RAC Audit Strategic Road Map for Leaders: Successfully Prevent & Appeal Denied Claims

RAC Audit Strategic Road Map for Leaders:
Successfully Prevent
& Appeal Denied Claims
HARMONY UNIVERSITY
The Provider Unit of
Harmony Healthcare International, Inc. (HHI)
Presented by:
Elisa Bovee MS OTR/L
Vice President of Operations

HARMONY UNIVERSITY
The Provider Unit of
Harmony Healthcare International, Inc. (HHI)
Presented by:
Elisa Bovee, MS OTR/L
Vice President of Operations
Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc. 2
RAC Audit Strategic Road Map for Leaders:
Successfully Prevent & Appeal Denied Claims
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Agenda
Defense!
Audit Triggers and Tools
Contractor Findings/Themes
Potential Audit Triggers
Medical Record Review Preparedness
Audit Tools
Appeal Process; Medicare Denied Claims
ADR Management
PREP Letter
Team Process
Appeal Strategies For Success Levels of Medicare Appeals
A Successful ALJ Hearing

Objectives
Learner will be able to summarize SNF
Medicare qualifiers
Learner will be able to discuss key elements
of skilled rehabilitation documentation
Learner will be able to articulate Audit
Triggers
Learner will be able to Summarize the ADR
and appeal process

Documenting Medicare Skilled
Coverage Requirements
DEFENSE!!
Copyright © 2014 All Rights Reserved 5Harmony Healthcare International, Inc.

Advice from Ben Franklin
Copyright © 2014 All Rights Reserved
“Either write something
worth reading or do
something worth
writing.”
“An ounce of
prevention is
worth a pound of
cure.”
6Harmony Healthcare International, Inc.

Prevention
The key to preventing denials is
documentation of skilled services
provided
The key to documenting skilled services
provided is understanding the
Medicare requirements for coverage

The Importance of Documentation
The key to ensuring accurate
reimbursement for services
provided is understanding skilled
coverage requirements

Technical Requirements
Technical requirements are not eligible for
appeal—if the patient does not meet technical
requirements, their stay will not be covered
Responsibility of the facility to determine if
technical eligibility requirements are met
The facility should have a process for
determining technical eligibility prior to or
immediately upon admission

Beneficiary is enrolled in Medicare Part
A and has available days
Beneficiary had a three-day qualifying
hospital stay
Skilled care must begin within 30 days
after discharge from a hospital or the
last covered Medicare day of a SNF stay

Three-day qualifying stay does not
include:
Nights spent in observation status or in an
ER bed
Can be in different hospitals, but nights
must be consecutive
The day of admission, but not the day of
discharge, is counted in the three days

60 Day Wellness
Maintain 60 calendar days without inpatient
hospital admissions (ER visits are allowable)
and without receiving any skilled services (as
defined by Medicare).
The litmus test for this break in the spell of
illness is to determine whether the services
being provided to the resident meet the
criteria for a Medicare skilled level of care, if
Medicare benefit days were available.

Exhausted Benefit
Patients who have exhausted their Medicare
benefits must be reviewed clinically to
determine if they continue to meet the
guidelines for a Medicare skilled level of care
Business Office sends a bill to CMS
communicating they have dropped in their level
of care
Not automatic
Not based on Diagnosis

Physician Certification
Physician Certification Frequency
Admission
14th Day
Every 30 Days (from last certification)
Addresses all skilled qualifiers
Rehab
Nursing

Additional Certifications to Support
Therapy Certification
Plan of Treatment/Care
Frequency of Services
Plan
Goals
Physician Involvement
Therapy Physician Orders
Evaluation
Treatment clarification

Clinical (Level of Care)
Requirements
The patient requires physician-ordered
skilled nursing or rehabilitation services
that relate to the hospital stay or a
condition that arose while receiving post-
hospital care
The services are provided on a daily basis
As a practical matter, the services must be
delivered in the SNF
The services are reasonable and necessary
for treatment of the illness/injury

Medicare Manual Source Document
Medicare Benefit Policy Manual
Chapter 8 - Coverage of Extended Care
(SNF) Services Under Hospital
Insurance (Rev. 175, 12-06-13)
Effective 1/7/14

Medicare Coverage/Skilled Care
Provided on a “daily” basis:
Skilled nursing (or combination of
nursing and rehabilitation) must be seven
days per week
Skilled restorative nursing must be at
least six days per week
Rehabilitation (PT, OT and/or SLP) must
be at least five days per week
An isolated break of “a day or two” is
allowable

Chapter 8 Medicare Manual (2014)
Rehabilitation Daily
Single type of skilled rehabilitation every day, or by
furnishing various types of skilled services on
different days that collectively add up to “daily”
skilled services. “Arbitrarily staggering the timing of
various therapy modalities though the week, merely
in order to have some type of therapy session occur
each day, would not satisfy the SNF coverage
requirement for skilled care to be needed on a “daily
basis.” To meet this requirement, the patient must
actually need skilled rehabilitation services to be
furnished on each of the days that the facility
makes such services available “

What is Skilled Care?
Nature of service requires the skills of a
licensed person (e.g. technical or
professional personnel)
Skilled services are provided directly by or
under general supervision of a licensed
nurse or therapist to assure the safety of the
patient and to achieve the medically desired
result
Diagnosis and prognosis do not determine
what is skilled care – it is the care of the
patient that is the deciding factor

“Practical Matter” Criterion
“As a practical matter,
considering economy and
efficiency, the daily skilled
services can only be provided
in a skilled nursing facility”

1. Outpatient services are not available in
the area where the individual lives
2.Outpatient services are available in the
area where the individual lives, but
transportation to the closest facility
could cause an excessive physical
hardship, be less economical, or less
effective than placement in the skilled
nursing facility

3. The availability at home of a capable and willing
caregiver should be considered, but the care can
be furnished only in the skilled nursing facility if
home care would be ineffective because there
would be insufficient assistance at home for the
patient/patient to reside there safely
4. If the use of alternative services would
adversely affect the patient/patient’s medical
condition, then as a practical matter the daily
skilled service(s) can only be provided on an
inpatient basis

Basic Medicare Requirements
If any one of these three factors is not
supported by the documentation in the
patient’s record, the SNF stay, even
though it might include the delivery of
daily skilled services, will not be
covered.

