How Well Are Statutory Documentation Requirements Decreasing CMS Program Risks?

Original story posted on: April 10, 2019

CMS cited by GAO for insufficient documentation.

The Government Accountability Office (GAO) issued a report on March 27 stating that the Centers for Medicare & Medicaid Services (CMS) should assess documentation necessary to identify improper payments. The study was performed on Medicare and Medicaid fee-for-service (FFS) improper payment data for four selected service types—home health, durable medical equipment (DME), laboratory, and hospice, for fiscal years 2005 through 2017.

In the fiscal year 2017, insufficient documentation comprised the majority of estimated FFS improper payments in both Medicare and Medicaid, accounting for 64 percent of Medicare and 57 percent of Medicaid medical review improper payments. The report indicated that Medicare FFS had an estimated $23.2 billion in improper payments and Medicaid FFS had $4.3 billion in improper payments in the fiscal year 2017, all due to insufficient documentation.

Part of the reason cited for conducting this study was to examine “Medicare and Medicaid documentation requirements and factors that contribute to improper payments due to insufficient documentation.” Essentially, one goal was to determine how insufficient documentation contributes to improper payments, based on Medicare FFS versus Medicaid FFS requirements for medical documentation, as there is often a huge discrepancy between Medicare and Medicaid requirements for medical documentation, even for the same services.

Insufficient documentation is defined as documentation that cannot be used to determine whether a claim was proper or if services were medically necessary. The definition can also include a scenario where a specific, required documentation element, such as a signature, is missing. Instances in which providers fail to submit requested documentation or respond that they do not have the requested documentation are counted separately and reported as “no documentation.” “No documentation” errors account for a very small number of improper payments.

There were two things about this report that struck me as providing food for thought. First, why is there a huge discrepancy between Medicare and Medicaid documentation requirements for medical necessity of these services, and how does that correlate to appropriate assessment of program risks by CMS? Second, why is this so hard? Why are providers failing so badly at providing payors with full and sufficient medical record documentation to support services billed in the first place?

Why the discrepancy in documentation requirements?

For Medicaid programs, states primarily set the standards for documentation requirements, and they often do not require documentation such as progress notes from referring physicians to support medical necessity. In contrast, Medicare requires supporting documentation from the referring physician for the four services reviewed in this report. And while both programs require signatures on provider documents, only Medicare has detailed standards for what constitutes a valid signature.

Without an understanding of how differing documentation requirements affect improper payment rates, CMS may not be able to fully identify and address FFS program risks. CMS told the GAO that they have not assessed the implications of how differing requirements between the programs may lead to differing assessments of the programs’ risks. So do greater documentation requirements equate to lower program risks? Or is Medicaid’s shorter list of required documentation doing the job to adequately protect against program risks? I think this report illustrates that we don’t know the definitive answer to that.

Why are providers failing at providing supporting documentation?

This was actually my first question as I was reading through the report. Why is this so hard? The report very clearly shows in graphical and narrative ways that poor response to additional documentation requests has been an issue for at least a decade, likely longer, and is not improving. Why is that? Does CMS have any concern over looking into the factors, barriers, behaviors, or failed processes that could be causing this very pervasive lack of provision of appropriate medical records to the payor? Does CMS even have any skin in this game to improve those poor response rates? (Also, when I say poor response, I don’t mean the providers aren’t sending medical records. I mean providers aren’t sending medical records that fully and appropriately support the medical necessity of the services provided and meet the statutory regulations for documentation of certain services).

According to the report, CMS officials are aware that some service providers are at a disadvantage in having to rely on documentation from referring providers to support medical necessity. And referring providers have little incentive to provide supporting documentation, as there is no financial repercussion for not providing it. The report indicates that CMS has provided education to physicians on the need for submitting supporting documentation, but not much else has been done to encourage improved compliance with requests for records.

So far, CMS has participated in the Patients over Paperwork initiative began in 2017 to simplify providers’ requirements for documentation. And the report states that thus far, CMS has clarified and amended several Medicare documentation requirements, including requirements for duplicate documentation, to help decrease the provider burden regarding documentation. It remains to be seen how much impact this program may have on this issue in the coming years.

So, did you know that Medicare’s Comprehensive Error Rate Testing (CERT) and Medicaid’s Payment Error Rate Measurement (PERM) contractors make multiple attempts to contact providers to get the medical record documentation they need for medical reviews? Both contractors allow providers 75 days to submit documentation but will accept late submissions as long as they have not yet reached the deadline to finalize their findings. If there is no response to an initial request for medical records and supporting documentation, the contractors will make at least three additional contacts with the provider to request the documentation. Three additional contacts! For Medicare, if the services are referred services, such as home health, durable medical equipment (DME), or laboratory services, the CERT contractor will also reach out to the referring physicians for documentation. Once the contractors do receive documentation, if it’s not sufficient, they will reach out again for additional documentation.

Despite all of these efforts, in the 2017 fiscal year, the CERT contractor requested additional documentation from 22,815 providers out of 50,000 claims reviewed – 56 percent of the time, no additional documentation was provided. This just baffles me. In its simplest form, it seems to be a breakdown in the communication process. In today’s age of instant communication, it seems difficult to fathom that after all of the attempted contacts from one entity to another, often an adequate response is still not forthcoming. Imagine if 56 percent of your texts never made it to their intended recipient or didn’t result in a requested response from the receiver. With such poor response rates, I can’t help but wonder how many dollars are being denied that could have been appropriately paid, had the requested documentation been supplied.

I’m sure the current process of asking for and receiving required documentation is not a simple one, and there are a lot of issues to consider if the process is to be improved. And I’m certain there are barriers for both entities preventing the achievement of higher percentages of submission of appropriate medical record documentation. But I think we all need to do better. How can we know how much documentation is enough if we can’t gather enough documentation to study it?

The GAO article can be found online here.


Denise Wilson, RN, MS, RRT

Denise Wilson is the vice president at Denial Research Group and AppealMasters. Denise is a registered respiratory therapist and a registered nurse, and holds a master’s degree in management information systems. Denise has over 30 years of experience in healthcare and is a nationally known speaker and educator on the RAC program and the Medicare appeals system.

This email address is being protected from spambots. You need JavaScript enabled to view it.

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