FY 2011:The MACs, RACs, Rules, and Tools

1. FY 2011:The MACs, RACs, Rules, and Tools

2. Disclaimer • Audits from federal and states are changing daily. • Consult your RAC Issues site for more information. This is changing daily. • Every practice needs to be responsible for internal compliance.

3. Agenda This presentation will focus on a variety of audits planned (and anticipated) for FY 2011 and beyond. • How We Got Here • OIG FY 2011 Work Plan • The RAC • The MIC • Others • Minimizing Your Risk

4. Disclaimer 2 • If this presentation does not make you totally paranoid, you either are doing something very wrong or very right!!!

5. Fraud Waste & Abuse Defined Fraud: an intentional act of deception, misrepresentation, or concealment in order to gain something of value. Waste: over-utilization of services (not caused by criminally negligent actions) and the misuse of resources. Abuse: excessive or improper use of services or actions that are inconsistent with acceptable business or medical practice. Refers to incidents that, although not fraudulent, may directly or indirectly cause financial loss. Examples include: Charging in excess for services or supplies. Providing medically unnecessary services. Billing for items or services that should not be paid for by Medicare. Billing for services that were never rendered. Billing for services at a higher rate than is actually justified. Misrepresenting services resulting in unnecessary cost to the Medicare program, improper payments to providers, or overpayments.

6. The Big Picture Timothy Hill, Chief Financial Officer and Director Office of Financial Management CMS September 9, 2008 RAC Presentation: http://www.gha.org/Regulatory/Sept9Update.pdf

7. The OIG FY 2011 Work Plan • Released October 1, the Plan describes the OIG’s new and ongoing projects. It is often used by providers to develop compliance activities. • The Plan includes new priorities relating to the American Recovery and Reinvestment Act of 2009. • The Obama administration has previously indicated that funding for health care reform will come, in part, from recoveries of alleged Medicare and Medicaid overpayments. So, enforcement is going to be more vigorous! http://oig.hhs.gov/publications/docs/workplan/2011/Work_Plan_FY_2011.pdf

8. OIG Mission Protect US Department of Health and Human Services (HHS) program integrity and beneficiary wellbeing by: - detecting and preventing waste, fraud and abuse - identifying to Congress, HHS and the public opportunities to improve program economy, efficiency and effectiveness - holding accountable those who violate Medicare requirements

9. Work Activities OIG mission accomplished by: - conducting audits, investigations and inspections - providing industry guidance - imposing civil monetary penalties, assessments and sanctions - work with DOJ

10. OIG Components OIG components: Office of Audit Services (OAS) - performs independent assessments of HHS programs and operations Office of Investigations (OI) - conducts investigations of fraud and misconduct Office of Evaluation & Inspections (OEI) - conducts national evaluations to provide HHS and Congress w/information and recommendations to improve program Office of Counsel to the Inspector General (OCIG) - provides general legal services to OIG, represents OIG in fraud and abuse cases, negotiates and monitors corporate integrity agreements, renders advisory opinions, publishes fraud alerts

11. OIG Workplan Workplan identifies and prioritizes OIG’s projects for future implementation - identifies risk areas OIG will study, audit and/or investigate 2011: Looks at many of the projects in the Patient Protection and Accountable Care Act (PPACA)

12. Physicians: Place Of Service Errors Background: Medicare pays physicians a higher amount when a service is performed in a non-facility setting, than when it is performed in a hospital or ASC Review: whether physicians properly coded the places of service on claims for services provided in ASCs and hospital outpatient departments (OAS work in progress, FY 2011)

13. Physicians: Evaluation And Management Services (E/M) Review: Do E/M codes represent the type, setting and complexity of services provided, and patient status (new or established) Trends in coding for E/M services (MACs have noted increased frequency of medical records w/identical documentation across services)> “Boilerplate” Multiple E/M services for same providers and/or patients to identify EHR documentation practices

14. Physicians: Medicare Payments For Imaging Services Background: Medicare fee schedule covers physician cost component, malpractice costs and practice expense (includes equipment utilization rate) Review: whether Medicare payments reflect expenses incurred (focus on practice expense component and equipment utilization rate) (OAS, new start, FY 2011)

15. All Providers: Excluded Providers Background: no payment made be made for items or services furnished, ordered or prescribed by an excluded individual or entity Review: were Medicare payments made for services ordered or referred by excluded providers OEI, new start, FY 2012

16. All: “Error Prone” Providers Background: CMS’ Comprehensive Error Rate Testing (CERT) program identified providers that consistently submit claims w/errors Review: select top error-prone providers based on dollar error amounts and match against National Claims History file to determine dollar amounts paid, then conduct a medical review on a sample of claims, project results to population and request refunds OAS new start FY 2011

