RAC Appeals Webinar for healthcare execs


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RAC Expert offers valuable guidelines, explanations, and tips to managing the Appeals portion of the CMS RAC Audits.

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RAC Appeals Webinar for healthcare execs

  1. 1. The 360°approach to compliance and risk management RAC Attack: An Operational Guide to Successful Appeals Proprietary and Confidential - © 2009 Compliance 360 – All Rights Reserved Compliance 360 at a Glance • #1 GRC in Healthcare • 150,000+ Active Users • 950,000+ Regulations • 250,000+ Policies • ZERO Software to Install or Maintain 2 Chief Compliance Officer Chief Risk Officer CEO/ Board General Counsel Internal Auditors Executive Dashboard Virtual Evidence Room™ Compliance Management p g g Risk Management Audit Management • Regulatory Intelligence and • Risk Frameworks and Models • Sarbanes-Oxley Management Content Repository • Risk Assessments • Risk Assessments • Policy Management • Controls Testing and Monitoring • Internal Audit / Self-Assessment • Automated Assessments • Incident Management • Claims Audit Management • Incident Management • Surveys • Incident Management • Surveys • Surveys • Workflow • Contracts • Search • Meetings • Projects • Reporting • Documents GRC Platform • Forums • Email Integration Content Providers (Laws and Regulations) HIPAA, EMTALA, STARK, Red Flags, Vendor Compliance, ABN, etc. 3 1
  2. 2. Additional Web Events • Preparing for MIC Audits: An Operational Guide – Thursday, Aug 13 – 2:00 – 3:00pm EDT • WEB DEMO: Compliance 360 Claims Auditor for RAC Audits – Tuesday, Sept 1 – 2:00 – 3:00pm EDT 4 AR Systems, Inc Training Library Presents RAC ATTACK – A Guide to Successful Appeals “To Appeal or not to Appeal” Instructor: I t t Day Egusquiza, P D E i Pres AR Systems, Inc 5 RAC2008 RAC –The Recovery Audit Contractor: What’s a provider to do? Where are we today? – powerful transmittals Walking thru the process - defense and validation audits Impact to departments –from letter to recoupment How will the recoupments work – automated vs complex Rebuttals with the RAC – prevent the denial Tracking and trending 5 levels of appeal – decision points Balancing moving forward as well as looking back 6 RAC2009 2
  3. 3. RAC –The Recovery Audit Contractor: In the beginning……back in 2003 Formal Definition: Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Section 306, directs the Secretary of the U.S. Department of Health and Human Services (HHS) to demonstrate the use of RACs under the Medicare Integrity Program in: 1) identifying underpayments and overpayments; 2) recouping overpayments under the Medicare program (for services for which payment is made under Part A or Part B of Title XVIII of the Social Security Act). From MLN Matters Numbers SE0469 & SE0565 & SE0617 7 RAC2009 Purpose of RAC The RAC program’s mission is to reduce Medicare improper payments thru the efficient detection and collection of overpayments, the identification of underpayments and the implementation of actions that will prevent further improper payments. The identification f d Th id tifi ti of underpayments and overpayments t d t and the recoupment of overpayments will occur for claims paid under the Medicare program for services which payment is made under part A or B of Title XVIII of the Social Security Act. Scope of Work/Statement of Work for the RAC program/CMS/www.fbo.gov/sbg/NHS/HCFA/AGG/reference%2Dnu mber%2dcms040001cgs1/listing.htmd or CMS’s website 8 RAC2009 Statutory Requirements Section 302 of the Tax Relief & Health Care Act of 2006 requires the Secretary of the Dept of H&HS to utilize RACs under the Medicare Integrity Program to identify underpayments and overpayments and recoup overpayments under the Medicare program for part A & B. Although there was considerable discussion and delay, the permanent RACs are slated to be completely implemented by 2010. 9 RAC2009 3
  4. 4. Underpayment examples (watch for more once live) DRG re-coded to higher DRG re- Transfer disposition on UB; however pt did not return to skilled SNF days. Missed charges when charges were Mi d h h h already present. If no charges were billed, lost charges are not subject to underpayment determinations. RACs are now compensated for underpayments. 10 RAC2009 ALERT ALERT Permanent RACs announced 10-6-08 10- Regions: A/Northeast Diversified Collection Services, Inc of Livermore, CA Contingency fee: 12.45% Ebony.brandon@cms.hhs.gov B/Upper midwest CGI Technologies and Solutions, Inc of Fairfax, VA Contingency fee: 12.50% 12 50% Scott.wakefield@cms.hhs.gov Scott wakefield@cms hhs gov C/Lower western Connolly Consulting Associates, Inc of Wilton, CT Contingency fee: 9% Amy.Reese@cms.hhs.gov D/Northwest HealthDataInsights, Inc of Las Vegas, NV HealthDataInsights, Contingency fee: 9.45% Kathleen.Wallace@cms.hhs.gov Rollout periods: Yellow states Summer 2009 Green states Summer 2009 Blue states Fall 2009 All states live no later than Jan , 2010 … PS Don’t forget the Medicaid Integrity Program/MIP with 4 contractors… contractors… www.cms.hhs.gov/RAC/03_RecentUpdates.asp 11 RAC2009 MAC J14 MAC J6 & J8 Summer 2009 Summer Early fall 2009 MAC J11 12 4
  5. 5. Updated RAC Info May 28, 2009 New demand letter sample provided. Use discussion period with the RAC from Results letter thru the 41st day of recoupment. CMS anticipates the revised timeline: RAC automated reviews – late June/July RAC medical necessity complex reviews- early 2010 reviews- Other complex reviews – DRG and other coding reviews – Fall 2009 Govt accting office/GOA is expected to complete its analysis of RAC program in 11-09. 