RUG-IV
Resource Utilization Groups
Each MDS qualifies for multiple RUGs,
and the software automatically chooses
the highest reimbursement rate
Rehabilitation Intensity, Diagnoses,
Nursing Services, and ADLs all
contribute
Documentation must support all coding
on the MDS 3.0 assessment

Presumption of Coverage
Medicare beneficiaries who are correctly
assigned to one of the upper 52 RUG-IV
groups on the initial 5-Day, Medicare
required assessment are automatically
classified as meeting the SNF level of care
definition up to and including the assessment
reference date on the 5-day Medicare-
required assessment
Only applies when admitted from Acute
Care Hospital (Not Swingbed or another
SNF)

This presumption recognizes the strong
likelihood that beneficiaries assigned to
one of the upper 52 RUG-IV groups
during the immediate post-hospital
period require a covered level of care,
which would be less likely for those
beneficiaries assigned to one of the
lower 14 RUG-IV groups

This administrative presumption policy
does not supersede the SNF’s
responsibility to ensure that its
decisions relating to level of care are
appropriate and timely, including a
review to confirm that the services
prompting the beneficiary’s assignment
to one of the upper 52 RUG-IV groups

Totality
While it is true that dialysis is one of the
discrete indicators for assignment to a RUG
within the Special Care Low category – a
category to which the level of care
presumption applies for a short period of
time at the start of a SNF stay – it is the
totality of items and services included
within a given RUG, not any one specific
coded service, that actually serves to justify
the presumption

What is Skilled Care ?
Direct Skilled Nursing Services
Management and Evaluation of a Care
Plan
Observation and Assessment
Teaching and Training
Skilled Rehabilitation

What is Skilled Care?
Nursing Anchors the Skill
Need to remain in a SNF
Medical Complexity
Supports Non-Therapy RUG
Increased potential Lower 14
and reviews with October 1st
Changes

Skilled Services Categories:
Nursing Inherent Complexity
Inherent Complexity – Direct skilled
nursing services including:
IV feeding
IV meds
Suctioning
Tracheostomy Care
Ventilator support
Ulcers

Nursing Inherent Complexity
Inherent Complexity
Tube feedings
Respiratory Therapy 7 days per week
Surgical wound or open lesions with treatments
Unstable clinically with diabetes with injections
Transfusions
Chemotherapy
Colostomy Care, early post op care

Skilled services when the likelihood of change
in a patient’s condition requires skilled
nursing or skilled rehabilitation personnel to
identify and evaluate the patient’s need for
possible modification of treatment or
initiation of additional medical procedures,
until the patient’s condition is essentially
stabilized. Reasonable potential for a future
complication or acute episode sufficient to
justify the need for continued skilled
observation and assessment.

Example (from Chapter 8 of the
Medicare Benefit Policy Manual):
A patient has been hospitalized
following a heart attack, and
following treatment but before
mobilization, is transferred to the
SNF

Example (continued): Because it is
unknown whether exertion will
exacerbate the heart disease,
skilled observation is reasonable
and necessary as mobilization is
initiated, until the patient’s
treatment regimen is essentially
stabilized

The medical documentation must
describe the skilled services that require
the involvement of nursing personnel to
promote the stabilization of the
patient's medical condition and safety
(Effective 1/2014).

KEY POINT: If a patient was admitted
for skilled observation but did not
develop a further acute episode or other
complications, the skilled observation
services still are covered so long as
there was a reasonable probability for
such a complication or further acute
episode

Fever
Dehydration
Septicemia
Pneumonia
Nutritional Risk
Chemotherapy
Weight loss
Blood sugar control
Impaired cognition
Severe Mood and
Behavior conditions

Neurological
Respiratory
Cardiac
Circulatory
Pain/Sensation
Nutritional
Gastrointestinal
Genitourinary
Musculoskeletal
Skin

Management and Evaluation of a Care Plan
Based on the Physician’s orders, these
services require the involvement of
skilled nursing to meet the resident’s
Medical needs
Promote recovery
Ensure medical safety

Teaching and Training
Teaching and Training: Activities
which require skilled nursing or skilled
rehabilitation personnel to teach a
patient and/or family member how to
manage the patient’s treatment regimen

Skilled Rehabilitation Overview
Directly related to a written plan of
treatment.
Requires knowledge/skills/judgment of
qualified professional.
Services must be considered under
acceptable standards of clinical practice.
Expectation of improvement of restorative
potential in a reasonable and predictable
amount of time…or…
Establishment of a safe and effective
maintenance program.

Medicare Benefit Policy
The services shall be of such a level of
complexity and sophistication or the
condition of the patient shall be such
that the services required can be safely
and effectively performed only by a
therapist.

