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NGS Services: Septermber 2009


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National Government Services Inpatient Review …

National Government Services Inpatient Review
September 29, 2009

Published in: Business, Health & Medicine

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  • 1. Greater New York Hospital Association National Government Services Inpatient Review p September 29, 2009 POEA0515 (09/09)
  • 2. Disclaimer National Government Services, Inc. has produced this material as an informational reference for providers furnishing services in our contract jurisdiction. National Government Services employees, agents, and staff make no representation, warranty, or guarantee that this compilation of Medicare information is error free and will bear no error-free responsibility or liability for the results or consequences of the use of this material. Although every reasonable effort has been made to assure the accuracy of the information within these pages at the time of y p g publication, the Medicare program is constantly changing, and it is the responsibility of each provider to remain abreast of the Medicare program requirements. Any regulations, policies and/or guidelines cited in this bli ti i thi publication are subject t change without f th notice. C bj t to h ith t further ti Currentt Medicare regulations can be found on the Centers for Medicare & Medicaid Services (CMS) Web site at 2
  • 3. Session Objectives • To provide an overview of the NGS Inpatient Review • To describe Medical Review tools and criteria for decision making • To summarize Medical Review findings • To highlight implications for hospital providers 3
  • 4. Agenda • Background Information – Transfer of review responsibility to FIs/MACs – Data analysis y – Targeted DRGs – Types of review • Medical Review Tools and Decision Making • Key Findings • Learning Points for Hospitals 4
  • 5. Background Information • The responsibility for review of Inpatient PPS claims p y p moved from the Quality Improvement Organizations (QIOs) to the FIs/MACs based on CMS Change Request (CR) 5849 published 08/07/2008 5849, • Data analysis targeted the review focus, using paid claims data covering January 1 – June 30, 2008 • Specific DRGs targeted and analyzed • Hospitals varying significantly from peers selected for review i • Pilot Project review began in January 2009 5
  • 6. Targeted DRGs • Medical Necessity of Inpatient Admissions – Brief Stay – DRGs: • 313 – Chest pain • 391, 392 – Esophagitis, gastroenteritis and misc. digestive disorders with and without MCC disorders, • 640, 641 – Nutritional & misc. metabolic disorders with and without MCC 6
  • 7. Targeted DRGs • DRG Validation Review – 061, 062 and 063 – stroke-related DRGs – 064, 065 and 066 – Intracranial hemorrhage DRGs – 067 and 068 – non-specific CVA DRGs – 069 – Transient cerebrovascular ischemia 7
  • 8. Types of Review • Medical Necessity of Inpatient Admission, Brief Stay – review to determine if complexity of care, intensity of services and medical necessity of i t it f i d di l it f inpatient admission are supported in the medical record • DRG Validation – review of medical record and coding to verify correct DRG assignment 8
  • 9. Medical Review Tools and Decision Making Criteria M ki C it i • Criteria for decision making – medical necessity necessit of admission review – Use of InterQual criteria as first step in the medical criteria, necessity determination • Severity of illness • Intensity of services – Clinical judgment of reviewers -- nurses, certified coders, coders and contractor medical director – Key Question: Does the medical record support the level of care provided? 9
  • 10. Medical Review Tools and Decision Making Criteria • DRG Validation Review – a review of the medical record documentation to ensure that the DRG assignment is supported • Performed by certified coders with inpatient coding and DRG validation experience • Tools include: – ICD-9-CM Coding Manual – Official Guidelines for Coding and Reporting – The Coding Clinic for ICD-9-CM g 10
  • 11. Key Review Statistics • Medical Necessity of Inpatient Admissions y p – Claims: reviewed: 472; denied: 448 – Claim Denial Rate: 94.9% – Dollar Denial Rate: 97.9% • DRG Validation – Claims: reviewed: 230 – DRGs changed: 20 (with error rate of 8.7%) – Claims denied: 12 – Admission Denial Rate: 5.2% (admissions denied/ total cases reviewed) 11
  • 12. Key Review Findings • Medical Necessity of Admission – Brief Stays – Majority of claims reviewed showed services were medically necessary, but did not require an inpatient level of care. – DRG 313 – chest pain – Constituted significant percent of claims reviewed – Laboratory and EKG results were negative – No acute findings – Clinical status was stable 12
