You wouldn’t think that a simple thing like the place of service would have the potential to cause a $9.5M overpayment by Medicare. But that is the figure the OIG (Office of the Inspector General) says it estimates that Medicare contractors overpaid physicians for place of service errors in 2009.
The OIG conducted the 2009 audit to determine whether physicians correctly coded non-facility place- of-service on selected part B claims submitted to and paid by Medicare contractors. The audit report, titled “Review of Place-of-Service Coding for Physician Services Processed by Medicare Part B Contractors During Calendar Year 2009” is available at http://oig.hhs.gov/oas/reports/region10/11000516.pdf on the OIG website.
Physicians correctly coded the claims for 17 of the 100 services that the OIG sampled. However, physicians incorrectly coded the claims for 83 sampled services by using non-facility place-of-service codes for services that were actually performed in hospital outpatient departments or ASCs. Based on the sample results, OIG estimated that nationally, Medicare contractors overpaid physicians $9.5 million for incorrectly coded services provided during calendar year 2009. – (MLN Matters®Number: SE1226)
It’s not surprising that physicians might use the wrong place of service. Because of the verbiage used to identify when the physician is providing the space, equipment and overhead versus when he is not, many of us in the field have been confused.
As we finish off another month here at MMP, we wanted to go back over some of our most popular posts from the month and get ready for another busy, productive, and meaningful month. Presenting, The Best of Manage My Practice, October 2011!
And finally, the Office of the Inspector General (OIG) of he department of Health and Human services has released its 2012 Work Plan for areas it will concentrate on investigating. Better safe than sorry! Mary Pat goes over the highlights here.
We’ve started this monthly wrap-up to make sure you don’t miss any of the great stuff we post throughout the month on Manage My Practice, but we also want to hear from you! What were your favorite posts and discussions this month? Did we skip over your favorite from October? Let us know in the comments!
Here are some highlights from the new OIG Work Plan for FY 2012. There are more items that apply to practices, as well as items for hospitals, nursing facilities, home health, and medical equipment and supplies. The link to the complete plan is at the end of the article.
Compliance With Assignment Rules
If you accept assignment with Medicare (i.e. you accept what Medicare allows as payment for a service), the OIG wants to know if you are adhering to the allowable and not collecting more than the patient’s deductible and co-insurance.
Physicians-Owned Distributors of Spinal Implants (New)
Do physician-owned distributors (PODs) of spinal implants have a conflict of interest when they sell implants to hospitals? The OIG will investigate.
Because there is a payment differential between a service provided in a hospital outpatient department or ASC and the same service provided in the physician’s office, the OIG wants to know if you provided the service where you claimed you did.
Physicians: Incident-To-Services (New)
Incident-to services are reported on the honor system – the claim does not reflect that a mid-level provider performed the service under the supervision of a physician. The OIG will dig under the claims to see if practices really understand and follow the incident-to rules.
There are a number of different audits that are carried out by Medicare-contracted auditors. It’s important to know the differences and have a plan for responding.
CERT stands for Comprehensive Error Rate Testing and CERT audits were initiated in 2000. The program is responsible for measuring improperly paid claims. The CERT Program uses the following OIG-approved methodology:
A sample of approximately 120,000 submitted claims is randomly selected;
medical records from providers who submitted the claims are requested; and
the claims and medical records are reviewed for compliance with Medicare coverage, coding and billing rules.
RAC stands for Recovery Audit Contractor and began in early 2009. The RACs detect and correct past improper payments so that CMS and Carriers, FIs, and MACs can implement actions to stop future improper payments. RAC is currently focusing on inpatient services and physical therapy services. As of the date this post was published RAC was not focusing on physician services.
