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The CMS ICD-10 Announcement: What It Means to Your Practice

The Lion and the Lamb - CMS and the AMA Collaborate on ICD-10 Concessions

First, the game-changing announcement below means that a sigh of relief is in order. Some of the anxiety surrounding potential financial disaster should be abated. CMS announced:

“Medicare review contractors [MACs and RACs] will not deny physician or other practitioner claims billed under the Part B physician fee schedule through either automated medical review or complex medical record review based solely on the specificity of the ICD-10 diagnosis code as long as the physician/practitioner used a valid code from the right family.” (see FAQ2 below)

Second, we think it means that the sword rattling coming from the AMA and other individuals should subside. The fact that the CMS changes are based on recommendations from the AMA, which has been adamantly opposed to the ICD-10 mandate for years, is no less unexpected than the lion laying down with the lamb.

Regardless of the changes, the AMA’s previous assertion that ICD-10 “will create significant burdens on the practice of medicine with no direct benefit to individual patients’ care” still stands. The transition is inevitable, in my mind, but the changes will lessen the burden on physicians.

In the announcement from CMS, the clarification was made that

“In accordance with the coming transition, the Medicare claims processing systems will not have the capability to accept ICD-9 codes for dates of services after September 30, 2015, nor will they be able to accept claims for both ICD-9 and ICD-10 codes.”

Third, CMS will name a CMS ICD-10 Ombudsman to triage and answer questions about the submission of claims. The ICD-10 Ombudsman will be located at CMS’s ICD-10 Coordination Center.

Also, mark your calendars! CMS will have a provider call on August 27th to discuss these changes.

See the answers below provided by CMS in their new FAQs published this week.

Q1. What if I run into a problem with the transition to ICD-10 on or after October 1st 2015?

A1. CMS understands that moving to ICD-10 is bringing significant changes to the provider community. CMS will set up a communication and collaboration center for monitoring the implementation of ICD-10. This center will quickly identify and initiate resolution of issues that arise as a result of the transition to ICD-10. As part of the center, CMS will have an ICD-10 Ombudsman to help receive and triage physician and provider issues. The Ombudsman will work closely with representatives in CMS’s regional offices to address physicians’ concerns. As we get closer to the October 1, 2015, compliance date, CMS will issue guidance about how to submit issues to the Ombudsman.

Q2. What happens if I use the wrong ICD-10 code, will my claim be denied?

A1. While diagnosis coding to the correct level of specificity is the goal for all claims, for 12 months after ICD-10 implementation, Medicare review contractors will not deny physician or other practitioner claims billed under the Part B physician fee schedule through either automated medical review or complex medical record review based solely on the specificity of the ICD-10 diagnosis code as long as the physician/practitioner used a valid code from the right family. However, a valid ICD-10 code will be required on all claims starting on October 1, 2015. It is possible a claim could be chosen for review for reasons other than the specificity of the ICD-10 code and the claim would continue to be reviewed for these reasons. This policy will be adopted by the Medicare Administrative Contractors, the Recovery Audit Contractors, the Zone Program Integrity Contractors, and the Supplemental Medical Review Contractor.

Q3. What happens if I use the wrong ICD-10 code for quality reporting? Will Medicare deny an informal review request?

A3. For all quality reporting completed for program year 2015 Medicare clinical quality data review contractors will not subject physicians or other Eligible Professionals (EP) to the Physician Quality Reporting System (PQRS), Value Based Modifier (VBM), or Meaningful Use 2 (MU) penalty during primary source verification or auditing related to the additional specificity of the ICD-10 diagnosis code, as long as the physician/EP used a code from the correct family of codes. Furthermore, an EP will not be subjected to a penalty if CMS experiences difficulty calculating the quality scores for PQRS, VBM, or MU due to the transition to ICD-10 codes. CMS will not deny any informal review request based on 2015 quality measures if it is found that the EP submitted the requisite number/type of measures and appropriate domains on the specified number/percentage of patients, and the EP’s only error(s) is/are related to the specificity of the ICD-10 diagnosis code (as long as the physician/EP used a code from the correct family of codes). CMS will continue to monitor the implementation and adjust the timeframe if needed.

Q4. What is advanced payment and how can I access this if needed?