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45
Maintenance Therapy
Maintenance Therapy. The repetitive services
required to maintain function sometimes involve
the use of complex and sophisticated therapy
procedures and consequently, the judgment and
skill of a physical therapist might be required for
the safe and effective rendition of such services (see
§214.1.B).
Must be necessary for the establishment of a safe
and effective maintenance program; or, the services
must require the skills of a qualified therapist for
the performance of a safe and effective
maintenance program (Effective 1/2014).

Maintenance Therapy
Therapy services in connection with a maintenance
program are considered skilled when they are so
inherently complex that they can be safely and
effectively performed only by, or under the
supervision of, a qualified therapist. (See 42CFR
§409.32) If all other requirements for coverage under
the SNF benefit are met, skilled therapy services are
covered when an individualized assessment of the
patient’s clinical condition demonstrates that the
specialized judgment, knowledge, and skills of a
qualified therapist are necessary for the performance
of a safe and effective maintenance program.

Jimmo v. Sebelius
The Jimmo v. Sebelius lawsuit was brought
on behalf of a nationwide class of Medicare
beneficiaries by six individual Medicare
beneficiaries and seven national
organizations representing people with
chronic conditions
The Jimmo v. Sebelius case challenged
Medicare's use of an "Improvement
Standard" to make coverage determinations

Jimmo v. Sebelius
On January 24, 2013, a settlement was
approved by the federal district court in
Vermont in the case of Jimmo v. Sebelius
regarding the "Improvement Standard"
Addresses the ability to terminate or
deny coverage to beneficiaries who are
not improving for Medicare Part A and
Part B

Jimmo v. Sebelius
Expands Medicare Part A and Part B
coverage to include the rendering of
skilled nursing and therapy services
necessary to maintain a person's
condition and is not dependent on
whether the Medicare beneficiary will ".
improve“.
CMS Fact Sheet States this is simply a
clarification

Jimmo v. Sebelius
The judgment indicates that as long as a
patient requires skills of a therapist or a
nurse a patient would meet skilled
coverage criteria despite not making
functional gains
Documentation must support the need
for skilled therapy intervention

Skills of a Therapist or a Nurse
Must require, the expertise, knowledge,
clinical judgment, decision making and
abilities of a therapist or a nurse that
qualified personnel, trained caretakers
or the patient cannot provide
independently

Skilled Nursing Documentation
What To Consider Including
Patient is at high risk for …
Skilled assessment of …
Daily skilled monitoring of …
Potential for recurrence of …
Potential for the following complications…
There is a likelihood of change related to…
The medical regimen is not essentially
stabilized as evidenced by…

Patient continues to require daily skilled rehab
for …
Observation and assessment for potential
complications related to …
Potential for medical complications related to
the diagnosis of …
Plan of care is being monitored to promote
recovery and ensure medical safety related to …
The patient requires daily skilled management
and evaluation of the plan of care related to …

Skilled neurological assessment resulted in…
Daily skilled monitoring for signs and symptoms
of exacerbation of _____ secondary to _______
Patient is high risk for ______ secondary to
_______
Medications adjusted to _____________, ongoing
skilled assessment of regimen to promote
recovery and ensure medical safety
Patient continues to require daily skilled nursing
as his treatment regimen is not essentially
stabilized and there is a potential for recurrence
of ________

Non-Supportive Nursing
Documentation
Plateau in progress
Voiced no complaints
Patient requires custodial
care
Patient requires
intermittent care
Patient is unable to
follow directions
Patient requires
intermittent services
Patient has poor
rehabilitation potential
Patients medical
treatment is essentially
stabilized
Refuses to participate in
therapy (instead give the
reason the patient is
unable)
Condition stable
Slept well/family into
visit

UB-04
Pulling It All Together
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UB-04 Diagnosis
Does it all work together?
Physician Certifications
MDS Diagnoses (Section I)
Therapy ICD-9 Coding
Skilled Therapy Documentation
UB-04

UB-04
Submitted by the SNF to the MAC
Multipurpose form used for all
Medicare providers
Not all fields pertain to the SNF

FL 66 – 69
FL 66 – 68 ICD-9 Codes
Principle Diagnosis goes in FL 67, secondary codes
to follow
Sequentially ordered by importance (top 5)
FL 69 = Admission Diagnosis ICD-9

Code Order
Codes should be ordered according to
most skilled to least skilled need.
The top 5 codes are the most vital to
have ordered appropriately.
ICD-9 coding is one way auditors select
records to review.

Principle Diagnosis
Governed by the condition chiefly
responsible for the admission to the
SNF and that is primarily responsible
for the need for skilled services.
This may or may not be the same as the
Admission Diagnosis.

Principle Diagnosis
It is not acceptable to use acute care
conditions as the Principle Diagnosis.
For example, the facility would not
want to use CVA (435.9), they would
use the Late effects of cerebrovascular
disease codes that start with 438.xx.

Principle Diagnosis
When the reason for skilled care is
Rehabilitation Services, codes from the
V57.xx category are appropriate.
The condition therapy is treating
should be listed as an additional
diagnosis.
Parkinson’s Disease (332.x)
Lack of coordination (781.3)
Abnormality of gait (781.2)

Rehabilitation Diagnosis
Medical diagnosis supports deficits identified on
evaluation being treated
Reported on the UB-04. What is the process between
therapy and billing?
Ensure chronic codes that are not related are not used
Dementia
UTI
Only a Therapist can Determine
Not always the “first code” in Discharge Summary
or Face sheet
May need to request Physician Clarification (e.g.
Dysphagia)

Rehabilitation Diagnosis
Indicate the Medical DX that has resulted in the
therapy disorder.
Relate to the current plan of care for therapy.
Represent the most intensive services (over 50% of
the revenue code billed)
Relevant to the problem to be treated E.g. O.A. with
treatment diagnosis of “pain in the joint” or
“difficulty walking”

Sometimes have to dig!
Psychiatric hospitalizations can be difficult to
code. Remember Principle and Admission
don’t have to be the same diagnosis.
Recent RAC audits for psych diagnosis reveal
a number of additional diagnoses treated
during hospitalizations:
Pneumonia, Dysphagia, Pressure Ulcers, Cardiac
Episodes, Hypotension, Dehydration,
Malnutrition, UTI, MRSA, and Extrapyramidal
Disease.