  • 13. Key Review Findings • DRG 640 – Nutritional & misc. metabolic disorders with and without MCC – Patient evaluated and treated in a relatively brief period of time – Laboratory results did not trigger inpatient criteria for admission 13
  • 14. Key Review Findings • DRG Validation Review – Overall, findings less dramatic – Errors reflected both DRG payment increases and decreases – Evidence of excellent physician documentation and accurate coding in many cases – Some cases had insufficient, late or conflicting documentation – Error rate varied significantly from hospital to hospital – Surprise finding: Twelve admissions were denied – medical necessity of IP admission not supported. 14
  • 15. You are Responsible for • Knowledge of the requirements necessitating inpatient admissions • Working in conjunction with physicians to ensure documentation of admission status is clearly defined by a signed and dated physician order. • Monitoring the documentation of clinical rationale for level of care decisions in the medical record. • Ensuring the documentation is complete and timely to support DRG assignment. 15
  • 16. Questions Thank you for the opportunity to discuss our review findings with y g you. As additional questions arise contact us arise, using the information that follows. 16
  • 17. Clinical POE Contact Information Telephone Inquiries NGS Clinical POE Toll-Free Line 800-338-6101 E-mail E mail Inquiries No PHI Please! 17
  • 18. National Government Services Reviews Inpatient Claims -- What did the DRG Validation Review Reveal? National Government Services (NGS) assumed responsibility for the review of Inpatient PPS services based upon CMS Change Request 5849, published in August 2008. The change request transferred the IP PPS review responsibility from the Quality Improvement Organizations (QIOs) to the Fiscal Intermediaries (FIs) and Medicare Administrative Contractors (MACs). During the initial pilot project, NGS initiated two reviews – one focusing on the medical necessity of inpatient admissions and the other focusing on validation of the DRG billed to Medicare. The second review, known as the DRG validation review, will be the focus of this article. The DRG validation review for the pilot project focused on hospitals in the states of Wisconsin, Michigan, New York and Connecticut. The DRG Validation review was initiated after data analysis first targeted specific DRGs and secondly, hospitals billing those DRGs. The DRGs included in the study are: • 061, 062 & 063 – Stroke-related DRGs • 064, 065 & 066 -- Intracranial hemorrhage DRGs • 067 & 068 – Non-specific CVA DRGs • 069 – Transient ischemic attack (TIA) Review Statistics The pilot project review included 396 cases from the four states. The overall denial rate was 5.8%; however, the denial rate does not fully reflect the severity of the errors identified in the review. • The number of cases where the DRG decreased was balanced by a similar number of cases where the DRG increased. • The net error rate, balancing increases and decreases, was only 5.8% • There were many examples where hospitals had excellent physician documentation and high quality coding. Overall Findings Provide a Clearer Focus While the net increases and decreases result in only a 5.8% error rate, there were significant variances when comparing individual provider error rates. Error rates ranged from 0% for some providers to a high of 24%. A 24% error rate would not meet the standards for many hospital quality and compliance programs. Review the findings below for areas where your hospital can make changes. • Untimely discharge summaries – A review of records indicates that discharge summaries are frequently dictated long after the patient’s Posted 09/15/2009 on NGS WebSite
  • 19. discharge. This means that full information in not available to coders and the resulting bill to Medicare is not based full information from the physician. The Medicare Hospital Conditions of Participation section relating to medical record services (482.24 (c) (2) (vii) specifies that records must contain “’final diagnosis with completion of medical records within 30 days following discharge.” • Incomplete or conflicting physician documentation – During the review, some records reflected inconsistent documentation on the patient’s major reason for admission. As an example, one physician progress note states the patient had a stroke while the other reflects the diagnosis of TIA, and both with equal frequency. In