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Weygandt-DrPaul-100The Centers for Medicare & Medicaid Services (CMS) released a special-edition MLN Matters article titled "The Importance of Correctly Coding the Place of Service by Physicians and Their Billing Agents." This article, released by CMS on March 9, 2011, was a follow-up to a July 2010 report from the acting deputy inspector general for audit services to CMS Administrator Don Berwick.

That report detailed the results of a review of place-of-service coding for physician Part B services billed during the 2007 calendar year. The audit covered 484,218 non facility-coded physician E/M services that were matched to hospital outpatient or ASC for the same patient on the same day, being responsible for more than $42 million in charges.

In a review of 100 sample services, physicians incorrectly coded the place of service 90 times. In this small sample, the resulting overpayments amounted to $4,710. Extrapolated to the larger population, the overpayment for "place-of-service" payments was estimated at $13.8 million. The recommendation of the report was to recover the $4,170 identified in the audit immediately and then reopen the unaudited 484,118 non-sampled services to recover the estimated $13.8 million.

Background

In the RVU system utilized in physician payment, the three critical components of relative value calculation are physician work, malpractice expense and practice expense. The practice expense component, contributing to physician payment, varies based on a distinction between "facility" and "non-facility" sites.

Basically, facility settings are hospital and ASC sites where the physician incurs substantially less practice expenses than in the office or at other non-facility locations, where additional practice expenses are incurred. To account for the increased overhead expense physicians incur to provide services in facilities where they pay practice expenses, Medicare reimburses at a higher rate for "non-facility" services. By misidentifying the place of service as non-facility, physicians in essence are double-charging Medicare for practice expenses for which the facility already is being compensated.

The 90 percent error rate cited in the aforementioned audit exposed physicians to extensive payment recovery, which we anticipate to proceed rapidly. Recall that the $13.8 million recovery is for incorrect place-of-service billing for only the 2007 calendar year. In addition to reopening the un-reviewed 2007 claims, we can anticipate reviews of claims from other years. Furthermore, the Office of Inspector General for the U.S. Department of Health and Human Services is working to improve current program safeguards to avoid future overpayment of such claims.

It is critical that physicians and their professional billing staff correctly identify place of service to code correctly and avoid recoverable overpayments.

Example of Incorrect Coding [from the audit report]

A carrier paid a physician $374 for performing a spinal pain injection procedure coded as having been performed in his office. Our analysis showed that the physician actually performed this procedure in a hospital outpatient department and that a fiscal intermediary had reimbursed the hospital for the overhead portion of the service. If the claim had been coded correctly, the physician would have received a payment of $96, which would not have included overhead costs.

As a result of the incorrect coding, the physician was overpaid $278.

About the Author

Paul Weygandt is a Certified Physician Executive (CPE) with more than 20 combined years of experience in medical management, legal counsel and orthopedic surgery. He has served as a hospital VPMA, improving documentation across all DRG payers. Dr. Weygandt is vice president of physician services for J.A. Thomas & Associates and is a partner in the firm.

Contact the Author

paul@JATHOMAS.COM

To comment on this article please go to editor@racmonitor.com

Leveling the Playing Field with Payers

tforce100Most physicians and healthcare administrators believe that healthcare, and particularly the "revenue cycle," are controlled entirely by managed-care companies.

They believe this because these companies are multi-million dollar conglomerates with seemingly endless streams of revenue. In addition, these same companies are the entities that draft the provider-managed care contracts that set reimbursement rates for most practices. Unless a health provider is a huge hospital network, there generally is very little room for negotiation of the terms and rates for such contracts.

While this common belief is understandable, it is simply untrue. The fact is, medical practices and their consumer patients have much more power than the insurance companies when it comes to the claims adjudication process. If the medical practices can learn to harness this power, their claims will be paid quickly and at fair reimbursement rates.

Payers such as managed-care companies, HMOs, PPOs and the like have many state and federal statutory and common-law responsibilities with respect to the adjudication of medical claims.  Providers simply do not have these obligations.

Consider that managed-care companies have to comply with the following:

  • State Prompt Payment Laws that mandate payment of claims within a set time frame (i.e. Section 3224-a of New York Insurance Law, which requires payment of electronically submitted claims within 30 days of receipt, or 45 days for claims submitted on paper).
  • State Prompt Payment Laws that mandate, in writing and with specific reasoning, the denial of claims within a set time frame (i.e. Section 3224-a of New York Insurance Law)
  • State Prompt Payment Laws that mandate payment of interest if claims are not paid within statutory time frames (i.e. Section 3224-a of New York Insurance Law, which cites a rate of at least 12 percent interest unless such interest would be less than $2).
  • Unfair Claims Settlement Practices acts and statutes that prohibit insurer conduct intended to foster intentional and systematic avoidance of payment of clean claims (i.e. Section 2601 of New York Insurance Law).
  • Unfair and Deceptive Trade Practices acts and statutes that prohibit deceptive and unfair advertising and marketing of insurers(i.e. New York Deceptive Trade Practices Laws - General Business Laws Section 349 - 350).
  • Federal ERISA laws that are applicable when insurance companies administer self-funded plans (Federal Statute 29 CFR 2560.503-1 sets forth claim and appeal adjudication requirements for self-funded plans).
  • The Patient Protection and Affordable Care Act, or PPACA, a new piece of federal legislationregulating, among other things, time limits for insurers responding to appeals.
  • Common-Law Responsibilities inherent in every contract, such as the implied duty of good faith and fair dealings.
  • Common-Law Responsibilities relating to construction of managed-care agreements, prohibiting vague or ambiguous provisions being interpreted to the benefit of the non-drafter policyholder and healthcare provider and to the detriment of the insurer (see Matter of United Community Ins. Co. v. Mucatel, 69 NY2d 777, 779, aff'd at 127 Misc.2d 1045; Hartol Products Corp. v. Prudential Ins. Co., 290 NY 44, 49).
  • Bad Faith, in other words insurer conduct so reckless that it results in severe civil and criminal sanctions against the insurer.