17. Medicare Incentive Payments For Electronic Health Records Background: ARRA authorizes Medicare incentive payments over 5 years to providers that demonstrate meaningful use of certified EHR technology (scheduled to begin 2011-2016, w/reductions in 2015 for providers who fail to become meaningful users) Review: of Medicare incentive payments from 2011 to identify payments to providers who should not have received payment

18. Information Data Privacy Review: Have Medicare and Medicaid providers implemented privacy standards of HIPAA as strengthened by HITECH Adequacy of OCR’s oversight of HIPAA privacy rule OEI work in progress FY 2012

19. Medicare Billings With Modifier GY Background: Modifier GY is to be used to code services not covered under Medicare, and patients are responsible - but providers are not required to provide patients with advance notice of charges for services excluded from Medicare by statute Review: whether providers have appropriately used modifier GY on claims for services not covered by Medicare (OEI work in progress)

20. Medicare Part D Prescription Drug Program Review: • Duplicate drug claims to hospice patients • Duplicate payment when patients change plans • Part A and B claims included with Part D claims • Out of pocket costs • Administrative costs included in bid submissions • Audits of pharmacies • Internal controls for fraud, waste and abuse • P&T Committee Conflicts of Interest

21. RACs What Are They Up To?

22. What is a RAC?RAC Program Mission The RACs will detect and correct past improper payments so that CMS and the Carriers/FIs/MACs can implement actions that will preventfuture improper payments Providers can avoid submitting claims that don’t comply with Medicare rules CMS can lower its error rate Taxpayers and future Medicare beneficiaries are protected 22 2

23. RAC Legislation Tax Relief and Healthcare Act of 2006, Section 302: requires a permanent and nationwide RAC program by no later than 2010 gave CMS the authority to pay RACs on a contingency fee basis 23

24. Demonstration Results RACs collected $980 million dollars, March 2005 – March 2008 Overpayments Collected by Provider Type Overpayments Collected by Error Type Outpatient Hosp/IRF/SNF Physician/Ambulance/ Lab/Other No/Insufficient Documentation DME Other 14% 1% 8% 17% 1.5% Inpatient Hospital Medically Unnecessary Incorrectly Coded 84% 35% 40% CMS has not updated the figure of $980 million to reflect successful appeals through 6/30/08 SOURCE: RAC Data Warehouse

25. Source of Majority of Overpayments in the Project • Inpatient Hospitals—84% of overpayments collected • Why? • Certain claims such as physician visits excluded from demonstration project • RACs target high dollar improper payments to maximize contingency fees

26. RAC Jurisdictions A D B March 1, 2009 C 26 3

27. Differences Between Demonstration and Permanent RACs

28. Know your enemy(oops, I meant RAC) • From Connolly’s website: • “Connolly is now the healthcare industry's largest data mining recovery audit firm, reviewing over $120 billion in paid medical claims annually.” • All RACs are paid on a contingency basis • In FY 2007, payments for contingency fees and other administrative expenses totaled $77.7 million • Good news: Connolly’s contingency only 9% (lowest of all national RACs)—others are 12%

29. RAC Review Process • RACs review claims on a post payment basis • RACs use the same Medicare policies as FIs, Carriers and MACs • NCDs, LCDs & CMS manuals • Two types of review: • Automated (no medical record needed) • Complex (medical record required) • RACs will NOT be able to review claims paid prior to October 1, 2007 • RACs will be able to look back three years from the date the claim was paid • RACs are required to employ a staff consisting of nurses, therapists, certified coders & a physician CMD 29 5

30. RAC Program’s Three Keys to Success Minimize Provider Burden Ensure Accuracy Maximize Transparency 30 6

31. Minimize Provider Burden Limit the RAC “look-back period” to three years Maximum look back date is October 7, 2007 RACs will accept imaged medical records on CD/DVD Limit the number of medical record requests (based on previous year Medicare volume)—We’ll talk about this in a minute… 31 7

32. Ensure Accuracy Each RAC employs: A physician medical director Certified coders CMS’ New Issue Review Board provides greater oversight RAC Validation Contractor provides annual accuracy scores for each RAC If a RAC loses at any level of appeal, the RAC must return the contingency fee 32 8

33. Maximize Transparency New issues are posted to the web Major Findings are posted to the web RAC claim status web interface Detailed Review Results Letter following all Complex Reviews 33 9

