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EMR Implementation and Meaningful Use Luncheon Feb. 28, 2012
 

Free Educational Seminar and Lunch (Earn CME)!

EMR Implementation and Meaningful Use

Penny Crow, RHIA, CEO of Operational Strategies

Tuesday, February  28, 11:30-1:00 p.m.
at Maggiano's in The Domain
10901 Domain Drive #100
Austin, TX 78758

You are cordially invited to join us for a FREE and FABULOUS lunch at Maggiano's Little Italy in The Domain.  Penny Crow, RHIA, was a speaker at the T-Bones (Texas Orthopedic Administrators Society) 2011 Annual Meeting and will give an informative presentation on dealing with the critical issues of EMR Implementation and Meaningful Use.

NOTE: Seating is limited so please register as soon as you can!
(Registration deadline is Tuesday, February 21).

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Medical Audits: What Physicians Need to Know

This is a publication of the Physicians Advocacy Institute, Inc.

PURPOSE
One of the greatest challenges facing physicians and their staffs today is how to prepare for audits and financial reviews conducted by the Medicare Recovery Audit Contractors (RACs) and private payers and how to appeal adverse audit findings. The Physicians Advocacy Institute, Inc., (PAI) is pleased to present this White Paper as part of an effort to assist physicians and their practice staff in understanding and appealing medical audits by RACs and commercial payers.

With ever increasing pressure on both governmental and private payers to reduce healthcare costs, it is inevitable that payers will continue to use audits to identify alleged overpayments and to demand that physicians repay these amounts. However, auditors err and their findings are not always correct. Moreover, even when auditors correctly identify billing and coding errors, such findings do not necessarily indicate fraud and abuse.

Therefore, physicians need to prepare for and manage external payer audits just as they manage any other part of the business side of their practices to minimize the risk of being audited and to ensure that any audit findings are fair and accurate. This White Paper is designed to provide physicians and their staffs with tools to do just that. Specifically, this White Paper will:

·         Provide tips on how to assess the risk of being audited or reviewed;

·         Describe the various types of audits;

·         Discuss the audit process;

·         Discuss how to respond to an audit;

·         Provide tips to analyze audit findings; and

·         Discuss appealing any adverse audit determinations.

For the rest of the article, please click here.

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Defending a Medicare Audit
 

by Wachler & Associates, P.C.
Andrew B. Wachler, Esq.
Jennifer Colagiovanni, Esq.
Jessica C. Lange, Esq.

The Centers for Medicare and Medicaid Services' (CMS) current audit initiatives have resulted in an active audit landscape of Medicare contractors targeting healthcare providers and suppliers, including orthopaedic physicians.  This article breaks down the Medicare appeals process into a step-by-step explanation to prepare physicians and other healthcare providers for what to expect when defending a Medicare audit appeal. 

The Medicare Appeals Process
The five step appeals process is uniform for all Medicare contractors and both Medicare Part A and Part B appeals.  This process applies to both orthopedic surgeons under Medicare Part B, as well hospitals including physician owned hospitals under Part A.  CMS contracts with a variety of audit Medicare contractors including: Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), Program Safeguard Integrity Contractors (PSCs) and Zone Program Integrity Contractors (ZPICs).

Providers are typically notified of audit findings by way of an audit results letter and an overpayment demand letter issued by the Medicare contractor.  This correspondence provides information regarding the reviewer's findings and the claim determinations, as well as the alleged overpayment to be returned to Medicare.  Providers should note that receipt of the overpayment demand letter triggers the timeframes for appeal.

Step 1: Redetermination
The first level of appeal is redetermination.  Providers who are dissatisfied with the contractor's initial determination must file a request for redetermination within 120 calendar days from the date the provider received notice of the initial determination.¹ However, in order to prevent recoupment of the alleged overpayment against the provider's current Medicare payments, the request for redetermination must be filed within 30 days of the date of the first demand letter.  Otherwise, recoupment will begin on the 41^st day after the date of the first demand letter.  Given this short timeframe, it is important for providers to act quickly in order to meet the appeal deadlines and prevent the withhold of current Medicare payments, which can create a significant financial hardship on a physician practice.  Although redetermination is the first stage of appeal, it is important to include legal counsel in the appeals process.  Healthcare attorneys specialize in developing the most effective appeal strategy at the earliest stages.  The early involvement of counsel may help physician practices receive favorable appeal determinations earlier in the appeals process.