11- 13 www.aha.org/rac www.cms.hhs.gov/RAC Email Updates 6-16-09 6-16- Cmdr Casey, RN,BSN, MPH Deputy Director, Division Recovery Operations Pt impact: Provider agreements demand that impact: the pt be refunded for any recouped Medicare payments. Record request: As of today, CMS is not moving request: q y g to the per tax ID. It will remain per NPI #. Timely rebill: There is no ability to rebill as an rebill: outpt medically necessary surgeries that are denied as incorrect setting (Demonstration only)- only)- i.e.inpt. i.e.inpt. 14 RAC2009 RAC/MAC Implementation Coordination 7. Implementation of the Permanent RAC Program (*) CMS will gradually implement the RAC permanent program nationwide. Due to the importance of protecting the Medicare Trust Funds, Congress included Section 302 in TRHCA, which requires the Secretary to implement the RAC program throughout the country by no later than January 1, 2010 (see Appendix B). CMS is undertaking a number of initiatives to gradually implement the RAC permanent program. … CMS has also developed an effective strategy to ensure that the RAC permanent program will not interfere with the transition from the old Medicare claims processing contractors to the new Medicare claims processing contractors, called Medicare Administrative Contractors (MACs). This strategy will allow the new MACs to focus on claims processing activities before working with the RACs. Generally, the RAC blackout period will be: a. 3 months before a MAC begins processing claims for a given State b. 3 months after a MAC begins processing claims for a given State. State. Impacted states: South Carolina/yellow but same MAC as FI, so no delay; New England/yellow but new MAC so delayed; Full blackout: Indiana, Michigan, Minnesota (*) THE MEDICARE RECOVERY AUDIT CONTRACTOR (RAC) PROGRAM: An Evaluation of the 3-Year Demonstration 15 RAC2009 5
  6. 6. RAC/MAC Implementation Coordination 16 When your state goes live- live- Outreach Education ( www/rac monitor.com 3--09) www/rac 3 Hospital association, RAC and CMS rep will do state-specific education prior to state- implementation. (RAC’s are forbidden by CMS to provide education directly to providers) Outline of issues: No set dates yet; but likely that activity will begin in May 2009 Results will drive implementation dates Create an ‘established black and white issues to begin with’. Fuzzy on initial recoupments would be automated vs complex as originally outlined. “New Issue” must be reviewed by CMS before the RAC can act. 17 RAC2009 Hot Spots for Audit that may result in denied claims (Idea: Work toward preventing the need for the appeal process) 18 RAC2009 6
  7. 7. Validation Process When RAC identifies a potential vulnerability, they send a sample of claims to be validated prior to moving forward. The RAC validation process ensures the there is a potential for an overpayment. RAC identifies ‘issue’; sends to CMS central office for issue ; review; to PRS auditor for 2nd opinion if needed Also use Validation to ‘check’ on RAC accuracy. NEW Validation Contractor: Provider Resources, Inc of Erie, PA. (10-10-08 ) (10-10- CMS sends a random sample of the RAC reviewed claims to the CMS &/or RAC Validation contractor each month w/an accuracy rate calculated. 19 RAC2009 RAC HealthDataInsights licenses Milliman Care guidelines “HDI has signed a 5 year license with Milliman Care Guidelines. HCI will use the care guidelines content and software to review Medicare claims. HDI will use the annually updated evidence based care guidelines products. id li d t The Care Guidelines promote healthcare quality by providing clinical guidelines based on the best available clinical evidence.” CMS does not mandate or endorse any specific guidelines or criteria for utilization review.” review.” Feb 25, 2009 “Evidence-based care guidelines will be used to combat waste in Medicare program.” “Evidence- 20 RAC2009 Medicare’s Inpt definition Medicare benefit policy manual chpt 1 10 An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight. overnight ” “However, the decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient's medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital's by- by-laws and admissions policies, and the relative appropriateness of treatment in each setting. Factors to be considered when making the decision to admit include such things as: – The severity of the signs and symptoms exhibited by the patient; – The medical predictability of something adverse happening to the 21 patient…” RAC2009 7
  8. 8. Catch 22…inpt medically 22…inpt necessary Look beyond meeting Interqual or Milliman criteria… they are simply a great resource. Physician – clearly outlines the severity of the p pt’s condition that requires the inpt stay. q p y Nursing – clearly documents the intensity of the ongoing pt care H&P and discharge summaries are not usually required for less than 48 hr stays; however, they are critical to help clarify the scope and course of treatment the physician was thinking, 22 assessing and treating. More RAC announcements Each RAC will have their own website/CMS will approve soon. Clinical Screening Tools Region R i A/DCS – Milli Milliman C Care G id li Guidelines Region B/CGI – InterQual Clinical Decision Support Guidelines Region C/Connolly – Milliman Care Guidelines Region D/HDI – Will use both Interqual & 23 Milliman RAC2009 Defense Audit- Audit- High areas of Focus-Inpt Focus- Top 10 diagnosis – 1 day stays vs sort by physician, by observation vs just an outpt in a bed! payer PEPPER- PEPPER-1 & 3 day stays Top DRGs from the 3 p Short stays – less than 24 demonstration states hrs billed as a inpt. inpt. Outlier inpt Inpt Rehab vs outpt rehab 3 day SNF qualifying MS- MS-DRG = %MCC, %CC Transfers that were Charge Master/Charge billed as ‘discharges” Capture rules 24 RAC2009 8
  9. 9. More data mining 1 day stay high MSDRG551/552: Medical Back pain vulnerabilities: PCI, pacemaker, syncope MSDRG 829: Other endocrine, nutritional, Create a report, from 10-07 10- metabolic OR Proc w/cc forward, forward for all 1 day stays or zero MSDRG373: major /short stays. gastrointestinal disorder w/o Sort by physician, by payer (only cc/mcc cc/mcc pull Medicare if appropriate MSDRG313: chest pain sample size) MSDRG 371: Major List all diagnosis & DRG gastrointestinal disorder Couple with the PEPPER report. w/mcc w/mcc Look for patterns Random auditing of high risk areas. 25 RAC2009 More: 3 day SNF qualifying Q: 3 day SNF deemed not medically necessary. A: If the 3 day qualifying stay is determined to be medically unnecessary, then there is no SNF Medicare benefit. A Medicare claims processing contractor(FI/MAC) that denies the inpt hospital stay is not precluded from also denying the SNF stay. At this time, if a RAC determines that a reasonable and necessary 3 day stay did not exist prior to admission to the Part P t A SNF stay, the RAC will d t th ill deny th inpt admission and will i f the i t d i i d ill inform th the FI/MAC that the subsequent SNF admission should also be denied. The FI/MAC will then deny the SNF stay. (Cdr Casey, 2-14-09 reply) 2-14- Weakness: “Retroing” orders to ‘admit from the beginning’ – started as OBS, then became Retroing” Inpt but not for 3 days. Critical access hospitals have swing beds billed as SNF. Referring to themselves. ER doc does not have admitting privileges. How is status determined for nursing? 26 RAC2009 Data Mining-Transfers & 3 day Mining- 3 day SNF qualifying Transfer vs discharge stay: Identify list of discharges that must be changed to transfer if Discharge disposition 61 the pt is admitting to a SNF or or 03 home health within 3 days post Identify patterns with a discharge. di h focus on: Internal process: Inpt bills must hold for 3 days Dehydration Working with case mgt/UR, Gastroenteritis identify ‘at risk’ patients upon Chest pain discharge Either call the pt (or the SNF/HH) Fever on the 3rd day, prior to bill drop, to Altered mental status determine final status. Respiratory 27 RAC2009 9
