors / potential payment errors Utilization patterns High volume Billing patterns Effort can result in identification of investigation targets
36 Zone Program Integrity Zones
37 Zone Geographic Area 1. American Samoa, California, Guam, Hawaii, Mariana Islands, Nevada 2. Alaska, Arizona, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming 3. Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, Wisconsin 4. Colorado, New Mexico, Oklahoma, Texas 5. Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia 6. Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont 7. Florida, Puerto Rico, U.S. Virgin Islands
38 ZPIC Payments BONUS
39 ZPIC Team Multi-disciplinary committee HIMS (medical records) CBO (billing) Medical Staff Nursing Case Management (utilization review) Compliance Legal Others
40 ZPIC Response Plan Standardized process Coordinate all RAC activities Each facility has RAC point of contact and response team Special fax cover sheets to identify RAC correspondence Dedicated and phone number for RAC correspondence and follow-up RAC Policies and Procedures Appeal templates/forms developed Education sessions
41 MICS Medicaid Integrity Contractors
42 Medicaid Integrity Contractor (MIC) Purpose: Ensure that paid claims were: Properly provided and documented Billed properly, using the correct procedure code For covered services Paid in accordance with regulations Three types: Review Analyze claims data to identify high-risk areas and potential vulnerabilities Audit Post payment audits both field and desk audits Education Findings from audits and reviews to identify educational opportunities to prevent improper payment
43 MIC Process Selection Data analysis/mining State Medicaid Agency Coordination between CMS and the state State protocols/procedures Preliminary audit Final audit report
44 Next Steps Overpayment Appeal
45 Healthcare Fraud Prevention and Enforcement Action Team (HEAT) Joint task force HHS and DOJ Focus areas Improper payments Payments for unnecessary medical services Insufficient documentation Ineligible patients Ineligible providers DME providers
46 Healthcare Fraud Prevention and Enforcement Action Team (HEAT) Multi-agency Strike Forces teams DOJ prosecutors OIG investigators FBI investigators Local law enforcement Supported by: CMS data analysis team CMS program experts
47 Medicaid Fraud Control Units (MFCU) MFCU must be an identifiable entity of state government Requires annual certification by Secretary of HHS Statewide criminal prosecution authority or formal referral Focus: procedures to local law enforcement Criminal healthcare fraud Patient abuse and neglect cases Billing for services not rendered Billing for medically unnecessary services Upcoding Double-billing Kickbacks Falsifying cost reports
48 QUESTIONS
3+ 3+ N = 155, 442 3+ R 2 =.32 < < < 3+ N = 149, 685 3+ R 2 =.27 < < < 3+ N = 99, 752 3+ R 2 =.4 < < < 3+ N = 98, 887 3+ R 2 =.6 < < < 3+ N = 52, 624 3+ R 2 =.28 < < < 3+ N = 36, 281 3+ R 2 =.5 < < < 7+
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