Key Point!
The ICD-9 Coding needs to tell the story of
the skilled services in the SNF.
Needs to tell the story behind the RUG score
and make sense with the RUG billed.
DO include the necessary ICD-9 codes to
support skill and DO NOT to include
unrelated codes (e.g. Chronic Codes).
Beware! A code for Personality Disorder
with an RUC – High Risk to get reviewed!

Audit Triggers and Tools

Harmony Healthcare International
OIG Investigation

Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc. 71Harmony Healthcare International, Inc. 71
OIG Report: Part A
OIG REPORT
Questionable Billing by
Skilled Nursing Facilities
Medicare Part A

Background
An OIG report found that 26 percent of
claims submitted by SNFs were not
supported by the medical record,
representing over $500 million in
potential overpayments

Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc. 73Copyright © 2012 All Rights Reserved Harmony Healthcare International, Inc. 73
Background
This study based on an analysis of
Medicare Part A claims from 2006 and
2008 and on data from the Online
Survey, Certification and Reporting
system

Recommendations
1. Monitor overall payments to SNFs
and adjust rates, if necessary
Adjust RUG rates annually, if necessary, to
ensure that the changes do not significantly
increase overall payments

Recommendations
2. Change the current method for determining
how much therapy is needed to ensure
appropriate payments
CMS should consider requiring each SNF to use
the beneficiary’s hospital diagnosis and other
information from the hospital stay to better
predict the beneficiary’s therapy needs
In addition, CMS should consider requiring that
therapists with no financial relationship to the
SNF determine the amount of therapy needed
throughout a beneficiary’s stay

Recommendations
3. Strengthen monitoring of SNFs that are
billing for higher paying RUGs
CMS should instruct it’s contractors to monitor
SNFs’ use of higher paying RUGs using the
indicators discussed in this report. CMS should
develop thresholds for the indicators and instruct
its contractors to conduct additional reviews of
SNFs that exceed them. If SNFs from a particular
chain frequently exceed the thresholds, then
additional reviews should be conducted of the
other SNFs in that chain.

Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc. 77Copyright © 2012 All Rights Reserved Harmony Healthcare International, Inc. 77
Agency Comments and Office
of Inspector General Response
CMS concurred with three of the four
recommendations
1. Agree: CMS concurred and stated that it would
assess the impact of the recent changes on overall
SNF payments as data became available and
would expect to recalibrate RUG rates in future
years, as appropriate
2. Not Agree: CMS noted several concerns with
relying on information from the beneficiary’s
hospital stay to determine the beneficiary’s
therapy needs during a SNF stay

Agency Comments and Office
of Inspector General Response
3. Agree: CMS concurred and stated that it
would determine whether additional
safeguards shall be put in place by the
Medicare contractors to target their efforts
4. Agree: CMS concurred and stated that it
would forward the list of SNFs with
questionable billing to the appropriate
contractors

Objectives
To determine the extent to which billing
by skilled nursing facilities (SNF)
changed from 2006 to 2008
To determine the extent to which billing
varied by type of SNF ownership in
2008
To identify SNFs with questionable
billing in 2008

Identification of SNFs With Questionable
Billing
Analysis based on the 12,286 SNFs that had at
least 50 Part A stays in 2008*
For each SNF, they determined:
The percentage of RUGs for ultra high therapy,
The percentage of RUGs with high ADL scores and
The average length of stay
They considered a SNF to have questionable
billing if it was in the top 1 percent for any of the
three measures
*We established a minimum of 50 Part A stays per SNF to ensure the reliability of the measures. For SNFs with
fewer Part A stays, changes in the characteristics of a small number of Part A stays could have a large effect on the
measures, making the measures loss reliable.

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OIG Report: Part B
OIG REPORT
Questionable Billing for Medicare
Outpatient Therapy Services
Medicare Part B

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Background
Medicare expenditures for outpatient
therapy increased 133 percent between
2000 and 2009, from $2.1 billion to $4.9
billion, while the number of Medicare
beneficiaries receiving outpatient
therapy increased only 26 percent from
3.6 million to 4.5 million

Background
Medicare limits (i.e., caps) its annual
per beneficiary outpatient therapy
expenditures
Providers may exceed a beneficiary’s
cap if the services are medically
necessary and are supported by medical
record documentation
If services are expected to exceed an
annual cap, providers must indicate this
when submitting the claim to Medicare

Background
Identified 20 counties that had in 2009:
The highest average Medicare payment per
beneficiary and
More than $1 million in total Medicare payments
for outpatient therapy (i.e., high utilization
counties)
Analyzed Miami-Dade County, Florida, separately
because it had the highest average Medicare
payments per beneficiary among the high
utilization counties and the highest total Medicare
payments for outpatient therapy in 2009