  10. 10. High Vulnerability DRGs from Demonstration Project DRG MS-DRG Description 076 166, 167, 169 Other Resp System OR procedures w/CC 082 180, 181, 182 Respiratory Neoplasms 124 286, 287 Circulatory Disorder Except AMI, w/Card Cath & complex dx 143 313 Chest pain 148 329, 330,331 Major small & large bowel procedures w/cc 217 463, 463, 465 Wound debridement & skin grafts 243 551, 552 Medical back problems 263 573, 574, 575 Skin graft with debridement 397 813 Coagulation disorders 415 853, 854, 855 OR procedure for injection & parasite diseases 416 870, 871, 782 Septicemia 468 981, 982, 983 Extensive OR procedure unrelated to principal dx 475 207, 208 Respiratory System Dx w/ventilator support 477 987,988, 989 Non-extensive OR procedure unrelated to principal diagnosis 28 RAC2009 More at risk areas Discharge disposition/DD UR /case mgt aware of a discharge status but not communicated to the individual responsible for inputting discharge p p g g disposition. EX) 250 transfer DRGs that require 3 day post discharge monitoring –if pt goes to SNF or HH –must revise DD from ‘home’ to ‘transfer’ Who is the owner of DD, exactly? 29 RAC2009 Known ‘at risk’ areas Charge master – J codes with incorrect multipliers; Reimbursement rules not known with charge capture; (Ex: 92507/1 unit; Observation – routine recovery prior to OBS) 59 modifier being applied when CPT codes reject without the medical record or knowledge of the CCI edit failures CPT codes mismatched with Revenue Codes 30 RAC2009 10
  11. 11. And then there was OBS----Broken OBS----Broken Billing ‘hrs in a bed’ Outpt service vs OBS vs medically bed. necessary hrs. Drug administration Routine Recovery y handoffs from ER – must occur for 4-64- too many initial hrs. hrs. Then evaluate UR is only working OBS due to M-F, 8 hr days. unplanned outcome Weekends? After or exacerbation of a Hrs? condition. Ancillary delays 31 RAC2009 OBS audit ideas ER to OBS – look for medical necessity as they leave ER w/action oriented orders OR to OBS – procedure with 4-6 hrs routine recovery 4- unplanned outcome/excerbation of a condition? place outcome/excerbation condition?= an obs bed. Look at late case=risk Direct to OBS – look at active physician orders when the pt is placed in a bed vs ‘see them I make rounds.” PS Don’t forget to look for lost charges too 32 RAC2009 Provider Risk Partners in reducing risk – Providers At risk areas: Physicians billing inpt visit with facility billing OBS Physician’s documentation inadequate to support ‘severity of y q pp y illness’ = inpt Physician’s share the same Tax ID # = higher risk to facility. (deep pockets) Physician’s E&M bell curve Physician unclear on dx to support admit as inpt Physician unaware of pt status: OBS, Inpt, Outpt in a bed and Inpt, order accordingly with support documentation to support medical necessity in a bed. ….more …… 3 day SNF 33 RAC2009 11
  12. 12. High areas of Focus-Outpt Focus- Modifiers – 59 CDM vs Outlier outpt claims &/or HIM $50,000 E&M leveling – auditable MUE – override issue criteria and bell curve analysis Self adm meds – 637, Drug administration start & 259. (Collecting from pt?) stop times t ti 73/74 discontinued E&M in hospital surgeries (same day) based/provider based J dosage multiplier clinics – earning an E&M when done with a procedure, modifier 25 975xx/wound/facility vs 36430/blood transfusion & 11000- 11000-15000/physicians ST/9250x (1 unit) only Hospital based physicians Charge Master/Charge 34 capture rules How will the RACs know what to audit? Claims history with MAC/FI Known vulnerabilities identified by the OIG or GAO Patterns identified outside the proprietary software of the RAC Identified patterns thru other auditing entities, FI/MAC, QIO, PEPPER report, CERT NOTE: Claims already in review, excluded data base. Can review current fiscal year. New List of issues compiled by CMS 35 RAC2009 Once the RAC is rolling Historical findings will be posted in the individual RAC websites CMS will have findings on their website New i N issues will b posted on th i di id l ill be t d the individual RAC websites as well as CMS website. Accuracy rates will be published for the RACs by 2010 Patterns should be closely evaluated with 36 corrective action completed internally 12
  13. 13. Audience Polling Question #1 Which of your departments has primary responsibility for managing RAC audits? (please select only one answer) 37 Powerful Transmittals Transmittal 152, June 12, 2009 CR 6384 Medicare Financial Management Chapter 4, Debt Collection Use of the RAC data warehouse for tracking appeals. Potential Fraud referrals – to CMS RAC Project Officer who will forward to the CMS Division of Benefit Integrity Management Operations. Dissemination of information between the RAC and MAC 38 RAC2009 More powerful transmittals Transmittal 47, Interpretive Guidelines for Hospitals June 5, 2009 “All entries in the medical record must be complete. Defined by: sufficient info to identify the pt; support the dx/condition; justify the dx/condition; care, treatment, and services; document the course and results of care, treatment and services and promote continuity of care among providers. “All entries must be dated, timed and authenticated, in written or electronic format, by the person responsible for providing or evaluating the service provided.” “All entries must be legible. Orders, progress notes, nursing notes, or other entries ….. 39 RAC2009 13
