Surviving Medicare’s Recovery Room: Monitoring Your Vital Signs for a Successful Operation

1. Surviving Medicare’s Recovery Room:Monitoring Your Vital Signs for a Successful Operation Presented by: Stacie L. Buck, RHIA, LHRM Vice President Coding & Compliance Services PM&R Resources April 7, 2005

2. Agenda Part 1 – Medicare’s Recovery Room • Comprehensive Error Rate Testing • Medicare Improper Fee for Service Payments FY 2004 • Recovery Audit Contractors • Medical Review • Comprehensive Data Analysis Part 2 – Monitoring Your Vital Signs • Internal Auditing • Comparative Billing Reports • 2005 OIG Work Plan

3. PART 1:Medicare’s “Recovery Room”

4. Medicare Program Integrity Mission: Pay It Right “The primary objective of program integrity activities at the Center for Medicare & Medicaid Services (CMS) is to insure that the Medicare Fee-for-Service program pays claims correctly. To meet this goal, Medicare contractors must pay the right amount for covered and correctly coded services rendered to eligible beneficiaries by legitimate providers.”

5. CMS Initiatives

6. CERT ProgramComprehensive Error Rate Testing • Produces national, contractor specific, and benefit category specific paid claim error rates • Independent reviewers periodically review a random sample of claims identified as soon as they are accepted into the claims processing system • Claims are followed through to their final disposition. • Paid claims are reviewed by the independent reviewers • Denied claims validated to ensure that the decision was appropriate. • Project resulted in • a national paid claims error rate, • a claims processing error rate, • a provider compliance rate, • a paid claims benefit specific error rate. • Error rates for Carriers, DMERCs & FI’s

7. Medicare Fee-for-Service Payments Two programs to monitor accuracy of FFS: • Comprehensive Error Rate Testing (CERT) • Hospital Payment Monitoring Program (HPMP) • Error rate for QIOs

8. Medicare FFS Monitoring

9. Improper Medicare Fee-for-Service Payments ReportFY 2004Overview

10. Medicare FFS Payment ReportFY 2004 Error rates and improper payments calculated using the following: • Random sample of 160,803 claims submitted in 2003 • Requested medical records from providers • Reviewed the claims and medical records to determine if claims complied with Medicare coverage, coding and billing rules • Assigned errors to claims paid or denied incorrectly • Classified relevant providers as non-responders

11. Medicare FFS Payment ReportFY 2004 Types of Error Rates • Paid Claims Error Rate • Provider Compliance Error Rate • Services Processed Error Rate

12. Summary of FindingsImproper MFFS Report2004

13. Summary of FindingsImproper MFFS Report2004

14. Summary of FindingsImproper MFFS Report2004

15. Insufficient Documentation • Provider did not include pertinent patient facts in the documentation submitted • No orders • Documentation to support condition incomplete

16. Insufficient Documentation

17. Medically Unnecessary Errors

18. Top 20 “Upcoding” Errors

19. Error Rates by Provider TypeNational

20. Error Rates by Provider TypeFlorida Medicare

21. CMS Audit & Recovery Activities for 2005 • CMS will continue the CERT & HPMP programs • CMS will continue to add resources to identify instances of overpayments and underpayments through a pilot program using Recovery Audit Contractors

22. Recovery Audit Contractors

23. Recovery Audit Contracts MMA of 2003 calls for the use of RACs to: • Identify underpayments and overpayments • Recoup overpayments Pilot program will determine if use of RACs is cost effective means of adding resources to ensure correct payments.

24. Recovery Audit Contracts (RAC) • Contractors will identify and collect Medicare claims overpayments not identified by carriers, FIs & DMERCs • California, Florida & New York selected for 3-year pilot program beginning around May 2005

25. Recovery Audit Contracts (RAC) • Claims from at least one year prior will be reviewed • Data analysis to identify areas of investigation • Request claims history information from carriers/FIs • Identify and recover overpayments • Application of NCDs/LCDs • Providers permitted to appeal • Underpayments will be forwarded to Medicare contractors for processing and payment

26. Carrier InitiativesFlorida Medicare

27. Medical Review Process Mission of the MRP is to reduce the claims payment error rate by insuring that every service reimbursed is: • A covered, medically necessary, and reasonable service or procedure • Rendered to eligible beneficiaries by legitimate providers. • Is for services within the Medicare benefit structure

28. Medical Review Process The overall goal of the medical review process is to identify and prevent inappropriate Medicare payments through the following objectives: • Utilize data when selecting areas for analysis and corrective action • Educate providers on appropriate billing, reducing denials and encouraging provider feedback • Avoid inconvenience to providers who adhere to Medicare Program requirements

29. Comprehensive Data Analysis • Medicare contractors perform analysis of service frequency by comparing utilization patterns to those of other like providers in the nation • Focuses on identifying aberrancies • Comparison of local claims data with national claims data as well as comparing like providers to each other within the state

30. Comprehensive Data Analysis • Starting point for all investigations and evaluations • Contractors look for trends in utilization • For Medicare Part B - performed to determine if frequency for a specific code is at least 50% higher than the national level • Comparisons are state-to-state, state-to- nation and within peer specialty groups