Background
Six questionable billing characteristics
that may indicate fraud:
(1) Services for which providers indicated
that an annual cap would be exceeded
(2) Beneficiaries whose providers indicated
that an annual therapy cap would be
exceeded on the beneficiaries first date of
service
(3) Payments for beneficiaries who received
outpatient therapy from multiple
providers

Background
(4) Payments for therapy services provided
throughout the year
(5) Payments for services that exceeded an
annual cap
(6) Providers who were paid for more than
8 hours of outpatient therapy provided in a
single day

Findings
Medicare per-beneficiary spending on
outpatient therapy services in Miami-Dade
County was three times the national average in
2009
Medicare paid an average of $3,459 per Miami-
Dade beneficiary for outpatient therapy,
compared to an average of $1,078 nationally
Each therapy beneficiary in Miami-Dade County
received an average of 158 services during 2009,
while the national average was 49 services per
beneficiary

Recommendations
Target outpatient therapy claims in high
utilization areas for further review
Target outpatient therapy claims with
questionable billing characteristics for further
review
Review geographic areas and providers with
questionable billing and take appropriate
action based on results
Revise the current therapy cap exception
process

Background
Outpatient therapy is designed to
improve, restore, and/or compensate for
loss of functioning following illness or
injury
Medicare beneficiaries are eligible to
receive outpatient therapy under
Medicare Part B. Medicare covers three
types of outpatient therapy.

Background
Physical Therapy (PT): Diagnosis and treatment of
impairments, functional limitations, disabilities, or changes
in physical function and health status*
Occupational Therapy (OT): Treatment to improve or
restore functions that have been impaired (or permanently
lost or reduced) because of illness or injury, to improve the
individual’s ability to perform tasks required for independent
functioning**; and
Speech Therapy (SLP): Diagnosis and treatment of speech
and language disorders, that result in communication
disabilities or swallowing disorders***
*CMS, Medicare Benefits Policy Manual, Pub. No. 100-02, ch. 15, § 230.1. **Ibid., § 230.2. ***Ibid., § 230.3.

Findings
As a result of the OIG investigations CMS
launched multiple Medical Review Initiatives

Common Auditors
Significant increase in frequency of
Medical Review
Office of Inspector General (OIG) Reports
Department of Justice (DOJ) Review
Zone Program Integrity Contractor (ZPIC)
Recovery Audit Contractor (RAC)
Budget cuts
Expect to be Reviewed

Recovery Audit Contractors

The Recovery Auditors Program Mission
The Recovery Auditor detect and correct past
improper payments so that CMS can implement
actions that will prevent future improper
payments:
Providers can avoid submitting claims that do
not comply with Medicare rules
CMS can lower its error rate
Taxpayers and future Medicare beneficiaries are
protected.

If you bill fee-for-service programs, your
claims will be subject to review by the
Recovery Auditors.

The Recovery Audit Review Process:
Recovery Auditors review claims on a post-payment basis
Recovery Auditors use the same Medicare policies as
Carriers, FIs and MACs: NCDs, LCDs and the CMS Manuals
Three types of review:
Automated (no medical record needed)
Semi-Automated (claims review using data and potential
human review of a medical record or other documentation)
Complex (medical record required)
Recovery Audits look back three years from the date the
claim was paid
Recovery Auditors are required to employ a staff consisting
of nurses, therapists, certified coders and a physician CMD

The appeal process for Recovery Audit denials
is the same as the appeal process for
Carrier/FI/MAC denials
Do not confuse the “Recovery Audit Programs’
Discussion Period” with the Appeals process
If you disagree with the Recovery Auditor’s
determination:
Do not stop with sending a discussion letter
File an appeal before the 120th day after the Demand
letter.

Recovery Auditors will offer an opportunity for
the provider to discuss the improper payment
determination with the Recovery Auditors (this
is outside the normal appeal process)

Appeal Determinations

Technical Denial Reasons
Response to Additional Documentation Request
(ADR) did contain documentation requested
Documentation not received within requested time
frame
Physician Certification not signed or missing
Therapy Billing logs do not support billing
Part A – MDS Assessment
Part B - 8 Minute Rule
Illegible documentation
Hospital documentation was not submitted

Clinical Denial Reasons
Documentation did not support medical
necessity
Documentation does not support daily
skilled intervention by a qualified therapist
Documentation in the medical records must
support continued progress

Denial Reasons
Services provided were likely clinically
appropriate but the documentation
provided to reviewers did not support:
Technical requirements
Medical necessity
The skills of a therapist were required
Functional outcome
Need to receive an inpatient level of care

Denial Reasons
Reasonable and Necessary
The amount, frequency and duration of
services were not reasonable, given the
patient’s current status
ST documentation demonstrates that
the therapist worked long enough with
the beneficiary to develop a restorative
program

Denial Reasons
Skills of A Therapist
ST minutes were reduced based on clinical
judgment because documentation did not
support the billed minutes were reasonable and
necessary. The beneficiary could not participate
in self feeding during this period and required
the speech therapist to assist with 100% of the
feeding.
Documentation did not support medical
necessity and need for continued skilled therapy.
Patient needs assistance and supervision.