Step 2: Reconsideration
A provider who is dissatisfied with the redetermination decision may file a request for reconsideration with a Qualified Independent Contractor (QIC).  A request for reconsideration must be filed within 180 calendar days from the date the provider received notice of the redetermination decision.²  However, in order to prevent a withhold of current Medicare payments at this stage, the request for reconsideration must be filed within 60 days of the date of the redetermination decision.³

Reconsideration is an independent review of the initial determination, redetermination and other issues related to payment of the appealed claim.⁴  The reconsideration decision is based on a review of the findings and evidence submitted at the initial determination and redetermination levels.  However, providers must also submit any additional evidence or missing documentation at this level of appeal.  Failure to submit all evidence prior to the issuance of the reconsideration decision will prevent the future consideration of that evidence absent a showing of good cause.⁵

The QIC must notify all parties of the reconsideration decision within 60 days of the request, unless additional evidence has been submitted, which extends the QIC's deadline.  Once a reconsideration decision has been rendered, providers are no longer able to stop the withhold of current Medicare billings and the Centers for Medicare and Medicaid (CMS) may begin recoupment of the alleged overpayment. 

Step 3: Administrative Law Judge Hearing
The third level of appeal involves an administrative law judge (ALJ) hearing.  In order to preserve the right to an ALJ hearing, a provider must file a written request within 60 days of the date that the provider received notice of the reconsideration decision.⁶  Unlike the first two levels of appeal, there is an amount in controversy requirement in order to proceed to an ALJ hearing, which is currently $130.⁷

ALJ hearings may be conducted in-person, by video-teleconference (VTC) or by telephone.  At the hearing, parties have an opportunity to present documentary evidence, legal arguments and witness testimony, which may include internal clinicians and experts. Testimony from clinicians and experts is helpful during an ALJ hearing because it highlights for the ALJ the clinical decision-making for the provision of the services and illustrates why the services provided to the beneficiary were medically necessary.  The ALJ examines the issues, questions the parties and other witnesses, and reviews documents material to the issues.  An ALJ's decision is based on the hearing record and is required to be made within 90 days from the date it received the request for hearing, unless the time period has been extended or waived. 

Step 4: Medicare Appeals Council
The fourth level of appeal is Medicare Appeals Council (MAC) review.  To request a MAC review, a party must file a written request within 60 days of receiving the ALJ decision or dismissal.⁸  A party's request for MAC review must identify the parts of the ALJ action with which it disagrees and explain the reasons for the disagreement.

An appeal to the MAC does not involve a hearing.  Instead, upon request, the MAC will give the parties an opportunity to file written statements.  The MAC may also request that CMS or its contractor file a brief.

The MAC may grant a party's request to appear and present oral argument if the case raises an important question of law, policy or fact that cannot be decided based on written submissions alone.  Unless extended due to the filing of a written brief, the MAC must issue a final action or remand within 90 days of receiving the appellant's request for review.  The MAC may remand the case if additional evidence is needed or if additional action by the ALJ is required to make a decision. The MAC's decision binds all parties unless the decision is later modified by a federal district court.  If the MAC does not issue a decision, dismissal or remand within the required time frame, the provider may request that the case be accelerated to federal district court. 

Step 5: Judicial Review in Federal District Court
A party to a MAC decision or a party requesting escalation from the MAC may proceed to a fifth level of appeal in federal district court. In order to file an action for judicial review, the amount in controversy requirement must be met (currently set at $1,350), and the party must file in federal district court within 60 days of receipt of the MAC's decision. 

Conclusion
It is important for healthcare providers and their staff to understand the Medicare appeals process and the key timeframes for appealing an unfavorable Medicare audit determination.  It is also imperative that providers develop an effective strategic approach early in the appeals process.  While the Medicare appeals process can appear daunting, providers armed with an understanding of the process are better prepared to jump into action if and when they are faced with a MAC, RAC or ZPIC audit of their Medicare claims.

