3/12/2012. DRG Validation, cont. New Challenges and Target Areas RACs. Update on RACs [Recovery Audit Contractors] & Other External Auditors

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1 Update on RACs [Recovery Audit Contractors] & Other External Auditors Presented by: Mary Legerski, RN, Esq., CHC, CPC, MBA, MPA New Challenges and Target Areas RACs CGI Targets as of 3/7/12 Inpatient claims 147 Outpatient claims 17 Professional 17 DME 11 DME by supplier 2 DME by physician 1 CSW 1 Total: 196 New Challenges and Target Areas RACs DRG Validation Reviews Audit types as of 3/7/12 Automated: 39 Outpatient 14 Professional 13 DME 10 CSW 1 Inpatient - 1 Complex: 156 Inpatient 146 DME - 4 Outpatient 3 Professional 3 Semi-automated [prof]: 1 Total: 196 Diseases and Disorders of the Blood [12/11] MS-DRG Validation to determine principal diagnosis and secondary diagnoses identified as CCs and MCCs [major complication or comorbidity] are: Present Correctly sequenced Coded and Clinically validated Principal diagnosis - condition established after study found to be chiefly responsible for admission to the hospital The other diagnosis - (MCC/CC) present during admission that impact the stay POA [present on admission] indicator for all diagnoses reported must be coded correctly DRG Validation, cont. Other Diseases of the Respiratory System [12/11] Acute Kidney Failure [11/11] Disorders of Pituitary Gland and Hypothalamic Control [11/11] Excisional Debridement [11/11] Reviewers will validate MS-DRGs with a procedure code of and for diagnoses that affect the MS-DRG assignment Nutritional Disorders [11/11] Medical Necessity Review Examples Acute Inpatient Admission Respiratory Conditions Conditions of the Circulatory System Diseases and Disorders of the Digestive System Infections Musculoskeletal Disorders Surgical Cardiovascular Procedures 1

2 Medical Necessity and DRG Review Examples Chest Pain Esophagitis, Gastroenteritis & Misc Digestive Disorders w/mcc Heart Failure & Shock w/mcc, w CC and w/o CC/MCC Nutritional and Metabolic Disorders Other Circulatory System Diagnoses w MCC Renal Failure Coding Reviews and Miscellaneous Issues Intravenous Infusion Chemotherapy and Nonchemotherapy - Excessive Units Reported Neulasta Outpatient Claims Billed within a PPS Inpatient Admission DME while Inpatient Excessive Billing of Positive Airway Pressure (PAP) and Respiratory Assist Device (RAD) Accessories Hospital to Hospital Transfer New Purchased Power Wheelchairs Other External Auditors Who are They? Power Wheelchairs are covered if the equipment is properly coded and meets coverage criteria/documentation requirements specified in the National Government Services (NGS) Local Coverage Determination (LCD) L27239, Medical records will be reviewed for new, purchased PWC for appropriate coding, documentation requirements and medical necessity criteria Medicaid RACs Medicare Administrative Contractors Medicaid Integrity Contractors Program Safeguard Contractors Office of Inspector General State audits Commercial audits Key Target Areas of Other Auditors Same as RACs in many cases Denials of readmissions due to inadequate discharge plans Tools to Assess Risk and Upcoming Target Areas of Auditors PEPPER reports OIG work plan issues RAC website updates MAC tip of the week info CMS and OIG website 2