  14. 14. More Transmittal 47 “Timing establishes when an order was given, when an activity happened or when an activity is to take place. Timing and dating establishes a baseline for future actions or assessments and establishes a timeline of events. (71 FR 68687) “Where an electronic medical record is used, the hospital must demonstrate how it prevents alterations of record entries after they have been authenticated. “When a practitioner is using a pre-printed order set, the ordering pre- practitioner may be in compliance with the requirement to date, time, and authenticate an order is the practitioner accomplishes the following: Last page: sign, date, and time the last page of the orders, with the last page also identifying the total number of pages. (more) A system of ‘auto authentication’ in which a physician authenticates an entry that he or she cannot review, e.g. because it has not yet been transcribed, or the electronic entry cannot be displayed, not meeting standard. There must be a method of determining that the practitioner did, in fact, authenticate the entry…. 40 RAC2009 RAC Operations 41 RAC2009 Medical Record Limits FY 2009 Inpt hospital, IRF, SNF, Physicians Hospice 10% of aver monthly Medicare Solo: 10 per 45 days claims (max of 200 ) per 45 2-5: 20 per 45 days days 6-15: 30 per 45 days Other Part A billers (outpt (outpt hospital, HH) Large grp 16+: 50 per 45 1% of aver monthly Medicare days services (max of 200) per 45 Other Part B (DME, days PENDING FINAL: Move from 200 Lab) per NPI # to 200 per TAX ID # 1% of aver monthly Medicare Services per 45 Office of Financial Mgt, 10-08 Update 10- days. 42 RAC2009 14
  15. 15. Summary: Review & Collection Process 1 Automated Review New 2 Automated Review RAC makes a Issue claim The Collection Process Posted to determination 3 4 RAC’s Day 1 Carrier/ website RAC issues FI/MAC Demand 5 issues Letter to Remittance Day 41 Provider Advice (RA) (includes $$$ Carrier/FI/ to provider and appeal MAC From Cmdr Casey, RN, CMS N432: rights) recoups Complex Review 10 “Adjustment Adjustment based on a INTEREST BEGINS TO by offset 7 • Recoupment 6 9 Recovery ACCRUE Audit” AFTER 30 will NOT New RAC 8 RAC clinician RAC issues DAYS FROM occur if: Complex issues reviews Review Results Provider DETERMINAT provider Review Medical medical Letter submits ION has paid in Issue Record records; to provider medical full; or Posted to Request (does NOT records makes a claim provider RAC’s Letter include $$$ or Website to provider determination appeal rights) filed an appeal BY day 30 • Provider has 45 + 10 • RAC has 60 calendar days to calendar days If no respond from receipt of findings medical record to STOP • Providers may request an extension send the Review 43 Results Letter • Claim is denied if no response 43 RAC Project Plan Example of how the RACs must communicate with CMS Project plans shall be for the base year with new issues being added as they are identified. Detailed quarterly projection by ‘vulnerability’ issue (e.g ‘vulnerability’ (e.g excisional debridement) including: a) incorrect procedure code and correct procedure code; b) type of review (automated, complex, extrapolation); c) type of vulnerability (medical necessity, incorrect coding…) Provider outreach educational plan to all stakeholders RACs will not conduct E&M physician claims nor review Hospice or Home Health claims (until 3-08 or later) 3- 44 RAC2009 How to conduct a Validation Review Immediately pre-audit any request for records or pre- Automated recoupment notice. Involve all clinical areas impacted; physician if necessary. Identify any weaknesses and immediately begin an improvement plan plan. Involve compliance, create a recorded history of all improvement done Anticipate at risk from the validation audit. Build internal flags on all accts where medical record requests occurred. Wait to see if any further action. A Review Results letter should be sent within 60 calendar days. 45 RAC2009 15
  16. 16. Inpt vs Outpt Validation Inpt: Inpt: paid per DRG or per diem/critical access. Audit against this payment method. Look at outliers as higher risk better payment. risk=better payment Outpt: Outpt: paid per line item/APC or a % of billed charges/Critical Access The validation audit: record against itemized against UB = Outpt. Outpt. 46 RAC2009 RAC Process (per HDI outreach ) Automated RAC makes a NO claim determination Review RAC decides CMS New Issue Approval Process whether medical New Issues posted to HDI records are required provider website once CMS-approved to make (may request records for new determinations issue process – not posted to web site) RAC issues Review Results Letter RAC has up to provider Complex RAC Provider has 45 to 60 days to RAC makes (does NOT requests days plus 10 YES medical calendar days mail review a claim communicate Review medical determination improper amount or records time to submit. records appeal rights including “no CMS findings”) Provider If no MAC findings 47 STOP 47 RAC Automated Review Discussion Period Carrier/FI/MAC Day 1 adjusts & issues RAC sends RAC issues Demand On Day 41, Remittance claim info to Letter which includes Carrier/FI/MAC recoups Carrier/FI/MAC Advice (RA) to amount and appeal by offset. provider. id rights. Code “N432” Complex Review Discussion Period CMS Provider can pay by check by day 30 or request Provider early recoupment from MAC to avoid interest. MAC Provider can appeal by day 120. Appeal by day 48 30 will hold recoupment although interest is charged unless outcome is provider favor. 48 RAC 16
  17. 17. Automated vs Complex Automated = Ex) units, discharge disposition/transfer DRG, outpt claims = fail the ‘reasonableness’ test or other edits= letter issued of take back. Medical records can be submitted to clarify/15 days or appeal. Complex = Ex) medical necessity, 1 day stays, obs, obs, incorrect coding,3 day qualifying stay, correct setting = letter requesting records. Determination made upon receipt of records. 49 RAC2009 RAC FAQ #7723 Automated Review Under what circumstances can a RAC make a overpayment or underpayment determination without a medical record? A: RACS may use automated review (where NO medical record is involved in the review) ONLY in situations where there is certainty that the claim contains an overpayment. Automated reviews must: A) Have a clear policy that serves as the basis for the overpayment (clear policy mandates a statute, regulation, NCD, coverage provision in an interpretive manual, or LCD that specifies the circumstances under which a service will ALWAYS be considered an overpayment) B) Be based on a medically unbelievable service or C) Occur when no timely response is received in response to a medical record request. 50 RAC2009 More on automated requests Q: Is there any limit on the # of the recoupments that can occur with automated recoupments? recoupments? A: There is no limitation on the number of automated recoupments. However, RAC recoupments. are required to develop processes to minimize provider burden to the greatest extend possible. (RAC SOW pg 6, Cdr Casey 2-14- 2-14- 09) 51 RAC2009 17