A4. When the Part B Medicare Contractors are unable to process claims within established time limits because of administrative problems, such as contractor system malfunction or implementation problems, an advance payment may be available. An advance payment is a conditional partial payment, which requires repayment, and may be issued when the conditions described in CMS regulations at 42 CFR Section 421.214 are met. To apply for an advance payment, the Medicare physician/supplier is required to submit the request to their appropriate Medicare Administrative Contractor (MAC). Should there be Medicare systems issues that interfere with claims processing, CMS and the MACs will post information on how to access advance payments. CMS does not have the authority to make advance payments in the case where a physician is unable to submit a valid claim for services rendered.

NOTE: Watch for upcoming posts on ICD-10 websites and apps that I am rating for their usefulness. We will also be producing free webinars on translating the diagnoses on your superbills, picklists and cheat sheets for ICD-10 – stay tuned!

Photo Credit: Tojosan via Compfight cc




A Guide to Healthcare Buzzwords and What They Mean: Part Two (M through Z)

Buzzwords in Healthcare Technology

Meaningful Use (MU)

Meaningful Use is the phrase used in the 2009 HITECH Act to describe the standard providers must achieve to receive incentive payments for purchasing and implementing an EHR system. The term meaningful use combines clinical use of the EHR (i.e. ePrescribing), health information exchange, and reporting of clinical quality measures. Achieving meaningful use also requires the use of an EHR that has been certified by a body such as CCHIT, Drummond Group, ICSA Laboratories, Inc. or InfoGuard Laboratories, Inc. The term can also apply informally to the process of achieving the standard, for example “How is our practice doing with meaningful use?”

mHealth

An abbreviation for Mobile Health, mHealth is a blanket label for transmitting health services, and indeed practicing medicine, using mobile devices such as cell phones and tablets. mHealth has large implications not only for newer devices like smartphones and high-end tablets, but also for feature phones and low-cost tablets in developing nations. Many different software and hardware applications fit under the umbrella of mHealth so the term is used conceptually to talk about future innovations and delivery systems.

NLP

An acronym for Natural Language Processing, NLP is a field of study and technology that seeks to develop software that can “understand” human speech – not just what words are being said, but what is meant by those words. By “processing” text input into an NLP program, large strings of text can be parsed into more traditionally meaningful data. For example, narrative from a doctor in a medical record could be transferred into data for research and statistical analysis. If we had every medical record and narrative in history, we could search it and look for trends – and possible new cures and symptoms. IBM’s famous Watson machine that could “listen” to Jeopardy! clues and answer is an advanced example of NLP.

ONCHIT

An acronym for “Office of the National Coordinator for Healthcare Information Technology,” the ONCHIT is a division of the Federal Government’s Department of Health and Human Services. The Office oversees the nation’s efforts to advance health information technology and build a secure, private, nationwide health network to exchange information. Although the National Coordinator position was created by executive order in 2004, the Office and its mission were officially mandated in the 2009 HITECH Act as a part of the stimulus package.

Patient Engagement

Patient Engagement is a broad term that describes the process of changing patient behaviors to promote wellness and a focus on preventative care. “Engagement” can roughly be read to describe the patient’s willingness to be an active participant in their own care and to take responsibility for their lifestyle choices. Patient Engagement efforts can be as simple as marketing campaigns for public heath and appointment reminders, and as advanced as wearable monitors that can transmit activity and exercise information so patients can track their fitness. Improving the health system’s ability to engage patients is considered key to lowering healthcare spending and attacking epidemics like obesity and heart disease.

Patient Portal

A patient portal is software that allows patients to interact, generally through an internet application, with their healthcare providers. Portals enable communication between providers and patients in a secure environment with no fear of inappropriate disclosure of the patient’s private healthcare information. Patients can get lab results, request appointments and review their own records without calling the provider. Patient portals can be sold as a standalone software module or as part of a comprehensive Practice Management/EHR package.

Patient-centered Care

Patient-centered care is a healthcare delivery concept that seeks to use the values and choices of the patient to drive all the care the patient receives. As elementary as it sounds, developing a culture that places the needs and concerns of the patient – the whole patient – at the center of the decision-making process is a new development in the healthcare system. Patient engagement is at the core of patient-centered care, because the patient is the central driver of the decisions – as is only right!

