Updated on: January 31, 2013

RACs Obtain CMS Approval for First Home Health Issue and Begin Testing for Additional Issues

By Bonny Kohr, RN, CHCE, HCS-D
Original story posted on: March 28, 2012

b-kohrConnolly Healthcare, the RAC contractor for Region C, has introduced an approved issue for home health review. The issue targets home health partial episode payments (PEPs) and involves automated reviews, which do not require contractors to obtain medical records from home health agencies. The intended purpose of the review is to identify agencies that have been underpaid.

PEP adjustments occur when a patient has been discharged and readmitted to the same home health agency (or transferred to another home health agency) within the same 60-day period. When an agency becomes aware of a PEP, it submits a discharge status code of 06 on the final claim for the first part of the 60-day episode. As a result, the claim is adjusted to pay a proportional amount based on the number of days of service provided.

This new RAC review will identify claims with a discharge status code of 06 for which another home health claim was not billed - indicating a start-of-care date within 60 days of the claim's filing, or in cases in which the patient did not have a Managed Care Organization effective date, within 60 days of the PEP claim's filing. In these situations the agency may be entitled to a full episode payment for the submitted claim. If the underpayment is validated, the provider will receive an underpayment notification letter from the RAC and the claim will be adjusted.

RACs must seek approval for all new issues and post approved issues to the RAC website prior to submitting any demand letters to providers. However, in order for new issues to be approved by CMS, they must be validated - and the RAC contractors may request medical records from providers to develop test cases.

Home health agencies currently are receiving letters requesting patient records for review of three new issues proposed by the RACs. These issues are related to low utilization payment adjustments (LUPAs), high rates of therapy utilization episodes and high numbers of subsequent episodes (recertifications). The letters identify that the requests are part of a test claim sample and require that all documentation be submitted within 45 days of the date of notice. The agency is required to submit all physician orders, plan(s) of care, OASIS assessments, lab results, HHABN(s) and visit notes for all billed services.

Home health providers recently have experienced a marked increase in the number of audits of their medical records. The reviews include post-payment audits from the Program Safeguard Contractors, prepayment reviews via Additional Documentation Requests (ADRs) from the MACs, and now requests for medical records from the RACs. Agencies must act now to ensure that they are prepared to submit the required documentation to the RACs or to any other auditor requesting documentation.

Begin by developing a team responsible for preparing records for review and for conducting the reviews. Agency size and structure will determine which individuals should be included on the team, and how many. The team should identify claims correlating to proposed or approved issues (LUPAs, high-therapy utilization, multiple re-certifications, etc.) and select a sample of records for review.

The goal of this is to develop a process for consistent and accurate submission of requested claims to the auditors. In order to do this, an agency should identify who will be responsible for each part of the process - including who will copy or scan the record, who will track the status of the submission, who will be responsible for creating an index of the documentation, etc. Once a submission plan is developed, the agency should conduct a review of the selected records to determine whether the billed services were medically reasonable and necessary, included in the plan of care and coded properly. The review also should ensure that the records are legible, that they contain sufficient documentation to support medical necessity and the HIPPS codes billed, and that the services were billed in accordance with Medicare regulations.

If the agency determines that there are deficiencies in its existing documentation, they have limited options. If the documentation and/or signatures are illegible, agencies can transcribe the existing records into a more legible format and submit either signature logs and/or attestation logs. Addendums that are dated at the time of the review can be submitted if the agency identifies a situation in which an addendum would clarify or add to the existing documentation. At no time can agencies change or modify existing documentation, however, or backdate any notes.

Upon completion of record review, agencies should identify patterns that need to be addressed. A corrective action plan could include  education on clinical or regulatory issues, development of a signature log and/or a collection of attestation statements, a redesign of clinical documentation forms, new processes for monitoring the collection of clinical records, and revision of the quarterly clinical record review process to allow for quicker and more effective identification of clinical record weaknesses.

Outside review of an agency's clinical records often is a time-consuming and disruptive process.  We all must recognize that it is necessary to ensure the appropriate payment of Medicare claims. However, successful agencies will use this review process to their advantage by strengthening their own internal audit functions to avoid future problems.

About the Author

Bonny Kohr, RN, CHCE, HCS-D, is the manager of clinical services for FR &R Healthcare Consulting, Inc. She is a Registered Nurse, Certified Homecare Coding Specialist and a Certified Homecare and Hospice Executive. Bonny worked 23 years in home health care.  She began her career in home care as a field staff nurse, then as a clinical director, and finally as the chief operating officer.

Contact the Author

BKohr@frrcpas.com

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