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The 360°approach to compliance and risk management




RAC Attack:
An Operational Guide to Successful Appeals




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               AR Systems, Inc
           Training Library Presents
     RAC ATTACK – A Guide to Successful Appeals
           “To Appeal or not to Appeal”

Instructor:
I t t                                    Day Egusquiza, P
                                         D E       i    Pres
                                         AR Systems, Inc




     5                         RAC2008




RAC –The Recovery Audit Contractor:
                  What’s a provider to do?

 Where are we today? – powerful transmittals
 Walking thru the process - defense and validation audits
 Impact to departments –from letter to recoupment
 How will the recoupments work – automated vs complex
 Rebuttals with the RAC – prevent the denial
 Tracking and trending
 5 levels of appeal – decision points
 Balancing moving forward as well as looking back



     6                         RAC2009




                                                               2
RAC –The Recovery Audit Contractor:
          In the beginning……back in 2003

                         Formal Definition:
Medicare Prescription Drug, Improvement, and Modernization Act of
  2003 (MMA), Section 306, directs the Secretary of the U.S.
  Department of Health and Human Services (HHS) to demonstrate
  the use of RACs under the Medicare Integrity Program in:

     1) identifying underpayments and overpayments;
     2) recouping overpayments under the Medicare program
    (for services for which payment is made under Part A or Part B of
    Title XVIII of the Social Security Act).

From   MLN Matters Numbers SE0469 & SE0565 & SE0617



7                                RAC2009




                 Purpose of RAC
    The RAC program’s mission is to reduce Medicare
    improper payments thru the efficient detection and
    collection of overpayments, the identification of
    underpayments and the implementation of actions that
    will prevent further improper payments.
    The identification f d
    Th id tifi ti of underpayments and overpayments
                                      t      d          t
    and the recoupment of overpayments will occur for
    claims paid under the Medicare program for services
    which payment is made under part A or B of Title XVIII of
    the Social Security Act.
    Scope of Work/Statement of Work for the RAC
    program/CMS/www.fbo.gov/sbg/NHS/HCFA/AGG/reference%2Dnu
    mber%2dcms040001cgs1/listing.htmd or CMS’s website

8                                RAC2009




           Statutory Requirements
    Section 302 of the Tax Relief & Health Care Act
    of 2006 requires the Secretary of the Dept of
    H&HS to utilize RACs under the Medicare
    Integrity Program to identify underpayments and
    overpayments and recoup overpayments under
    the Medicare program for part A & B.
    Although there was considerable discussion and
    delay, the permanent RACs are slated to be
    completely implemented by 2010.


9                                RAC2009




                                                                        3
Underpayment examples
             (watch for more once live)
     DRG re-coded to higher DRG
           re-
     Transfer disposition on UB; however pt did
     not return to skilled SNF days.
     Missed charges when charges were
     Mi     d h          h    h
     already present. If no charges were billed,
     lost charges are not subject to
     underpayment determinations.
     RACs are now compensated for
     underpayments.
10                                               RAC2009




                             ALERT ALERT
     Permanent RACs announced 10-6-08
                              10-
     Regions:
          A/Northeast                 Diversified Collection Services, Inc of Livermore, CA
                                      Contingency fee: 12.45%       Ebony.brandon@cms.hhs.gov
          B/Upper midwest             CGI Technologies and Solutions, Inc of Fairfax, VA
                                      Contingency fee: 12.50%
                                                         12 50%      Scott.wakefield@cms.hhs.gov
                                                                     Scott wakefield@cms hhs gov
          C/Lower western             Connolly Consulting Associates, Inc of Wilton, CT
                                      Contingency fee: 9%               Amy.Reese@cms.hhs.gov
          D/Northwest                 HealthDataInsights, Inc of Las Vegas, NV
                                      HealthDataInsights,
                                      Contingency fee: 9.45%          Kathleen.Wallace@cms.hhs.gov

      Rollout periods: Yellow states                            Summer 2009
                       Green states                             Summer 2009
                       Blue states                              Fall 2009
                       All states live no later than Jan , 2010 …
      PS Don’t forget the Medicaid Integrity Program/MIP with 4 contractors…
                                                                contractors…
      www.cms.hhs.gov/RAC/03_RecentUpdates.asp
11                                               RAC2009




                                                                                            MAC J14
                                     MAC J6 & J8




                                                                                       Summer
                                                                                        2009

                                                                                     Summer



                                                                                     Early fall
                                                                                    2009


                                                                                     MAC J11
12




                                                                                                      4
Updated RAC Info
                        May 28, 2009
     New demand letter sample provided.
     Use discussion period with the RAC from
     Results letter thru the 41st day of recoupment.
     CMS anticipates the revised timeline:
        RAC automated reviews – late June/July
        RAC medical necessity complex reviews- early 2010
                                        reviews-
        Other complex reviews – DRG and other coding
        reviews – Fall 2009
        Govt accting office/GOA is expected to complete its
        analysis of RAC program in 11-09.
                                    11-
13
        www.aha.org/rac                        www.cms.hhs.gov/RAC




           Email Updates 6-16-09
                         6-16-
                  Cmdr Casey, RN,BSN, MPH
          Deputy Director, Division Recovery Operations
     Pt impact: Provider agreements demand that
         impact:
     the pt be refunded for any recouped Medicare
     payments.
     Record request: As of today, CMS is not moving
               request:
                 q                 y                     g
     to the per tax ID. It will remain per NPI #.
     Timely rebill: There is no ability to rebill as an
              rebill:
     outpt medically necessary surgeries that are
     denied as incorrect setting (Demonstration only)-
                                                     only)-
     i.e.inpt.
     i.e.inpt.

14                                          RAC2009




     RAC/MAC Implementation Coordination

     7. Implementation of the Permanent RAC Program (*)
        CMS will gradually implement the RAC permanent program nationwide. Due to the
        importance of protecting the Medicare Trust Funds, Congress included Section 302 in
        TRHCA, which requires the Secretary to implement the RAC program throughout the country
        by no later than January 1, 2010 (see Appendix B). CMS is undertaking a number of
        initiatives to gradually implement the RAC permanent program.
           …
        CMS has also developed an effective strategy to ensure that the RAC permanent program
        will not interfere with the transition from the old Medicare claims processing contractors to
        the new Medicare claims processing contractors, called Medicare Administrative Contractors
        (MACs). This strategy will allow the new MACs to focus on claims processing activities
        before working with the RACs.