  18. 18. Automated Recoupments = no request for records occurs 835/remittance must be watched closely for N432. RAC adjustment code will be used for a) overpayments, overpayments b) underpayments c) interest applied, d) interest paid. No separate codes at this time. Since no records are requested, the Demand Letter will be the first notice of a potential recoupment. 52 RAC2009 What will the pt impact be? If the inpt is denied, the pt (and Medigap supplements) will be informed they don’t owe the inpt deductible. Refund to pt and/or supplement or auto recoupment. If the facility determines they would like to do a corrected claim submission once a decision is made not to appeal – the pt will receive notice they owe a new outpt deductible/coinsurance. If the outpt claim is denied payment, the pt will be informed they don’t owe the outpt portion. HINT: Develop scripts for the PFS staff to explain. NOTE –all activity/recoupments can go back 3 years activity/recoupments beginning with 10-1-07 PD dates. 10- 53 RAC2009 Sample letter communication Dear pt As part of ABC hospital’s commitment to compliance, we are continuously auditing to ensure accuracy and adherence to the Medicare regulations. On (date), Medicare and ABC hospital had a dispute regarding your (type of service) Medicare has determined to taken back the ). payment and therefore, we will be refunding your payment of $ (or indicate if the supplemental insurance will be refunded.) If you have any questions, please call our Medicare specialist, Susan Jones, at 1 -800-happy hospital. We apologize for any 800- confusion this may have caused. Thank you for allowing ABC hospital to serve your health care needs. 54 RAC2009 18
  19. 19. Safety Nets for Pt Impact Immediately upon receipt of the Automated recoupment Or Complex request notice – stop statements within the main IT system system. Ensure there is an unique flag created to allow tracking and trending the status of any activity within the main IT system. This does not preclude a separate system. 55 RAC2009 Impacted Departments Business Office/PFS If inpt denial, monitor for Create flag for each acct medigap supplemental impacted by RAC letter If inpt denial, monitor and execute supplemental refund Special Adj codes for interest recoupment or payment If an outpt denial/OBS, monitor for ancillary CPTs that are Flag if acct is involved in a allowed. takeback. takeback. Appeal filed? Prepare letter to send to pt if Create tracking tool for acct to denials as there will be an watch for take back. Special impact to the pt. Defuse! adjustment code for tracking and trending. Prepare scripts for the BO to explain EOBs received from If inpt denial, rebill part B outpt Medicare. ancillary only. New Co- Co- Closely coordinate with RAC 56 insurance due from pt. specialist. Impacted Departments HIM UR Requests for medical Part of RAC Attack team records. Expand UR coverage to Ensure FULL record is 24/7 thru quasi-UR. quasi- identified /found Identify ‘at risk’ d/c that Validation audit may result in transfer/72 coordinated prior to hrs submission Identify 3 day qualifying Coordinate w/RAC at risk and coordinate Specialist to ensure ‘skilled’ dialogue returned within 45 days Continue training lrdship 57 RAC2009 19
  20. 20. Step1:The Request for Records letter used on Complex/Medical Necessity Reviews Immediately flag the account within the main IT system. Stop monthly statements, create an internal flag for reports, tracking and trending, pending recoupments. recoupments. Create the 45 day threshold for monitoring Pull together th appropriate audit team to pre-audit all P ll t th the i t dit t t pre- dit ll requests prior to returning. VALIDATION PROCESS Assess potential risk Determine go forward plan as well as look back plan Determine if additional independent work should be done, rebill a corrected billing, conduct internal training to prevent any further risk. Cost and impact of any rebills should be known. Watch for the Review Results within 60 days of receipt of 58 records. RAC2009 Huge Risk with Medical Records Why I hate electronic medical records? Little tongue in cheek, but common issues found when performing audits: EMR has the ancillary information but nursing is online in a different system. Only certain departments are live on the EMR. Others are still hardcopy and/or are delayed in implementation. Even the EMR departments are still doing hardcopy documentation. Being scanned in later? HYBIRD record – run for cover!! As requests are received, ensure the ENTIRE medical record is 59 pre- pre-audited prior to submission with action items identified. More on medical record risk Hybird record = part of the pt history is electronic, part is on paper. Did every department go live with the EMR on the same day? Risk with lost revenue as well as documentation documentation. Handoffs become a problem – drug administration, recovery, ER to another pt status. Electronic Audit Sample Nightmare-multiple systems. Nightmare- Ibex (ER System only) Quadramed CPR (once they are moved from ER to a floor) Siemens Imaging system (for those records that are still handwritten and not documented in a system) 60 RAC2009 20
  21. 21. Step 2: Results of Review Letter Letter is received that indicates the results of all requests for records. Letter does not indicate amt of recoupment – just the results and the expectation of the demand letter. Demand letter is from CMS that funds are due. There is a 15-41 day rebuttal period to 15- ‘chat’ with the RAC… 61 RAC2009 BUT… The 15-41 days are included in the 30 15- days to file the 1st level of appeal or recoupment will occur on the 41st day. (N432) Expected determinations: Medical unnecessary service= excessive service= units = 2 36430/blood transfusion. Can only have 1 per day Medically unnecessary setting = had as an 62 inpt, inpt, should have been an outpt. outpt. Update on N432-RAC N432- adjustment Queried Cdr Casey if there were different codes to separate different activity that could be represented by N 432: Under payment Over payment Interest accrued Interest paid Reply: There is one code for both underpayments and overpayments. (? Interest) 2-14-09 2-14- PS: N102 or 56900 is used to recoup when no records were sent. (SOW pg 20) 20) 63 RAC2009 21