34. Contact InformationRAC@cms.hhs.govCMS Websitewww.cms.hhs.gov/RAC 34 11

35. Automated Reviews (Part B 2010) • RAC makes a claim determination at the system level without human review of the medical record • Coverage / coding determination made through automated review when the following applies: • Certainty the service is not covered or is incorrectly coded, AND • Written Medicare policy • Medicare article • or Medicare sanctioned coding guidelines exist • CPT Statements • CPT Assistant Statements • Coding Clinic Statements • Other determinations made through automated reviews • Duplicate Claims • Pricing mistakes • Units • Discharge Disposition / Transfer DRG

36. Complex Reviews • Reviews requiring human review of the medical record • Where there is a high probability that the service is not covered • Copies of medical records will be needed to support overpayment • Use of proprietary data scrubber identifying cases with highest probability of DRG changes • Medical Necessity 1 Day Stays OBS Incorrect coding 3 day qualifying stay

37. Record Reviews Starting 2/14/2011

38. RAC Updates Through COA • Go to CAN web site http://communityoncology.info • Select your RAC Region • Then, you can click on your RAC Issues by STATE

39. Oncology Specific: Region A (Check Individual States) • DCS • Multiple DME Rentals • CSW Services During Inpatient • Pharmacy Supply dispensing Fee: Orals • Date of Death vs. DME • -TC During Inpatient • IV Hydration Units • TC/PC Issues • Claims overpaid for add-on codes when the required primary procedure is not billed on any claim (same or different) for the same date of service. • DCS • Transfusions • Neulasta • Once In A Lifetime • New vs Established patients • Duplicate Claims • CCI Edits • Add-on Codes With No Qualifying • Place of service codes • Identification of overpayments associated with providers billing 'initial' intravenous infusion (90765 and 96365), and subcutaneous infusion (90769 and 96369) with more than 1 unit per day

40. Oncology Specific Region B • Blood Transfusions • Hydration • Neulasta • Once In A Lifetime • Add-on codes without the primary procedure

41. RAC Issues—Region C • Part B Offices • Dose versus billed • Fulvestrant • Palonosetron • Filgrastim 480 mcg • Dolasetron • Rituximab • Leuprolide • Paclitaxel • Cetuximab • Abraxane

42. RAC Issues—Region C • Hospital Outpatient • Units Billed versus Dose • Tenecteplase • Pamidronate sodium • Adenosine • Zoledronic Acid • Irinotecan • Docetaxel • Carboplatin • Bevacizumab • Darbepoetin

43. RAC Issues-Region C • Both Settings • CSW During Hospital Stay • Admit Order for Admission • Blood Transfusions • IV Hydration • Pegfilgrastim Units of Service • Billing the pharmacy supplier fee in error • Duplicate claims

44. Region D Oncology Specific Issues • Place of Service • Once In A Lifetime • Transfusion • Pegfilgrastim • TC vs. PC • CSW During Inpatient • Hydration • SNF vs Part B • A4221 units of service • Hospice vs. Part B • Date of Death • Infusion Pump vs. Supplies • MUEs • DME Duplicate Claims • New vs. Established Patient • NCCI Edits • DME In Hospice • Part B Duplicate Claims

45. Timeline – Receipt of Initial Request

46. Timeline - Receipt of Demand Letter to Appeal

47. Levels of Appeal Must be filed within 60 days Level 5 Court Appeals Board has 90 days for determination Must be filed within 60 days Level 4MAC Review Must be filed within 60 days ALJ has 90 days for determination Level 3Administrative Law Judge Must be filed within 180 days QIC has 60 days for determination Level 2 Reconsideration Must be filed within 120 days Level 1 Re-determination appeal to FI/MAC MAC / FI has 60 days for redetermination Note:

48. Medicaid Integrity Contractors Review Medicaid claims for inappropriate payments or fraud. Similar to the RACs, the MICs will use a data-driven approach to focus efforts on aberrant billing practices. Three Types: • Review MIC • Audit MIC • Education MIC • Contracting Right Now! http://www.cms.hhs.gov/medicaidintegrityprogram/ http://www.tha.org/HealthCareProviders/Advocacy/FederalIssues/MedicaidRACAudits/hms%20-%20Medicaid%20Integrity%20Audit%20Overview.ppt#931,11,Audit MIC Contractors

49. Medicaid Integrity Contractors • MICs are paid a fee for their services; plus a bonus tied to quality of work, not quantity of recoupment http://www.ipro.org/index http://www.ipro.org/index/news-app/story.27/title.ipro-awarded-medicaid-integrity-program-task-order-by-cms

50. Medicaid Integrity Contractors Possible Targets Include: • Services Provided After the Death of a Beneficiary • Duplicate Claims • Unbundling of Services • OP Claims That Overlap With IP Stay • Unlikely Services • Excluded Individuals Possible Medical record reviews: • Documentation and Medical Necessity • Diagnosis and Procedure Coding • Covered Services • Appropriate Billing and Reimbursement