such cases, the record was reviewed by the contractor medical director to identify the principal diagnosis. • Failure to query the attending physician – In situations where the physician’s documentation is incomplete or conflicting, the coder has the responsibility to query the physician for clarification. Only one provider documented the use of the query process. • Inaccurate coding – Primary factors contributing to coding errors included the failure to use official coding guidelines for the appropriate timeframe and the failure to read physician documentation carefully and thoroughly. Inpatient review will continue to be a key focus in the Fiscal Year 2010 Medical Review Strategy. Review your policies and procedures to ensure that inpatient records support an accurate Medicare claim. Posted 09/15/2009 on NGS WebSite
  • 20. Limitation on Recoupment (935) for Providers, Physicians, ( ) , y , and Suppliers Overpayment POEA0520 (09/09)
  • 21. Disclaimer National Government Services, Inc. has produced this material as an informational reference for providers furnishing services in our contract jurisdiction. National Government Services employees, agents, and staff make no representation, warranty, or guarantee that this compilation of Medicare information is error-free and will bear no responsibility or liability for the results or consequences of the use of this material. Although every reasonable effort has been made to assure the accuracy of the information within these pages at the time of publication, the Medicare program is constantly changing, and it is the responsibility of each provider to remain abreast of the Medicare program requirements. Any regulations, policies and/or guidelines cited requirements regulations in this publication are subject to change without further notice. Current Medicare regulations can be found on the Centers for Medicare & Medicaid Services (CMS) Web site at http://www cms hhs gov 2 National Government Services, Inc.
  • 22. Acronyms Centers for Medicare & Medicaid CMS Services EFT Electronic Funds Transfer ERP Extended Repayment Plan (Loan) FI Fiscal Intermediary HHA Home Health Agency Home H lth P H Health Prospective P ti Payment t HHPPS System MAC Medicare Administrative Contractor 3 National Government Services, Inc.
  • 23. Acronyms Medicare Prescription Drug Drug, MMA Improvement, and Modernization Act MSP Medicare Secondary Payer QIC Qualified Independent Contractor RA Remittance Advice RAP Request for Anticipated Payment RHHI Regional Home Health Intermediary SSA Social Security Administration 4 National Government Services, Inc.
  • 24. Objective • Give providers a better understanding of the 935 recoupment process and how it relates to the appeal process 5 National Government Services, Inc.
  • 25. Agenda • Background • Definitions • Overpayment Steps • Appeals and how it p pp pertains to limitation on recoupment (935) • Provider Payment Summary Screens 6 National Government Services, Inc.
  • 26. Background – 935 • Medicare Prescription Drug Improvement and Drug, Improvement, Modernization Act of 2003, (MMA) Section 935 amended Title XVIII of Social Security Act to add y a new paragraph to Section 1893, (f)(2)(a) – Requires CMS to change • How it recoups certain overpayments to providers, physicians, suppliers • How it pays interest to provider, physician, supplier provider physician whose overpayment is reversed at subsequent administrative or judicial levels of appeal 7 National Government Services, Inc.
  • 27. Background – 935 • Final Rule defines – Overpayments to which limitation applies – How limitation works in concert with appeal process – Change in obligation to p y interest to g g pay provider or supplier whose appeal is successful at levels above QIC • R f Reference: 42 CFR P t 401 (S b t F) Part (Subpart F), Part 405 Section 405.378 8 National Government Services, Inc.
  • 28. What is an Overpayment? • Medicare monies a provider has received in excess of amounts due and payable under Medicare – Amount of overpayment is debt owed to Federal Government – CMS is required to seek recovery of overpayment regardless of how it was identified or caused 9 National Government Services, Inc.
  • 29. Examples of Overpayments • Payment for excluded or medically unnecessary services • P Payment made as primary payer when t d i h Medicare should have paid as secondary payer 10 National Government Services, Inc.
  • 30. What is Recoupment? • Recovery by Medicare of any outstanding Medicare debt by reducing present or future Medicare remittance advice payments and applying amount withheld to the indebtedness 11 National Government Services, Inc.