In light of the many obligations of the insurer in the claims adjudication process, it is incumbent upon the healthcare provider and medical practice to understand the law. Once this understanding is achieved, those providers and practices can use it to hold the insurance companies accountable. Knowledge of the law is the power necessary to ensure that claims are paid promptly, with interest if required by state law, and at fair reimbursement rates.


The following are some tips providers and practices can utilize to ensure that medical claims are paid quickly and fairly:

(1)  Obtain proof of submission and receipt of claim. If your claims are submitted electronically, your clearinghouse can provide validation reports that will prove delivery and receipt by the payor. If the claims are submitted on paper via a CMS-1500 claim form, there are ways in which proof of submission and receipt can be established. For one thing, in law there is a presumption that a properly addressed document placed in the mail (in the custody of the United States Postal Service or any other recognized mail carrier) is received by the intended recipient. The intended recipient has the burden to prove that the mail was not received. Medical practices should establish a written procedure for the mailing of paper claims and follow that procedure precisely. Use of one staffer or a mail room to accomplish this is the preferred method. Paper claims also can be mailed in bulk via certified mail, return receipt requested, and documented on a mail ledger to prove mailing of claims to an insurer. The returned receipt is the required proof of delivery to the insurer.

(2)  Check applicable prompt-payment laws and managed-care agreements. It is important to know with certainty the time frames in which the insurer must pay claims, deny claims and/or request additional information to adjudicate a claim.

(3) Attack time frames before the merits of a denial. Before appealing a claim on the merits, determine if the statutory and contractual time frame requirements were satisfied by the insurer.  For example, was the claim denied within 30 days of receipt? Was the payment made within 45 days? If not, was interest included in the payment? Was the denial set forth in writing and in plain language? Was the specific reason for the denial detailed? Were the insured and provider offered an opportunity to appeal and given appeal submission instruction?

(4) Appeal on the merits. Make sure you provide a written explanation in the form of a first-level appeal or grievance indicating the reasons the denial is believed to be unfair and wrongful. Remind the insurer of its good-faith obligations under the Unfair Claims Settlement Practices Act, your state's prompt-payment law and managed-care agreements. Attach supporting documentation, including factual affidavits, medical records, photographs and CPT Code explanations as needed. Make sure the appeal is sent to the appeals and grievances department, which may have a different address than where claims submissions are sent. And always ensure that appeals are made prior to submission deadlines set forth in the managed-care agreement.

(5)  Consider second-level appeals. Don't worry if your first-level appeal is denied. Instead, first determine whether the appeal was sent within time frames set by applicable state and federal laws or the managed-care agreement. Many claims denied at the first level of appeal are paid after a second-level appeal is filed, so make sure to consider this as an option. Be mindful that states have different laws for medical necessity and cosmetic denials. For example, New York affords an immediate right to an appeal review by an external appeals agent after denial of a first-level appeal for medical necessity or experiment reasons (see Title I & II of Article 49 of the New York Insurance Law and Title I & II of Article 49 of the New York Public Health Law).

(6) Utilize state insurance department complaint procedures. Violations of state insurance laws are investigated by the commissioner of insurance for the applicable state. Self-funded plans administered by insurance companies are governed by ERISA under the oversight of the U.S. Department of Labor. A consumer or a healthcare provider may file a complaint with the regulatory authority when it is believed that an insurer (or an administrator of a self-funded plan) violated a law relating to claims adjudication, such as a prompt-payment law. These regulators usually are very helpful in resolving issues with insurers, and most complaint forms are readily available for filing online.

(7)  Utilize small-claims lawsuits (less than $5,000). Most states have courts that permit lawsuits against commercial entities like insurance companies. Most of these courts permit lawsuits brought by non-lawyers in which alleged damages are less than $5,000. The cost for filing these lawsuits is usually nominal, often less than $35, and the complaints are usually simplified.

(8)  Ensure assignment of benefits forms. Make sure your AOBs include authorization from the patient, permitting the medical practice or its representatives to file appeals against their health insurers for denied claims.


(9) Collect patient e-mail addresses. Patients often respond to text messages and e-mails better than traditionally mailed letters and phone calls. Obtaining patient e-mail addresses and cell phone numbers for text messages is an easy and cost-effective way to communicate with patients, and it's especially useful when collecting on deductibles, coinsurance or non-covered services. The patient will have to sign a short consent form to receive communications by e-mail and text. In doing this you could save a significant amount of money on postage, and self-pay responsibility should be easier to ensure.

In summary, it is imperative that medical practices, healthcare providers and revenue recycle administrators familiarize themselves with the various laws and other responsibilities of managed-care organizations. Then hold these payers accountable to the law.

Remember, the power is with you....