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AAOS Special Edition: Medicare Audits 101

If you participate in Medicare, you may have had some of your claims audited. Sometimes, this results in an overpayment request, which requires you to refund payment for a specific claim to Medicare. Our goal at the AAOS is to ensure that all of our members are armed with the information necessary to comply with Medicare policies and avoid overpayment requests or claims denials. This article is intended to provide you with a thorough background of current audit programs and how to learn more about successfully complying with Medicare rules. 

Medicare Has Increased Audit Programs
In 2010, the President announced three goals for cutting improper Medicare payments by 2012: reducing overall payment errors by $50 billion, cutting the Medicare fee-for-service error rate in half, and recovering $2 billion in improper payments. To that end, Medicare has initiated a number of projects with the intention of reaching those goals. The Agency is very clear in its statements that these are not primarily fraud prevention goals. Improper payments should not be conflated with fraud. All fraudulent claims are improper payments, but not all improper payments are fraudulent claims—most improper payments are due to documentation errors.

Terms You Should Know

MAC: Medicare Administrative Contractor. The US is split into fifteen regions for purposes of Medicare claims administration, though the regions will be consolidated into ten over the next few years. MACs are private companies that serve as contractors performing claims administration for Medicare.

CERT: Comprehensive Error Rate Testing. The CERT audit program is designed to monitor the performance of MACs and to ensure that they are administering claims properly. CERT audits result in annual reports of the rate of improper payments made to hospitals. A high error rate for a particular procedure on the Part A hospital side may lead to increased scrutiny of Part B physician claims.

RAC: Recovery Audit Contractor. A RAC is an independent medical collection agency that works for Medicare to recover overpayments from providers. There are currently four RACs; each of them has an exclusive geographic jurisdiction. RACs are paid 9-12.5% contingency fees for the overpayments they recover. RACs have the ability to analyze claims with payment dates reaching as far back as October 1, 2007 or 3 years prior to any new RAC initiative.

LCD: Local Coverage Determination. Much like private insurers, Medicare has local coverage determinations. MACs define LCDs for different procedures. The LCD tells you what Medicare will cover in its MAC jurisdiction. For example, they define what constitutes medical necessity for a specific procedure, and no procedure will be covered if it is not found to be medically necessary. Failure to follow the requirements of an LCD will result in an overpayment, which could be sought after an audit. If a MAC contains four states, its LCDs will apply to all four states, unless otherwise specified.

CAC: Contractor Advisory Committee. A CAC serves as a formal mechanism for physicians in each state to be informed of and participate in the development of an LCD in an advisory capacity, a mechanism to discuss and improve administrative policies that are within MAC discretion, and a forum for information exchange between MACs and physicians. Every state has a CAC, so the MACs that contain multiple states will have multiple CACs commenting on LCDs. Each CAC is supposed to have an orthopaedic representative.

Current Medicare Audits

RAC Audits
The Recovery Audit Contractor (RAC), program was created through the Medicare Modernization Act of 2003. It was designed to extract waste from the Medicare system by identifying and recovering improper payments paid to healthcare providers. The RAC program has been successful in reclaiming money through retrospective review of fee-for-service claims through a process known as “claw back".

The Centers for Medicare and Medicaid Services (CMS) began the program in 2005, as a three-year long demonstration project, which initially focused on Medicare payments in California, New York, and Florida and was later expanded to include Massachusetts and South Carolina. Subsequently, under the Tax Relief and Health Care Act of 2006, the permanent RAC program was implemented in all 50 states and also has been expanded to Medicaid in all 50 states.

The RAC program, which divides the U.S. into four geographic regions, uses contractors to  review, audit, and identify improper Medicare payments in each of those jurisdictions. Contractors are paid on a contingency fee basis, receiving a percentage of the improper payments they collect from providers. While RAC audits focused on site of care and upcoding in the past, they are now increasingly addressing medical necessity. Generally, RAC auditors may review the last three years of provider claims, and they may also conduct medical record reviews.