31. Comprehensive Data Analysis • Aberrancy does not always indicate improper payments • Detailed analysis performed prior to initiation medical review • Distribution of provider utilization • Local demographic patterns • Volume of service provided • Availability and accessibility of substitute procedures • Extent of “upcoding”and/or “downcoding” • Appropriateness of the procedure for dx billed • Appropriateness of POS, specialties billing for service, modifiers billed with the service

32. Comprehensive Data Analysis • Data evaluated to determine what is driving the aberrancy • Recommendations made for medical review activities • Provider-specific probe reviews (20-40 claims) • Widespread probe reviews (100 claims) • Development of LCD • Publication of educational article

33. Progressive Corrective Action • Education • Policy Development • Pre-payment Review • Post-payment Review

34. Progressive Corrective Action Corrective action based on results of probe review

35. Pre-Payment Review • Automated editing • ICD-9-CM to CPT-4 code • Medically Unbelievable • Place of Service • Specialty to Procedure • Utilization Screening • Establishment of a specific parameter for a specific procedure code • Services billed in excess of screen will require submission of documentation on pre-payment basis • Part B “Flag” (provider specific) • Certain procedure codes “flagged” or all claims “flagged” for pre-payment review

36. Post-Payment Review • Individual Provider • Letter sent to provider requesting documentation to support 20-40 selected claims • Documentation reviewed • Provider notified in writing of results • Additional steps depend on outcome • Widespread Probe • Approximately 100 claims reviewed • A few claims are requested from several providers • Results determine corrective action • Statistically Valid Random Sample • In depth audit of provider’s utilization, coding and documentation practices • Used when major problems identified through a probe review and for suspected fraud and abuse • Results determine corrective action

37. Pre/Post Payment ReviewsRequestedDocumentation Documentation may include, but not limited to: • Office records including progress notes, H&P, treatment plan • Identity and professional status of provider • Laboratory & Radiology Reports • Comprehensive Problem List • Current list of prescribed medications • Progress notes for each visit that demonstrates patient response to prescribed treatment

38. Overpayment? • Payment based on a charge that exceeds the fee schedule or reasonable charge (incorrect procedure code) • Duplicate processing of same claim • Payment made to incorrect payee • Payment for non-covered items/services or medically unnecessary services • Incorrect application of deductible or co-insurance • Payment for items/services provided during a period of non-entitlement • Claims processed incorrectly by Medicare Part B as the primary payer

39. Detecting Overpayments • Identified by physicians or beneficiaries • Identified by review or hearing process • Identified as a result of an investigation of customer complaints or random sample of billing practices • Identified by federal agencies conducting audits

40. Refunding Overpayments • If identified by the provider, the provider is expected to issue a refund check to Medicare • If identified by Medicare, the provider receives a refund request letter • Provider has 30 days to refund • After 30 days interest begins accruing and offset is initiated • Scheduling of repayments in excess of $1,000 may be requested

41. PART 2:Monitoring Your “Vital Signs”

42. Internal Auditing & Monitoring • Reduces the risk of an audit by Medicare and other third party payers • Identifies and allows for correction of deficiencies in your revenue cycle, speeding payment of claims • Tracking and trending of claim denial to resolve payment and compliance issues • Identification of missed charges • Improved documentation practice result in improved quality of care

43. Auditing vs. Monitoring • Auditing • Periodic • Gathering baseline information to identify risks • Verifying information – coding vs. documentation • Monitoring • Continuous • Key indicators • Put in place as a result of previous audit findings

44. Auditing & Monitoring Where do I begin??? • Conduct a baseline audit – documentation vs. codes billed • Key indicators • Comparative Billing Report (CBR) • Current OIG Work Plan

45. Audit Process • Conduct claims submission audits (billing errors) • Conduct coding compliance audits (documentation) • Conduct focused audits (problem areas, OIG) • Select at least 10 records per physician to establish documentation patterns • Audit frequency will depend on audit findings • Retrospective vs. prospective • Corrective action

46. Audit Process Audit for for the following patterns that may trigger a Medicare focused review: • Using the same code over and over • Inconsistencies among partners in a group • Upcoding/Undercoding • Modifiers • Non-specific diagnosis coding Source: Skurka, Margaret A. “Navigating the Physician Services Maze.” Journal of AHIMA 72, no. 7 (2001): 51-58

47. Audit Process Utilizing the medical record verify accuracy of the following: • CPT-4 coding • ICD-9-CM coding • Modifiers • Medical necessity (ABNs)

48. Audit Process Source documents: • OV/progress notes, consultations, H&P • Test orders • Superbill/fee ticket • 1500 form • EOB

49. Monitoring Key Indicators • Aging Report • Denials • Comparative Billing Report

50. Comparative Billing Reports • Provide a “snapshot” of CPT Code utilization • Used by Medicare to identify aberrancies • Medicare reviews CBR for: • Standard deviations from the mean • Percent above the mean or median • Percent increase in charges, number of visits/services from one period to another