About the Author

Thomas J. Force, Esq. is a nationally recognized expert in revenue collection techniques, managed-care contracting and appeal strategies. He is the founder, president and chairman of the board of The Patriot Group in New York. As a state- and federally licensed attorney in both New Jersey and New York, Mr. Force has more than 21 years of experience in the healthcare and insurance industries. His success as a Wall Street insurance litigator and his tenure as general counsel for a New York-based accident and health insurance company where he served as chief compliance officer propelled the founding of The Patriot Group. He is co-founder of the Healthcare Reimbursement Attorneys Network, a national association of attorneys who represent physicians and hospital clients. Mr. Force also works closely with the American Medical Association and various state medical associations.

Contact the Author

TForce@patriotcompli.com

To comment on this article please go to editor@racmonitor.com

New Attention Paid to Coding Malnutrition and Compliance

afehn100

jColagiovanni100

The suspension of Medicare payments in conjunction with a CMS contractor audit creates a one-two punch that can easily result in a provider being forced out of business before having the opportunity to defend against a contractor's allegations.

CMS may suspend payments to Medicare providers and suppliers in situations involving suspected fraud or where an overpayment exists but additional information is required to make a determination.  In accordance with the Affordable Care Act, CMS recently issued proposed regulations on September 23, 2010, providing that in cases of suspected fraud, Medicare payments may be suspended pending an investigation if "a credible allegation of fraud exists against a provider or supplier, unless there is good cause not to suspend payments."  The proposed regulations define a "credible allegation of fraud" as an allegation from any source, including but not limited to fraud hotline complaints, claims data mining and patterns identified through provider audits, civil false claims cases, and law enforcement investigations.  Allegations are considered "credible" when they have "indicia of reliability."

The Office of Inspector General ("OIG") for the Department of Health and Human Services recently released a Memorandum Report addressing the use of payment suspensions to prevent inappropriate Medicare payments.  This memorandum provides some insight on the frequency with which suspensions are imposed, the likelihood of successfully rebutting a suspension, and the rate at which overpayments of suspended providers are ultimately reversed.

The OIG memorandum notes that payment suspensions are typically requested from Program Safeguard Contractors (PSCs) and Zone Program Integrity Contractors (ZPICs), both of which conduct benefit integrity activities to identify potential Medicare fraud.  Law enforcement entities also request payment suspensions from CMS through PSCs and ZPICs.  A Medicare contractor may initiate a request for payment suspension based on its own analysis, CMS's request or at the request of a law enforcement entity such as the OIG or Department of Justice (DOJ).

Because the extent and amount of an overpayment need not be determined prior to imposing a suspension, a suspension may occur prior to the initiation of a formal audit of the provider's services.  To initiate a payment suspension, the contractor provides CMS with a draft notification letter and a summary of the reliable information the suspension is based upon.  CMS then determines if suspension should be implemented and whether the provider should receive notice of the suspension before or after it is initiated.  Generally if the provider's payments are suspended due to suspected fraud or willful misrepresentation, the provider is notified after the suspension is implemented.

Providers are not permitted to appeal a payment suspension.  The only recourse offered is the opportunity to file a rebuttal statement to explain why CMS should remove the suspension.  A provider experiencing a payment suspension must file its rebuttal statement within 15 days of the date of the suspension notification letter.  CMS contractors are instructed to respond to the provider's rebuttal within 15 days of receipt.  According to the OIG's memorandum, only 16 percent of providers submitted rebuttals to CMS and, of those 16, only 3 rebuttals resulted in CMS lifting the suspension.

Payments are typically suspended for a period of 180 days, though CMS may extend the suspension if warranted under the circumstances.  During the course of payment suspension, providers may continue to submit claims to their Medicare contractor, but payment amounts from valid claims will be held in suspense, thus eliminating cash flow to the provider's business.

Once the payment suspension is implemented, the contractor procures any additional information needed to calculate the overpayment.  This calculation can involve the use of a statistically valid random sample and the request and review of medical records from the provider.  Once the overpayment amount is calculated, a demand letter is issued by the provider's Medicare claims processing contractor.  Payments that have been held in suspense over the course of the suspension are applied to the overpayment and the suspension is then removed.  Once the suspended payments have been applied to the overpayment amount, any remaining monies are returned to the provider.

The OIG's memorandum involved the analysis of 253 payment suspensions implemented by CMS over 2007 and 2008.  The vast majority of suspensions involved Part B providers and were concentrated in four states/territories: Florida, Puerto Rico, California and Michigan.  More than half of the payment suspensions were in areas with Medicare Fraud Strike Force operations.  As of August 2009, CMS had removed suspensions in 182 cases it approved over the course of 2007 and 2008.


 

In reviewing these 182 suspensions, the majority of the providers demonstrated questionable billing patterns and many of the suspensions were supported with information from beneficiaries or other providers that raise question about their practices.  When the contractors requested medical records in order to make overpayment determinations, 55 percent of providers failed to provide records for review.

While the OIG memorandum states that the great majority of suspended providers exhibited characteristics that suggested fraud, it is also important to note that, in 23 cases the CMS contractors ultimately found no overpayment.  In 16 cases, the CMS contractor did not provide the OIG with information regarding the size of the overpayment and in 71 cases the final overpayment amount had not been determined.  These statistics highlight the very real and harsh possibility that in some situations suspensions have been imposed against providers whose billings were ultimately approved or possibly had only minor overpayments.  Further, it is likely that many suspended providers did not have the necessary resources to defend the overpayment allegations because of cash flow issues created by the suspension.

