9/25/2012 AGENDA. Set the Stage Monitoring versus Audit Identifying Risk Strategies related to an audit plan Corrective Action Plans Examples

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1 The Art and Science of Designing a Physician Practice Audit : Unique Techniques Lori Laubach, Partner MOSS ADAMS LLP 1 AGENDA Set the Stage Monitoring versus Audit Identifying Risk Strategies related to an audit plan Corrective Action Plans Examples MOSS ADAMS LLP 2 ONE OF THE SEVEN ELEMENTS An audit is an excellent way for a physician practice to ascertain what, if any, problem areas exist and focus on the risk areas that are associated with those problems. There are two types of reviews that can be performed as part of this evaluation: (1) A standards and procedures review; and (2) a claims submission audit. OIG Guidance for Physicians Auditing and Monitoring (Oct. 2005) MOSS ADAMS LLP 3 1

2 COMPLIANCE AND INTERNAL CONTROL OIG has suggested that an effective Compliance Plan is put in place to detect, prevent and correct violations Compliance is a broad form of internal control If an organization initiates but is unable to sustain = no compliance plan Lack of sufficient controls = no compliance plan MOSS ADAMS LLP 4 AUDIT & MONITORING? MOSS ADAMS LLP 5 AUDITING VERSUS MONITORING Auditing The process of going back and looking at some thing or some part of an ongoing process that is completed and checking to see whether it was done and, if it was done, was it done correctly. Monitoring It is the on going, day to day process that ensure that things do get done on time and correctly. 6 MOSS ADAMS LLP 6 2

3 AUDITING VERSUS MONITORING EXAMPLES Monitoring Sampling protocols that identify and review variations from a pre determined baseline o Refund overpayments o Claims with modifier 25 Auditing Testing of transactions/processes Documentation and coding Overpayment refunds MOSS ADAMS LLP 7 AUDITING AND MONITORING - HOW? Use a risk based approach to determine what to audit and monitor Develop and implement policies and procedures for periodic auditing and monitoring Establish monitoring systems focused on prevention, early detection and resolution Rotate through specific areas on periodic basis Operating departments should be doing on going monitoring of key processes and accounts MOSS ADAMS LLP 8 MONITORING EXAMPLES Coding work queues Denial management Claim Scrubber Ethic/compliance hotlines Excluded Provider listing/background checks Teaching physician supervision requirements Evaluation and Management coding distributions Non physician practitioner code use MOSS ADAMS LLP 9 3

4 WHAT SHOULD BE OUR PLAN? What should we be looking at? MOSS ADAMS LLP 10 RISK BASED APPROACH Annual OIG work plan Medicaid Recovery Audit Contractors (RAC) Employee complaints CIA/CCA deficiencies MOSS ADAMS LLP 11 OIG AREAS OF CONCERN Billing for items or services not rendered or not provided as claimed; Submitting claims for equipment, medical supplies and services that are not reasonable and necessary; Double billing resulting in duplicate payment; Billing for non covered services as if covered; Knowing misuse of provider identification numbers, which results in improper billing; Unbundling (billing for each component of the service instead of billing or using an all inclusive code); Failure to properly use coding modifiers; Clustering; and Upcoding the level of service provided. MOSS ADAMS LLP 12 4

5 OIG S AREAS OF CONCERN (CONT.) Reasonable and Necessary Services Advance Beneficiary Notices Billing for non covered services as if covered Billing for items or services furnished pursuant to a prohibited referral under the Stark physician self referral law Improper patient solicitation activities and high pressure marketing of non covered or unnecessary services Non compliance with the Federal, State and private payor supplier standards Providing false information on the Medicare enrollment form MOSS ADAMS LLP 13 OIG WORK PLAN 2012 Compliance With Assignment Rules High Cumulative Part B Payments Place of service errors Incident to Services Impact of Opting Out of Medicare ASC Payment System E/M services Trends E/M during global surgery periods E/M Use of Modifiers during global surgery period E/M Potentially inappropriate payments Imaging Services Outpatient PT Services Sleep disorder clinics Physician Owned Distributors of Spinal Implants Payments for services ordered or referred by Excluded providers Chiropractors: Part B Payments for Services ASC Safety and Quality of Surgery and Procedures Medical Claims Review at Selected Providers MOSS ADAMS LLP 14 OIG WORK PLAN 2012 RECOVERY ACT Medicare Incentive Payments for Electronic Health Records Medicaid Incentive Payments for Electronic Health Records OCR Oversight of the HIPAA Privacy Rule OCR Oversight of the HITECH Breach Notification Rule MOSS ADAMS LLP 15 5