Denial Reasons
Deconditioning
Skills of a therapist are not required to maintain
function or improve strength and endurance
Services related to activities for the general good
and welfare of patients (e.g., general exercises to
promote overall fitness and flexibility, and
activities to provide diversion or general
motivation), do not constitute physical therapy
services for Medicare purposes
Practicing of previously taught exercises does
not require the skills of a therapist

Denial Reasons
Restorative Level of Care
Skilled therapy was provided when
non-skilled maintenance services
would have been more appropriate
Restorative level of care provided
Documentation supports that
restorative nursing could have helped
the beneficiary progress versus skilled
rehabilitation services
106Harmony Healthcare International, Inc.Copyright © 2014 All Rights Reserved

Denial Reasons
Custodial Level of Care
Skilled rehabilitation and nursing services
were custodial in nature and could have
been met with restorative nursing, family
member, or nursing provision of
intermittent skilled rehabilitation and
nursing services and that needs were
custodial in nature and could have been
met with restorative nursing, family
member, or nursing assistant

Denial Reasons
Prior Level of Function
The therapist ignored the patient’s prior level of
function and set unrealistic goals
Prior level of function was illegible. Prior level of
function was blank.
Patient's functional level had not changed when
compared to his prior level of functioning
documented in the medical record
Weekly nursing progress notes demonstrate that
the beneficiary required the same amount of
assistance (extensive assistance) prior to and after
the hospital stay

Denial Reasons
Rehab Potential
The medical record did not support that
the condition of the patient would
improve materially in a reasonable and
generally predictable period of time
Poor Rehab potential

Denial Reasons
Goals
Goals are not functional (i.e., patient
will perform 10 repetitions of upper
extremity exercises with the yellow
theraband)
Duplication of services between
disciplines

Denial Reasons
Lack of Functional Progress
Gains were not significant and there was no
indication of carryover of the functional task
Lack of documentation relating to the patient
having the potential to show significant
progress
No significant improvement with functional
ability
The outcome of therapy treatment was not
documented
Failure to document a complete treatment plan
as outlined in Documentation Required section

Skilled Interventions
Medicare will support continued
services when the patient is not making
progress if there is documentation that
multiple skilled interventions have been
trialed
It is appropriate to give each trial an
adequate amount of time to determine
if the patient will progress

Denial Reasons
Modalities
Electrical Stimulation used to treat motor function
disorders, such as multiple sclerosis, is considered
investigational and therefore, non-covered
Electrical Stimulation used in the treatment of
facial nerve paralysis, commonly known as Bell’s
Palsy, is considered investigational and therefore,
non-covered
Diathermy and Ultrasound heat treatments for the
treatment of asthma, bronchitis, or any other
pulmonary condition are considered not
reasonable and necessary, and therefore, non-
covered

Denial Reasons
Cognitive Therapy
The record documented a diagnosis of
Alzheimer’s disease. SLP documentation
does not support further significant
practical improvement could be expected.
Medical justification for ST services is not
established
Speech treatment cognition for dementia
Poor progress with cognition

Denial Reasons
Inpatient Level of Care
Documentation did not support the
need for inpatient level of care
No daily skilled care requiring a
stay in the SNF
Supervised level of care

Denial Reasons
Medical Record Conflicts
Nursing notes mostly dependent
ADLs/functional tasks throughout the SNF
stay. Nursing note indicated there was no
improvement and fluctuation of progress
with self-care tasks.
MDS assessments indicate that the
beneficiary's ability to perform functional
tasks/ADLs did not improve from the 5-day to
the 90-day assessment

Documentation to Support Identified Risk Areas
Identify potential denial risk areas
What might the reviewer have not seen in the
documentation provided to lead the reviewer to deny
services?
What additional documentation may be included to
further support skilled Rehabilitation and Nursing
services provided?
Consultations/ED Visits
Care Plan
Physician Progress Notes
Social Services/Dietary Notes

Appeal Process

Appeal Rights

Appeal Rights
Right to Appeal:
If the Beneficiaries is the only one with the right to
appeal given specific situations, provider must
obtain transfer from beneficiary
Beneficiaries may transfer appeal rights to
providers who provide the items or services and
do not otherwise have appeal rights
Form CMS-20031 must be completed and signed
by the beneficiary and supplier to transfer the
beneficiary’s appeal rights

Appeal Rights
Right to Appeal
All appeal requests must be
made in writing

Appeal Rights
Medicare offers five levels in the Part A and Part
B Appeals Process:
1. Redetermination by a MAC
2. Reconsideration by a QIC
3. Hearing by an Administrative Law Judge
(ALJ)
4. Review by the Medicare Appeals Council,
within the Department Appeals Board
5. Judicial review in U.S. District Court

Appeal Rights
Redetermination
A review of the claim by the MAC utilizing
personnel who are different from the
personnel who made the initial
determination
The appellant (individual filing the appeal)
has 120 days from the date of receipt of
initial denial to file an appeal
A minimum monetary threshold is not
required to request a redetermination

Appeal Rights
Reconsideration
If the facility is dissatisfied with result of
redetermination, they may request a
reconsideration
A Qualified Independent Contractor (QIC) will
conduct the reconsideration
The reconsideration process is an independent
review of medical necessity by a panel of
physicians or other health care professionals
A minimum monetary threshold is not required to
request a reconsideration

Appeal Rights
ALJ Hearing
If at least $130 remains in controversy
following the QIC’s decision, the facility
may request an ALJ hearing within 60 days
of receipt of the reconsideration
The facility must also send a notice of the
ALJ hearing request to the QIC and verify
this on the hearing request form or in the
written request

The Appeal

The Appeal
Assign a team leader to oversee the
preparation of the denial package
Work as a team to gather pertinent
information for the Medicare Appeal
Review the medical record to ensure
completeness

The Appeal
It is important to read the ADR or denial
letter thoroughly as the letters will assist
the facility in gathering the appropriate
information
Review the list of items provided in the
decision statement to include in the
medical record
Consider additional info not listed that will
support the services provided