PCMH

An acronym for Patient Centered Medical Home, a PCMH is a model for healthcare delivery where most or all of a patient’s services for preventative, acute and chronic primary care are delivered in a single place by a single team to improve patient outcomes and satisfaction as well as lower costs. PCMHs may also operate under a different reimbursement structure, as they can be paid on an outcome basis or on a capitation model as opposed to fee-for-service.

PHR

An acronym for a “Personal Health Record,” a PHR is a collection of health data that is personally maintained by the patient for access by caregivers, relatives, and other stakeholders. As opposed to the EHR model, in which a single hospital or system collects all the health information generated in the facility for storage and exchange with other providers, the PHR is maintained, actively or passively with mobile data capture or sensor devices, by the patient. The PHR can supplement or supplant other health records depending on the way it is used.

PPACA

An acronym for the “Patient Protection and Affordable Care Act,” the PPACA was a federal law passed in 2010 to reform the United States healthcare system by lowering costs and improving access to heath insurance and healthcare. The PPACA uses a variety of methods – market reforms to outlaw discrimination based on gender or pre-existing condition, subsidies and tax credits for individuals, families and employers, and an individual mandate forcing the uninsured to pay penalties – to increase access to insurance and lower healthcare costs.

PQRS

An acronym for the “Patient Quality Reporting System,” PQRS is a mechanism by which Medicare providers submit clinical quality and safety information in exchange for incentive payments. Physicians who elect not to participate or are found unsuccessful during the 2013 program year, will receive a 1.5 percent Medicare payment penalty in 2015, and 2 percent Medicare payment penalty every year thereafter.

RAC

An acronym for “Recovery Audit Contractor,” a RAC is a private company that has been contracted by the Centers for Medicare and Medicaid Services to identify and recover fraudulent or mistaken reimbursements to providers. There are four regions of the United States, each with its own RAC  which is authorized to recover money on behalf of the Federal Government. A pilot program between 2005 to 2007 netted nearly $700 million dollars in repayments and the program was made permanent nationwide in 2010.

REC

An acronym for “Regional Extension Center,” a REC is a organization or facility funded by a federal grant from the Office of the National Coordinator for Health Information Technology to provide assistance and resources to providers who want to adopt an EHR and achieve meaningful use but need technical or deployment support to get their system up and running. There are currently 62 RECs in the United States who focus primarily on small and individual practices, practices without sufficient resources, or critical access and public hospitals that serve those without coverage.

Registry

A Registry is a database of clinical data about medical conditions and outcomes that is organized to track a specific subset of the population. Registries are important to track the efficacy of drugs and treatment, as well as to analyze and identify possible treatment and policy opportunities to improve care. A registry can also be used to report PQRS.

Telehealth

Telehealth is a broad term that describes delivering healthcare and healthcare services through telecommunication technology. Although the terms telehealth and mhealth can be used somewhat interchangeably, “telehealth” tends to focus more on leveraging existing technologies – phone, fax and video conferencing to deliver services over a long distance, or to facilitate communication between providers. Remote evaluation and management and robotics are both examples of care innovations that would fall under the telehealth umbrella.

Value-based Purchasing

Value-based purchasing is a reimbursement model for health care providers that rewards outcomes for patients as opposed to the volume of services provided. Both through increased payments for positive outcomes, and decreased payments for negative ones, value-based purchasing seeks to lower costs by focusing on increasing quality and patient-focus. Accountable Care Organizations and Patient Centered Medical Homes are both examples of delivery systems that rely on value-based purchasing.




76 Ways to Use the Cloud in Your Medical Practice (or Any Business)

I’ve had a lot of questions since last week when I offered to help readers “get on the cloud.” Most people want to know – what exactly does getting on the cloud mean?

The term cloud comes from both the look of technical drawings which depict the relationship between cloud services and consumers, and is also a metaphor for the fact that cloud service providers exist out of sight in some distant location. My favorite definition of the cloud is “Using the Internet to store, manipulate and deliver data.” Here are 76 ways to do just that!