ZPIC (Zone Program Integrity Contractors) replaces the Medicare Program Safeguard Contractors (PSCs) and Medicare Drug Integrity Contractors (MEDICs) that are currently in use by CMS. ZPICs are be responsible for detection and deterrence of fraud, waste and abuse across all claim types. ZPICs have access to CMS National Claims History data, which can be used to look at the entire history of a patient’s treatment no matter where claims were processed. Being able to look at the overall picture will enable them to more readily spot over billing and fraudulent claims. Among other things, ZPICs will look for billing trends or patterns that make a particular provider stand out from the other providers in that community. Once a ZPIC identifies a case of suspected fraud and abuse, the issue is referred to the Office of Inspector General (OIG) for consideration and possible initiation of criminal or civil prosecution. ZPIC is widely considered to be the greatest threat to physician practices.
Seven ZPIC zones have been identified. The zones include the following states and/or territories and most have been assigned contractors:
Zone 1 – CA, NV, American Samoa, Guam, HI and the Mariana Islands http://www.safeguard-servicesllc.com/zpic.asp
Zone 2 – AK, WA, OR, MT, ID, WY, UT, AZ, ND, SD, NE, KS, IA, MO AdvanceMed was just purchased by NCI – site not current
Zone 3 – MN, WI, IL, IN, MI, OH and KY – not awarded
Log all requests for records from all payers. Time and date all communications received and all communications sent.
Scan all records sent and include a cover letter itemizing contents of response.
Send records via certified mail.
If you get a request for a large amount of records at one time, consider getting advice from a consultant or attorney who specializes in Medicare audits as a large scale record request may cripple the practice operations.
How can you be proactive before you get an audit letter?
Check the audit sites monthly to see if your specialty or any services you provide are being targeted for an audit.
Today I was fortunate enough to attend an outreach session designed to educate hospitals, physicians and other providers about Recovery Audit Contractors (RAC), specifically Connolly Consulting, the RAC for North Carolina. Although I cannot vouch that the information I am sharing for Region C will be consistent for the other three RACs, the fact that there is a standard handout being used for all RAC outreach sessions makes me think there’s a very good chance that CMS is encouraging a high level of consistency.
If you read the recent Manage My Practice article here by Carla Hannibal, you already know that the RACs were established after CMS demonstration projects proved “to be successful in returning dollars to the Medicare Trust Funds and identifying monies that need to be returned to providers. It has provided CMS with a new mechanism for detecting improper payments made in the past, and has also given CMS a valuable new tool for preventing future payments.” (CMS website)
Each RAC bid for and won the jurisdiction as follows:
Region A: CT, DE, DC, MD, ME, MA, NH, NJ, NY, PA, RI, VTDiversified Collection Services (DCS) -1-866-201-0580, website here
Region B: MN, WI, IL, IN, OH, MI, KY CGI Technologies and Solutions -1-877-316-7222, website here
Region C: AL, AR, CO, FL, GA, LA, MS, NC, NM, OK, SC, TN, TX, VA, WV and the territories of Puerto Rico and U.S. Virgin Islands. Connolly Consulting, Inc. -1-866-360-2507, website here
Region D: WA, OR, ID, CA, NV, MT, WY, UT, AZ, ND, SD, NE, KS, IA, MO, AK, HI HealthDataInsights, Inc.-Part A: 866-590-5598, Part B: 866-376-2319, e-mail:website here
Each RAC is required to provide outreach education sessions in their region prior to sending out any letters. Any hospital or physician who bills fee-for-service programs (Part A and/or Part B) for Medicare beneficiaries is eligible for a RAC audit.
These are the important points that I took away from attending this outreach program:
RACs may review claims as far back as October 1, 2007.
RACs review claims after they have been paid using the same Medicare policies used to pay the claim initially.
There are two types of reviews: Automated Reviews which do not request the medical record and Complex Reviews which will request the medical record.
Automated Reviews are “done deals” and the claim will be adjudicated and a letter sent detailing the dollars requested.
Providers may return the payment by writing a check, allowing a recoupment from future payments or may apply for an extended payment plan.
Complex Reviews entail a request for medical records. Records can be mailed, faxed, or sent on a CD/DVD. Mailed records must be sent in a tamper-proof package, and should be sent via trackable carriers (FedEx, UPS, Registered USPS.) Multiple records may be sent in one package if each record set is in a separate envelope inside the package.