3 PEPPER OIG Work Plan Issues [2012 Examples] Provides summary statistics of claims data on CMS target areas payment errors due to billing, DRG/coding and/or admission necessity issues Hospitals can review data for the current quarters and the previous three fiscal years for each of the areas targeted for improvement by CMS, and compare their performance to that of the other acute-care PPS hospitals within their state. Can also compare their own data across years to: identify significant changes in billing practices; pinpoint areas in need of auditing; identify potential DRG under- or over-coding problems; and identify target areas where length-of-stay is increasing. Accuracy of Present-on-Admission Indicators Submitted on Medicare Claims (New) Medicare Inpatient and Outpatient Payments to Acute Care Hospitals (New) Hospital Inpatient Outlier Payments: Trends and Hospital Characteristics Medicare s Reconciliations of Outlier Payments Hospital Claims With High or Excessive Payments Hospital Same-Day Readmissions Acute-Care Hospital Inpatient Transfers to Inpatient Hospice Care (New) Medicare Payments for Beneficiaries With Other Insurance Coverage MAC [CGS] tip of the week Info CMS and OIG Websites Tip of the Week: Make sure all documents are signed by the person providing the service Tip of the Week: Should you receive a request for a signature or attestation because the documentation submitted did not meet the signature requirements you MUST respond within 20 days of the request Tip of the Week: Make sure that all required information is documented in the medical record Tip of the Week: It is important that you comply with CERT requests timely. Not responding or submitting insufficient documentation will result in a CERT denial and recoupment of funds CMS Hospital: OIG Includes in and outpatient services provided by certain hospitals Allegedly about 100 hospitals will be visited OIG uses following to identify billing risk areas computer matching data mining and analysis techniques Also have new audit tool: OIG s Internal Controls Questionnaires OIG audits 7 to 10 error types OIG picks from menu of 30 risk areas Once in a chart OIG can review anything Examples of review areas: physician signatures, bylaw reviews, inpatient short stays, same day discharges and re-admissions - 3

4 OIG s Internal Controls Questionnaires St. Vincent Medical Center in Conn. Had OIG audit Results were as follows: 60 outpatient 138 inpatient claims which risk for error Result: 38 inpatient and 3 outpatient claims had billing errors Total $284,773 And OIG asks for parking, fax machines, internet access, etc Asks specific questions about provider processes in an attempt to identify root causes for errors Areas reviewed include: Processes and internal control mechanisms Contracts for billing and payment processing vendors Determination of accuracy of clinical orders Safeguards for correct coding and record documentation Results of current and previous internal and external audits of coding, billing and documentation processes Inpatient Transfer Claim Example Examples of the types of claims at risk for noncompliance included the following: inpatient claims for short stays inpatient transfer claim inpatient claims with high severity level DRG codes inpatient claims for blood clotting factor drugs outpatient claims billed prior to and during inpatient stays outpatient claims billed with modifier -59 (indicating that a procedure or service was distinct from other services performed on the same day) inpatient and outpatient claims paid in excess of charges, and inpatient and outpatient claims involving manufacturer credits for replaced medical devices A discharge of inpatient is a transfer if patient is readmitted same day to another hospital unless readmission is unrelated to initial discharge* A discharge of inpatient is also a transfer when the patient s discharge is assigned to one of the qualifying DRGs and the discharge is to a home under a written plan of care for the provision of home health services from a home health agency and those services begin within 3 days after the date of discharge** Under the above circumstances hospital is paid a graduated per diem rate for each day of the patient s stay in that hospital, not to exceed the full DRG payment that would have been paid if the patient had been discharged to another setting*** * 42 CFR 412.4(b) ** 42 CFR 412.4(c) ***42 CFR 412.4(f) Inpatient Transfer Claim Example How can Case Managers assist in evaluating high risk areas and establish processes to prevent loss of revenue? In review done of a specific hospital OIG found that in a majority of the claims they should have coded the discharge as transfer to another facility instead of discharge to home Hospital should have received per diem payment instead of full DRG payment For 1 of 26 claims, the entire Medicare payment was in error - Medicare was subsequently determined to be the secondary payer Hospital stated errors occurred because coding staff did not identify disposition status information in the discharge plans and physician orders Appeals process Review based on criteria [Interqual or Milliman] Remember these are guidelines Include arguments of medical necessity Patient co-morbidities Physician clinical judgment According to Highmark Medicare Services, Inc., the Medicare Administrative Contractor ( MAC ) for Jurisdiction I, a person is considered an inpatient if: he is formally admitted based on the physician s expectation of a need for an appropriate inpatient stay justification for an inpatient stay is based on the information available at the time of admission Subsequent information may support a physician s hunch that the patient needed inpatient care, but never serves to refute that original determination. 4