  • 31. Limitation on Recoupment (935)
  • 32. Limitation on Recoupment For Providers O P id Overpayments t • SSA section 1893 (f) (2) (a) provides limitations on recoupment of Medicare overpayments • Providers are protected during initial stages of p g g appeal process – At redetermination and reconsideration level – Limitations do not affect providers appeal rights and timeframes for appeals are not affected • Providers must decide to appeal to stop recoupment p 13 National Government Services, Inc.
  • 33. Overpayments Subject to Limitation on R Li it ti Recoupmentt • Determined post-pay denial of claims for benefits for which a written demand letter was issued – Medicare Part A (Inpatient) – Medicare Part B (Outpatient) ( p ) • Final claims associated with HHA RAP under HH PPS, but not the RAP itself , – CMS Publication 100-04, Chapter 10, Sections 10.10-10.12, 40.1, and 50 14 National Government Services, Inc.
  • 34. Overpayments Subject to Limitation on R Li it ti Recoupmentt • MSP recovery – Where provider or supplier received a duplicate primary payment and for which a written demand letter was issued, or – Based on provider s or supplier’s failure to file provider’s supplier s a proper claim with a third party payer plan, p g program, or insurer for p y , payment for Part A claims 15 National Government Services, Inc.
  • 35. Scenarios – Post-Pay Denial Post Pay • ABC hospital was paid for an inpatient claim. Medical records were requested and upon review it was determined that the hospital stay was not reasonable and necessary. necessary • XYZ hospital was paid for an outpatient claim which subsequently received a post- l i hi h b tl i d t pay denial. 16 National Government Services, Inc.
  • 36. Scenarios – Post-Pay Denial Answer: • Claims will be subject to 935 process • Claims will be adjusted • Adjustments will appear on remittance advice as 935 eligible • Demand letters will be issued, advising p providers that an overpayment occurred p y 17 National Government Services, Inc.
  • 37. Overpayments NOT Subject to Limitation on R Li it ti Recoupment t • Provider-initiated adjustments • All other MSP recoveries except those previously identified • Overpayments arising from a cost report determination • HHA RAP under HH PPS • Hospice Cap calculations • Accelerated/Advanced Payments 18 National Government Services, Inc.
  • 38. Rebuttal Process • Opportunity for provider to rebut any proposed recoupment action – Is not an appeal of overpayment determination – Will not delay recoupment before a rebuttal y response has been rendered – Provider advised of decision in 15 days from receipt date of rebuttal • 42 CFR, Part 405.373 through 405.375 19 National Government Services, Inc.
  • 39. Steps in Overpayment Process
  • 40. Step One – Overpayments, Part A • As a result of post pay review or MSP post-pay recoveries and during Part A claim adjustment process – If adjustment results in refund to provider • Existing underpayment policies are followed – If adjustment considered to be an overpayment and 935 rules apply • Claim will be marked as being eligible for limitation on recoupment protections 21 National Government Services, Inc.
  • 41. Step Two – Overpayments, Demand Letter D d L tt • Adjustment triggers creation of demand letter and accounts receivable • First demand letter will state – To stop recoupment under provisions of Section 935 of MMA, providers must submit a valid appeal request (redetermination) of the overpayment within 30 days from date of demand letter • Interest begins to accrue after 30 days – Provider may submit a rebuttal statement (which is y ( not an appeal request) to any proposed recoupment action • Rebuttal rarely used and does not stop recoupment 22 National Government Services, Inc.
  • 42. Step Two – Overpayments, Demand Letter D d L tt • Recoupment will begin on the 41st day from date of first demand letter if – Payment is not received in full, or – Acceptable request for ERP, or valid request for a contractor redetermination is not date-stamped in our mailroom by day 30 from date of demand letter y y • If an appeal is filed later than 30 days, Medicare will stop recoupment at whatever point appeal is received and validated i d d lid t d – Medicare may not refund any recoupment already taken 23 National Government Services, Inc.
  • 43. Scenario – Overpayment Part A • It has been determined that the inpatient claim from ABC hospital should not have been paid What is going to happen next in paid. the 935 process? • Answer: Claim will be adjusted and this overpayment will trigger a demand letter be sent, which will provide all of the details o on 935 process. p ocess 24 National Government Services, Inc.
