General Compliance Question of the Week
Archive
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August 30, 2010
Question:
The August 16 answer addresses the fact that RACs will begin medical necessity reviews. Will they continue DRG reviews or not?
Answer:
About that topic, an August 19 online RAC Monitor article (Top DRGs Approved for RAC Medical Necessity Review: But What’s New?) reports the following.
“Given the findings from the RAC Demonstration Project, we always knew medical necessity would be reviewed by the RACs, we just didn’t know when CMS would finally let it loose so to speak,” said Paula Digby, a co-founder of eduTrax and the consulting firm of AlphaQuest, LLC. “But the time has come just like we knew it would. Now they have full access. First, they can look at admission orders and question whether the physician’s admission order is properly worded and documented. Then they can question the coding to validate the DRG, move the code up or down in the DRG or even move to a different DRG. And now finally they can look at medical necessity, which could affect the admission itself and even lead to a complete denial of the entire claim.”
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August 23, 2010
Question:
Has CMS mandated any issues for audit by the RACs for IRFs?
Answer:
The Centers for Medicare & Medicaid Services (CMS) does not mandate areas for recovery audit contractors (RACs) to review. In response to a recent recommendation by Department of Health & Human Services Office of Inspector General (OIG), it said that it would “share” information with them and “encourage” them to consider non-RAC audit findings in making decisions about issues of concern.
In the case of inpatient rehabilitation facilities (IRFs), what it shared related to improperly coded transfers. You can read more about this in the OIG’s June 2010 report entitled Review of Inpatient Rehabilitation Facilities’ Compliance with Medicare’s Transfer Regulation During Fiscal Years 2004 Through 2007 at http://oig.hhs.gov/oas/reports/region4/40900059.asp.
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August 16, 2010
Question:
Do RACs review inpatient records for medical necessity as well as to validate DRG assignments?
Answer:
According to the American Hospital Association (AHA), the Centers for Medicare & Medicaid Services' (CMS) have indeed approved these types of reviews, so affected hospital staff may want to start checking the web site of their recovery audit contractors (RACs) for new postings on the topic.
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August 9, 2010
Question:
What are the primary reasons for automated denials by RACs?
Answer:
According to the American Hospital Association’s RACTrac Survey (mentioned last week also), primary reasons break down as follows:
- Outpatient billing error (51 percent);
- All other, details not listed (23 percent).
- Duplicate payment (13 percent);
- Outpatient coding error (8 percent); and
- Inpatient coding error (MS-DRG) (5 percent).
- Incorrect MS-DRG or other coding error (92 percent);
- All other (3 percent);
- No or insufficient documentation in the medical record (2 percent);
- Incorrect APC or other outpatient coding error (1 percent); and
- Other medically unnecessary (1 percent).
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August 2, 2010
Question:
What are the main reasons for complex denials under the RAC program?
Answer:
As stated in last week’s answer, the American Hospital Association (AHA) recently released findings of its RACTrac survey. It lists the following as the top reasons for complex denials by dollar amount for hospitals with RAC activity:
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July 26, 2010
Question:
I know that RACs perform two types of reviews but wondered whether both are being performed on hospital inpatient records?
Answer:
According to findings from a recently completed American Hospital Association Survey (called RACTrac), most recovery audit contractors (RACs) are performing complex reviews for inpatient coding. In a complex review, RACs review medical records and other medical documentation to identify improper payments to providers.
Most automated reviews relate to outpatient coding and billing. In these reviews, computer software is used to detect improper payments.
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July 19, 2010
Question:
Do any of the RAC reviews involve evaluation and management (E&M) services?
Answer:
At this moment, the answer is no. However, in the 2010 final rule for the hospital outpatient prospective payment system (OPPS), the Centers for Medicare & Medicaid Services stated that it encourages recovery audit contractors (RACs) to review a hospital’s internal guidelines for E&M services when an audit occurs even though “we note that currently there are no RAC activities involving visit services.”