        Generally, the RAC blackout period will be:
        a. 3 months before a MAC begins processing claims for a given State
        b. 3 months after a MAC begins processing claims for a given State.
                                                                     State.
     Impacted states: South Carolina/yellow but same MAC as FI, so no delay;
     New England/yellow but new MAC so delayed; Full blackout: Indiana, Michigan, Minnesota

     (*) THE MEDICARE RECOVERY AUDIT CONTRACTOR (RAC) PROGRAM: An Evaluation of the
            3-Year Demonstration


15                                          RAC2009




                                                                                                        5
RAC/MAC Implementation Coordination




16




  When your state goes live-  live-
Outreach Education ( www/rac monitor.com 3--09)
                     www/rac             3

     Hospital association, RAC and CMS rep
     will do state-specific education prior to
             state-
     implementation. (RAC’s are forbidden by CMS to provide
     education directly to providers)

     Outline of issues:
        No set dates yet; but likely that activity will begin in May 2009
        Results will drive implementation dates
        Create an ‘established black and white issues to begin with’.
        Fuzzy on initial recoupments would be automated vs complex as
        originally outlined.
        “New Issue” must be reviewed by CMS before the RAC can act.
17                                 RAC2009




      Hot Spots for Audit that may result in
                 denied claims
       (Idea: Work toward preventing the
          need for the appeal process)




18                                 RAC2009




                                                                            6
Validation Process
     When RAC identifies a potential vulnerability, they send
     a sample of claims to be validated prior to moving
     forward. The RAC validation process ensures the there
     is a potential for an overpayment.
     RAC identifies ‘issue’; sends to CMS central office for
                         issue ;
     review; to PRS auditor for 2nd opinion if needed
     Also use Validation to ‘check’ on RAC accuracy.
     NEW Validation Contractor: Provider Resources, Inc
     of Erie, PA. (10-10-08 )
                   (10-10-


     CMS sends a random sample of the RAC reviewed
     claims to the CMS &/or RAC Validation contractor each
     month w/an accuracy rate calculated.
     19                                     RAC2009




          RAC HealthDataInsights licenses
            Milliman Care guidelines
      “HDI has signed a 5 year license with Milliman Care
      Guidelines. HCI will use the care guidelines content and
      software to review Medicare claims.
      HDI will use the annually updated evidence based care
      guidelines products.
         id li       d t
      The Care Guidelines promote healthcare quality by
      providing clinical guidelines based on the best available
      clinical evidence.”
      CMS does not mandate or endorse any specific
      guidelines or criteria for utilization review.”
                                             review.”
Feb 25, 2009 “Evidence-based care guidelines will be used to combat waste in Medicare program.”
             “Evidence-


20                                          RAC2009




            Medicare’s Inpt definition
     Medicare benefit policy manual chpt 1 10
      An inpatient is a person who has been admitted to a hospital for bed
      occupancy for purposes of receiving inpatient hospital services. Generally, a
      patient is considered an inpatient if formally admitted as inpatient with the
      expectation that he or she will remain at least overnight and occupy a bed
      even though it later develops that the patient can be discharged or
      transferred to another hospital and not actually use a hospital bed
      overnight.
      overnight ”
       “However, the decision to admit a patient is a complex medical judgment
      which can be made only after the physician has considered a number of
      factors, including the patient's medical history and current medical needs,
      the types of facilities available to inpatients and to outpatients, the hospital's
      by-
      by-laws and admissions policies, and the relative appropriateness of
      treatment in each setting. Factors to be considered when making the
      decision to admit include such things as:
      – The severity of the signs and symptoms exhibited by the patient;
      – The medical predictability of something adverse happening to the
21    patient…”                           RAC2009




                                                                                                  7
Catch 22…inpt medically
               22…inpt
               necessary
     Look beyond meeting Interqual or Milliman criteria…
     they are simply a great resource.
     Physician – clearly outlines the severity of the
     p
     pt’s condition that requires the inpt stay.
                            q            p    y
     Nursing – clearly documents the intensity of the
     ongoing pt care
     H&P and discharge summaries are not usually
     required for less than 48 hr stays; however, they
     are critical to help clarify the scope and course
     of treatment the physician was thinking,
22   assessing and treating.




     More RAC announcements
     Each RAC will have their own
     website/CMS will approve soon.
     Clinical Screening Tools
       Region
       R i A/DCS – Milli
                       Milliman C
                                Care G id li
                                      Guidelines
       Region B/CGI – InterQual Clinical Decision
       Support Guidelines
       Region C/Connolly – Milliman Care
       Guidelines
       Region D/HDI – Will use both Interqual &
23     Milliman         RAC2009




             Defense Audit-
                       Audit-
         High areas of Focus-Inpt
                       Focus-
     Top 10 diagnosis –                1 day stays vs
     sort by physician, by             observation vs just an
                                       outpt in a bed!
     payer
                                       PEPPER-
                                       PEPPER-1 & 3 day stays
     Top DRGs from the 3
         p
                                       Short stays – less than 24
     demonstration states              hrs billed as a inpt.
                                                       inpt.
     Outlier inpt                      Inpt Rehab vs outpt rehab
     3 day SNF qualifying              MS-
                                       MS-DRG = %MCC, %CC
     Transfers that were               Charge Master/Charge
     billed as ‘discharges”            Capture rules

24                           RAC2009




                                                                    8
More data mining
1 day stay high                                  MSDRG551/552: Medical
                                                 Back pain
  vulnerabilities:                               PCI, pacemaker, syncope
      MSDRG 829: Other
      endocrine, nutritional,
                                                 Create a report, from 10-07
                                                                       10-
      metabolic OR Proc w/cc                     forward,
                                                 forward for all 1 day stays or zero
      MSDRG373: major                            /short stays.
      gastrointestinal disorder w/o              Sort by physician, by payer (only
      cc/mcc
      cc/mcc                                     pull Medicare if appropriate
      MSDRG313: chest pain                       sample size)
      MSDRG 371: Major                           List all diagnosis & DRG
      gastrointestinal disorder                  Couple with the PEPPER report.
      w/mcc
      w/mcc                                      Look for patterns
                                                 Random auditing of high risk
                                                 areas.
25                                     RAC2009




       More: 3 day SNF qualifying
     Q: 3 day SNF deemed not medically necessary.
     A: If the 3 day qualifying stay is determined to be medically unnecessary,
     then there is no SNF Medicare benefit. A Medicare claims processing
     contractor(FI/MAC) that denies the inpt hospital stay is not precluded from
     also denying the SNF stay. At this time, if a RAC determines that a
     reasonable and necessary 3 day stay did not exist prior to admission to the
     Part
     P t A SNF stay, the RAC will d
                   t   th          ill deny th inpt admission and will i f
                                            the i t d i i       d ill inform th
                                                                             the
     FI/MAC that the subsequent SNF admission should also be denied. The
     FI/MAC will then deny the SNF stay. (Cdr Casey, 2-14-09 reply)
                                                         2-14-
     Weakness:
        “Retroing” orders to ‘admit from the beginning’ – started as OBS, then became
         Retroing”
        Inpt but not for 3 days.
        Critical access hospitals have swing beds billed as SNF. Referring to
        themselves.
        ER doc does not have admitting privileges. How is status determined for
        nursing?
26                                     RAC2009




     Data Mining-Transfers & 3 day
          Mining-
3 day SNF qualifying                         Transfer vs discharge
  stay:                                          Identify list of discharges that
                                                 must be changed to transfer if
     Discharge disposition 61                    the pt is admitting to a SNF or
     or 03                                       home health within 3 days post
     Identify patterns with a                    discharge.
                                                 di h
     focus on:                                   Internal process:
                                                     Inpt bills must hold for 3 days
        Dehydration
                                                     Working with case mgt/UR,
        Gastroenteritis                              identify ‘at risk’ patients upon
        Chest pain                                   discharge
                                                     Either call the pt (or the SNF/HH)
        Fever                                        on the 3rd day, prior to bill drop, to
        Altered mental status                        determine final status.

