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Update on CMS Recovery Audit Contractors and Emerging Issues. Texas Association for Healthcare Administrators 2014 TAHFA Seminar Series Elaine Anderson, SVP and Chief Compliance Officer Texas Health Resources. Where are the RACs? ….A Welcome “Pause”.
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Texas Association for Healthcare Administrators
2014 TAHFA Seminar Series
Elaine Anderson, SVP and Chief Compliance Officer
Texas Health Resources
Pause announced in Feb. – RACs must suspend all requests
Does CMS finally see the system is broken?
Will RAC 2.0 be any better?
RACs have until June 1st to send improper payment documentation to MACs for adjustment.
No new requests until CMS redefines program to make the process faster and “fairer” to providers.
New 5 year contracts are being pursued
Biggest reason………..tremendous backlog in appeals facing the Administrative Law Judges (ALJs)
65 ALJs face a workload of 15,000 new RAC appeals per week.
Current backlog of over 350,000 claims – could take years to work through
Some say this backlog could give providers a strong due-process claim against CMS.
CMS says: “some period of months”
Speculation – 4 months to 2 years?
But….CMS has every incentive to reform and reboot the RAC program ASAP
In 2011 – RAC program returned $488 mil to Medicare
No reason to believe claims during the “pause” will not be subject to future review.
Post payment audits are almost certainly here to stay….we can only hope the process gets better.
CMS has merely realized they need a better process…..so stay tuned.
THR manages the RAC/MAC audit processes centrally
All denials found to be inappropriate are appealed
94% of all RAC denials to date have been appealed
VAST MAJORITY of the appealed denials have been overturned to date
But,tThe pipeline is full. Cases pending in appeal…..approximately 2,800!!!!
Can the favorable overturn rate be sustained? Unknown.
RAC must wait 30 days to allow for discussion before senidng the calim to the MAC for adjustment
RAC must confirm receipt of discussion request within 3 days
RAC must wait until the 2nd level of appeal is exhausted before they receive their contingency fee
Revised ADR limits will be established an will be diversified across different claim types
RAC will have to adjust the ADR limits in accordance with a provider’s denial rate.
Expected to use every administrative tool to take payments back or stop payments from being made
Expected sometime in 2015- one vendor to run the program with 5 to 15 UPICs across the nation
Will replace Zone Program Integrity Contractors (ZPICs), Medicaid Integrity Contractors and two other contractors
Will aggregate data from public and private payers in one “data pool” to identify overpayments or fraud across payers
Will blur the enforcement lines between federal programs and private payers.
Establishes two medically necessary midnights as the “benchmark” for admission decisions
Prior – patient had to require “inpatient level care” at the time the order was written.
Now there is no such thing as “inpatient services”….now CMS says if the patient requires 2 midnights in the hospital, counting the time already spent as an outpatient, they should be admitted as an inpatient
Admissions between October 1, 2013 and March 31, 2015 protected from admission medical necessity review except the probe and educate MAC audits
But….CERT, ZPIC, OIG, etc. can recoup when they find noncompliant admissions as a part of their review process
Also….MAC can select additional claims as determines appropriate as result of probe and educate audits
RACs can do post payment reviews for admissions prior to March 31, 2015 if there is evidence of systematic gaming, fraud, abuse of delays in care
Use electronic health record to put in a “hard stop” so discharge orders cannot be entered if the admission order has not been signed.
Look for ways to garner appropriate physician documentation of “expected 2 midnight stay”
Look for ways to raise physician awareness of need to document “unexpected faster recovery”.
Review all 0 and 1 inpatient midnight stays prior to billing.
Auditors to date have paid little attention to obs
There has always been a medical necessity requirement for obs
Reimbursement was low….now is higher - $1,199
CMS has expressed concerns about increased number of obs patients and length of stay – a driver behind 2 MN rule
Patients must still require “hospital level of care” for obs, but less than 2 midnights
CMS has said – there should be no payment for IP or OP care when a patient can be safely discharged from the ED.
RACs could choose to retrospectively review obs when the “pause” ends.
Seeing cases where the RAC denied IP case for lack of indication for surgery. For example….saying the procedure was not indicated (unilateral knee replacement).
Upon Appeal- MAC denies appeal saying there was no need for the service and also says the case should have been outpatient…not inpatient. ?????
Appeal to QIC on both indication for surgery and IP status.
QIC denies solely on the IP versus OP question.
Now at ALJ level of appeal
Areas that OIG focuses on during OIG Medicare compliance reviews, although not necessarily all at once:
More Medicare compliance reviews are occurring, underscoring the HHS Office of Inspector General’s commitment to this new multi-faceted strategy for auditing hospitals.