Although the OIG's memorandum highlights the low success rate of the rebuttal process, providers should consider making arguments based upon any circumstances that are unique to their billing practices.  Providers should also vigorously appeal any overpayment findings, or denials based upon audit findings, including additional development requests, arising in connection with a payment suspension.  Although the appeals process can be difficult in light of cash flow issues and the time allocated to each stage of the appeals process, it remains the best hope for fighting a payment suspension.

About the Authors

Amy K. Fehnis a partner at Wachler & Associates, P.C.Ms. Fehn is a former registered nurse who has been counseling healthcare providers for the past eleven years on regulatory and compliance matters and frequently defends providers in RAC and other Medicare audits.

Jennifer Colagiovanni is an attorney at Wachler & Associates, P.C.Ms. Colagiovanni graduated withDistinction from the University of Michigan and Cum Laude from Wayne State University Law School.Upon graduation, Ms. Colagiovanni was nominated to the Order of the Coif. Ms. Colagiovanni devotes a substantial portion of her practice to defending Medicare and other third party payer audits on behalf of providers and suppliers.She is a member of the State Bar of Michigan Health Care Law Section.

Contact the Authors

afehn@wachler.com

jcolagiovanni@wachler.com

To comment on this article please go to editor@racmonitor.com

afehn100jColagiovanni100

 Noncompliance with the recently enacted face-to-face certification requirements is one of the newest compliance risk areas that could lead to denials in future audits for home health agencies. The face-to-face requirements are part of the Patient Protection and Affordable Care Act of 2010 (PPACA), and they require physicians to perform face-to-face encounters on home health patients as part of home health certification. While the PPACA originally required compliance with this mandate by Jan. 1, 2011, CMS recently announced that it will delay enforcement until April 1, 2011.

In order to satisfy the face-to-face requirements, certain criteria must be met. First, encounters must take place no more than 90 days prior to or within 30 days after the start of home health care services. Encounters may occur up to 90 days prior to this point if a previous face-to-face encounter was related to the reason the patient requires home health services. Also, this encounter must be performed by a physician or a permissible non-physician practitioner (NPP), i.e., an advanced practice nurse or physician assistant. If an NPP performs the face-to-face encounter, the practitioner must document the clinical findings and communicate those findings to the certifying physician. The documentation of the face-to-face encounter must be a separate and distinct section or addendum to the certification, and must be signed and dated by the certifying physician.

Both physicians and NPPs who have a financial relationship with a home health agency are prohibited from conducting the face-to-face encounters unless the relationship falls within a Stark or anti-kickback exception. This regulatory requirement prevents home health agencies from hiring physicians or NPPs to perform face-to-face encounters, representing an important consideration for a home health agency setting up a program for compliance with the new requirements.

Documentation of the face-to-face encounter must include a statement demonstrating that the encounter was performed for the same condition or conditions that represent the primary reason for home care services. In addition, the documentation must include an explanation of the reasons for the patient's homebound status and the medical necessity of either intermittent skilled therapy and/or skilled nursing services. Also, it is important to note that for patients referred directly from a hospital, a hospitalist could conduct the face-to-face encounter. To qualify, the hospitalist would need to document the encounter, perform the certification and review of the initial plan of care, and then clearly communicate the name of the physician in the community (i.e., the patient's primary care physician) who will continue to follow up with the patient going forward. In rural areas, the face-to-face encounter also may be conducted via telehealth services as long as other program requirements are met for telehealth.

CMS has indicated that it will issue instructions to its contractors with regard to medical reviews and program integrity activities. These contractors will be tasked with making sure that providers are complying with the required time frames set forth for the face-to-face encounters. CMS also has indicated that partial payments will not be made if the face-to-face encounters are performed outside the required time frames.

Physicians and home health agencies should note that the face-to-face encounter only is required for the initial certification and not for any subsequent recertification.

In developing compliance policies, home health agencies should review all guidance from CMS and contractors on this issue to ensure that documentation is adequate. Home health agencies also should collaborate proactively with referring physicians and educate them to ensure that they also understand the requirements prior to the April 1, 2011 effective date.

About the Authors

Amy K. Fehnis a partner at Wachler & Associates, P.C. Ms. Fehn is a former registered nurse who has been counseling healthcare providers for the past eleven years on regulatory and compliance matters and frequently defends providers in RAC and other Medicare audits.

Jennifer Colagiovanni is an attorney at Wachler & Associates, P.C. Ms. Colagiovanni graduated with Distinction from the University of Michigan and Cum Laude from Wayne State University Law School. Upongraduation, Ms. Colagiovanni was nominated to the Order of the Coif. Ms. Colagiovanni devotes a substantial portion of her practice to defending Medicare and other third party payer audits on behalf of providers and suppliers. She is a member of the State Bar of Michigan Health Care Law Section.

Contact the Authors

afehn@wachler.com

jcolagiovanni@wachler.com

ED. NOTE: Healthcare attorney Andrew Wachler, founder of Wachler & Associates, discusses RACs and Home Health on Monitor Monday, March 14, 2011. Register to listen at www.monitormondays.com.