        Respiratory
27                                     RAC2009




                                                                                              9
High Vulnerability DRGs from
        Demonstration Project

        DRG     MS-DRG          Description
        076     166, 167, 169   Other Resp System OR procedures w/CC
        082     180, 181, 182   Respiratory Neoplasms
        124     286, 287        Circulatory Disorder Except AMI, w/Card Cath &
                                complex dx
        143     313             Chest pain
        148     329, 330,331    Major small & large bowel procedures w/cc
        217     463, 463, 465   Wound debridement & skin grafts
        243     551, 552        Medical back problems
        263     573, 574, 575   Skin graft with debridement
        397     813             Coagulation disorders
        415     853, 854, 855   OR procedure for injection & parasite diseases
        416     870, 871, 782   Septicemia
        468     981, 982, 983   Extensive OR procedure unrelated to principal dx
        475     207, 208        Respiratory System Dx w/ventilator support
        477     987,988, 989    Non-extensive OR procedure unrelated to principal
                                diagnosis




28                              RAC2009




               More at risk areas
     Discharge disposition/DD
      UR /case mgt aware of a discharge status but
      not communicated to the individual
      responsible for inputting discharge
         p              p     g        g
      disposition.
      EX) 250 transfer DRGs that require 3 day post
      discharge monitoring –if pt goes to SNF or HH
      –must revise DD from ‘home’ to ‘transfer’
      Who is the owner of DD, exactly?

29                              RAC2009




              Known ‘at risk’ areas
     Charge master –
      J codes with incorrect multipliers;
      Reimbursement rules not known with charge
      capture; (Ex: 92507/1 unit; Observation –
      routine recovery prior to OBS)
      59 modifier being applied when CPT codes
      reject without the medical record or
      knowledge of the CCI edit failures
      CPT codes mismatched with Revenue Codes
30                              RAC2009




                                                                                    10
And then there was OBS----Broken
                   OBS----Broken
     Billing ‘hrs in a bed’               Outpt service vs OBS
     vs medically                         bed.
     necessary hrs.                       Drug administration
     Routine Recovery    y                handoffs from ER –
     must occur for 4-64-                 too many initial hrs.
     hrs. Then evaluate                   UR is only working
     OBS due to                           M-F, 8 hr days.
     unplanned outcome                    Weekends? After
     or exacerbation of a                 Hrs?
     condition.
                                          Ancillary delays
31                              RAC2009




                 OBS audit ideas
ER to OBS – look for medical necessity as they leave
ER w/action oriented orders
OR to OBS – procedure with 4-6 hrs routine recovery
                              4-
unplanned outcome/excerbation of a condition? place
          outcome/excerbation      condition?=
an obs bed. Look at late case=risk
Direct to OBS – look at active physician orders when
the pt is placed in a bed vs ‘see them I make rounds.”
PS Don’t forget to look for lost charges too

32                              RAC2009




                     Provider Risk
     Partners in reducing risk – Providers
     At risk areas:
       Physicians billing inpt visit with facility billing OBS
       Physician’s documentation inadequate to support ‘severity of
           y                                q             pp     y
       illness’ = inpt
       Physician’s share the same Tax ID # = higher risk to facility.
       (deep pockets)
       Physician’s E&M bell curve
       Physician unclear on dx to support admit as inpt
       Physician unaware of pt status: OBS, Inpt, Outpt in a bed and
                                                   Inpt,
       order accordingly with support documentation to support medical
       necessity in a bed. ….more …… 3 day SNF
33                              RAC2009




                                                                         11
High areas of Focus-Outpt
                        Focus-
     Modifiers – 59 CDM vs                        Outlier outpt claims &/or
     HIM                                          $50,000
     E&M leveling – auditable                     MUE – override issue
     criteria and bell curve analysis             Self adm meds – 637,
     Drug administration start &                  259. (Collecting from pt?)
     stop times
      t ti                                        73/74 discontinued
     E&M in hospital                              surgeries (same day)
     based/provider based                         J dosage multiplier
     clinics – earning an E&M when
     done with a procedure, modifier 25           975xx/wound/facility vs
     36430/blood transfusion &                    11000-
                                                  11000-15000/physicians
     ST/9250x (1 unit)                            only
     Hospital based physicians                    Charge Master/Charge
34                                                capture rules




How will the RACs know what to
             audit?
     Claims history with MAC/FI
     Known vulnerabilities identified by the OIG or GAO
     Patterns identified outside the proprietary software
     of the RAC
     Identified patterns thru other auditing entities,
     FI/MAC, QIO, PEPPER report, CERT
     NOTE: Claims already in review, excluded data
     base. Can review current fiscal year.
     New List of issues compiled by CMS
35                                      RAC2009




             Once the RAC is rolling
      Historical findings will be posted in the
      individual RAC websites
      CMS will have findings on their website
      New i
      N     issues will b posted on th i di id l
                      ill be   t d    the individual
      RAC websites as well as CMS website.
      Accuracy rates will be published for the
      RACs by 2010
      Patterns should be closely evaluated with
36
      corrective action completed internally




                                                                               12
Audience Polling Question #1



     Which of your departments has
       primary responsibility for
        managing RAC audits?

     (please select only one answer)




37




                Powerful Transmittals
       Transmittal 152, June 12, 2009 CR 6384
       Medicare Financial Management Chapter 4, Debt Collection
       Use of the RAC data warehouse for tracking appeals.
       Potential Fraud referrals – to CMS RAC Project Officer who will
       forward to the CMS Division of Benefit Integrity Management
       Operations.
        Dissemination of information between the RAC and MAC




      38                              RAC2009




           More powerful transmittals
       Transmittal 47, Interpretive Guidelines for
       Hospitals June 5, 2009
       “All entries in the medical record must be complete. Defined by:
       sufficient info to identify the pt; support the dx/condition; justify the
                                                       dx/condition;
       care, treatment, and services; document the course and results of
       care, treatment and services and promote continuity of care among
       providers.
       “All entries must be dated, timed and authenticated, in written or
       electronic format, by the person responsible for providing or
       evaluating the service provided.”
       “All entries must be legible. Orders, progress notes, nursing
       notes, or other entries …..
      39                              RAC2009




                                                                                   13
More Transmittal 47
      “Timing establishes when an order was given, when an activity happened or
      when an activity is to take place. Timing and dating establishes a baseline
      for future actions or assessments and establishes a timeline of events. (71
      FR 68687)
      “Where an electronic medical record is used, the hospital must demonstrate
      how it prevents alterations of record entries after they have been
      authenticated.
      “When a practitioner is using a pre-printed order set, the ordering
                                       pre-
      practitioner may be in compliance with the requirement to date, time, and
      authenticate an order is the practitioner accomplishes the following:
          Last page: sign, date, and time the last page of the orders, with the last page
          also identifying the total number of pages. (more)
          A system of ‘auto authentication’ in which a physician authenticates an entry that
          he or she cannot review, e.g. because it has not yet been transcribed, or the
          electronic entry cannot be displayed, not meeting standard. There must be a
          method of determining that the practitioner did, in fact, authenticate the entry….