SECURITY & RISK MANAGEMENT

  1. Decide user by user which files and folders each employee or stakeholder may have access to. Decide if the user may view information, upload information, download information, invite other collaborators or edit documents. Change the user’s permission instantly, or eliminate their access to everything on the spot.
  2. Store critical documents:  letter of incorporation, Tax ID assignment, Medicare letters, shareholder agreements, by-laws, etc.
  3. Scan in any and all documentation of lawsuits and or legal correspondence about patients.
  4. Collate logon information for important sites:  CAQH, NPPES, PECOS, state board, specialty board, etc.
  5. Collect all information needed for credentialing and privileges for all providers in one easy place: CV, photo, license, board credentials, DEA, state registration, malpractice, references, etc. Keep copies of all credentialing applications in the same file.
  6. Keep a licensing and privileges spreadsheet for all professionals so deadlines don’t take you by surprise. Include CPR, ALSC, DEA, state licenses, and board certification and recertification.
  7. Never worry if you’ve locked your office, your file cabinet or your desk again. Your information is safe in the cloud.
  8. Store important logons and passwords on the cloud along with instructions and know that if something happens to you, the business will recover quickly.
  9. Have employees watch for health fairs and special events that your practice can participate in. Develop a calendar for community events that you can prepare for annually.

INFORMATION SHARING

  1. Share files up to 2GB (images, video, audio, text)
  2. Turn a folder into a public web page.
  3. Start a secure referrers’ area and give access to those practices that refer to you. Stock it with FAQs, referral forms, maps and directions to your practice, and phone numbers and emails for communication. Keep a referrer satisfaction survey on their pod at all times.
  4. Push the patient schedule into the cloud so any provider can check their schedule at any time from anywhere.
  5. Store building or suite blueprints.
  6. Develop a practice glossary to document all abbreviations and specialty-specific terminology – very helpful for new employees and transcriptionists.
  7. Make a secure education area for your patients which they can access from your website or in your waiting area on iPads. Include websites, blogs, patient satisfaction and other surveys, health tracking programs, etc.
  8. For those providers on productivity bonuses, push a productivity report to the cloud for them to review privately.
  9. Put staff education programs on the cloud for new employee orientation and annual training on compliance, OSHA, HIPAA, fire safety and disaster communication plans.
  10. Post photos of the office picnic or Christmas party, or the new baby, or the bride and groom.
  11. Use the cloud as a digital scrapbook of events, new employees, new services, accolades, advertising or publicity.
  12. Pass around a digital birthday greeting card to all staff except the one having the birthday!
  13. Post a job on craigslist. Once you have a group of candidates you want to consider, give them a link to a folder with the position job description, benefits schedule and in-depth information about the hiring time line.
  14. Post lunch menus for restaurants and take-outs within several miles of the practice so employees can get lunch efficiently and quickly.
  15. Post the office schedule for the year showing which dates the office will be closed for holidays.
  16. Post the call schedule and let your answering service and the hospitals view it.
  17. Publish your weekly practice newsletter on the cloud – it becomes an instant record of when and how things were communicated.

BUSINESS MANAGEMENT

  1. Scan invoices to the cloud for storage once you’ve paid them.
  2. Scan invoices to the cloud for an external bookkeeper to access and pay them.
  3. Scan invoices to the cloud for a physician to approve them for payment.
  4. Scan the daily accounts receivable work (EOBs, checks, deposit slips, denials, reconciliations) to the cloud and shred the originals at the interval of your choice.
  5. Scan documents to the cloud when you are notified that employees are having monies withheld from their paychecks for child support or garnishment, or when they change their deposit information or retirement plan contribution.
  6. Track the history of files and folders – when did we change this policy? When did we go to this compensation system? What was the original wording of this contract?
  7. Generate reports on employee productivity, looking for patterns of collaboration and innovation.
  8. Scan RAC, CERT, ZPIC and other audit letters when they come and keep a spreadsheet of dates records and appeals are due.

COLLABORATION

  1. Have online meetings centered around documents in the cloud.
  2. Post job protocols and empower employees to change protocols regularly as information and routines change.
  3. Start a CME log for each provider that the providers can easily add to.
  4. Have your employees collect stories, links and other items in the cloud to push to your Facebook page or website blog.
  5. Keep minutes from physician meetings and request all physicians review, ask for changes and sign off.
  6. Keep attendance and minutes from staff meetings and ask all staff to electronically sign the minutes.
  7. Have each employee keep a continuing education log for face-to-face and online education.
  8. Assign tasks. Place something on the cloud and assign staff to respond to it, change it, develop it or implement it.