Monitor the Appeal
Internal tracking system to monitor
When ADR or denial was received
When package was sent out
Final results of the review

Additional Development Requests

Medicare Contractors send providers
additional development request (ADR)
letters requesting additional
documentation
The ADR letters will be mailed and /or
the claim in question will be in status
location S B6001 that identifies claims in
FISS that are in an ADR status/location

Do not submit replacement/duplicate
claims for the ones pending in medical
review
The submission of
replacement/duplicate claims will result
in claim denial, rejection or recoupment
This will p r o l o n g the medical
review process

When the claim is finalized, the claim
will have paid in full or part, or denied
If you disagree with the decision, you
can request a redetermination/1st level
of appeal within 120 days of the
determination (date on the remittance
advice)

After the 45th day, if the documentation
needed to make a medical
determination is not received, the claim
may be denied as records not received
timely and these claim denials are
issued with Remittance Advice Code
N102/56900

CMS guidelines allow contractors the
time frame of 60 days to complete the
review from the date on which the last
of the requested medical records is
received

ADR Response
And
Appeal Packages

The Appeal
In order to effectively manage a Medicare
denial, the facility must work as a team to
gather pertinent information
Assign a team leader to oversee the
preparation of the denial package
All members of the team should review the
medical record to ensure completeness

The Appeal
The following team members are beneficial in this
process:
MDS Coordinator
Director of Nursing
Unit Managers (consider)
Restorative Nursing program Manager
Director of Therapy
Any therapy professionals involved in the patient’s care
Social Services
Dietary
Additional team members who participated in care

The Appeal
It is important to read the ADR or denial
letter thoroughly as the letters will assist
the facility in gathering the appropriate
information
Review the list of items listed in the
ADR/decision statement to include in the
medical record
Consider additional info not listed that will
support the services provided

ADR/Help Letter Checklist
HELP LETTER REVIEW CHECK LIST
Period Skilled Nursing Chart Review: From: __________________ To: _________________
Medicare Admission Date: ___________ Diagnosis: ________________________________
MDS Reference Dates Review
5 day 14 day 30 day 60 day 90 day
SOT/EOT
OMRA
ARD
Billing Dates
RUG/HIPPS
COT COT COT COT COT COT
ARD
Billing Dates
RUG/HIPPS
ICD-9 Codes
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

The Appeal Package
List of items typically requested:
Initial MDS and any MDS that corresponds to
the billed dates of service and look back
All physician documentation for dates of
service in question
Physician’s orders
MD certifications
MD progress notes
History and Physical

The Appeal Package
Important to know the consequences if
the facility does not submit all
necessary paperwork
Facility needs to review the packet
carefully to avoid a technical denial based
on missing information including
signatures

The Appeal Package
Each team member should review the
package as a whole
The team leader should have a final
look prior to submitting the appeal
PREP Letter
Proper Reimbursement Explanation Paper
Always keep a copy of the packet sent
to the reviewing agency

Appeals Process
PREP
Include a statement of position letter with
the medical record documentation to the
reviewing agency explaining the services
provided to the patient

Monitor the Appeal

Monitor the Appeal
Internal tracking system to monitor
When ADR or denial was received
When package was sent out
Final results of the review

Redetermination
and
Reconsideration

Redetermination and Reconsideration
If a claim is initially denied, there is
action the facility can take
The first stage is the Redetermination
The next step is a Reconsideration

Redetermination
An examination of a claim by a review
agency who is different from the agency
who made the initial determination
The facility has 120 days from the date
of receipt of the initial claim
determination to file an appeal
required to request a determination

Redetermination
Request for redetermination may be
filled on Form CMS-20027 available at
http://www.cms.hhs.gov/CMSForms/C
MSForms/list.asp#TopOfPage

Redetermination
Requests not made on Form CMS-20027
must include:
Beneficiary name
Medicare Health Insurance Claim (HIC)
number
Specific service and/or items(s) for which a
redetermination is being requested.
Specific date(s) of service

Redetermination
Requests not made on Form CMS-20027
must include
Name and signature of the party or the
representative of the party (Usually the
administrator of the building)
The name and address of the facility

Redetermination
Include an appeal letter that outlines
the argument for coverage
Brief explanation of the hospitalization (if
one occurred)
Past medical history
Status of patient on admission
List of the skilled nursing services
provided to the patient

Redetermination
Appeal Letter
An explanation of skilled therapy
services provided to the patient
Medicare guidelines used in the
skilled care decision making process,
if applicable

Redetermination
Any additional supporting documentation
not submitted during the Help letter phase
from the medical record should be submitted
along with the redetermination request
Highlight
Add sticky tabs
The redetermination request should be sent
to the contractor that issued the initial
determination

Redetermination
Contractors will generally issue a
decision within 60 days of receipt of
redetermination request in the form of :
A letter
A Medicare Redetermination Notice
(MRN)
Revised remittance advice

Reconsideration
If the request for redetermination results in a
denial, a reconsideration can be requested
A QIC will conduct the reconsideration
request
The QIC reconsideration process allows for
an independent review of medical necessity
by a panel of physicians or other health-care
professions
required to request a reconsideration

Reconsideration
A written reconsideration request must
be filed within 180 days of receipt of the
redetermination
Instructions are provided on the
Medicare Redetermination Notice
(MRN)
A Request for reconsideration may be
made on Form CMS-20033. This form
will be mailed with the MRN

Reconsideration
If Form 20033 is not used, request must
contain:
Beneficiary name
Medicare Health Insurance Claim (HIC)
number
Specific service(s) and/or item(s) for which
the reconsideration is requested
Specific date(s) of service