     40                                   RAC2009




                        RAC Operations




41                                        RAC2009




                Medical Record Limits
                      FY 2009
  Inpt hospital, IRF, SNF,                          Physicians
  Hospice
10% of aver monthly Medicare                     Solo: 10 per 45 days
  claims (max of 200 ) per 45                    2-5: 20 per 45 days
  days
                                                 6-15: 30 per 45 days
  Other Part A billers (outpt
                       (outpt
  hospital, HH)                                  Large grp 16+: 50 per 45
1% of aver monthly Medicare                        days
  services (max of 200) per 45                      Other Part B (DME,
  days
PENDING FINAL: Move from 200
                                                    Lab)
  per NPI # to 200 per TAX ID #                  1% of aver monthly
                                                   Medicare Services per 45
Office of Financial Mgt, 10-08 Update
                         10-                       days.
42                                        RAC2009




                                                                                               14
Summary: Review & Collection Process
1       Automated Review
   New                                   2
Automated
 Review                                          RAC makes a
  Issue                                              claim                         The Collection Process
Posted to                                        determination                     3              4
  RAC’s                                                                                               Day 1
                                                                                      Carrier/
 website                                                                                           RAC issues
                                                                                      FI/MAC
                                                                                                      Demand        5
                                                                                      issues
                                                                                                     Letter to
                                                                                   Remittance                             Day 41
                                                                                                     Provider
                                                                                   Advice (RA)
                                                                                                  (includes $$$         Carrier/FI/
                                                                                    to provider
                                                                                                    and appeal            MAC
                                                       From Cmdr Casey, RN, CMS
                                                                                       N432:           rights)          recoups
                   Complex Review                                10
                                                                                    “Adjustment
                                                                                     Adjustment
                                                                                     based on a
                                                                                                    INTEREST
                                                                                                   BEGINS TO
                                                                                                                        by offset
               7                                                                                                  • Recoupment
6                                            9                                        Recovery       ACCRUE
                                                                                       Audit”        AFTER 30       will NOT
   New             RAC       8               RAC clinician          RAC issues
                                                                                                  DAYS FROM         occur if:
Complex          issues                        reviews           Review Results
                              Provider                                                            DETERMINAT        provider
 Review         Medical                        medical                Letter
                              submits                                                                    ION        has paid in
  Issue          Record                        records;             to provider
                              medical                                                                               full; or
Posted to       Request                                             (does NOT
                              records        makes a claim                                                          provider
 RAC’s            Letter                                          include $$$ or
Website        to provider                   determination        appeal rights)                                    filed an
                                                                                                                    appeal BY
                                                                                                                    day 30
               • Provider has 45 + 10        • RAC has 60
                 calendar days to              calendar days             If no
                 respond                       from receipt of         findings
                                               medical record to        STOP
               • Providers may
                 request an extension          send the Review
     43                                        Results Letter
               • Claim is denied if no
                 response                                         43




                                   RAC Project Plan
     Example of how the RACs must communicate with CMS
       Project plans shall be for the base year with new issues
       being added as they are identified.
       Detailed quarterly projection by ‘vulnerability’ issue (e.g
                                        ‘vulnerability’       (e.g
       excisional debridement) including: a) incorrect procedure
       code and correct procedure code; b) type of review
       (automated, complex, extrapolation); c) type of
       vulnerability (medical necessity, incorrect coding…)
       Provider outreach educational plan to all stakeholders
       RACs will not conduct E&M physician claims nor review
       Hospice or Home Health claims (until 3-08 or later)
                                               3-
     44                                                          RAC2009




               How to conduct a Validation
                        Review
            Immediately pre-audit any request for records or
                          pre-
            Automated recoupment notice. Involve all clinical areas
            impacted; physician if necessary.
            Identify any weaknesses and immediately begin an
            improvement plan
                           plan.
            Involve compliance, create a recorded history of all
            improvement done
            Anticipate at risk from the validation audit.
            Build internal flags on all accts where medical record
            requests occurred.
            Wait to see if any further action. A Review Results letter
            should be sent within 60 calendar days.
          45                                                     RAC2009




                                                                                                                                      15
Inpt vs Outpt Validation
            Inpt:
            Inpt: paid per DRG or per diem/critical
            access. Audit against this payment
            method. Look at outliers as higher
            risk better payment.
            risk=better payment
            Outpt:
            Outpt: paid per line item/APC or a % of
            billed charges/Critical Access
            The validation audit: record against
            itemized against UB = Outpt.
                                    Outpt.

           46                                                 RAC2009




                                  RAC Process (per HDI outreach )
                      Automated                                                                                          RAC makes a
        NO                                                                                                                   claim
                                                                                                                         determination
                       Review




    RAC decides             CMS New Issue Approval Process
  whether medical                New Issues posted to HDI
records are required       provider website once CMS-approved
      to make                  (may request records for new
   determinations         issue process – not posted to web site)



                                                                                                                 RAC issues Review
                                                                                                                   Results Letter
                                                                           RAC has up                                to provider
                  Complex            RAC         Provider has 45
                                                                          to 60 days to       RAC makes              (does NOT
                                  requests          days plus 10
       YES                         medical      calendar days mail
                                                                              review            a claim             communicate
                  Review                                                     medical         determination       improper amount or
                                   records        time to submit.
                                                                             records                                appeal rights
                                                                                                                    including “no
  CMS                                                                                                                 findings”)

Provider
                                                                                                                          If no
  MAC                                                                                                                   findings
                                                                     47                                                  STOP
                                                                                                                                    47
  RAC




                                                                                   Automated Review
                                                                                   Discussion Period




                                   Carrier/FI/MAC
                                                                      Day 1
                                   adjusts & issues
      RAC sends                                               RAC issues Demand                              On Day 41,
                                     Remittance
      claim info to                                           Letter which includes                    Carrier/FI/MAC recoups
     Carrier/FI/MAC
                                   Advice (RA) to
                                                               amount and appeal                               by offset.
                                       provider.
                                           id
                                                                      rights.
                                    Code “N432”




                          Complex Review Discussion Period


  CMS
                                                                                   Provider can pay by check by day 30 or request
Provider                                                                           early recoupment from MAC to avoid interest.

  MAC                                                                              Provider can appeal by day 120. Appeal by day
                                                                     48            30 will hold recoupment although interest is
                                                                                   charged unless outcome is provider favor.    48
  RAC




                                                                                                                                         16
Automated vs Complex
     Automated = Ex) units, discharge
     disposition/transfer DRG, outpt claims = fail the
     ‘reasonableness’ test or other edits= letter
     issued of take back. Medical records can be
     submitted to clarify/15 days or appeal.
     Complex = Ex) medical necessity, 1 day stays,
     obs,
     obs, incorrect coding,3 day qualifying stay,
     correct setting = letter requesting records.
     Determination made upon receipt of records.

49                                RAC2009




                 RAC FAQ #7723
                Automated Review
     Under what circumstances can a RAC make a
     overpayment or underpayment determination
     without a medical record?
     A: RACS may use automated review (where NO medical record is
     involved in the review) ONLY in situations where there is certainty
     that the claim contains an overpayment. Automated reviews must:
     A) Have a clear policy that serves as the basis for the overpayment
     (clear policy mandates a statute, regulation, NCD, coverage
     provision in an interpretive manual, or LCD that specifies the
     circumstances under which a service will ALWAYS be considered
     an overpayment)
     B) Be based on a medically unbelievable service or
     C) Occur when no timely response is received in response to a
     medical record request.
50                                RAC2009




     More on automated requests
     Q: Is there any limit on the # of the
     recoupments that can occur with
     automated recoupments?
                recoupments?
     A: There is no limitation on the number of
     automated recoupments. However, RAC
                recoupments.
     are required to develop processes to
     minimize provider burden to the greatest
     extend possible. (RAC SOW pg 6, Cdr Casey 2-14-
                                               2-14-
     09)
51                                RAC2009




                                                                           17
Automated Recoupments = no
       request for records occurs
     835/remittance must be watched closely
     for N432.
        RAC adjustment code will be used for a)
        overpayments,
        overpayments b) underpayments c) interest
        applied, d) interest paid. No separate codes
        at this time.
        Since no records are requested, the Demand
        Letter will be the first notice of a potential
        recoupment.