INCREASE EFFICIENCY

  1. Develop a “How Do I?” document for quick information new employees need to know and established employees may not remember.  Some examples: How do I reach the inclement weather information line? What do I do if there is a blood spill in the practice?
  2. For the manager – develop a staff roster with dates of hire, dates of birth, social security numbers, phone numbers, hourly wage and termination dates. One document will answer 25% of questions you have or others ask you every day.
  3. Standardize protocols and information when you have multiple sites or divisions.
  4. Show each employee how to keep their most-used files on their digital desktop to access without a logon and password.
  5. Sync desktop folders to cloud folders automatically – documents are updated to the latest version without thinking about it.
  6. Restructure your files and folders as many times as you want or need to.  Rename files, move and copy files, and delete files if they are not serving the purpose you thought they would.
  7. Expand the number of users instantly for special projects.
  8. Put every form on the cloud, have employees complete them on the cloud, sign them electronically, then share them with you for your electronic signature.
  9. Put new templates or forms on the cloud for everyone to draw from – eliminate old letterheads, logos, addresses, etc. instantly.

IMPROVE MOBILITY

  1. Fax documents from the cloud to a fax machine.
  2. Email files from anywhere.
  3. Search for anything in your cloud by words or phrases. Never lose anything again!
  4. Access the cloud from anywhere and from any device – smartphone, PC, iPad…
  5. Put the patient schedule information into the cloud so if inclement weather hits, staff can access the schedule at home and contact patients about their appointments.
  6. Access your business 24/7/365.

DAY-TO-DAY MANAGEMENT

  1. Assign a folder for your CPA to be notified when financials are available for download, or for you and the physicians to be notified when s/he finishes the financials or taxes.
  2. Assign a folder for your benefits broker to be notified when new employee applications for medical and dental benefits are available for download.
  3. Assign a folder for your banker to be notified when quarterly financials are available for download.
  4. Assign a folder for your physicians/owners to be notified when monthly or quarterly financials are available for their review.
  5. Post practice calendars for paid time off requested and approved.
  6. Develop a physician referral resource tool if your PMS does not organize that information well. Create your own spreadsheet with all the fields of information that are important to your practice and have all employees add to it and correct it routinely.  Have someone in the practice or a temp or prn person call every practice/group on the list twice a year and confirm all the pertinent information.
  7. Post a “Who Covers Whom” list that spells out who covers primary responsibilities in the practice when someone is out of the office. Building your team 3 deep (for every primary task, there are at least 3 people that can perform that task) is crucial for reducing vulnerability.
  8. Video new employees answering a few questions about themselves and post it on the cloud for all staff to view.
  9. Put video of all staff introducing themselves and telling what they do on the cloud for new employees to view.
  10. Video benefit providers discussing benefits so employees can watch at any time –  medical insurance, dental insurance, vision insurance, short and long-term disability, life insurance and retirement benefits. Employees will get more out of and become more aware of what their benefits are.
  11. Make an easy-reference spreadsheet with the payer contracts listed and images of the plan cards for staff to be able to identify the contracts and plans in force at any given time.
  12. Keep personnel files on the cloud. You may choose to have a file of documents the employee may see and get a copy of, and a file of documents they may not see or get copies of. Both can be a part of the same folder.
  13. Store scripts for your messages on hold, your after-hours message and your scripting for employees.

SAVE MONEY

  1. Increase storage space without buying any hardware or software.
  2. Scan charts into the cloud as a preliminary repository before implementing EMR, or scan charts of inactive patients in so you don’t have to pay to store them offsite.
  3. Never back-up your documents on your computer again.
  4. Put your triage algorithm or flow sheet on the cloud. Hire nurses to triage from home.
  5. If a manual doesn’t come electronically, scan it onto your cloud. Check the manual before you call the repairman.
  6. Preserve your valuable employee knowledge – have each department develop a folder with the important resources for their staff. The billing department may have websites they refer to for coding questions, a primer on evaluation and management coding, a cheat sheet on standard practice fees, and a calendar for the times of the year that different updates and revisions to CPTs, ICDs and NCCI edits.



Medicare is Auditing You! What To Do Next?