5 How CM s Can Help Understand How CM s Can Help - Understand On average, Medicare pays about $4,500 to $5,000 more for a DRG than for an APC with its bundled observation fee. Billing one legitimate inpatient admission as an outpatient observation claim every day adds up to about $1.7 million in lost revenue annually. * Hospitals need to ensure there is a process in place to identify the correct patient status preferably before the patient is discharged from the hospital *Health Care Compliance Association Inpatient Short Stay Admissions Enforcement Developments April 18-21, 2010, p.5 By: William R. Mitchelson, Jr. & Lisa Barry Frist The physician or other practitioner responsible for a patient s care at the hospital is also responsible for determining whether the patient should be admitted as an inpatient By state law, only physicians can order the admission of a patient to a hospital Nurses (including care managers) are not legally qualified to make that decision, which is outside their scope of practice How CM s Can Help Understand How CM s Can Help Understand The MBPM sets forth the following factors that should be considered by the physician in determining whether to admit a patient as an inpatient: The severity of the signs and symptoms exhibited by the patient The medical predictability of something adverse happening to the patient The need for diagnostic studies that appropriately are outpatient services and The availability of diagnostic procedures at the time CMS created Condition Code 44 which allows the hospital to change the patient s status from inpatient to observation after the patient has been admitted but before the patient is discharged from the hospital. Even though Condition Code 44 may help to catch errors prior to discharge, it is better to assign the correct patient status when the patient presents at the hospital (often in the emergency room) Early communication between the utilization review nurses, the emergency room physician, and the treating physician facilitate this process How can you be proactive with documentation, monitoring, and communications? Ensure the documentation addresses: Problems identified in the history and physical Treatment initiated Patient s response to treatment Major changes in the patient s condition and action taken Status of unresolved problems Discharge planning and follow-up How can you be proactive with documentation, monitoring, and communications? Use case examples to educate providers Consult with peers in the community to see how they have been successful with appeals Realize at the ALJ level you may have more success Need to ensure appeal is tailored to audience Don t appeal all cases credibility Be organized and succinct Utilize physician advocates to assist in writing appeals and presenting evidence to ALJ 5

6 Saint Joseph s Health System in Atlanta settled False Claims Act allegations with the federal government in December 2007 Hospital paid $26 million to settle claims that it improperly admitted patients to the hospital that did not meet medical necessity for inpatient admission Government s investigation focused on the medical necessity for claims submitted for short inpatient stays: one-day & two-day inpatient stays three-day stays followed by a discharge to a skilled nursing facility one-day stays ESRD patients receiving urgent dialysis after missing scheduled maintenance dialysis as a result of needing to repair blocked or nonfunctioning access sites September 2009 six Indiana and Alabama hospitals resolved allegations the hospitals overcharged Medicare related to kyphoplasty procedure government alleged that kyphoplasty is a minimally-invasive procedure that should have been performed on an outpatient basis rather than admitting the patients as inpatients Hospitals agreed to pay the United States more than $8 million to settle the allegations July 2009, Yale-New Haven Hospital in Connecticut settled claims with the government related to medically unnecessary inpatient hospital admissions. Hospital paid $885,953 to settle the allegations Allegations related to a Gamma Knife stereotactic radiosurgery procedure which is generally used to treat malignant and benign tumors, vascular abnormalities, and other neurological conditions. Government contended this procedure was non-invasive and should have been performed on an outpatient basis without general anesthesia rather than admitting the patients as inpatients January 2010, Wheaton Community Hospital in Minnesota agreed to pay $846,461 to settle allegations that their hospital admission practices violated the False Claims Act. Government alleged that the hospital admitted some patients and kept others admitted to acute care when doing so was not medically necessary. Hospital then billed Medicare for the inpatient hospital admissions that were not medically necessary. Investigation of Wheaton Community Hospital began with a lawsuit filed in federal court in Minnesota under the qui tam provisions of the False Claims Act Whistleblower in this case was a physician who formerly practiced at the hospital Recommended Actions Recommended Actions Education and ongoing training for emergency room physicians, treating physicians, and utilization review/care management nurses regarding the differences between inpatient and observation status as well as Condition Code 44 Use of up-to-date InterQual (or other screening criteria) guidelines by the utilization review/care management nurses Early communication among members of the treating team including physicians and utilization review/care management nurses Ensure hospital has an up-to-date UR Plan and UR Committee to review short stay admissions and unnecessary admissions Develop plan of action if high percentage of one-day stays or unnecessary admissions Emphasize importance of clear documentation in admission orders (e.g., physician order to admit is not clear; physician order should specify inpatient, outpatient, and observation and should include the admitting diagnosis) Use physician advisors Involve utilization review staff, coding/billing department, Health Information Management department, finance department, and compliance team regarding compliance with Medicare rules and regulations 6

7 Questions? 7