Note: if faxing, fax the records to yourself to check for readability before you fax to the RAC.
Email records are currently not acceptable due to HIPAA.
Providers have 45 days plus 10 mailing days for a total of 55 days to send the records, but extensions are available if this is not abused. If you do not communicate with your RAC about any problems you are having sending the records (e.g. you can’t find the record!), you risk having the claim(s) automatically recouped. The Connolly representative even mentioned something to the effect that she wasn’t above calling the practice/entity CEO to let them know that their contact person wasn’t playing by the rules.
Once a claim has been reviewed and a Complex Review is in play, the provider will receive a Demand Letter from the RAC and the provider will have a “discussion period” to contact the RAC and ask questions and/or provide additional information. The RAC representative emphasized to communicate, communicate, communicate and to call the RAC and speak to the reviewer of the claim. Once you have spoken to the reviewer, if you still disagree with the decision, you should ask to speak to the supervisor, and if there still is no agreement, you need to file an appeal.
Appeals must be filed within 120 days of the receipt of the demand letter from the RAC.
Here is a suggested action plan for physician practices to prepare for the RAC process:
Visit the CMS website here and click on Demonstration Projects to see what improper payments were found by the RAC demonstration projects.
Visit the CMS and OIG websites to see what improper payments were found by reading the OIG (Office of Inspector General) reportshereand CERT (Comprehensive Error Rate Testing) reports here.
Conduct an internal assessment to see if you are in compliance with Medicare rules, and if not, identify corrective actions needed to bring your group into compliance. Corrective actions may include provider education and a periodic internal audit to rate the improvement.
Provide your RAC (they will tell you how to do this) with a contact person who will receive RAC letters and who will be the point person for providing the RAC with additional documentation. The RAC will also ask for information about providers and their NPIs, including any providers who were with the group between October 1, 2007 and now, even if the provider is no longer with you. Connolly suggests copying the list of providers you supply to the RAC and placing it in the personnel file of the contact person to be reminded of this important responsibility if this person leaves the organization.
Develop a basic tracking system for receipt of letters, and activity for each request.
VISIT YOUR RAC WEBSITE AT LEAST WEEKLY.
I have received lots of questions about what a RAC letter will look like, and the speaker today provided a sliver of information saying that the Region C letters will have the CMS logo at the top of the letter and Connolly’s logo at the bottom of the letter. Because your practice/entity will be providing the RAC with a contact person’s name, unless things are in total chaos at your place of business, the letters will go to the person you’ve entrusted with this important responsibility.
Here are some other questions and answers from the program today:
Q: Does the RAC pay for the copying/mailing for records?
A: They will pay hospitals, but will not pay physicians for record expense.
Q: If a claim is refunded to Medicare, must the patient be refunded their portion?
Q:What determines which region the practice/entity belongs to for RAC?
A: The state that the practice/entity is located in.
Q: Are patients contacted if their claim is audited?
A: They receive a notice if the claim is adjusted in any way.
Q: I heard that there are consultants selling RAC insurance – is that a good idea?
A: There is no such thing as audit insurance, but there is such a thing as appeal insurance.
Q: Will a claim be audited if a practice/entity self-audits, finds an error and corrects it?
A: As long as an amended claim is filed by the provider, RAC will not audit the claim.
Q:Who sets the guidelines for medical necessity?
A: The medical director of the RAC.
Q: Are the number of claims that can be audited in each period counted by transaction lines (5 per CMS form) or by claim/single CMS form?
A: By transaction lines.
Q: Will the RACs extrapolate their findings?
A: The RACs are entitled to extrapolate their findings if they so choose.
Q: Are the RACs paid on a percentage of their findings?
A: Yes, RACs are paid a percentage of both overpayments and underpayments. The percentage ranges from 9% to 12.50% based on each RAC’s bid.
If this information is new to you, I suggest you click on some of the links provided in this article, start developing your RAC plan, and start educating your providers and staff. This topic is also a good one for sharing of best practices between local and regional groups. To get email updates on RAC from CMS, sign-up here. Remember to bookmark your RAC’s website and visit often!