6 AUDIT PROGRAM MOSS ADAMS LLP 16 AUDIT PROGRAM DESIGN 1. Define the need 2. Define review areas 3. Prospective or retrospective 4. Obtain policies and procedures for area of focus 5. Establish your coding compliance goal / accuracy rate 6. Choose an appropriate sample size 7. Choose who should perform review 8. Request data MOSS ADAMS LLP 17 AUDIT PROGRAM DESIGN(CONT.) 9. Standardize a method for classifying and reporting variances 10. Utilize credible references and determine audit tools to use 11. Schedule the audit 12. Prepare the audit report with findings and recommendations 13. Review with compliance committee and/or management 14. Corrective Action Plan (CAP) 15. Ongoing monitoring MOSS ADAMS LLP 18 6

7 DEFINE THE NEED Based on a risk assessment, identify concerns or reported activity Stop any questionable conduct Document the audit objectives: o Why are you going to perform this audit? o Control flow of information Communicate to the right stakeholders Define the reporting process of results MOSS ADAMS LLP 19 PROSPECTIVE VS. RETROSPECTIVE AUDIT Prospective o Review of claims prior to being submitted for payment o May be performed internally or by outside consultants Retrospective o Review of claims after submittal for payment o May be performed internally or by outside consultants MOSS ADAMS LLP 20 POLICIES One of the first steps in an audit is to request the current policies and procedures for: o Coding o Billing o Compliance MOSS ADAMS LLP 21 7

8 REQUEST DATA Develop a memo to request data with specific data elements Assign responsibility for tracking data Define how to store data Crosswalk of acronyms and jargon specific to your organization 22 MOSS ADAMS LLP 22 WHAT IS YOUR SAMPLE SIZE? Determine based on review areas and needs Period of audit Current versus historical Random, judgmental, or statistically sound Representative review (profile) MOSS ADAMS LLP 23 RECORD ISSUES What is the required record set? Who maintains the required records? What form are the records maintained in? Can you easily and efficiently access the information? Do they really have the records? Are you maintaining required records for other parties? Do you have a record retention policy? MOSS ADAMS LLP 24 8

9 WHO PERFORMS? According the Office of Inspector General 's (OIG) auditing standards, evidence gathered by auditors and compliance officers should be sufficient, competent, and relevant. Sufficiency The presence of enough relevant, factual, and convincing evidence to sustain the findings, conclusions, and recommendations. Competency This refers to the reliability of evidence that is attained through reasonable and reliable methods. Relevancy Evidence used to support an audit finding is relevant if it has a logical, sensible relationship to 25that finding. MOSS ADAMS LLP 25 TYPE OF AUDITS Desk Audit Interview and risk assessment Walk through with testing Chart Audit MOSS ADAMS LLP 26 AUDIT TOOLS Forms and templates internally developed Purchase ready made tools o Customize the tool to your organization Data extraction software Consider data set for long term consistency and comparability MOSS ADAMS LLP 27 9

10 REPORTING OF RESULTS Corrective action plans and who to report to MOSS ADAMS LLP 28 REPORTING AND FOLLOW-UP Draft report for review with stakeholders Final report with recommendations Follow up on status of implementation of recommendations/corrective actions Identify monitoring activities for long term compliance Establish follow up reporting timeframes MOSS ADAMS LLP 29 ERROR CALCULATION Count of met and not met for: o Claims o Lines (services billed) Net reimbursement Weighted points to the total lines o By line o By type of CPT code o Diagnosis errors o Modifiers o Teaching physician count MOSS ADAMS LLP 30 10

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12 POST AUDIT RESOLUTION Identify concerns Stop questionable conduct Communicate to the right stakeholder Define the reporting process draft v. final Follow up on status of corrective action Establish follow up reporting timeframes MOSS ADAMS LLP 34 CORRECTIVE ACTION Corrective action should be taken whenever non compliance is identified Should develop a corrective action plan with a time table o If applicable, overpayments will be returned o Stakeholders will be given the opportunity to appeal/respond to findings o Identify procedures for monitoring effectiveness of the plan MOSS ADAMS LLP 35 CORRECTIVE ACTION PLAN Area of Opportunity Action Plan Responsible Party EMR Templates Lacking Chief Complaint New vs. established Modifier 25 Work with IT to allow documentation of all levels of service Education of providers on documenting CC Identify process to aid in determining new from Est for providers Develop monitoring and educate providers IT and Coding/ compliance Coding Operations Compliance and coding Due Date Education on EM Use case studies Coding Follow up audit those Audit plan Compliance 3 mths exceeding error score MOSS ADAMS LLP 36 12