To comment on the article please go to editor@racmonitor.com

"Digital Cowboys: Do RAC Auditors Need Auditors"

wiitalaRA February announcement by the Centers for Medicare & Medicaid Services indicates that it is going the extra mile to increase the accuracy of the data collected by comprehensive error rate testing (CERT) program contractors. Specifically, CMS staff will make follow-up calls to providers to obtain all necessary medical record documentation for claims reviewed under the CERT program. The CMS staff calls go above and beyond the calls and letters that providers receive from CERT contractors.

In its memo, CMS stated that these additional efforts may change a claim's status from improper to proper payment. At the least, the added information will allow the agency to "calculate a more accurate Medicare FFS [fee for service] error rate" and reduce the amount of improper payments. As providers know by now, these two goals are the exact reasons for the CERT program.

Going back a few months, to a November 16, 2010, press release, CMS credits the "new standards" that it implemented in 2009 as helping to lower Medicare FFS improper payment rates in 2010.(1) CMS now holds review contractors to a strict adherence to Medicare policy and documentation requirements. These include signature legibility(2), removal of claims history as a valid source for review information, and the determination that medical record documentation received only from a supplier is, by definition, insufficient to substantiate a claim.

As CMS says, "Following the Obama Administration's work to more accurately account for improper payments and a renewed focus on fighting waste, fraud and abuse, the 2010 error rate for Medicare claims declined ... and is on track for a 50 percent reduction by 2012, or a reduction of 6.2%."

Specifically, in 2010, the Medicare FFS error rate dropped to 10.5 percent (or $34.3 billion in estimated improper claims payments). The 2009 error rate was 12.4 percent or $35.4 billion. The primary causes of errors that were found for 2010 were insufficient documentation and medically unnecessary services.

The CERT program follow-up calls by CMS staff to providers show that the federal government agencies are continuing to invest time and resources to work with providers across the country and eliminate errors through increased and improved training and education outreach. CMS says that it is "enhancing its efforts to educate and inform doctors, hospitals and other health care providers about the comprehensive requirements to help lower the number of errors and improper payments, not only across Medicare, but also in Medicaid, CHIP, Medicare Advantage Part C, Medicare Part D prescription drug coverage."

_____

(1) See Transmittal 327 at http://www.cms.gov/transmittals/downloads/R327PI.pdf for more on signature requirements for medical review purposes.

(2) The Medicare and Medicaid improper payment rates are issued annually as part of the U.S. Department of Health and Human Services (HHS) Agency Financial Report.)

To comment on this article please go to editor@racmonitor.com

About the Author

Randy Wiitala, BS, MT (ASCP) is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

Contact the Author

rwiitala@medlearn.com

awachler100

The Patient Protection and Affordable Care Act (PPACA) of 2010. Under the PPACA, the Medicare hospice benefit underwent changes related to both documentation and billing requirements. It is important for providers to recognize these changes and adjust their procedures accordingly. Failure to comply with these new requirements may leave providers vulnerable to claim denials and overpayment recoupment in a future RAC or other Medicare audit.

Hospice Certification

In order for a patient to receive hospice care, a physician must certify that the patient is suffering from a terminal illness and that the individual's prognosis is for a life expectancy of six months or less if that illness runs its normal course. In 2009, the Centers for Medicare & Medicaid Services (CMS) added a clinical narrative requirement to the certification process. This requirement calls for a physician to prepare a narrative outlining the clinical findings that support a life expectancy of no longer than six months in order to certify a patient for hospice.

This narrative must be reflective of the patient's individual clinical conditions and cannot contain form language or check-box information. Furthermore, the physician is required to attest that he or she wrote the narrative personally, based on examination or the patient's medical records. This additional measure is designed to ensure that the physician has diagnosed the patient's condition personally and is not just signing off on what another clinician on the nursing staff has concluded. Increased physician and patient contact seems to be the trend in hospice care recently.

Recertification

Accordingly, the PPACA also adopted several of the Medicare Payment Advisory Commission's (MedPAC) recommendations regarding recertification. Specifically, Section 3132 of the PPACA called for greater physician engagement in the recertification of hospice patients' eligibility to receive Medicare coverage for hospice services. The focus on increased physician engagement was memorialized in a Final Rule issued on Nov. 17, 2010 a directive that incorporated new legislative requirements for face-to-face encounters.

The new regulations required that a hospice physician or nurse practitioner undertake a face-to-face encounter with all hospice patients prior to the 180-day recertification - and all subsequent recertifications - to determine a patient's continued eligibility for hospice. The face-to-face encounter is not required for certification of the first or second 90-day benefit period, but must be performed for patients entering their third (60-day) benefit period, and for any and all subsequent 60-day benefit periods. While nurse practitioners may conduct the face-to-face encounter, only a physician may certify the patient's terminal illness.  Thus, if a nurse practitioner conducts the encounter, he or she must certify that the clinical information was provided to the certifying physician.

The face-to-face encounter is required to take place no more than 30 days prior to the 180-day recertification or subsequent recertifications.  Without a valid face-to-face encounter, Medicare will not cover the hospice stay. The face-to-face requirements took effect on Jan. 1, and all providers now need to adopt protocols to ensure that these encounters are taking place with the appropriate personnel and in the time frames required - or risk potential claim denials.

Once a patient has been certified properly, level of care is another important consideration. Hospice care is provided in four different levels, including routine home care, general inpatient, continuous home care and inpatient respite care. Each level has specific criteria used to determine whether it is the appropriate level of care for the patient at issue, and each level has its own billing rate. Providers need to ensure that they are meeting all the requirements for the level of care billed in order to avoid any possible issues when or if their practice becomes the subject of a RAC or Medicare audit.