An adverse opinion from a RAC audit may be appealed. There are five levels of appeal that need to be filed within a specific timeline. These levels of appeal include: Request for Redetermination before the RAC, Request for Reconsideration with a Qualified Independent Contractor, Administrative Law Judge (ALJ) Review, Medicare Appeals Council (MAC) Review, and Judicial Review. The cost and success of the appeal process varies at each level.

Recovery Audit Prepayment Review Demonstration
On November 15, CMS announced three new demonstrations. One of these three year demonstrations, the Recovery Audit Prepayment Review Demonstration, was designed to help curb improper Medicare and Medicaid payments CMS had planned to implement the three-year demonstration program on January 1, 2012, but announced in late December that implementation would be delayed indefinitely. The AAOS staff anticipate that the program will be implemented in some form at a later date and staff continue to monitor developments.

The AAOS staff has been proactively engaged in fact-finding and advocacy activities related to this CMS initiative. Shortly after CMS announced this demonstration, AAOS staff met with lead CMS staff to discuss implications for AAOS members and their patients.

As we learned, the demonstration as proposed would allow Medicare recovery auditors to review claims after services are provided but before claims are paid to ensure that the provider complied with all Medicare payment rules. CMS' goal is to prevent improper payments before they are made. These  reviews would focus on seven states with high populations of fraud and error-prone providers (FL, CA, MI, TX, NY, LA, IL) and four states with high claims volumes of short inpatient stays (PA, OH, NC, MO) for a total of 11 states. It is important to note that while this program is being labeled a demonstration, it would be implemented in our most populous states and affect almost 50% of the Medicare population.

At an Open Door teleconference on December 21, prior to the decision to delay implementation of the program, CMS released details of the new demonstration. As planned, the program would authorize recovery auditors to review Part A hospital claims in the 11 approved demonstration states-after provision of service, but before they are paid. Initially, the demonstration would focus on short stay inpatient hospital claims, none of which involve orthopaedic procedures. CMS staff cited several recurring problems with claims for short inpatient hospital stays, including incorrect coding, patients being admitted from the emergency department who should have been placed in outpatient observation, and patients getting surgery on an elective admission rather than on an outpatient basis. CMS acknowledged that RACs would be looking at medical necessity in these prepayment reviews. The demonstration project, however, would not review 100 percent of claims under the selected DRGs, but only a limited number. The appeals process for RAC audits would follow the same procedures as other appeals.

If the program is successful once implemented, CMS stated it may authorize reviews on additional DRGs in the future.    CMS also clarified that the demonstration would not replace MAC prepayment review. CMS explained, however, that the MACs would coordinate review areas so providers will not be reviewed by two different contractors for the same cases.

While CMS staff disclosed basic operational details at the Open Door forum, they provided little clarity regarding the documentation CMS would be seeking to justify claims. Some of the examples cited by one of the CMS presenters were criticized during the question and answer period.  Concerned about the potential future implications for orthopaedic surgeons, AAOS staff questioned CMS representatives about the lack of available provider education materials. Following the criticism that CMS received in the lead-up to implementation of this program, the agency decided to delay implementation.

MAC-Generated Prepayment Audits
MACs have always had the authority to audit claims in order to reduce their CERT error rates. In late 2011, at least two MACs—MAC Jurisdiction 4 and Mac Jurisdiction 9--initiated audits that target specific orthopaedic procedures with high error rates in their jurisdictions.

In the summer of 2011, the contractor for MAC jurisdiction 9, which includes Florida, Puerto Rico, and the Virgin Islands, developed an LCD on total joint replacements. The original draft LCD included onerous documentation requirements of multiple 12-week non-surgical interventions prior to authorizing coverage of a total joint replacement. After receiving comments from the AAOS and the American Academy of Hip and Knee Surgeons (AAHKS), the contractor stripped the onerous requirements from the LCD, making it so that only one non-surgical intervention needed to fail in order to meet the requirements of the LCD.