52                               RAC2009




       What will the pt impact be?
     If the inpt is denied, the pt (and Medigap supplements)
     will be informed they don’t owe the inpt deductible.
     Refund to pt and/or supplement or auto recoupment.
     If the facility determines they would like to do a corrected
     claim submission once a decision is made not to appeal
     – the pt will receive notice they owe a new outpt
     deductible/coinsurance.
     If the outpt claim is denied payment, the pt will be
     informed they don’t owe the outpt portion.
     HINT: Develop scripts for the PFS staff to explain.
     NOTE –all activity/recoupments can go back 3 years
                   activity/recoupments
     beginning with 10-1-07 PD dates.
                       10-
53                               RAC2009




     Sample letter communication
     Dear pt
     As part of ABC hospital’s commitment to compliance, we are
     continuously auditing to ensure accuracy and adherence to the
     Medicare regulations.
     On (date), Medicare and ABC hospital had a dispute regarding your
     (type of service) Medicare has determined to taken back the
                      ).
     payment and therefore, we will be refunding your payment of $ (or
     indicate if the supplemental insurance will be refunded.)
     If you have any questions, please call our Medicare specialist,
     Susan Jones, at 1 -800-happy hospital. We apologize for any
                          800-
     confusion this may have caused.
     Thank you for allowing ABC hospital to serve your health care
     needs.
54                               RAC2009




                                                                         18
Safety Nets for Pt Impact
      Immediately upon receipt of the
      Automated recoupment Or Complex
      request notice – stop statements within the
      main IT system
               system.
      Ensure there is an unique flag created to
      allow tracking and trending the status of
      any activity within the main IT system.
      This does not preclude a separate system.
 55                                    RAC2009




              Impacted Departments
      Business Office/PFS                        If inpt denial, monitor for
      Create flag for each acct                  medigap supplemental
      impacted by RAC letter                     If inpt denial, monitor and
                                                 execute supplemental refund
      Special Adj codes for interest
      recoupment or payment                      If an outpt denial/OBS, monitor
                                                 for ancillary CPTs that are
      Flag if acct is involved in a
                                                 allowed.
      takeback.
      takeback. Appeal filed?
                                                 Prepare letter to send to pt if
      Create tracking tool for acct to
                                                 denials as there will be an
      watch for take back. Special
                                                 impact to the pt. Defuse!
      adjustment code for tracking
      and trending.                              Prepare scripts for the BO to
                                                 explain EOBs received from
      If inpt denial, rebill part B outpt        Medicare.
      ancillary only. New Co- Co-                Closely coordinate with RAC
56
      insurance due from pt.                     specialist.




              Impacted Departments
      HIM                                        UR
      Requests for medical                       Part of RAC Attack team
      records.                                   Expand UR coverage to
      Ensure FULL record is                      24/7 thru quasi-UR.
                                                             quasi-
      identified /found                          Identify ‘at risk’ d/c that
      Validation audit                           may result in transfer/72
      coordinated prior to                       hrs
      submission                                 Identify 3 day qualifying
      Coordinate w/RAC                           at risk and coordinate
      Specialist to ensure                       ‘skilled’ dialogue
      returned within 45 days                    Continue training lrdship
 57                                    RAC2009




                                                                                   19
Step1:The Request for Records letter used
  on Complex/Medical Necessity Reviews
     Immediately flag the account within the main IT system.
     Stop monthly statements, create an internal flag for
     reports, tracking and trending, pending recoupments.
                                             recoupments.
     Create the 45 day threshold for monitoring
     Pull together th appropriate audit team to pre-audit all
     P ll t    th the          i t    dit t   t pre- dit ll
     requests prior to returning. VALIDATION PROCESS
        Assess potential risk
        Determine go forward plan as well as look back plan
        Determine if additional independent work should be done, rebill a
        corrected billing, conduct internal training to prevent any further
        risk. Cost and impact of any rebills should be known.
        Watch for the Review Results within 60 days of receipt of
58      records.                   RAC2009




Huge Risk with Medical Records
     Why I hate electronic medical records?
     Little tongue in cheek, but common issues
     found when performing audits:
        EMR has the ancillary information but nursing is online in a
        different system.
        Only certain departments are live on the EMR. Others are still
        hardcopy and/or are delayed in implementation.
        Even the EMR departments are still doing hardcopy
        documentation. Being scanned in later?
        HYBIRD record – run for cover!!

     As requests are received, ensure the ENTIRE medical record is
59
       pre-
       pre-audited prior to submission with action items identified.




      More on medical record risk
     Hybird record = part of the pt history is electronic, part is
     on paper.
     Did every department go live with the EMR on the same
     day?
     Risk with lost revenue as well as documentation
                                        documentation.
     Handoffs become a problem – drug administration,
     recovery, ER to another pt status.
     Electronic Audit Sample Nightmare-multiple systems.
                               Nightmare-
        Ibex (ER System only)
        Quadramed CPR (once they are moved from ER to a floor)
        Siemens Imaging system (for those records that are still
        handwritten and not documented in a system)
60                                RAC2009




                                                                              20
Step 2: Results of Review Letter
      Letter is received that indicates the results
      of all requests for records.
      Letter does not indicate amt of
      recoupment – just the results and the
      expectation of the demand letter.
      Demand letter is from CMS that funds are
      due.
      There is a 15-41 day rebuttal period to
                  15-
      ‘chat’ with the RAC…
 61                           RAC2009




                           BUT…
      The 15-41 days are included in the 30
            15-
      days to file the 1st level of appeal or
      recoupment will occur on the 41st day.
      (N432)
      Expected determinations:
      Medical unnecessary service= excessive
                               service=
      units = 2 36430/blood transfusion. Can
      only have 1 per day
      Medically unnecessary setting = had as an
62
      inpt,
      inpt, should have been an outpt.
                                    outpt.




             Update on N432-RAC
                       N432-
                 adjustment
      Queried Cdr Casey if there were different codes to
      separate different activity that could be represented by N
      432:
        Under payment
        Over payment
        Interest accrued
        Interest paid
       Reply: There is one code for both underpayments and
        overpayments. (? Interest) 2-14-09
                                       2-14-
       PS: N102 or 56900 is used to recoup when no records
        were sent. (SOW pg 20)   20)
 63                           RAC2009




                                                                   21
What to do if the inpt is denied?
        RAC FAQ #9462
11-
11-6-08 communication with Commander Casey, RN-CMS      RN-
Q: If the inpt stay is denied, can the facility bill the outpt
  ancillary services as an outpt claim?
A: Providers can rebill the claims as an outpt as long as
  timely filing requirement are still met The timely filing
                                      met.
  requirements were waived during the demonstration
  program. However, CMS has no authority to waive the
  timely filing requirements in the national program.
                                               program.
Timely filing: Transmittal 1818, 8-29-2003
                                  8-29-
New claims: Services dated Jan thru Sept = Dec 31st of the following
     claims:
      calendar year. Services dated Oct –Dec = Dec 31st two years later.