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July 12, 2010
Question:
Do the signature guidelines that CMS outlined in Transmittal 327 apply to recovery audit contractors?
Answer:
According to CMS in answer to a question posed from MedLearn, Transmittal 327 (Signature Guidelines for Medical Review Purposes) is not applicable to the Recovery Audit Contractors.
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July 5, 2010
Question:
Can you define the rebuttal and redetermination process used in the RAC appeal?
Answer:
The rebuttal process allows providers to submit a statement and accompanying evidence indicating why the overpayment action will cause a financial hardship and should not take place. A rebuttal is not intended to review supporting medical documentation nor disagreement with the overpayment decision. A rebuttal is the same as the redetermination process. Providers will always contact their Medicare contractors for this option, and do so within the first 15 days of the demand letter’s date. The timeframe ends on day 15.
A redetermination is the first level of appeal that providers may request when they are dissatisfied with the overpayment decision. A redetermination must be submitted within 30 days to prevent offset on day 41. Always contact the Medicare contractor for this option. A redetermination must be submitted within 120 days of receipt of the demand letter.
The Provider Options Chart at http://www.cms.gov/RAC/Downloads/ProviderOptionsChart.pdf summarizes information about these two processes and about the discussion period.
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June 28, 2010
Question:
Have the RACs posted any new issues for audit lately?
Answer:
Yes, the RACs for all four regions have posted new issues within the last few weeks. Listed below are quick notes about what you’ll find at their websites. RAC Monitor.com reported that during the last two weeks, RACs added a total of 126 new DRG validations and new patient evaluation and management (E&M) codes to their lists. Medical necessity reviews are still not included in any issues posted by the RACs. The new issues are listed below:
- Region A, DCS Healthcare Services (www.dcsrac.com), posted several new issues, mostly for automated review;
- Region B, CGI Federal (www.racb.cgi.com), posted 87 new DRG validations in 10 approved issues;
- Region C, Connolly Healthcare,(www.connollyhealthcare.com/RAC), added two DRG validations and one issue for automated review and;
-Region D, HealthDataInsights (www.racinfo.healthdatainsights.com), added one issue for automated review, and that is "incorrect patient status, acute."
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June 21, 2010
Question:
What is the recovery audit contractor (RAC) discussion period?
Answer:
The discussion period offers the opportunity for the provider to provide additional information to the RAC to indicate why recoupment should not be initiated. It also offers the opportunity for the RAC to explain the rationale for the overpayment decision. After reviewing the additional documentation submitted, the RAC could decide to reverse their decision. A letter will go to the provider detailing the outcome of the discussion period. You always contact the RAC for this option. The timeframe is between day 1 and 40 and will begin with receipt of the demand letter for automated review and from receipt of the review results letter for complex review. The timeframe ends on day 40. Offset will occur on day 41.
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June 14, 2010
Question:
Do providers have to submit a UB-92 with medical records to the recovery
audit contractors (RACs)?
Answer:
The decision to request a UB-92 is up to the individual RAC. If this information is needed it will be notated on the medical record request letter.
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June 7, 2010
Question:
How can we know if overpayments identified by RACs are being charged to
our facility?
Answer:
The remittance advice (RA) is how Medicare communicates with providers about claim-processing decisions such as payments, adjustments, and denials. RA notices are very important to a provider's business, and the Centers for Medicare & Medicaid Services (CMS) says that it "wants to make sure that every provider that receives RAs from Medicare sufficiently understands how to read and interpret these notices." To ensure this happens, CMS encourages providers to download and use Understanding the Remittance Advice: A Guide for Medicare Providers, Physicians, Suppliers, and Billers. (For the manual, go to http://www.cms.gov/MLNProducts/downloads/RA_Guide_Full_03-22-06.pdf.)
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May 31, 2010
Question:
Can a RAC do a medical necessity review on a claim that they originally
reviewed for DRG validation?