Reconsideration
Documents to include
Name and signature of the party or
the representative of the party
(usually the administrator of the
building)
Name of the contractor that made the
determination
Name and address of the facility

Reconsideration
Include a letter outlining the argument
for payment
The request should clearly explain why
the facility disagrees with the
redetermination
A copy of the MRN, and any other
supportive documentation, should be
sent with the reconsideration request to
the QIC identified in the MRN

Reconsideration
Reconsiderations are conducted on-the-
record; and in most cases, the QIC will
send its decision to all parties within 60
days of receipt of the request for
reconsideration
The decision will contain detailed info
on further appeal rights if the decision
is not fully favorable

Reconsideration
If the QIC cannot complete its
decision in the applicable
timeframe, it will inform the
appellant of their right to escalate
the case to an ALJ

A Successful ALJ Hearing

ALJ Overview
After the redetermination and
reconsideration process, if at least $130
remains in controversy following the QIC’s
decision, the facility may request an ALJ
hearing within 60 days of receipt of the
reconsideration
The facility must send a notice of the ALJ
hearing request to the QIC on the hearing
request form or in the written request

ALJ Overview
A letter to request the ALJ hearing
should simply highlight the most
pertinent reasons justifying
payment

ALJ Overview
ALJ hearings are generally held by
video-teleconference (VTC) or by
telephone
If the facility prefers not to have a VTC
or telephone hearing, they may ask for
an in-person hearing, but they must
demonstrate the necessity for an in-
person hearing

ALJ Overview
The ALJ will determine whether an in-
person hearing is warranted on a case-by-
case basis
Facilities may also ask the ALJ to make a
decision without a hearing (on-the-
record).
CMS or its contractors may participate in
an ALJ hearing, but they must provide
notice to the ALJ and all parties of the
hearing

ALJ Overview
ALJ will generally issue a decision within 90 days of
receipt of the hearing request
The timeframe may be extended for a variety of
reasons including, but not limited to:
The case being escalated from the reconsideration
level
The submission of additional evidence not
included with the hearing request
The request for an in-person hearing
The facility’s failure to send notice of the hearing
request to other parties and
The initiation of discovery if CMS is a party

ALJ Overview
If the ALJ does not issue a decision
within the applicable timeframe,
you may ask the ALJ to escalate the
case to the Appeals Council level

ALJ
Hearing Preparation

ALJ
Office of Medicare Hearings and Appeals (OHMA)
Administrative law judge hearings will not be assigned to
a judge for at least two years
OMHA stopped assigning new hearing requests from
providers as of July 15, 2013
The weekly influx of hearing requests surged from an
average of 1,250 in January 2012 to more than 15,000 in
December 2013
Medicare Appellant Forum to provide updates to OMHA
appellants on the status of OMHA operations
http://www.hhs.gov/omha/omha_medicare_appellant_for
um.html

ALJ Hearing Preparation
Appeal Process
Discuss and study CMS Guidelines
Discuss type of ALJ hearing (video,
phone, in person) to anticipate the
format
Goals of the Hearing
Inform the Judge of skilled services
Get the claim paid

ALJ Hearing Preparation
Team Preparation
Medical record review
Outline of speaking points
Select a point person for the
hearing
Team input

ALJ Hearing
Hearing Process
Prepare the facility designated hearing
room for video or phone hearings
Judge’s assistant will initiate the phone
contact (test phone lines and speakers)
Introductions
Statement by facility
Offer to fax any pertinent documents
discussed during the hearing

ALJ Hearing
Organize documentation
Keep pertinent notes or forms at your
finger tips
Number the pages for reference
Have the staff that worked with patient
on the call
Speak respectfully, clearly, slowly
Provide a concise summary

ALJ Hearing
Be prepared to answer questions prepared
by the Judge
Why did the patient require skilled therapy
when they were hospitalized for a UTI?
Where does the medical record state that
continued therapy services were necessary
after the initial date in question?
Explain why skilled care continued although
the notes indicate the patient did not have an
exacerbation of medical condition?

ALJ Hearing
Be prepared to answer questions asked
by the Judge
When did the patient get discharged
from therapy services?
Why do the daily nursing notes state
the patient was ambulating ad lib, yet
physical therapy continued to
provide skilled treatment?

Conclusion
Educate, Discuss and Prepare
Don’t Wait for Medicare Medical Review
Communicate to all Staff Medicare Skilled
Care Criteria
Refine Interdisciplinary Management of
Medicare Appeals
Establish and Maintain Peer Review and
External Review of Records to Assure
Insulation of Claims

Keys to Success
Provide clinically appropriate care
Document
Medical necessity
Deficits
Outcomes
Meet technical requirements
Review entire medical record
Respond to ADRs timely

Upcoming webinars…
Top 5 Ways to Prevent Falls
January 28, 2014 1:00 p.m. – 2:00 p.m.
Medicare Skilled Nursing Documentation
February 20, 2014 1:00 p.m. – 2:00 p.m.
Medicare Rehabilitation Documentation
February 25, 2014 1:00 p.m. – 2:00 p.m.
Rehabilitation in a SNF Setting: Skilled Medicare
Coverage Criteria
March 20, 10:00 a.m. – 11:00 a.m.

Questions/Answers
1 (800) 530 – 4413
www.Harmony-Healthcare.com
ebovee@Harmony-Healthcare.com
Harmony Healthcare International, Inc. 182182Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc.

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RAC Audit Strategic Road Map for Leaders: Successfully Prevent & Appeal Denied Claims

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