December 28, 2008

RAC Delay Means More Time to Prepare for Rough Times Ahead

By

lfotheringill120ds

Finally!  Some good news about the RACs! -

The roll out of the permanent program is being delayed until early February while the loosing bidders protest CMS’ choices on which private companies get the lucrative award as a RAC contractor.

 

The not-so-good news is that the delay of the rollout will not stop the RAC program, and the RACs can still look back to October 1, 2007 for the opportunity to recoup alleged overpayments.

 

However, the RAC rollout delay gives providers more time to prepare for the rough times ahead.  As part of the preparation, many facilities are shopping for a RAC “Tracking” software tool.  Vendors are in a frenzy to develop the so-called RAC “Tracking” tool to meet the demand, and there are at least 30 vendors who claim to have a viable RAC software tool.

 

But here is some food for thought:  It is not just the RACs that providers must worry about.  The RAC program is just one (albeit a major one) of the multiple programs that CMS is kicking into high gear to safeguard the Medicare Trust Fund.

 

For denial prevention and successful appeal purposes, facilities should be certain that the software tool they choose will accommodate all of the CMS programs on the same platform.  Among other reasons, RACs are generally not supposed to review a claim that has previously been reviewed by another entity, and a comprehensive tracking/appeal management tool will ensure that there is no double dipping.

 

The May 2008 Improper Medicare FFS Payments Report claims that 3.7 percent (i.e. $10.2 billion) of the Medicare dollars paid did not comply with one or more Medicare coverage, coding, billing, or payment rules. Meanwhile, CMS has announced that they will be in the red by 2010 and that there will be complete exhaustion of the trust fund by 2018 without “corrective legislative action.” So CMS is going after every allegedly overpaid dollar, and will do so with multiple Pre-payment and Post-payment programs.  A brief summary of these programs follows:

 

National Correct Coding Initiatives (NCCI) Edits

The NCCI edits are automated pre-payment Medicare Part B edits. The submitted claim is processed by the Medicare claims processing contractor’s systems and the submitted procedures are analyzed to determine if they comply with the NCCI edit policy.  The edit policies are to be updated quarterly!   Processing systems test every pair of codes reported for the same date of service for the same beneficiary by the same provider against the NCCI edit tables. If a pair of codes hits against an NCCI edit, the column two code of the edit pair is denied unless it is submitted with an NCCI associated modifier and the edit allows such modifiers.  HCPCS/CPT codes representing services denied based on NCCI edits may not be billed to Medicare beneficiaries.

 

Medically Unlikely Edits (MUEs)

CMS has established units of service edits for Medicare Part B benefit claims, referred to as MUEs. Just like the NCCI edit, the MUE edit is an automated prepayment edit that is designed to prevent inappropriate payments. As the submitted claim is processed by the Medicare claims processing contractor’s systems, the submitted procedures are analyzed to determine if they comply with the MUE policy. An MUE for a HCPCS/CPT code is the maximum units of service under most circumstances that a provider would report for a code for a single beneficiary on a single date of service. There are quarterly updates to MUEs on the same schedule as the quarterly updates to NCCI.  The claim lines that violate the MUE edits are not processed for payment.

 

Carrier/FI/MAC Medical Review Program

If the Medicare claims processing contractor verifies that an error exists through a review of a small sample of claims, the contractor is to classify the severity of the problem as minor, moderate, or significant and must impose corrective actions that are appropriate for the severity of the infraction.

 

The following corrective actions can result from Medical Review:

 

Prepayment review — Prepayment review consists of medical review of a claim prior to payment. Providers with identified problems submitting correct claims may be placed on “prepayment review”, in which a percentage of their claims are subjected to review before payment can be authorized. Providers are not removed from prepayment review until they have established that they are billing correctly according to the MAC.

 

Postpayment review — Postpayment review is commonly performed by using Statistically Valid Sampling. Sampling allows an overpayment to be estimated without requesting all records on all claims from providers. This reduces the administrative burden for Medicare, but obviously may unfairly impact Providers.


 

Both prepayment and postpayment reviews may require providers to submit medical records. When medical records are requested, the provider must submit them within the specified timeframe or the claim will be denied.

 

Comprehensive Error Rate Testing (CERT) Program

The CERT post-payment medical review process begins at the Medicare claims processing contractors. After the claims have been processed, samples of the claims are selected for CERT review. The CERT then uses information from the claims processing contractors to request documentation from the provider/supplier who submitted the sampled claim.

 

The claim and the supporting documentation are reviewed by CERT program clinicians who determine if the claim was submitted and paid appropriately. Due to the sampling methodology, very few providers will be subject to CERT review. However, provider claims that are selected for CERT review are subject to potential post-pay payment denials, payment adjustments, or other administrative or legal actions depending upon the result of the review. Claims can be adjusted or denied based on the CERT review.

 

Program Safeguard Contractors (PSCs)

In 1999, CMS began transferring the responsibility for detecting fraud and abuse in Medicare Parts A and B from carrier and fiscal intermediary fraud units to PSCs, and completed the transfer of responsibilities in 2006.

 

As part of their duties, PSCs conduct investigations to determine the facts and magnitude of alleged fraud and abuse. Upon completing investigations, PSCs determine whether to refer the investigations as cases to law enforcement. CMS expects PSCs to be innovative and effective in data analysis, moving beyond the capabilities of carrier and fiscal intermediary fraud units. This was one of the reasons for awarding contracts to PSCs. CMS expects a significant part of PSC data analysis to be proactive, i.e., self-initiated exploratory analysis that seeks previously unidentified patterns or instances of fraud and abuse.

 

In summary, the economic pressures of the quickly dwindling Medicare Trust Fund appear to be prompting more aggressive efforts by CMS to prevent and correct allegedly improper payments.  Further, CMS has made it clear that the RAC program will not hamper fraud investigation and law enforcement efforts, and has mandated that suspected fraud or abuse be reported by RAC contractors.

 

The prudent facility should continue their best practice compliance programs, and should develop or purchase a software-tracking tool that monitors, manages, and appeals all CMS/Medicare audit activity on one platform.

 

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Linda Fotheringill is the Co-Founder & Principal of Washington & West, LLC

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Linda Fotheringill, Esq.

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