     64                              RAC2009




                    RAC FAQ # 9462
                      Inpt Denial
      If I receive a demand letter from RAC because an inpt
      did not meet inpt criteria, can I rebill all the services as
      an outpt?
          outpt?
      Providers can re-bill for inpt Part B services, also known
                      re-
      as ancillary services but only for the services on the list
                   services,
      in the benefit policy manual. That list can be found in Ch
      6, Section 10:
      www.cms.hhs.gov/manuals/downloads/bp12c06.pdf. Re-
      www.cms.hhs.gov/manuals/downloads/bp12c06.pdf. Re-
      billing for any service will only be allowed if all claim processing
      rules and claim timeliness rules are met. There are no exceptions to
      the rules in the national program. The time limit for re-billing is 15-
                                                                re-        15-
      27 months from the date of service. Timely can be found in Claims’
      Processing Manual, Chapter 1, Section 70.
     65                              RAC2009




          Can the False Claims Act
                   Apply?
      If the RACs find ‘reckless disregard for the
      law’, referrals can be made to the
      appropriate agency –starting with the FI.
      The FI can investigate further and refer for
      further investigation.
      And the story continues.
      NO HEAD IN THE SAND!!

66                                   RAC2009




                                                                                 22
Audience Polling Question #2



         What are your greatest
        challenges to managing
              RAC Audits?

      (please check all that apply)




67




68                                    RAC2009




       CMS Claim’s Review Entities
      Roles of Various Medicare Improper Payment Reviews
        Timothy Hill, CFO , Dir of Office on Financial Mgt
                                9-9-08 presentation
Entity          Type of         How selected Volume of                            Purpose of
                claims                       claims                               review
QIO             Inpt hospital   All claims where         Very small               To prevent improper
                                hospital submits an                               payment thru
                                adj claim for a higher                            upcoding.
                                DRG.                                              To resolve disputes
                                Expedited coverage                                between bene and
                                review requested by                               hospital
                                bene
CERT            All             Randomly                 Small                    To measure improper
                                                                                  payments
MAC             All             Targeted                 Depends on # of          To prevent future
                                                         claims with improper     improper payments
                                                         payments
RAC             All             Targeted                 Depends on the # of      To detect and correct
                                                         claims with improper     past improper
                                                         payments                 payments
PSC             All             Targeted                 Depends on the # of      To identify potential
                                                         potential fraud claims   fraud
OIG             All             Targeted                 Depends on the # of      To identify Fraud
                                                         potential fraud claims
69                                    RAC2009




                                                                                                          23
RAC FAQs
Q: Will the Recovery Audit Contractors
 (RAC) appeal process mirror the regular
 Medicare appeal process?
A: The Medicare appeals process will remain th same f
A Th M di                l             ill      i the   for
  physicians under Part B and Part A non-inpatient
                                           non-
  claims. The only difference under Part A is for the
  inpatient hospital claims under the Prospective Payment
  System (PPS). In the current appeals process, the first
  level appeal will go to the Quality Improvement
  Organization (QIO); however, the RAC appeals will go
  to the Fiscal Intermediary that processed the claim.
 70                            RAC2009




          Who are the Original Medicare
  Qualified Independent Contractors/QIC?
  Part A East: Maximus, Inc
               Maximus,
  Part A West: Maximus, Inc (as of 12-08)
               Maximus,             12-
  Part B North: First Coast Services, Inc
  Part B South: Q2 Administrators, LLC
  DME: Rivertrust Solutions, Inc

Source: www.cms.hhs.gov/OrgMedFFSAppeals

 71                            RAC2009




        New Appeal Transmittal
  Transmittal 1762, CR 6377 July 2, 2009
  www.cms.hhs.gov/transmittals/downloads/R1762CP.pdf
  Glossary of terms
  All appeals are on behalf of the beneficiary. “A provider or supplier
  may represent that beneficiary on the beneficiary s behalf No fee
                                           beneficiary’s behalf.  fee.
  CMS can assign liability to the pt if they ‘should have known’ non-
                                                                 non-
  coverage. Uncommon…
  “When an appellant requests a reconsideration with a QIC (level 2),
  the contractor (MAC/FI) must prepare and forward the case file to
  the QIC. “
  Letter format for appeals
  Elements of each level of appeal

 72                            RAC2009




                                                                          24
Now you have the RAC letter..
     Review results of the initial validation review.
     Involve physician if necessary to assist in developing an
     appeal strategy.
     If no appeal is appropriate, flag the account for
     recoupment and monitor
                       monitor.
     Prepare a letter to send to the pt; watch for Medigap
     recoupment &/or refunds
     Determine rebilling potential for lesser services.
     Determine the value of using the informal 15-41 day
                                                   15-
     rebuttal.

    73                                     RAC2009




         Timeline for Appeal Process
Type of appeal       Provider timeline Determination by Decision
                     within…                            Timeline within.
Redetermination      120 days from initial   FI, Carrier or MAC   60 days of receipt
                     determination
Reconsideration      180 days from the       QIC                  60 days of receipt
                     redetermination
Hearing by the ALJ
      g y            60 days from the
                           y                 ALJ                  90 days of receipt
                                                                       y          p
                     QIC’s
                     reconsideration;
                     Balance at least
                     $120
Board of Medicare    60 days from the        Board of appeals     90 days of receipt
Appeals Council      ALJ’s decision
Judicial Review in   60 days from the        US Court             Normal legal/court
US district court    Council’s decision;                          process
                     at least $1180

    74                                     RAC2009




                     Transmittal 141, CR 6183
     Section 935/Medicare Modernization Act, 2003
                     “Limitation on Recoupment”
     Overpayments that are subject to
     limitations on recoupment – appeals will
     suspend the recoupment.
           Post-p y
           Post-pay denials of claim under Part A and Part B
           MSP duplicate payment
           Both have demand letters

         Medicare will resume overpayment recoveries WITH INTEREST if
           the Medicare overpayment decision is upheld in the appeals
           process.
         www.cms.hhs.gov/transmittals/downloads/R141FM.pdf. MN 6183
         www.cms.hhs.gov/transmittals/downloads/R141FM.pdf.
           is also available at this website. 9-12-08
                                              9-12-
    75                                     RAC2009




                                                                                       25
Understanding ‘interest’
                            ‘interest’
              NEW Transmittal 141, CR 6183, 9-12-08
                                            9-12-
                “Limitation on Recoupment (935) “
      If the facility decides to appeal a RAC
      determination-
      determination-understand the process:
             If an appeal is filed within 30 days, the MAC/FI will not take back the funds.
             (Take back is immediate and will occur within 41 days of notice if no appeal.)
             However, while the facility is going thru the numerous Medicare steps of appeal,
                       ,                 y g g                                     p      pp ,
             interest will accrue on the amount that is being disputed.
             If the overpayment dispute is overturned at any level of the appeal process, the
             interest will be removed.
             If the overpayment dispute is not overturned, then the interest is left on the
             account.
             The overpayment take back will include the interest.