  • 44. Overpayment Demand Letter Tips • Timeliness of the appeal request is important – During appeal process, interest continues to accrue – Once first two levels of appeal are completed, if appeal decision is Affirmation, collection may resume within designated timeframes • Provider who has filed a bankruptcy petition or is involved in a bankruptcy proceeding, should contact National Government Services immediately 25 National Government Services, Inc.
  • 45. Step Three – How to Stop Medicare Recoupment after Fi t D R t ft First Demand L tt d Letter Timeframe NGS Provider Date of Demand Notification received of Day 1 Letter overpayment determination Provider can pay by check Day 30 – Interest Day 30 within 30 days and avoid begins to accrue interest Provider can appeal and No recoupment Day 1-40 potentially limit recoupment occurs from occurring Provider can appeal and Day 41 Recoupment begins potentially stop recoupment 26 National Government Services, Inc.
  • 46. Did You Know… • Providers have a choice regarding how they want to respond to demand letter – P b check within 30 d Pay by h k ithi days ( t i t (stop interest) t) – Allow recoupment from future payments –RRequest Extended R t E t d d Repayment Pl (l t Plan (loan) ) 27 National Government Services, Inc.
  • 47. Appeals and How They Pertain to Limitation on Recoupment
  • 48. First Level Appeal – Redetermination • Upon receiving your valid request for a redetermination of overpayment, we will take the following actions – Cease recoupment of overpayment that is subject of appeal, or will not initiate recoupment if it has not yet started – Retain any amounts recouped, if already collected before receiving request for redetermination, and apply them first to interest and then to principal – Continue to collect any other debts providers might owe, but will not withhold or place in suspense any monies related to this debt, while it is in appeal status , pp 29 National Government Services, Inc.
  • 49. First Level Appeal – Redetermination • Redetermination can have three possible outcomes – F ll reversal (f Full l (favorable) bl ) – Partial reversal (partially favorable) – F ll Affi Full Affirmation ( f ti (unfavorable) bl ) 30 National Government Services, Inc.
  • 50. Scenario – First Level Appeal • ABC hospital received a demand letter stating that an overpayment occurred and the hospital does not agree. What should be done to ensure the th monies are not taken back? i t t k b k? • Answer: Within 30 days of receiving a demand y g letter an appeal must be submitted. On the appeal request indicate that this is an overpayment appeal and you are requesting a redetermination. This will stop recoupment until a decision is made on the appeal 31 National Government Services, Inc.
  • 51. Full Reversal of Overpayment Decision • In this instance we will: – Reimburse provider for covered items/services – Any recouped funds and interest paid will be repaid to the provider 32 National Government Services, Inc.
  • 52. Partial Reversal of the Overpayment Decision D i i • In this instance (in which debt is reduced below initial stated amount) we will: –RRecalculate correct amounts of both l l t t t f b th underpayment and overpayment – Make appropriate payments to provider if due – If necessary, issue a revised demand letter for the newly calculated overpayment amount 33 National Government Services, Inc.
  • 53. Full Affirmation of the Overpayment Decision D i i • With this “unfavorable” decision that unfavorable upholds the overpayment determination, we will – Issue the second or third demand letter (as appropriate) 34 National Government Services, Inc.
  • 54. Timeframe for Medicare Recoupment Process Aft Redetermination P After R d t i ti Timeframe NGS Provider Day 60 following Date NGS is notified Must pay revised notice of by QIC that they overpayment or must overpayment t have received a h i d have submitted h b itt d following request for request for second redetermination reconsideration level appeal Recoupment could Day 61-75 st day Appeal or pay begin on the 61 Can still appeal and Recoupment begins recoupment will stop Day 76 or resumes on receipt date of appeal 35 National Government Services, Inc.
  • 55. Second Level Appeal – Reconsideration • Providers can stop Medicare from recouping any payments at a second point in the recoupment process by filing a valid request for reconsideration with the QIC within 60 days of the Medicare Redetermination Notice 36 National Government Services, Inc.