CMS logo found on the header of all audit lettersThere 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:

  1. A sample of approximately 120,000 submitted claims is randomly selected;
  2. medical records from providers who submitted the claims are requested; and
  3. 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
  • Zone 4  – CO, NM, OK, TX. HealthIntegrity
  • Zone 5  – AL, AR, GA, LA, MS, NC, SC, TN, VA and WV AdvanceMed was just purchased by NCI – site not current
  • Zone 6 – PA, NY, MD, DC, DE and ME, MA, NJ, CT, RI, NH and VT – not awarded
  • Zone 7  – FL, PR and VI http://www.safeguard-servicesllc.com/zpic.asp

How should you respond to a Medicare audit?

  1. Log all requests for records from all payers.  Time and date all communications received and all communications sent.
  2. Scan all records sent and include a cover letter itemizing contents of response.
  3. Send records via certified mail.
  4. 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?

  1. Check the audit sites monthly to see if your specialty or any services you provide are being targeted for an audit.
  2. Conduct an internal assessment to identify if you are in compliance with Medicare rules or hire a third-party to conduct an audit for you.
  3. Identify corrective actions to promote compliance.
  4. Appeal when necessary

Excellent resource site http://www.willyancey.com/sampling-claims.html




The Cohen Report: Free Webinar on Auditing the RAC Auditors

NOTE: If you need the basics on RACs, click here for my article.

Finance - Financial injection - Finance

Image by doug88888 via Flickr

From our friend Frank Cohen:

Over the past year or so, I have been involved in conducting post RAC (and other) audit analyses to determine whether the RAC (or other auditing agency) was using appropriate statistics and calculations to create their overpayment estimates.

As you can probably imagine, in nearly every case, I have found this not to be true. In fact, as it turns out, the errors I find nearly always are in favor of the auditor, not the healthcare provider.

RAC is able to take advantage of the practice in three areas

The first area has to do with pulling samples for review. If these samples are not random or worse yet, if they are intentionally biased, they can create a misrepresentation of overpayment that unfairly penalizes the provider and because RACs are paid a commission, benefits them.

The second area has to do with the way in which the overpayment point estimate is calculated. This is where they come up with something like the average overpayment per audited unit (i.e., claim, claim line, member event, etc.).

The third has to do with the methodology used to extrapolate the point estimate for the sample to the universe of units for the healthcare provider. An error in any one of these areas can result in a gross exaggeration of the final overpayment demand.

Understanding how to defend yourself from the results of an audit

I have developed a series of three short, free webinars to teach you how to catch potential errors in each of three areas.

Part 1 will be on validating random samples and is scheduled for Monday, December 13 from 1:00 to 2:00 EST.

Part 2 is on how to calculate the overpayment point estimate and is scheduled for Tuesday, December 14 from 1:00 to 2:00 EST.

Part 3 is on verifying extrapolation results and is scheduled for Wednesday, December 15 from 1:00 to 2:00 EST.

Each webinar will probably last around 30 minutes with an additional 30 minutes for questions.  I plan to record these and post them later so if you can’t make it, don’t worry.  Each session will be available for review after the last one is completed.

For more info or to register, go to www.frankcohen.com and click on the Webinar tab. Also, feel free to forward this on to co-workers or to post wherever you think folks may benefit.

Frank Cohen
The Frank Cohen Group, LLC
www.frankcohen.com
frank@frankcohen.com
727.442.9117




The RAC Outreach Session: Get Your Medical Practice Ready Now!

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, VT Diversified 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:

  1. RACs may review claims as far back as October 1, 2007.
  2. RACs review claims after they have been paid using the same Medicare policies used to pay the claim initially.
  3. There are two types of reviews: Automated Reviews which do not request the medical record and Complex Reviews which will request the medical record.
  4. Automated Reviews are “done deals” and the claim will be adjudicated and a letter sent detailing the dollars requested.
  5. Providers may return the payment by writing a check, allowing a recoupment from future payments or may apply for an extended payment plan.
  6. 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.
  7. Note: if faxing, fax the records to yourself to check for readability before you fax to the RAC.
  8. Email records are currently not acceptable due to HIPAA.
  9. 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.
  10. 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.
  11. 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:

  1. Visit the CMS website here and click on Demonstration Projects to see what improper payments were found by the RAC demonstration projects.
  2. Visit the CMS and OIG websites to see what improper payments were found by reading the OIG (Office of Inspector General) reports here and CERT (Comprehensive Error Rate Testing) reports here.
  3. 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.
  4. 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.
  5. Develop a basic tracking system for receipt of letters, and activity for each request.
  6. 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?