  22. 22. What to do if the inpt is denied? RAC FAQ #9462 11- 11-6-08 communication with Commander Casey, RN-CMS RN- Q: If the inpt stay is denied, can the facility bill the outpt ancillary services as an outpt claim? A: Providers can rebill the claims as an outpt as long as timely filing requirement are still met The timely filing met. requirements were waived during the demonstration program. However, CMS has no authority to waive the timely filing requirements in the national program. program. Timely filing: Transmittal 1818, 8-29-2003 8-29- New claims: Services dated Jan thru Sept = Dec 31st of the following claims: calendar year. Services dated Oct –Dec = Dec 31st two years later. 64 RAC2009 RAC FAQ # 9462 Inpt Denial If I receive a demand letter from RAC because an inpt did not meet inpt criteria, can I rebill all the services as an outpt? outpt? Providers can re-bill for inpt Part B services, also known re- as ancillary services but only for the services on the list services, in the benefit policy manual. That list can be found in Ch 6, Section 10: www.cms.hhs.gov/manuals/downloads/bp12c06.pdf. Re- www.cms.hhs.gov/manuals/downloads/bp12c06.pdf. Re- billing for any service will only be allowed if all claim processing rules and claim timeliness rules are met. There are no exceptions to the rules in the national program. The time limit for re-billing is 15- re- 15- 27 months from the date of service. Timely can be found in Claims’ Processing Manual, Chapter 1, Section 70. 65 RAC2009 Can the False Claims Act Apply? If the RACs find ‘reckless disregard for the law’, referrals can be made to the appropriate agency –starting with the FI. The FI can investigate further and refer for further investigation. And the story continues. NO HEAD IN THE SAND!! 66 RAC2009 22
  23. 23. Audience Polling Question #2 What are your greatest challenges to managing RAC Audits? (please check all that apply) 67 68 RAC2009 CMS Claim’s Review Entities Roles of Various Medicare Improper Payment Reviews Timothy Hill, CFO , Dir of Office on Financial Mgt 9-9-08 presentation Entity Type of How selected Volume of Purpose of claims claims review QIO Inpt hospital All claims where Very small To prevent improper hospital submits an payment thru adj claim for a higher upcoding. DRG. To resolve disputes Expedited coverage between bene and review requested by hospital bene CERT All Randomly Small To measure improper payments MAC All Targeted Depends on # of To prevent future claims with improper improper payments payments RAC All Targeted Depends on the # of To detect and correct claims with improper past improper payments payments PSC All Targeted Depends on the # of To identify potential potential fraud claims fraud OIG All Targeted Depends on the # of To identify Fraud potential fraud claims 69 RAC2009 23
  24. 24. RAC FAQs Q: Will the Recovery Audit Contractors (RAC) appeal process mirror the regular Medicare appeal process? A: The Medicare appeals process will remain th same f A Th M di l ill i the for physicians under Part B and Part A non-inpatient non- claims. The only difference under Part A is for the inpatient hospital claims under the Prospective Payment System (PPS). In the current appeals process, the first level appeal will go to the Quality Improvement Organization (QIO); however, the RAC appeals will go to the Fiscal Intermediary that processed the claim. 70 RAC2009 Who are the Original Medicare Qualified Independent Contractors/QIC? Part A East: Maximus, Inc Maximus, Part A West: Maximus, Inc (as of 12-08) Maximus, 12- Part B North: First Coast Services, Inc Part B South: Q2 Administrators, LLC DME: Rivertrust Solutions, Inc Source: www.cms.hhs.gov/OrgMedFFSAppeals 71 RAC2009 New Appeal Transmittal Transmittal 1762, CR 6377 July 2, 2009 www.cms.hhs.gov/transmittals/downloads/R1762CP.pdf Glossary of terms All appeals are on behalf of the beneficiary. “A provider or supplier may represent that beneficiary on the beneficiary s behalf No fee beneficiary’s behalf. fee. CMS can assign liability to the pt if they ‘should have known’ non- non- coverage. Uncommon… “When an appellant requests a reconsideration with a QIC (level 2), the contractor (MAC/FI) must prepare and forward the case file to the QIC. “ Letter format for appeals Elements of each level of appeal 72 RAC2009 24
  25. 25. Now you have the RAC letter.. Review results of the initial validation review. Involve physician if necessary to assist in developing an appeal strategy. If no appeal is appropriate, flag the account for recoupment and monitor monitor. Prepare a letter to send to the pt; watch for Medigap recoupment &/or refunds Determine rebilling potential for lesser services. Determine the value of using the informal 15-41 day 15- rebuttal. 73 RAC2009 Timeline for Appeal Process Type of appeal Provider timeline Determination by Decision within… Timeline within. Redetermination 120 days from initial FI, Carrier or MAC 60 days of receipt determination Reconsideration 180 days from the QIC 60 days of receipt redetermination Hearing by the ALJ g y 60 days from the y ALJ 90 days of receipt y p QIC’s reconsideration; Balance at least $120 Board of Medicare 60 days from the Board of appeals 90 days of receipt Appeals Council ALJ’s decision Judicial Review in 60 days from the US Court Normal legal/court US district court Council’s decision; process at least $1180 74 RAC2009 Transmittal 141, CR 6183 Section 935/Medicare Modernization Act, 2003 “Limitation on Recoupment” Overpayments that are subject to limitations on recoupment – appeals will suspend the recoupment. Post-p y Post-pay denials of claim under Part A and Part B MSP duplicate payment Both have demand letters Medicare will resume overpayment recoveries WITH INTEREST if the Medicare overpayment decision is upheld in the appeals process. www.cms.hhs.gov/transmittals/downloads/R141FM.pdf. MN 6183 www.cms.hhs.gov/transmittals/downloads/R141FM.pdf. is also available at this website. 9-12-08 9-12- 75 RAC2009 25