          There is an incentive to only appeal the determinations where there is a good
             reason to believe it will be overturned. “Punished’ for appealing all.
          (www.cms.hhs.gov/transmittals/downloads/R141FM.pdf)
     76                                      RAC2009




When Can Recoupments Occur
Options:
Options:                                               If level 2/reconsideration
      If no formal        (1st
                         level)                        is upheld, recoupment will
      appeal is filed within 30                        occur prior to ALJ
      days of the recoupment                           decision.
      notice,
      notice the recoupment                            If a date for appeal is
      will occur on the 41st day.                      missed, recoupment
      1st level = 120 days to                          process begins.
      file. But if not done in 30                      Interest will either be
      days, eligible for                               charged against or added
      recoupment.                                      to the acct – depending..
                                                       See table

77                                           RAC2009




              Impact of Transmittal 141
Without filing an appeal                          With a timely appeal
1) Recoupment in 41 days                          1) Timely = 120 days/redetermination
                                                  Recoupment will occur on the 41st day,
                                                  but the appeal can still be filed
                                                  2) Timely = 30 days/redetermination
                                                  from de a d letter will stop t e
                                                    o demand ette              the
                                                  recoupment from occurring on the 41st
                                                  day
                                                  3) Timely for level 2 = 180 days
                                                  4) Timely for level 2 to stop
                                                     recoupment = 60 days from level
                                                     1/redetermination letter




     78                                      RAC2009




                                                                                                 26
79   RAC2009




80   RAC2009




81   RAC2009




               27
What about that Interest?
             Penalty-
             Penalty-If an appeal                                                                    Recoupment occurs
             is filed to stop the                                                                    but money is returned
             recoupment, interest                                                                    after additional levels
             accrues every 30                                                                        of appeal are
             days until                                                                              completed.
             recoupment. If                                                                          Interest is paid to the
             overturned, no                                                                          provider if
             penalty will be                                                                         recoupment is
             assessed.                                                                               overturned. Each 30
             Average rate 11.00%                                                                     day period. (CR 6183)
       82                                                                       RAC2009




RAC Review Process
TIMELINE
                                                                              SEND RAC APPEAL LETTER VIA
                                                                              CERTIFIED, REGISTERED PRIORITY MAIL
                                                                              (3 BUSINESS DAY RECEIPT)
 RAC PROCESS BEGINS AT FACILITY                                                                                                RAC ANSWER DUE BACK
                                                                                                Get in Mail by Jan 30th
  Receive RAC Letter - Jan 4th                                 FIRST DRAFT                                                     TO FACILITY
                             Request Medical Record            RAC                                                              Apr 4-10th
                             chart copy
                                         Receive Copied Chart
                                         from Medical Records



                                                        W/E                         W/E                     W/E      W/E     W/E    MONTH W/E W/E    W/E
          W/E                                           Jan       W/E      W/E      Jan     W/E     W/E     Feb      Feb     Feb    OF    APR APR    APR
          Dec 28th        Jan 4th   Jan 7th     Jan 8th 11th      Jan 14th Jan 21st 28th    Feb 1st Feb 8th 15th     21st    28th   MARCH 4th 11th   18th



                                                                                                                           RAC APPEAL DUE            RAC APPEAL LETTER
                                                                RAC NOTIFICATION DUE 15 DAYS                               WITH IN 45 DAYS           ANSWER DUE BACK
            RAC LETTER SENT OUT                                                                                                                      TO FACILITY
                                                                FROM LETTER DATE
                                                                                                                   Feb 10th is RAC due date
           Letter dated December 27th                           Jan 11th - Fax RAC Notification                    (45 days from Letter Date)    Apr 4-10th - 60 days from
           Appeal due within 45 days                                      letter of Appeal                                                       "Appeal received by RAC"

                                              Begin Chart Coding & Medical Necessity
                                              Review;                                                         RAC REVIEWS APPEAL LETTER
                                                                                                              AND SUPPORTING DOCUMENTS
                                              Input From Utilization Nursing, Nurse Auditors,
                                              Medical Records, HIM


       83                                                                       RAC2009




                     Timeframe for Medicare Recoupment
                      Process after the first demand letter
                          Transmittal 141, CR 6183
      Timeframe                                                Medicare Contractor                                    Provider
      Day 1                                                    Date of demand letter (date                                Provider receives notification by
                                                               demand letter mailed)                                      first class mail of overpayment
                                                                                                                          determination
      Day 1-15-41                                              Day 15 deadline for rebuttal                               Provider must submit a
                                                               request. (w/RAC) No                                        statement within 15 days from
                                                               recoupment occurs                                          the date of the demand letter
      Day 1-40                                                 No recoupment occurs                                       Provider can appeal and
                                                                                                                          potentially limit recoupment from
                                                                                                                          occurring
      Day 41                                                   Recoupment begins                                          Provider can appeal and
                                                                                                                          potentially stop recoupment.




            84                                                                  RAC2009




                                                                                                                                                                             28
Redetermination
        Documentation Process
Send ALL medical records for Redetermination level of appeal

Entire medical record reviewed

Medicare Redetermination Notice (MRN)
Summary of the Facts:
- Specific claim information

Explanation of the Decision:
- Most important element of the MRN
- Provides the logic for CMS-FI decision.
                         CMS-

What to Include in your Request for an Independent Appeal:
CMS-
CMS-FI provides a list of documentation needed to make a decision
  for next level of Appeal.
 85                              RAC2009




        RAC Appeal Guidelines

May use CMS-20027 (Redetermination
         CMS-
 Request Form) or
Send letter on provider letterhead

Also include
  ~ RAC determination letter
  ~ Detail page specific to claim
  ~ Any additional supporting information
Send to FI
 86                              RAC2009




           3 Potential Outcomes with
               Redeterminations
  Full reversal of the overpayment decision.(If
  the recoupment had already occurred, verify no other
  outstanding debt, then repay.)
  Partial reversal = the debt is reduced below
  th initial stated amt. FI/MAC will recalculate the
  the i iti l t t d    t           ill   l l t th
  correct amt. Letter will indicate same. Recoupment of
  remaining debt may start no earlier than 61 days from
  the date of the revised overpayment determination.
  Full Affirmation of the Overpayment decision.
  CMS will issue 2nd or 3rd demand letter which will state
  begin recoupment on 61st day unless QIC notice of
  reconsideration appeal filed.
 87                              RAC2009




                                                                    29
2007 History of
               Redeterminations
      186 M claims                   Redeterminations
      furnished by                   Dispositions:
      hospitals, SNF, HH             Part A: 45%
      and other providers.           unfavorable, 5%
      14.5 M were denied             partial, 50% favorable
      FI/MAC did appx                Part B: 37%
      240,000 Part A                 unfavorable, 3%
      redeterminations=              partial, 60%
      1.7% of these denials          favorable.
      resulted in an appeal.         Not all were RAC/Unable to
                                     discern.
88                         RAC2009




     89                    RAC2009




     90                    RAC2009




                                                                  30
91                               RAC2009




  92                               RAC2009




       Next steps for Recoupment
                Process

Timeframe                 Medicare Contractor     Provider
Day 60 following revised Date reconsideration     Provider must pay
notice of overpayment     request is stamped in   overpayment or must
following redetermination Mailroom or payment
                          Mailroom,               have submitted request
                          received from the       for 2nd level of appeal to
                          revised overpayment     stop the recoupment
                          notice
Day 61-75                 Recoupment could begin Provider appeals or pays
                          on the 61st day
Day 76                    Recoupment begins or    Provider can still appeal.
                          resumes                 Recoupment stops on
                                                  date of receipt of appeal.