  • 56. Second Level Appeal – Reconsideration • When we receive notification from the QIC of your valid and timely request for reconsideration, we will – Cease recoupment of overpayment or not initiate overpayment, recoupment if it has not yet begun – Retain amount recouped, and apply it first to interest and then to principal (if recoupment process had begun before reconsideration request was received) – Continue to collect other debts that provider might owe, if overpayment is appealed and recoupment ti l d d t stopped, but will not withhold or place in suspense any monies related to this debt while it is in appeal status 37 National Government Services, Inc.
  • 57. Second Level Appeal – Reconsideration • QIC reconsideration can have three possible outcomes – F ll Reversal (favorable) Full R l (f bl ) – Partial Reversal (partially favorable) – Affi Affirmation (unfavorable) ti ( f bl ) 38 National Government Services, Inc.
  • 58. Full Reversal • National Government Services will adjust the overpayment and amount of interest charged once notified by QIC that the decision resulted in an adjustment 39 National Government Services, Inc.
  • 59. Partial Reversal • This decision reduces the overpayment • Medicare: – Reprocesses based on QIC reconsideration decision – If necessary issues a revised demand letter for revised overpayment amount or make appropriate payments of underpayment amount, if due – May apply excess to any other debt (including interest) that a provider might owe before releasing payment 40 National Government Services, Inc.
  • 60. Full Affirmation • If QIC reconsideration results in “unfavorable” overpayment decision – Recoupment may be resumed on the 30th calendar day after the date of notice of reconsideration – Gives providers time to make p y p payment or to request a repayment plan 41 National Government Services, Inc.
  • 61. Third Level of Appeal – Administrative Law Judge (ALJ) L J d • Whether or not a provider subsequently appeals overpayment to ALJ, Medicare Appeals Council or Federal court Council, – Medicare will continue to recoup until debt is satisfied in full 42 National Government Services, Inc.
  • 62. Third Level of Appeal – Administrative Law Judge (ALJ) L J d • If ALJ reverses the Medicare overpayment determination, Medicare will – Refund both principal and interest collected – Also pay 935 interest on any recouped funds that Medicare took from ongoing Medicare payments • If provider has any other outstanding overpayments, Medicare will – Apply the amount collected first to those overpayments, and – Any excess monies will then be refunded back to the p provider 43 National Government Services, Inc.
  • 63. Status of Debt • During redetermination and reconsideration process, status is appeal • Wh recoupment begins/resumes, status When tb i / t t will be changed to eligible for offset 44 National Government Services, Inc.
  • 64. Voluntary Refund • A voluntary refund submitted within 30 days avoids having to pay interest Connecticut, Connecticut New York Providers: National Government Services, Inc. J13 Part A-Voluntary Refund P.O. B P O Box 13078 Newark, NJ 07188 • http://www ngsmedicare com/NGSMedicar e/PartA/Resources/Forms/0409_PartA_V RF_V1.pdf pd 45 National Government Services, Inc.
  • 65. Extended Repayment Schedule (ERS) • Any time a provider needs longer than 30 days to repay the full amount of an overpayment, the provider should request an extended repayment plan (ERP) – Can be requested at any time during debt q y g collection process – Submission within first 15 days may decrease necessity t withhold all i t i payments it to ithh ld ll interim t – Demand letter includes contact information 46 National Government Services, Inc.
  • 66. Did You Know… • When a claim for an overpayment has been adjusted and appears on remittance advice, advice overpayment shown appears as if monies have already been recouped. That is not the case. case 47 National Government Services, Inc.
  • 67. Remittance Advice and 935 • Claim adjustment correcting the claim data will appear on the remittance advice generated on the date of the demand letter – Reason Code N469 • O Overpayment amount is NOT subtracted t ti bt t d from the remittance payment 48 National Government Services, Inc.
  • 68. Provider Payment Summary Screens
  • 69. Provider Payment Summary Screens PHI PHI PHI 50 National Government Services, Inc.
  • 70. Provider Payment Summary S S Screens 51 National Government Services, Inc.
  • 71. What We ve Learned Today… We’ve • Appeal rights and timeframes for filing an appeal have not changed • P id Providers hhave t two opportunities t stop t iti to t recoupment • Interest will begin to accrue on day 31(and every 30 days after) but recoupment will not start until after day 41 52 National Government Services, Inc.