 

The audit and compliance environment continues to change at a rapid rate as new documentation and coverage requirements are implemented. Based on our experience, providers are facing key audit risk areas and claim denials related to six-month prognosis, level of care, continuous care, inpatient hospital admissions, hospice/nursing facility benefit and technical denials for certifications. The best defense for a RAC or Medicare audit is to have a comprehensive compliance plan in place that mitigates these and other potential audit risk areas. This is especially true in the hospice arena, where CMS recently has been implementing provisions of the PPACA that directly affect hospice providers.  While there is a no guarantee that a provider with a strong compliance program will not find his or her practice in the crosshairs of a Medicare auditor, it is one of the best ways to prepare for the situation proactively.

To comment on this article please go to editor@racmonitor.com

"Moving From Coding to Payment Audits: 12 Easy Steps"

About The Authors

Andrew B. Wachler is the principal of Wachler & Associates, P.C.  He graduated Cum Laude from the University of Michigan in 1974 and was the recipient of the William J. Branstom Award. He graduated Cum Laude from Wayne State University Law School in 1978. Mr. Wachler has been practicing healthcare and business law for over 25 years and has been defending Medicare and other third party payor audits since 1980.  Mr. Wachler counsels healthcare providers and organizations nationwide in a variety of legal matters.  He writes and speaks nationally to professional organizations and other entities on a variety of healthcare legal topics.

Jennifer Colagiovanni is an attorney at Wachler & Associates, P.C.  Ms. Colagiovanni graduated with Distinction from the University of Michigan and Cum Laude from Wayne State University Law School.  Upon graduation, Ms. Colagiovanni was nominated to the Order of the Coif. Ms. Colagiovanni devotes a substantial portion of her practice to defending Medicare and other third party payer audits on behalf of providers and suppliers.  She is a member of the State Bar of Michigan Health Care Law Section.

Contact The Authors

awachler@wachler.com

jcolagiovanni@wachler.com

nbeckley(02/19/11)----In what is being labeled an "important provider notice" DCS, the Region A Recovery Audit Contractor (RAC), has overturned the automated review of untimed codes as well as the review of A000112009 NCCI - OPPS.

The notice posted to its website yesterday, was dated Feb. 16, and involves two issues, including Issue number A000152009 - Untimed Codes.  According to the DCS Statement "letters were mailed to affected providers the first week of February 2011 with notification of the incorrect edit resulting in the overturned automated reviews."

RACmonitor readers have been continually apprised of the issues of untimed codes through numerous articles over the past 15 months as demand letters for untimed codes were issued improperly, and an update on untimed codes appeared in yesterday's edition of RACMonitorEnews in an article on Canalith Repositioning.  This past Monday on the Monitor Monday podcast I interviewed Kathleen Parisian, OTR, regarding her therapy company's experience with untimed codes in Region C, and how they were successful at having the recoupments overturned.

The DCS notice further indicates that DCS is working closely with the MACs to ensure any recouped overpayments are adjusted appropriately and adjustments may take up to four weeks.  Providers should receive a remittance advice that will show reason code N432 for the repayment of any related recouped amounts.

In an important move, DCS is asking providers to allow time for adjustments stating:  "since the overpayment is being rescinded you may choose not to appeal the overpayment." DCS is further thanking providers for their consideration as they correct the mistake.

Wonders never cease, and hope springs eternal.

To comment on this article please go to editor@racmonitor.com

About the Author

Nancy Beckley is a founder and president of Nancy Beckley & Associates LLC, providing compliance planning and outsourced compliance services to rehab providers in hospitals, rehab agencies, CORFs, SNFs and private practice. Nancy is certified in healthcare compliance by the Healthcare Compliance Board.  She is on the Board of the National Association of Rehab Providers & Agencies.  She previously served on the CMS Professional Expert Technical Panel for Comprehensive Outpatient Rehabilitation Facilities.

Contact the Author

nancy@nancybeckley.com

pspencer100

Beginning January 1, 2010, Medicare ceased issuing reimbursement for consultation codes (CPT codes 99241-99255), thereby removing one of the biggest areas of reimbursement for specialist physicians.

From the time this decision was brought forward by CMS as part of the proposed rules for the 2010 Physician Fee Schedule, specialty societies, most notably the American College of Cardiology, have fought to no avail for immediate reinstatement of the reimbursement. Even after more than a decade of attempting to educate physicians about the documentation requirements for consultations, and explaining the difference between a consult and a "transfer-of-care," Medicare has held firm with its original determination.

In this cold part of the country, in the heyday of consultation reimbursement, WPS Medicare estimated at one point that the payment error rate for consultations was higher than 40 percent. It was numbers like this in the Upper Midwest and other payment jurisdictions that made Medicare's decision to cease reimbursement that much easier.

RAC Issue

We are now 13 months into the post-consultation world, but it struck me that with such a high error rate, the documentation for those old consultations languishing in your patients' medical records could be current or future RAC audit targets. My imagination began to run wild, ultimately reaching a wall with a simple question: can the RACs look at consultations for medical necessity review even though Medicare no longer reimburses the service?

With question in hand, and curiosity aflame, I sent this question to Scott Wakefield, the CMS project officer for recovery audit operations for RAC Regions A and B. In response, I received the following answer:

"By their statutory and contractual authorities, the CMS Recovery Audit Contractors (RACs) may review any Medicare, Fee for Service claim within a 3-year look-back period if it has been deemed that an improper payment (under or overpayment) may have been made, and the associated review issue has been approved by CMS and posted to the respective RAC Website."