13 EXAMPLE: DISCIPLINARY ACTION LEVEL ONE Billing is suspended Stakeholder repeats training session Billing is resumed Re audit within a short period of time (next 60 days) MOSS ADAMS LLP 37 EXAMPLE: DISCIPLINARY ACTION LEVEL TWO Practitioner ceases all billing and clinical activity Department may be fined $X for aggregated instances of non compliance identified in the review period or the amount of erroneous billing Billing is resumed after remediation activities are completed Re audit within a short period of time (the next 60 days) MOSS ADAMS LLP 38 EXAMPLE: DISCIPLINARY ACTION LEVEL THREE Practitioner ceases all billing and clinical activity Begin process of termination Evaluate recommendation that information regarding non compliance of practitioner be reported to appropriate government authorities 39 MOSS ADAMS LLP 39 13

14 EXAMPLES MOSS ADAMS LLP 40 EXAMPLES High Level E/M Billing for a provider no longer at entity Cut and Paste Shared Visits MOSS ADAMS LLP 41 SAMPLE AUDIT PLAN FOR HIGH LEVEL E/M Purpose Scope Other The purpose of this audit is to verify the use of high level E/M codes by one provider using time to assign E/M level. Unless decided otherwise after initial research has been done, the audit will examine services billed for the provider in The charts will be examined solely for the purpose stated above. Place project under attorney client privilege. MOSS ADAMS LLP 42 14

15 SAMPLE AUDIT PLAN FOR HIGH LEVEL E/M Method 1. Limit this audit to Medicare and Medicaid only. 2. Audit all claims including those not paid. 3. Assign a physician to complete a review of medical necessity. 4. Analyze data for services for the following: o Where 992X3 to 992X5 have been billed consecutively for greater than 2 months consecutively. o Scheduled time exceeds time allotted for E/M codes based on CPT coding guidelines. MOSS ADAMS LLP 43 SAMPLE AUDIT PLAN FOR HIGH LEVEL E/M 5. Develop a sample plan from analysis. 6. Design an audit tool including: the minimum necessary demographic information, date of service, place of service, provider, CPT, modifier, ICD 9 CM, findings (account for all possible errors). 7. Develop report of findings o Calculate line error percent o Include error percent based on net reimbursement MOSS ADAMS LLP 44 SAMPLE AUDIT PLAN FOR HIGH LEVEL E/M 9. Review report with management assigned to project 10. Determine Corrective Action Plan (CAP) o Follow up audit o Repayment o Education of provider 11. File work papers and CAP for follow up MOSS ADAMS LLP 45 15

16 FRAUD CASE NEW YORK A Manhattan man charged with more than $30 million in health care fraud saw his Lamborghini seized and made bail only after his parents put up their home as collateral in Brooklyn federal court yesterday. The manager took over a Queens radiology office where he worked and billed Medicaid and Medicare for services credited to a doctor who no longer worked at the office, federal authorities charged. X is not a doctor, said Assistant US Attorney William Campos. The defendant is accused of billing the government for radiological services for Dr. John Doe [whose name the feds are protecting], who didn t work there. The feds say Tai billed Medicare about $20 million and Medicaid about $12 million for work supposedly done between May 2010 and March But that doctor told an FBI agent that he did no work during that period. Read more: fjpb3 MOSS ADAMS LLP 46 FORMER OWNER OF DAYTONA BEACH CLINIC PLEADS GUILTY TO FRAUD, CONSPIRACY, AND MONEY LAUNDERING Submitted inflated bills to public and private health care beneficiary programs, including Medicare. Charged those programs at the higher rates for services rendered by medical doctors, instead of the rates appropriate for chiropractors. Systematically submitted claims for reimbursement for services not rendered. Submitted fraudulent billings in the names of medical doctors Provided customers with prescriptions for prescription drugs, often in return for cash payments MOSS ADAMS LLP SAMPLE AUDIT PLAN FOR THIS TYPE OF CASE Purpose Scope Other The purpose of this audit is to review claims for services provided. Reported concern of manager. Identify scope by completing an utilization analyses which is reviewed by one or two physicians Place project under attorney client privilege. MOSS ADAMS LLP 48 16

17 2 - SAMPLE AUDIT PLAN FOR NO PROVIDER Method 1. Limit this audit to Medicare and Medicaid only. 2. Audit all claims including those not paid. 3. Assign a physician to complete a review of medical necessity. 4. Determine from utilization analysis providers who have been terminated or schedule changes MOSS ADAMS LLP SAMPLE AUDIT PLAN (CONT.) 5. Develop a sample plan from analysis. 6. Design an audit tool including: the minimum necessary demographic information, date of service, provider at location 7. Develop report of findings o Calculate line error percent o Include error percent based on net reimbursement MOSS ADAMS LLP SAMPLE AUDIT PLAN (CONT.) 8. Review report with management assigned to project 9. Determine Corrective Action Plan (CAP) o Follow up audit o Repayment o Education of provider 11. File work papers and CAP for follow up MOSS ADAMS LLP 51 17