Answer:
Here's what the Centers for Medicare & Medicaid Services (CMS) said about that. At this time, if the RAC has already requested documentation and issued a review results letter to the provider for a DRG validation, the RAC will not be allowed to re-review the claim again for medical necessity. However, if both issues are approved (DRG validation and medical necessity) prior to the request of the additional documentation, the RAC may conduct both reviews simultaneously.
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May 24, 2010
Question:
Will RACs automatically deny claims associated with an inpatient stay?
Answer:
According to the Centers for Medicare & Medicaid Services (CMS), it is often asked about other claim types that may be affected by a full inpatient denial and if the recovery audit contractors (RACs) will deny other claim types associated with the inpatient stay, such as physician evaluation and management services. It says, "At this time the RAC will not automatically deny claims that are associated with a full inpatient denial. However, these claims may be reviewed individually and there may be a need to fully/partially adjust the claim based on the documentation submitted." This information can be found at http://www.cms.gov/RAC.
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May 17, 2010
Question:
I know that RACs and several others audit healthcare providers to ensure
proper payments but who audits CMS to ensure quality controls of the RACs?
Answer:
At the request of Congress, the U.S. Government Accountability Office (GAO) recently evaluated the policing efforts being made by the Centers for Medicare & Medicaid Services (CMS) over the recovery audit contractors (RACs) and their practices. The GAO discovered that CMS is not perfect when it comes to its monitoring and control activities.
For a summary of the GAO's findings, go to http://www.gao.gov/products/GAO-10-143.
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May 10, 2010
Question:
I know that recovery audit contractors (RACs) look for overpayments but
do they also look for underpayments? What happens if they find an underpaid
claim?
Answer:
Yes, RACs will identify underpayments as well as overpayments. In situations where a RAC identifies both overpayments and underpayments for a provider, the RACs offset the underpayment from the overpayment.
In situations where a RAC identifies an underpayment for which there is no overpayment from which to offset, the RACs will inform the carrier or intermediary who will proceed with the claim adjustment and payment to the provider.
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May 3, 2010
Question:
Is a RAC's "additional" documentation request different from
just a medical record request?
Answer:
In the additional documentation request (ADR), RACs request records for complex review because their data analyses indicate potentially incorrect billing and improper payment. In three out of four cases, documentation must include the complete medical record including physician query documents, ICD-9-CM coding summary sheet, and the UB-04 claim. (The exception is Region C, which does not request UB-04.)
Attached to the request is a listing of accounts required for submission within 45 days of the date on the letter. RACs will reimburse hospital providers for copying fees. Instructions for how to correctly submit paper documents or CD/DVD electronic documents are included. A copy of the ADR form and account listing form must be attached to the copied documentation.
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April 26, 2010
Question:
Is a RAC's "additional" documentation request different from
just a medical record request?
Answer:
In the additional documentation request (ADR), RACs request records for complex review because their data analyses indicate potentially incorrect billing and improper payment. In three out of four cases, documentation must include the complete medical record including physician query documents, ICD-9-CM coding summary sheet, and the UB-04 claim. (The exception is Region C, which does not request UB-04.)
Attached to the request is a listing of accounts required for submission within 45 days of the date on the letter. RACs will reimburse hospital providers for copying fees. Instructions for how to correctly submit paper documents or CD/DVD electronic documents are included. A copy of the ADR form and account listing form must be attached to the copied documentation.
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April 19, 2010
Question:
What effect will the expansion of the RACs included in the healthcare reform
law have on providers?
Answer:
Although the details of the expansion mentioned in last week's answer are still uncertain, the promise of expanded audits probably means a heavier administrative burden for providers. Any provider who has experience with RACs knows that responding to their requests takes time, manpower and effort from many hospital departments, including compliance officers, health information management, coding, and case management.
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April 12, 2010
Question:
Last week you mentioned that payment-recapture audits for Medicaid claims
would begin soon. Who will be doing these audits?