  26. 26. Understanding ‘interest’ ‘interest’ NEW Transmittal 141, CR 6183, 9-12-08 9-12- “Limitation on Recoupment (935) “ If the facility decides to appeal a RAC determination- determination-understand the process: If an appeal is filed within 30 days, the MAC/FI will not take back the funds. (Take back is immediate and will occur within 41 days of notice if no appeal.) However, while the facility is going thru the numerous Medicare steps of appeal, , y g g p pp , interest will accrue on the amount that is being disputed. If the overpayment dispute is overturned at any level of the appeal process, the interest will be removed. If the overpayment dispute is not overturned, then the interest is left on the account. The overpayment take back will include the interest. There is an incentive to only appeal the determinations where there is a good reason to believe it will be overturned. “Punished’ for appealing all. (www.cms.hhs.gov/transmittals/downloads/R141FM.pdf) 76 RAC2009 When Can Recoupments Occur Options: Options: If level 2/reconsideration If no formal (1st level) is upheld, recoupment will appeal is filed within 30 occur prior to ALJ days of the recoupment decision. notice, notice the recoupment If a date for appeal is will occur on the 41st day. missed, recoupment 1st level = 120 days to process begins. file. But if not done in 30 Interest will either be days, eligible for charged against or added recoupment. to the acct – depending.. See table 77 RAC2009 Impact of Transmittal 141 Without filing an appeal With a timely appeal 1) Recoupment in 41 days 1) Timely = 120 days/redetermination Recoupment will occur on the 41st day, but the appeal can still be filed 2) Timely = 30 days/redetermination from de a d letter will stop t e o demand ette the recoupment from occurring on the 41st day 3) Timely for level 2 = 180 days 4) Timely for level 2 to stop recoupment = 60 days from level 1/redetermination letter 78 RAC2009 26
  27. 27. 79 RAC2009 80 RAC2009 81 RAC2009 27
  28. 28. What about that Interest? Penalty- Penalty-If an appeal Recoupment occurs is filed to stop the but money is returned recoupment, interest after additional levels accrues every 30 of appeal are days until completed. recoupment. If Interest is paid to the overturned, no provider if penalty will be recoupment is assessed. overturned. Each 30 Average rate 11.00% day period. (CR 6183) 82 RAC2009 RAC Review Process TIMELINE SEND RAC APPEAL LETTER VIA CERTIFIED, REGISTERED PRIORITY MAIL (3 BUSINESS DAY RECEIPT) RAC PROCESS BEGINS AT FACILITY RAC ANSWER DUE BACK Get in Mail by Jan 30th Receive RAC Letter - Jan 4th FIRST DRAFT TO FACILITY Request Medical Record RAC Apr 4-10th chart copy Receive Copied Chart from Medical Records W/E W/E W/E W/E W/E MONTH W/E W/E W/E W/E Jan W/E W/E Jan W/E W/E Feb Feb Feb OF APR APR APR Dec 28th Jan 4th Jan 7th Jan 8th 11th Jan 14th Jan 21st 28th Feb 1st Feb 8th 15th 21st 28th MARCH 4th 11th 18th RAC APPEAL DUE RAC APPEAL LETTER RAC NOTIFICATION DUE 15 DAYS WITH IN 45 DAYS ANSWER DUE BACK RAC LETTER SENT OUT TO FACILITY FROM LETTER DATE Feb 10th is RAC due date Letter dated December 27th Jan 11th - Fax RAC Notification (45 days from Letter Date) Apr 4-10th - 60 days from Appeal due within 45 days letter of Appeal "Appeal received by RAC" Begin Chart Coding & Medical Necessity Review; RAC REVIEWS APPEAL LETTER AND SUPPORTING DOCUMENTS Input From Utilization Nursing, Nurse Auditors, Medical Records, HIM 83 RAC2009 Timeframe for Medicare Recoupment Process after the first demand letter Transmittal 141, CR 6183 Timeframe Medicare Contractor Provider Day 1 Date of demand letter (date Provider receives notification by demand letter mailed) first class mail of overpayment determination Day 1-15-41 Day 15 deadline for rebuttal Provider must submit a request. (w/RAC) No statement within 15 days from recoupment occurs the date of the demand letter Day 1-40 No recoupment occurs Provider can appeal and potentially limit recoupment from occurring Day 41 Recoupment begins Provider can appeal and potentially stop recoupment. 84 RAC2009 28
  29. 29. Redetermination Documentation Process Send ALL medical records for Redetermination level of appeal Entire medical record reviewed Medicare Redetermination Notice (MRN) Summary of the Facts: - Specific claim information Explanation of the Decision: - Most important element of the MRN - Provides the logic for CMS-FI decision. CMS- What to Include in your Request for an Independent Appeal: CMS- CMS-FI provides a list of documentation needed to make a decision for next level of Appeal. 85 RAC2009 RAC Appeal Guidelines May use CMS-20027 (Redetermination CMS- Request Form) or Send letter on provider letterhead Also include ~ RAC determination letter ~ Detail page specific to claim ~ Any additional supporting information Send to FI 86 RAC2009 3 Potential Outcomes with Redeterminations Full reversal of the overpayment decision.(If the recoupment had already occurred, verify no other outstanding debt, then repay.) Partial reversal = the debt is reduced below th initial stated amt. FI/MAC will recalculate the the i iti l t t d t ill l l t th correct amt. Letter will indicate same. Recoupment of remaining debt may start no earlier than 61 days from the date of the revised overpayment determination. Full Affirmation of the Overpayment decision. CMS will issue 2nd or 3rd demand letter which will state begin recoupment on 61st day unless QIC notice of reconsideration appeal filed. 87 RAC2009 29
  30. 30. 2007 History of Redeterminations 186 M claims Redeterminations furnished by Dispositions: hospitals, SNF, HH Part A: 45% and other providers. unfavorable, 5% 14.5 M were denied partial, 50% favorable FI/MAC did appx Part B: 37% 240,000 Part A unfavorable, 3% redeterminations= partial, 60% 1.7% of these denials favorable. resulted in an appeal. Not all were RAC/Unable to discern. 88 RAC2009 89 RAC2009 90 RAC2009 30
  31. 31. 91 RAC2009 92 RAC2009 Next steps for Recoupment Process Timeframe Medicare Contractor Provider Day 60 following revised Date reconsideration Provider must pay notice of overpayment request is stamped in overpayment or must following redetermination Mailroom or payment Mailroom, have submitted request received from the for 2nd level of appeal to revised overpayment stop the recoupment notice Day 61-75 Recoupment could begin Provider appeals or pays on the 61st day Day 76 Recoupment begins or Provider can still appeal. resumes Recoupment stops on date of receipt of appeal. 93 RAC2009 31