  • 72. Resources • Change Request 6183 – s/R141FM.pdf s/R141FM pdf • MLN Matters 6183 – downloads/MM6183.pdf 53 National Government Services, Inc.
  • 73. Resources • Appeals Process Flowchart – Downloads/AppealsprocessflowchartAB.pdf Downloads/AppealsprocessflowchartAB pdf • Medicare Appeals Process brochure pp – downloads/MedicareAppealsprocess.pdf 54 National Government Services, Inc.
  • 74. Resources • FI Appeals and QIC mailing addresses – PartA/Resources/ContactInformation/ Appeals%20_ContactInfo_PartA.aspx • Recovery Audit Contractor Web site – 55 National Government Services, Inc.
  • 75. Resources • Voluntary Refund Forms – Part A & FQHC • http://www ngsmedicare com/NGSMedicare/PartA/ Resources/Forms/0409_PartA_VRF_V1.pdf –H Home H lth/H Health/Hospice i • Resources/Forms/0409_HHH_VRF_V1.pdf Resources/Forms/0409 HHH VRF V1 pdf 56 National Government Services, Inc.
  • 76. How to Calculate 935 Interest Interest paid under 935 is only applicable at the Administrative Law Judge (ALJ) or further appeal  level when that decision results in a full or partial reversal of the prior decision and National  Government Services has retained recouped funds.    Medicare has the obligation to pay providers interest if the overpayment determination is  reversed at the first (redetermination) and second (reconsideration) level of the administrative  appeal process and the decisions are not put into effect timely. At these levels of appeal, interest  would continue to be payable by Medicare if the underpayment is not paid within 30 days of the  final determination decision.    The formula for calculating interest is simple ‐ Time x Rate x Amount ‐ For each recoupment  action:    1. TIME: Determine the total Julian days starting from the recoupment date and ending with the  ALJ decision date or the date on the revised notice with the new overpayment, if applicable.  Divide the number of Julian days by 30 to compute the number of 30‐day periods. The interest  will not be payable for any periods of less than 30 days in which National Government  Services had possession of the recouped funds.    2. RATE: Use the annual rate of interest in effect at the time of the ALJ decision date or from the  revised New Written Determination date and convert interest rate to a monthly interest rate.  (For example: The rate of interest as of July 17, 2009 is 11.25%. Convert annual Rate to a  monthly rate by dividing by 12.)    3. AMOUNT: The amounts that are to be used as the basis on which to compute interest earned  by the provider are those amounts that are credited to principal resulting from any  involuntary payments from the provider after the elimination/satisfaction of all Medicare debt.  Recouped monies applied to interest are not included in the determining the 935 interest. Only  those principal funds recouped via withholding (e.g., payments recouped under a defaulted  ERS or offset) are included. Do not include payments a provider makes under an ERS or other  voluntary payments made by the provider.       
  • 77. How to Calculate 935 Interest: (935 interest at the ALJ and higher levels) Fully Favorable Decision   Rate of interest  Recoupment  Recoupment  Length of time  Interest Owed to  from ALJ  Amounts  Date  money held  Provider  decision date  301 Julian Days   1. $9,062.00  March 7, 2007  12.5%  $943.95  (10 months, 1 day)  230 Julian Days   2. $9,806.00  May 18, 2007  12.5%  $715.02  (7 months, 20 days)  148 Julian Days   3. $9,136.00  August 8, 2007  12.5%  $380.66  (4 months, 28 days)  Total 935 Interest owed to Provider  $2,039.63      Calculation Example Time x Rate x Amount = Interest Time  Rate  Amount  Interest  1. 10 months  .125 divided by 12  $9,062.00  $943.95  2. 7 months  .125 divided by 12  $9,806.00  $715.02  3. 7 months  .125 divided by 12  $9,136.00  $380.66  935 Interest Owed to Provider $2,039.63    Reference: CMS Internet‐Only Manual (IOM) Publication 100‐06, Medicare Financial Management  Manual, Chapter 3, Section 200.6.2