  93                               RAC2009




                                                                               31
How to file a Reconsideration
                  Level 2
      Written appeal request             If the form is not used,
      sent to QIC within 180             a written request must
      days of receipt of the
                                         contain all the following:
      redetermination. (To stop
                                         Bene name
      recoupment=60 days)
                                         Bene’s HIC #
                                         Bene s
      Follow instructions on             Specific service & items for which the
      Medicare                           reconsideration is requested and
      Redetermination Notice             specific dates of service
                                         Name and signature of party
      (MRN)
                                         Name of the contractor that made the
      Use standard form CMS-
                          CMS-           redetermination
      20033.                             Clearly state why you disagree with
                                         reconsideration determination.
      Form is mailed with the
94
      MRN.                    RAC2009




          3 Potential Outcomes with
              Reconsiderations
      Full reversal – same as redeterminations
      Partial reversal – this reduces the
      overpayment. QIC issue a revised demand letter
      or make appropriate p y
                 pp p       payments if due of an
      underpayment amt. Recoupment will begin on
      the 30th day from the date of the notice of the
      revised payment.
      Affirmation – recoupment may resume on the
      30th calendar after the date of the notice of the
      reconsideration.
     95                        RAC2009




      2007 Reconsideration History
      QIC (Qualified                     Reconsideration
      Independent                        Dispositions:
      Contractors)                       Part A: 79%
      processed appox                    unfavorable, 3%
      400,000 appeals in                 partial, 18%
      2007.                              favorable.
      DME is separate.                   Part B: 64%
      Not all were                       unfavorable, 5%
      RAC/unable to                      partial, 31%
      discern.                           favorable.
96                             RAC2009




                                                                                  32
And then there was
     ALJ/Administrative Law Judge
      Medicare contractors can initiate (or resume)
      recoupment immediately upon receipt of the QIC’s
      decision or dismissal notice regardless of subsequent
      appeal to the ALJ (3rd level of appeal) and all further
        pp
      appeals.
      If the ALJ level process reverses the Medicare
      overpayment determination, Medicare will refund both
      principal and interest collected + pay interest on any
      recouped funds that may kept from ongoing Medicare
      payments.
      If other outstanding debts, interest is applied against
      those first before payment to the provider is made.
      Can add up same issue items and fill jointly.
97




             Contingency Fee Rules
      RAC must payback the contingency fee if
      the claim was overturned at…

          Demonstration RAC                      first level of appeal
                                                                 pp
          Permanent RAC                          any level of appeal




     98                                RAC2009




               RAC ATTACK Rollout
      Create tracking and trending tool.
      Track all requests – look for patterns as to why
      the request was sent.
      Track all recoupments with reasons. Implement
      physician & nursing documentation training;
      CDM changes; Dept head ed on charge
      capture/billable services; coding ed,ed,
      continued inhouse defense auditing.
      Determine best practices for TNT..
      Develop corrective action w/immediate
      implementation. This is not optional!
     99                                RAC2009




                                                                         33
Tools for Success
       Look at a tracking tool
       Continue to learn from other states as the roll
       out to 2010 is completed.
       Watch for ongoing education from CMS
       Look for trends identified from auditing and data
       mining.
       Internally audit, train – audit, train some more
       Explore creation of a RAC Specialist-the most
                                    Specialist-
       detailed person in the revenue cycle!

 100                             RAC2009




 Audience Polling Question #3



      Please describe your current
         state of preparation for
         managing RAC Audits.

  (please select only one answer)




101




 102                             RAC2008




                                                           34
First Level of Appeal
WHAT:         Redetermination
WHO:          Carried out by the FI
USING:        Form CMS 20027
HOW:          Send request to MAC/FI
TIME:         120 days from initial decision
                     y

~ No minimum amount in controversy

RESULTS: Review must be completed in 60 days

MAIL TO:
Attention: Part A Appeals
Check with your FI for correct address
 103                        RAC2009




       Second Level of Appeal
WHAT:     Reconsideration
WHO:      Carried out by the QIC/qualified indpt
          contractor
USING:    Form CMS 20033
HOW:      Request sent to QIC
TIME:     180 days from the date of
          Redetermination decision
~ No minimum amount in controversy
RESULTS:
Review must be completed in 60 days
 104                        RAC2009




           Third Level of Appeal
WHO:      Administrative Law Judge (ALJ)
HOW:      File with the entity specified in QIC’s
     reconsideration notice
          (HHS OMHA field office)
TIME:     60 days from the date of QIC’s
     reconsideration notice

~ Amount in controversy must be at least $120 as of
  January 1, 2006
RESULTS: Review must be completed in 90 days
 105                        RAC2009




                                                      35
Fourth Level of Appeal
WHO:        Medicare Appeals Council
            (Also referred to as Departmental
            Appeals Board)
HOW:        Carried out by an independent
            agency within DHHS
                     i hi
TIME:       60 days from ALJ decision

~ Amount in controversy – carried in from ALJ

RESULTS: 90 days to complete review
106                   RAC2009




      Fourth Level of Appeal
      Medicare Appeals Council Address:

Departmental Appeals Board, MS 6127
330 Independence Avenue SW
                 Avenue,
Cohen Building, Room G‐644
                     G‐
Washington, DC 20201



107                   RAC2009




          Fifth Level of Appeal
WHAT:       Federal Court Review
WHO:        Carried out by The Federal District
                  Court
TIME:       60 days from the Medicare Appeals
                  Council decision
INCLUDE: ~ Amount in controversy - $1180
              (effective 01/01/06)
         ~ Date of request


108                   RAC2009




                                                  36
Fifth Level of Appeal
         Federal Court Review Address:

         Department of Health and Human Services
         General Counsel
         200 Independence Avenue, SW
         Washington, DC 20201


   109                                            RAC2009




References
Revisions to appeals process
– CR 3530 –MM 3530
– CR 3939 –MM 3939
– CR 3970 –MM 3970
– CR 4147 –MM 4147
                                     •
Requirements – PUB 100‐04, Chapter 29, Sections 310.1
and 310.1
Information on appeals process
http://www.empiremedicare.com/PartA/parta_appeals.htm

Documentation requirements
– MNU 2006‐01, January 2006
   110                                            RAC2009




References: Appeals information
Appeals: Administration Law Judge;
Departmental Appeals Board; U.S. District
Court Review
Changes to chapter 29 – Appeals of claims
decisions –revised
Appeals of RAC decisions
– MNU 2006‐02
Appeals of ALJ, Departmental Appeals Board,
and U.S. District Court Review
– CR 4152       Slide Material Culled from:  1) 06/2007 Medicare Appeals Process  Provider Outreach & Education    
   111                                                                    2) CMS 03/07/2006_Appeals_Session_Materials
                                                  RAC2009




                                                                                                                        37
RAC References

For Concerns about the RAC Demonstration
  Program:
Contact the RAC Project Officer at CMS
  RecoveryAuditDemo@cms.hhs.gov
Or on the web at
  http://www.cms.hhs.gov/RAC/

Frequently asked questions - RAC




 112                        RAC2009




        AR Systems’ Contact Info

Day Egusquiza, President
AR Systems, Inc
Box 2521
Twin Falls, Id 83303
208 423 9036
daylee1@mindspring.com


Thanks for joining us!


 113                        RAC2009




 Audience Polling Question #4




    Would you like to learn how
  Compliance 360 can help you take
      control of RAC audits?
          t l f          dit ?




 114




                                           38
Additional Web Events

 • Preparing for MIC Audits: An Operational Guide
        – Thursday, Aug 13
        – 2:00 – 3:00pm EDT



 • WEB DEMO:
   Compliance 360 Claims Auditor for RAC Audits
        – Tuesday, Sept 1
        – 2:00 – 3:00pm EDT


115




The 360°approach to compliance and risk management




RAC Attack:
An Operational Guide to Successful Appeals




 Proprietary and Confidential - © 2009 Compliance 360 – All Rights Reserved




                                                                              39

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RAC Appeals Webinar for healthcare execs

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