  32. 32. How to file a Reconsideration Level 2 Written appeal request If the form is not used, sent to QIC within 180 a written request must days of receipt of the contain all the following: redetermination. (To stop Bene name recoupment=60 days) Bene’s HIC # Bene s Follow instructions on Specific service & items for which the Medicare reconsideration is requested and Redetermination Notice specific dates of service Name and signature of party (MRN) Name of the contractor that made the Use standard form CMS- CMS- redetermination 20033. Clearly state why you disagree with reconsideration determination. Form is mailed with the 94 MRN. RAC2009 3 Potential Outcomes with Reconsiderations Full reversal – same as redeterminations Partial reversal – this reduces the overpayment. QIC issue a revised demand letter or make appropriate p y pp p payments if due of an underpayment amt. Recoupment will begin on the 30th day from the date of the notice of the revised payment. Affirmation – recoupment may resume on the 30th calendar after the date of the notice of the reconsideration. 95 RAC2009 2007 Reconsideration History QIC (Qualified Reconsideration Independent Dispositions: Contractors) Part A: 79% processed appox unfavorable, 3% 400,000 appeals in partial, 18% 2007. favorable. DME is separate. Part B: 64% Not all were unfavorable, 5% RAC/unable to partial, 31% discern. favorable. 96 RAC2009 32
  33. 33. And then there was ALJ/Administrative Law Judge Medicare contractors can initiate (or resume) recoupment immediately upon receipt of the QIC’s decision or dismissal notice regardless of subsequent appeal to the ALJ (3rd level of appeal) and all further pp appeals. If the ALJ level process reverses the Medicare overpayment determination, Medicare will refund both principal and interest collected + pay interest on any recouped funds that may kept from ongoing Medicare payments. If other outstanding debts, interest is applied against those first before payment to the provider is made. Can add up same issue items and fill jointly. 97 Contingency Fee Rules RAC must payback the contingency fee if the claim was overturned at… Demonstration RAC first level of appeal pp Permanent RAC any level of appeal 98 RAC2009 RAC ATTACK Rollout Create tracking and trending tool. Track all requests – look for patterns as to why the request was sent. Track all recoupments with reasons. Implement physician & nursing documentation training; CDM changes; Dept head ed on charge capture/billable services; coding ed,ed, continued inhouse defense auditing. Determine best practices for TNT.. Develop corrective action w/immediate implementation. This is not optional! 99 RAC2009 33
  34. 34. Tools for Success Look at a tracking tool Continue to learn from other states as the roll out to 2010 is completed. Watch for ongoing education from CMS Look for trends identified from auditing and data mining. Internally audit, train – audit, train some more Explore creation of a RAC Specialist-the most Specialist- detailed person in the revenue cycle! 100 RAC2009 Audience Polling Question #3 Please describe your current state of preparation for managing RAC Audits. (please select only one answer) 101 102 RAC2008 34
  35. 35. First Level of Appeal WHAT: Redetermination WHO: Carried out by the FI USING: Form CMS 20027 HOW: Send request to MAC/FI TIME: 120 days from initial decision y ~ No minimum amount in controversy RESULTS: Review must be completed in 60 days MAIL TO: Attention: Part A Appeals Check with your FI for correct address 103 RAC2009 Second Level of Appeal WHAT: Reconsideration WHO: Carried out by the QIC/qualified indpt contractor USING: Form CMS 20033 HOW: Request sent to QIC TIME: 180 days from the date of Redetermination decision ~ No minimum amount in controversy RESULTS: Review must be completed in 60 days 104 RAC2009 Third Level of Appeal WHO: Administrative Law Judge (ALJ) HOW: File with the entity specified in QIC’s reconsideration notice (HHS OMHA field office) TIME: 60 days from the date of QIC’s reconsideration notice ~ Amount in controversy must be at least $120 as of January 1, 2006 RESULTS: Review must be completed in 90 days 105 RAC2009 35
  36. 36. Fourth Level of Appeal WHO: Medicare Appeals Council (Also referred to as Departmental Appeals Board) HOW: Carried out by an independent agency within DHHS i hi TIME: 60 days from ALJ decision ~ Amount in controversy – carried in from ALJ RESULTS: 90 days to complete review 106 RAC2009 Fourth Level of Appeal Medicare Appeals Council Address: Departmental Appeals Board, MS 6127 330 Independence Avenue SW Avenue, Cohen Building, Room G‐644 G‐ Washington, DC 20201 107 RAC2009 Fifth Level of Appeal WHAT: Federal Court Review WHO: Carried out by The Federal District Court TIME: 60 days from the Medicare Appeals Council decision INCLUDE: ~ Amount in controversy - $1180 (effective 01/01/06) ~ Date of request 108 RAC2009 36
  37. 37. Fifth Level of Appeal Federal Court Review Address: Department of Health and Human Services General Counsel 200 Independence Avenue, SW Washington, DC 20201 109 RAC2009 References Revisions to appeals process – CR 3530 –MM 3530 – CR 3939 –MM 3939 – CR 3970 –MM 3970 – CR 4147 –MM 4147 • Requirements – PUB 100‐04, Chapter 29, Sections 310.1 and 310.1 Information on appeals process http://www.empiremedicare.com/PartA/parta_appeals.htm Documentation requirements – MNU 2006‐01, January 2006 110 RAC2009 References: Appeals information Appeals: Administration Law Judge; Departmental Appeals Board; U.S. District Court Review Changes to chapter 29 – Appeals of claims decisions –revised Appeals of RAC decisions – MNU 2006‐02 Appeals of ALJ, Departmental Appeals Board, and U.S. District Court Review – CR 4152 Slide Material Culled from:  1) 06/2007 Medicare Appeals Process  Provider Outreach & Education     111 2) CMS 03/07/2006_Appeals_Session_Materials RAC2009 37
  38. 38. RAC References For Concerns about the RAC Demonstration Program: Contact the RAC Project Officer at CMS RecoveryAuditDemo@cms.hhs.gov Or on the web at http://www.cms.hhs.gov/RAC/ Frequently asked questions - RAC 112 RAC2009 AR Systems’ Contact Info Day Egusquiza, President AR Systems, Inc Box 2521 Twin Falls, Id 83303 208 423 9036 daylee1@mindspring.com Thanks for joining us! 113 RAC2009 Audience Polling Question #4 Would you like to learn how Compliance 360 can help you take control of RAC audits? t l f dit ? 114 38
  39. 39. Additional Web Events • Preparing for MIC Audits: An Operational Guide – Thursday, Aug 13 – 2:00 – 3:00pm EDT • WEB DEMO: Compliance 360 Claims Auditor for RAC Audits – Tuesday, Sept 1 – 2:00 – 3:00pm EDT 115 The 360°approach to compliance and risk management RAC Attack: An Operational Guide to Successful Appeals Proprietary and Confidential - © 2009 Compliance 360 – All Rights Reserved 39