Weeks after the LCD was finalized, the contractor announced a new prepayment audit of 15 specific DRGs. Four of them are orthopaedic codes, including that which covers total joint replacements:

458 -- Spinal fusion except cervical w/spinal curve, malign, or 9+ fusions w/o CC
460 -- Spinal fusion except cervical w/o MCC
470 -- Major joint replacement or reattachment of lower extremity w/o MCC
490 -- Back and neck procedures except spinal fusion w/CC/MCC or disc device/neurostimulator

Under this audit, which only applies in Florida, the MAC began auditing 100% of Part A hospital claims related to the 15 DRGs on the list at the beginning of 2012. Shortly after implementing the audit, the MAC reduced the rate of claims that it would audit from 100% to 50% of claims related to DRG 470. The MAC cited improved documentation as a result of the orthopaedic community's educational efforts as one of the reasons for the reduced rate. Under the audit program, if problems are found with the Part A claims, then payment will be denied, and the MAC may then perform a post-payment audit of the Past B physician services claims related to the problematic Part A claims. The MAC notes that the review of Part B claims are most likely to be due to a failure to support the medical necessity of the procedure. Physicians must pay close attention to LCDs relating to the procedures they perform and ensure that documentation of medical necessity in the hospital record complies with relevant LCDs.

Around the same time of year, the MAC responsible for Jurisdiction 4 (Colorado, New Mexico, Texas, and Wyoming) announced a similar audit with a smaller number of target DRGs. Two orthopaedic DRGs are included on this list:  

460 -- Spinal fusion except cervical w/o MCC
470 -- Major joint replacement or reattachment of lower extremity w/o MCC

This audit was scheduled to take place in October through December of 2011. We have heard very little provider feedback from this audit, which leads us to believe that providers are either submitting documentation and being paid or successfully appealing claims denials. 

Why Are Certain Procedures Targeted by Auditors?
The procedures that are targeted for audits are those that have shown a high error rate in the MAC jurisdiction in which they are performed. At least three MACs have noted high error rates for DRG 470, total joint replacements. Each of them indicates that the improper payments are due to a failure to show medical necessity in the hospital record. This does not mean that the procedures were not medically necessary; generally speaking, the problem is not noting the failure of non-surgical interventions in the hospital records themselves. 

How Can Physicians Properly Document Medical Necessity?
A specific criterion for proper documentation of medical necessity depends on the MAC jurisdiction in which you practice. However, the general consensus among published LCDs and informal notices generated by MACs is that failure of conservative treatment for approximately 12-weeks is necessary to show medical necessity. While this information may be present in the physician's office medical record, in most cases it needs to be documented in the hospital records, as well. Please consult your local MAC for specific information. If you are audited and a claim is denied, the process for appealing the audit is the same as for any other claims denial. 

AAOS Response to Audits
The AAOS Health Care Systems Committee formed a workgroup to look at developments in Medicare auditing programs.  Workgroup members, Dr. John Cherf, Dr. Peggy Naas, and Dr. David  Halsey, are preparing an action plan for what the AAOS needs to provide members in terms of education, materials and direction. The workgroup is coordinating their efforts with the AAOS Office of Government Relations, AAHKS President Carlos Lavernia, MD, leadership of other orthopaedic subspecialty organizations, and some state orthopaedic societies to ensure that our physicians have the information and tools they need to understand evolving audit programs and comply with Medicare requirements.

In addition, the AAOS met with CMS officials on December 27th to discuss the various audit programs and how the AAOS can work with CMS in order to ensure that the audit programs are effective, administered fairly, and that the particulars are transmitted to our members in a timely fashion. The AAOS is in the process of scheduling a similar meeting focused on MAC generated audits. In addition, the AAOS is working with CMS to develop an article for the CMS publication MLN Matters. This document will provide background information on documentation for total joint replacements and will be sent to all Medicare fee-for-service providers.

The AAOS also continues to work with state orthopaedic societies to assist them with their advocacy efforts as they relate to MACs. One way that the AAOS is working to offer additional support on Medicare coverage issues is by developing a nationwide network of orthopaedic CAC representatives. This group of orthopaedic surgeons should be aware of all LCDs being issued in the ten MACs and can report important information about trends in Medicare payment policies to the AAOS.

Look for more information about Medicare payment policies and audit programs at upcoming AAOS webinars and in future AAOS publications. In the mean time, please do not hesitate to contact the AAOS Office of Government Relations at 202-546-4430 or DC@aaos.org.

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