A: Yes.

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!

Photo credit: © Milosluz | Dreamstime.com




What Health Care Providers Need To Know About Medicare and the RAC

Carla Hannibal

By Carla Hannibal, CMM,CPM,CIMBS

Recovery Audit Contractors (RACs) will pursue corrections of Medicare claims by auditing for overpayments and underpayments under Part A or B of the title XVIII of the Social Security Act.  Health care providers will be affected as Medicare has recently contracted with RACs for 2009 and beyond.  RACs will audit every United States and Peurto Rico health care provider who files with Medicare.  The audit and recovery plan is expected to be in place by 2010 in all 50 states and Puerto Rico on a permanent basis. Based on findings, if compliance with Medicare billing rules is not up to standard, penalties may be assessed including fines and in severe cases, the loss of Medicare billing privileges.

What should providers do?
Health care providers would be wise to ensure their offices are in compliance because Medicare will not provide any specific guidance to the physician or provider of care outside of basic written guidelines.  RAC contracts fees are contingency-based which means they will have every incentive to find errors.  It should be noted that each RAC’s contingency fee is established during contract negotiations with CMS and varies for each RAC.

Region A: 12.45%
Region B: 12.50%
Region C: 9.00%
Region D: 9.49%

For practices, internal changes need to be established to monitor documentation and coding for compliance as well as establishing a framework to track RAC requests.  These are not new requirements to providers.  The provider application and contract clearly states that it is the sole responsibility of the Physician to follow all documentation rules and regulations, coding and billing rules 100% of the time.  Offices setting up compliance guidelines should appoint someone who will be responsible for monitoring compliance within the practice.

Is there a limit to what records RACs will audit?

Yes there is a medical records limit, established by NPI, of records the RAC will audit.

Ӣ Solo Practitioner
Limit = 10 medical records/45 days

Ӣ Partnership of 2-5 individuals
Limit = 20 medical records/45 days

Ӣ Group of 6-15 individuals
Limit = 30 medical records/45 days

Ӣ Large Group (16+ individuals)
Limit = 50 medical records/45 days

What are the RACs focusing on?

Under the program, RACs will focus on CMS-established payment criteria and will consist of both automated claims history reviews from the CMS database as well as complex clinical reviews of patient medical records.   Specific areas of concentration include “not medically necessary services” (or those not meeting the established CMS clinical payment criteria), non-covered services, incorrectly coded claims, duplicate services and incorrect payment amounts.

What is involved in the RAC claims audit process?

The Process consists of six phases.

I.     Data Screening & Claim Selection

II.    Medical Record Request

III.  Record Review and Status Determination

IV.  Post Review Notification

V.    Overpayment Recoupment

VI.   Post Determination- Other Provider Options and Data Tracking

Does the RAC program cover Medicare Replacement policies?

No the RAC program does not detect or correct payments for Medicare Advantage or the Medicare prescription drug benefit.

What happens after a RAC audit?

In those cases of overpayments, the physicians may choose to send a rebuttal of the findings directly to the RAC within 15 days of receiving the RAC’s letter identifying an overpayment.  However this does not stop the clock on the 120-day time period during which you can request a redetermination (first level appeal) from your Medicare contractor or on the interest accrued when money is not refunded to CMS within 30 days of request.  If the RAC discovers that an underpayment has been made to the provider then the RAC will inform the carrier or intermediary who will proceed with the claim adjustment and payment to the provider.

When does all this begin?

Implementation will take place on a rolling basis in 3 phases which began 10/1/08.  The schedule for the program rollout can be found here.


Will your practice be ready?


Carla Hannibal, CMM, CPM, CIMBS is President of Hannibal Professional Services, LLC (HPS).  HPS is a practice management company that provides services for small to medium-sized physician groups.  Carla is a writer, speaker, trainer and highly skilled manager with 27 years of clinical and administrative experience in the healthcare industry.  Her experience in the healthcare industry ranges from claims processing to practice management.  If you need more information on RAC, or help in implementing a compliance process in your practice, Carla can be reached at 623- 204-8992.