In case you haven't mastered the mysterious dialect of government jargon, the above paragraph roughly translates to "yes."

Assessing The Risks

Knowing that consultations will be on the table for RAC review until Dec. 31, 2012 is disheartening for two reasons. First, the documentation for these services is closed and is roughly a year too old for addenda to be included in any fashion. Second, thanks to Medicare's new and shortened time window for claims submissions, corrected claims cannot be submitted. If the RACs decided to commence reviews of consultation services from 2009 and the bulk of 2008, it would be left up to practices to attempt to fight them via appeal for any possible E/M reimbursement based on documentation: far from an enviable task.

Depending on the reliability of your practice's management system, now may be as good a time as any to look at total dollars reimbursed for consultation services from February 2008 through the end of 2009 to determine your level of financial exposure to what may become a sudden and surprising target. Remember that the number of records eligible to be requested by the RACs depends on the size of your practice. It is possible to assess vulnerability by comparing the instances of consultations and performing a rough comparison against the number of records that legally can be requested.

Some Good News

The only positive news that can be brought forward at this moment in time is that to date, consultations are neither an approved issue nor a RAC probe audit target for any of the contractors. Each day we exist in this current state means that one day's worth of consultations fall off the review table, which in turn means that the news continues to get better. I exist in a world of optimism and genuinely hope that this continues through the end of 2012, thereby leaving your consultation documentation right where it currently is until the end of time.

Of course, I thought my beloved Philadelphia Eagles would finally win the Super Bowl this year, so you may want to prepare yourself just in case.

About the Author

Paul Spencer is the Compliance Officer for Fi-Med Management, Inc., a national physician practice financial management company based in Wauwatosa, WI. Paul has over 20 years of experience across all facets of healthcare billing, including 6 years spent with insurance carriers. In his current role with Fi-Med, he acts as a physician educator on issues related to E/M level of service and documentation audits by CMS and other outside entities. Paul has carried the CPC and CPC-H credentials from the American Academy of Professional Coders since 1998.

Contact the Author

pspencer@fimed.com

To comment on this article please go to editor@racmonitor.com

"New Code is Untimed: Canalith Repositioning, Outpatient Therapy Providers Beware"

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Effective compliance programs are an essential tool for identifying and mitigating audit risks. Due to the recently imposed mandatory compliance requirements in the Patient Protection and Affordable Care Act of 2010 (PPACA), the lack of an effective compliance program also could be a risk in itself.

The PPACA requires skilled nursing facilities (SNFs), as a condition of participation, to have a compliance program in place by March 2013. Because compliance with this condition is a prerequisite for payment, noncompliance could result in denied claims and pose a future audit risk for SNFs. Failure to meet the conditions of participation also has been used in the past as a basis for liability under the False Claims Act.

More specifically, section 6102 of the PPACA requires compliance and ethics programs to be implemented in all SNFs, which will be allowed flexibility in tailoring them based on the size and scope of services provided by each facility. But the programs must be followed by all employees and agents of the SNF and prove effective in the prevention and detection of criminal, civil and administrative violations. The programs also must identify and involve specific individuals with authority and resources who are assigned to oversee compliance.

Caution in Delegating

As part of implementing its programs, each organization must exercise due care in delegating authority so as not to hand control to individuals whom the SNF knew or should have known may a propensity to engage in criminal, civil or administrative violations. Furthermore, if an offense is detected, the organization must respond appropriately.  Each SNF must take steps to educate its employees about its programs, and will be required to make efforts to achieve compliance with the standards it promulgates. A periodic reassessment of the programs and the implementation of any necessary changes also will be a required component.

Regulations addressing additional requirements for the programs have yet to be released by Secretary of Health and Human Services (HHS) Kathleen Sebelius, but they are required to be issued within two years of the PPACA's passage.

Compliance Program

SNFs also will be required to comply with the compliance program requirements promulgated pursuant to Section 6401(a) of the act, which includes all providers enrolled in Medicare, Medicaid and CHIP.

While a final rule has not yet been issued, a proposed approach and solicitation of comments in connection with the mandatory compliance program provisions were released in the Federal Register on Feb. 2. The solicitation of comments aims to gain input from various industry stakeholders about the proposed provisions.  Specifically, HHS is seeking comments about the use of the elements of an effective compliance program as set forth in Chapter 8 of the U.S. Federal Sentencing Guidelines Manual. These core elements are based on the idea of preventing, detecting and correcting behavior that is detrimental to compliance with applicable laws and ethical standards within a facility or organization.  HHS is looking to see how providers with compliance plans currently in place have integrated these elements. Moreover, the solicitation seeks to find any other elements beyond those set forth in the sentencing guidelines that should be integrated into future regulations.

The solicitation also seeks to generate comments on several other issues. Input related to the costs and benefits of compliance programs, the type of systems providers will need to implement effective programs, as well as the extent to which providers integrate the use of consultants, review organizations and auditors in their efforts all were sought in the recent solicitation. It is important to note that HHS indicated that it does not intend to finalize the compliance plan requirements in this final rule, but instead will continue with further rulemaking and issue proposals in the future.

