December 19, 2013

The New CMS Rules May Bring Clarification to All Appeal Levels – But Stay Focused on the Big Picture

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In August I covered aspects of the report titled "Improvements are Needed at the Administrative Law Judge (ALJ) Level of Medicare Appeals" put out by the U.S. Department of Health and Human Services Office of Inspector General (OIG).

My article analyzed the implications for providers counting on the ALJs to overturn appeals. In the report it was made clear that the Centers for Medicare & Medicaid Services (CMS) would like the ALJs to interpret regulations in the same ways as CMS and the Recovery Auditors (RA), which obviously would reduce the number of overturned appeals at the ALJ level. The report specifically recommends coordinated training for ALJ and CMS Qualified Independent Contractors (QICs) in order to ensure consistent interpretation of CMS rules.

Meanwhile, what was not addressed in the OIG report was this: We now are hearing that the ALJs have backlogs of as much as 12 months, as providers continue to wait with no way to recoup funds already taken back. Of course, the manual, paper system in use by the ALJs exacerbates the problem.

So, has CMS responded to the ALJ bottleneck and these troubling delays? Have they addressed inconsistencies in training and the interpretation of rules? The answer is a distinct "maybe."

CMS has reduced individual interpretation and variation throughout the appeals process, including at the ALJ level. The agency has clarified observation and inpatient stays with the two-midnight rule and published clear rules governing physician order requirements for certification. As a by-product, the ALJ process actually may have been streamlined, because they have tightened interpretation of the law. Without the need for the ALJ to spend time interpreting laws, there perhaps should be a reduction in the backlog. Only time will reveal if this actually results in greater consistency in the appeal levels and a "catch-up" in the ALJ, resulting in timely appeals.

But wait! As I was writing this article, it occured to me that I have been sucked into what I usually rail against: a focus on the appeals process and the back end. We need to get it right in the beginning, with a focus on the front of the process. Meanwhile, as I listen to the many discussions revolving around how to implement the new rules, it strikes me again that we are spending far too much time on each individual new rule and not enough time on how we manage billing compliance from a systemic approach.

I recently had a discussion with Bill Malm, RN, of Craneware, and I believe he has it right. CMS is going back to the basics. Physician certification is just another way of specifying what physicians should have always included in their admission orders. As providers, we can get lost in the weeds and must back up to gain perspective on how to manage billing compliance as a whole, not just manage the bits and pieces.

To ensure that the big picture is being addressed, every provider should have some type of RA and billing compliance committee that reports to the utilization management committee (UMC) and the quality committee (QC). It takes a multi-disciplinary approach to manage how to get all the rules and regulations correct on the front end to eliminate denials on the back end. A RA/billing compliance committee manages the accountability function, through which activities across the organization are coordinated. For instance, I recently heard a discussion from a provider regarding how certification forms were being utilized, and it was suggested that the facility should audit the forms for compliance. The question arose as to where to send the audits, as often these forms go nowhere. The correct answer is that they should be sent where accountability lies – ideally, with the RA/billing compliance committee. By utilizing this entity, the results of an audit are transparent and go to the UMC for enforcement through the medical staff. By going to the QC, hospital issues are addressed.

Your physician advisors and care managers should function on the RA/billing compliance committee as the bridge between clinical documentation and revenue cycle. Add a clinical documentation specialist program and you have the makings of a best-practice-concurrent system to address the two-midnight rule, certification, and any other rules that come along in a proactive manner. Finance and billing by themselves only can try to deal with issues on the back end, when it is too late.

If you must focus on appeals because you are losing a lot of money, use the RA/billing compliance committee to study where you are vulnerable. Review charts of denied claims and put corrective plans into place. Hold people accountable and measure improvement. And just maybe, you will see fewer denials and allow your resources to focus on how to keep up with and implement the constant change that is inherent to our environment.

About the Author

Elizabeth Lambin, MHA, is a partner in PACE Healthcare Consulting. Elizabeth has more than 20 years of C-suite level hospital executive management experience. Most recently, she was the CEO/Market President for Tenet Healthcare's Hilton Head Regional Healthcare. Elizabeth holds an undergraduate degree in Business Administration, Cum Laude and a Master's in Healthcare Administration from the University of South Carolina.

Contact the Author

elizabeth.lamkin@pacehm.com

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Elizabeth Lamkin, MHA

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