18 LOS ANGELES CASE A doctor already serving a lengthy prison sentence in a narcotics case has been convicted of health care fraud for submitting approximately $1 million in fraudulent bills to Medicare in just seven months The evidence presented at trial showed that the provider repeatedly lied to Medicare about services he claimed to have provided at clinic locations from which he had been evicted. The jury also heard expert testimony from a neurologist about the provider s patient files, which contained so many internal inconsistencies and improbably identical results that they appeared to have been a copy and paste job. MOSS ADAMS LLP 52 VASCULAR SURGEON SENTENCED A Chicago area vascular and thoracic surgeon was sentenced today to 10 months in federal custody Made false statements in post operation reports o false post operation reports o contained extensive details about aneurysm repairs that he never performed o surgeries he did perform as being more complex and elaborate than they actually were MOSS ADAMS LLP SAMPLE AUDIT PLAN FOR THIS TYPE OF CASE Purpose Scope Other The purpose of this audit is to review claims for Copy and Paste Identify scope by completing an utilization analyses Identify services by diagnosis type Place project under attorney client privilege. MOSS ADAMS LLP 54 18

19 SAMPLE AUDIT PLAN FOR COPY / PASTE Method 1. Limit this audit to Medicare and Medicaid only. 2. Audit all claims including those not paid. 3. Assign a physician to complete a review of medical necessity. 4. Create Utilization Analysis of population a. The trends of CPT codes across sequential months in period b. Identify providers where coding higher than peers 5. Inquire of coding audit team where cloning has been observed MOSS ADAMS LLP SAMPLE AUDIT PLAN 6. Develop a sample plan from analysis and interviews. 7. Design an audit tool to track where documentation may have been cloned and determine what should have been billed 8. Develop report of findings o Calculate line error percent o Include error percent based on net reimbursement differences MOSS ADAMS LLP SAMPLE AUDIT PLAN (CONT.) 8. Review report with management assigned to project 9. Determine Corrective Action Plan (CAP) o Follow up audit o Repayment o Education of provider 11. File work papers and CAP for follow up MOSS ADAMS LLP 57 19

20 AUDIT PLAN - CUT & PASTE / COPY & PASTE Audit Difficulty: Identifying if this function was used Documentation Integrity Risk: o Bring forth information which is not specific to the patient o Fail to edit information that is not applicable to the subsequent encounter Utilized software originally designed to detect plagiarism at universities Using encounter data, compared the following EHR o Same provider, same primary diagnosis o All visits for one day for a provider Plagiarism software download: AHIMA article: MOSS ADAMS LLP 58 SHARED VISITS Incident to and shared visits are transparent to the payer Physicians using NPPs should be selected for review. Physicians with high work RVUs compared to their peers should also be considered for review. MOSS ADAMS LLP 59 SAMPLE AUDIT PLAN FOR THIS TYPE OF CASE Purpose Scope Other Assess compliance with Medicare s documentation requirements for shared visit billing in the hospital setting and identify opportunities for improvement. Assess the need for education and/or assistive techniques to improve compliance in billing for NPP services. Identify scope by completing an utilization analyses on rendering versus billed Place project under attorney client privilege. MOSS ADAMS LLP 60 20

21 SAMPLE AUDIT PLAN FOR SHARED VISITS Method 1. Limit this audit to Medicare and Medicaid only. 2. Audit all claims including those not paid. 3. Assign a physician to complete a review of medical necessity. 4. Develop an utilization analysis a. Identify where rendering provider varies from billing provider b. Identify high code utilization providers 5. Obtain charts for review MOSS ADAMS LLP SAMPLE AUDIT PLAN 6. Interview staff. 7. Develop a sample plan from analysis. 8. Design an audit tool including: o Time records o Medical necessity for use of an NPP to see the same patients as the physicians. 9. Develop report of findings o Calculate line error percent o Include error percent based on net reimbursement MOSS ADAMS LLP 62 SUMMARY Auditing and Monitoring should be part of regular activities/operations Monitor & Audit high risk areas for compliance Report results and progress against recommendations Use a risk based approach Communicate, communicate Follow up, follow up Policies, Policies, Policies o Establish clear documentation guidelines Offer training on audit outcomes MOSS ADAMS LLP 63 21

22 QUESTIONS? Lori Laubach MOSS ADAMS LLP 64 22