Prepare Now

SNFs need to prepare themselves now for the changes ahead in the compliance landscape. Even if facilities currently have compliance programs in place, the administration should look to see that they are effective and contain all of the elements set forth in the statute and associated regulations, once published.


 

The sharp focus on SNFs in healthcare reform legislation also may reflect an indication of increased scrutiny on SNFs by the various audit contractors. As such, it is vital for SNF providers and administrators to increase compliance efforts.

An effective compliance program not only will help facilities to meet the conditions of participation, but also to identify and rectify potential audit risk areas.

To comment on this article please go to editor@racmonitor.com

About the Authors

Andrew B. Wachler is the principal of Wachler & Associates, P.C.  He graduated Cum Laude from the University of Michigan in 1974 and was the recipient of the William J. Branstom Award. He graduated Cum Laude from Wayne State University Law School in 1978. Mr. Wachler has been practicing healthcare and business law for over 25 years and has been defending Medicare and other third party payor audits since 1980.  Mr. Wachler counsels healthcare providers and organizations nationwide in a variety of legal matters.  He writes and speaks nationally to professional organizations and other entities on a variety of healthcare legal topics.

Amy K. Fehnis a partner at Wachler & Associates, P.C.Ms. Fehn is a former registered nurse who has been counseling healthcare providers for the past eleven years on regulatory and compliance matters and frequently defends providers in RAC and other Medicare audits.

Jennifer Colagiovanni is an attorney at Wachler & Associates, P.C.  Ms. Colagiovanni graduated with Distinction from the University of Michigan and Cum Laude from Wayne State University Law School.  Upon graduation, Ms. Colagiovanni was nominated to the Order of the Coif. Ms. Colagiovanni devotes a substantial portion of her practice to defending Medicare and other third party payer audits on behalf of providers and suppliers.  She is a member of the State Bar of Michigan Health Care Law Section.

Contact the Authors

awachler@wachler.com

afehn@wachler.com

jcolagiovanni@wachler.com

"Digital Cowboys: Do RAC Auditors Need Auditors"

nbeckleyOutpatient physical therapists who have been providing canalith repositioning for their patients have been instructed by CMS to bill this procedure with CPT code 95992 effective immediately.

Canalith repositioning is a treatment for benign paroxysmal position vertigo (BPPV), which is caused by crystals floating in the fluid of the inner ear. Prior to now the canalith repositioning code was considered bundled with codes utilized by other providers, most notably evaluation & management (E&M) codes. As a result, CMS in 2009 instructed the therapy community (MM6397) to utilize CPT code 97112, for neuromuscular reeducation, to report use of the canalith repositioning procedure, the Epley Maneuver or the Semont Maneuver.

The neuromuscular reeducation code is a timed code requiring one-on-one direct contract with the physical therapist, and it is billed in increments of 15 minutes. CMS documentation requirements call for a daily therapy note to include the recording of minutes in timed codes as well as total minutes of therapy (i.e. totals in timed and untimed codes).

Timed codes are subject to the Medicare "eight-minute rule," and the total number of billed units is constrained by the total minutes in timed codes, potentially resulting in confusing documentation and billing. For example, an ultrasound procedure may take only seven minutes, but often it is not billed directly because those minutes are rolled into the total minutes in timed codes, often resulting in an additional unit of another code being billed. CMS provides guidance on the "eight-minute rule" in Chapter 5 of the Medicare Claims Processing Manual.

Now that CMS has instructed physical therapists to utilize CPT® code 95992, caution must be exercised to bill this code only once per day, a reversal from the past practice of utilizing a timed code that could be billed in units greater than one. The topic of untimed therapy codes has been on the Recovery Audit Contractors' radar in all four regions as a CMS-approved issue for automated reviews. Many providers have been caught on this issue when billing for multiple units of the same untimed procedure, such as a physical therapy evaluation or mechanical traction. Early on, it was reported by providers in Region C that demand letters related to untimed codes were issued for instances in which the provider utilized two untimed codes rather than two units of one untimed code. More recently, providers in Region A reported the same situation, with more demand letters issued for appropriate use of untimed codes.

Some key steps that can be taken to ensure compliance with CMS guidelines include the following:

  • Add CPT code 95992 to your billing system and suppress the value to a unit of 1.
  • Instruct therapists in proper billing for the canalith repositioning maneuver.
  • Reeducate all billing and therapy staff on the CMS "eight-minute rule" and how to account for all therapy services provided in the daily note.

CPT code 95992 is not subject to edits in the Correct Coding Initiative (CCI). Some good news is that this code also is not subject to the Multiple Procedure Payment (MPPR) reduction policy that is in effect for "always" therapy codes.

MPPR provides for a practice expense reduction of 20 percent on second and subsequent billed codes per day in an office setting (private practice), and a 25 percent practice expense reduction in facility settings, including hospital OP departments, rehab agencies, CORFs and SNF Part B therapy services.

About the Author

Nancy Beckley is a founder and president of Nancy Beckley & Associates LLC, providing compliance planning and outsourced compliance services to rehab providers in hospitals, rehab agencies, CORFs, SNFs and private practice. Nancy is certified in healthcare compliance by the Healthcare Compliance Board.  She is on the Board of the National Association of Rehab Providers & Agencies.  She previously served on the CMS Professional Expert Technical Panel for Comprehensive Outpatient Rehabilitation Facilities.

Contact the Author

nancy@nancybeckley.com

To comment on this article please go to editor@racmonitor.com

"Will  RACs Target Physician Consultations"