Answer:
In the case of Medicaid, each state must contract with at least one recovery audit contractor (RAC) to identify underpayments and overpayments. This should not be confused with the audits now being conducted by the Medicaid integrity contractors (MICs), which are part of the Medicaid integrity program (MIP). Unlike the RACs, MICs do not receive financial incentives to uncover improper payments. To many industry observers, the federal government's goal is to tie the auditors' compensation to the identification of overpayments and underpayments.
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April 5, 2010
Question:
I heard that the government will increase its use of RACs. How is that
possible? It seems they are already widespread.
Answer:
According to the newly passed Patient Protection and Affordable Care Act
(otherwise known as healthcare reform legislation), federal government agencies
must expand-no later than December 31, 2010-the current recovery audits
to include Medicaid as well as Medicare Parts C and D. They are being called
"payment-recapture audits" but are the same, basically, as what
the RACs are doing now.
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March 29, 2010
Question:
Are RACs doing any audits of claims related to ambulance services?
Answer:
Ambulance services were one of the approved audit issues listed by recovery audit contractors (RACs) in early January 2010. The Issue is unbundling during an inpatient hospital stay.
According to billing requirements established by the Centers for Medicare
& Medicaid Services (CMS), ambulance services should be billed to inpatient
providers. According to claims data reviewed by the RAC program, an issue
may exist when a beneficiary received ambulance services during an inpatient
stay that were billed and reimbursed under Medicare Part B. As a result,
RACs are initiating automated reviews for overpayments.
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March 22, 2010
Question:
The term "data analytics" is often used when preparation for
RAC reviews is being discussed. Exactly what does this mean?
Answer:
With data analytics, you can perform a sweep of your MS-DRG and claims data and discover patterns and potential outliers representative of erroneous claims that may result in improper payments (overpayments or underpayments). This can be performed manually, but it is time-consuming and limited. To expedite the process, use a coding and medical necessity claims analyzer that includes pre-programmed logic and reporting.
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March 15, 2010
Question:
Our hospital team is starting the process of creating an audit and monitoring
program to prepare for RAC reviews. Can you provide a tip or two regarding
what makes such a program successful?
Answer:
Congratulations, the best defense against RAC reviews is a highly effective and flexible audit and monitoring program that quantifies coding errors as a system (administration, medical staff, management, coders, physicians, clinical documentation specialists) and reports the financial impact of coding errors. Existing programs may need to be re-evaluated, re-designed, and re-energized. The new program will succeed when it is designed as an integrated approach between the financial and clinical team with nothing less than 100 percent accountability for improvements and lasting results for their respective part of the error rate.
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March 8, 2010
Question:
What tools and resources would help hospitals prepare for recovery audit
contractors (RACs)?
Answer:
Here are two of the many references that would assist in that endeavor:
- There's a new Program for Evaluating Payment Patterns Electronic Report
(PEPPER), which includes summary statistics of administrative claims data
for the Centers for Medicare & Medicaid Services (CMS) target areas
(areas likely to have payment errors due to billing, MS-DRG coding, and/or
admission necessity issues). This electronic report contains hospital-specific
data statistics for 13 Medicare severity diagnosis-related groups (MS-DRGs)
and discharges that have been identified as high risk for payment errors
for every hospital. For more information, go to http://www.PEPPERresources.org.
To obtain a copy, you must be registered as a Quality Net user (http://www.qualitynet.org/).
After registering, you will receive download instructions in a separate
e-mail. Throughout the rest of 2010, updated reports will be available on
March 24, May 24, August 24 and October 25.
- CMS issued the latest Comprehensive Error Rate Testing (CERT) report in
early February (http://www.cms.hhs.gov/CERT/).
The report covers the Medicare fee-for-service (FFS) program, and it provides
a summary of the reviews conducted of claims submitted to all Medicare contractors.
For example, the two areas with significant increases in errors from last
year were inpatient services and durable medical equipment (DME).
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March 1, 2010
Question:
Are the RACs auditing any information related to drugs in the pharmacy?
Answer:
A quick review of the approved issues posted by the recovery audit contractors (RACs) shows that Connolly Healthcare (http://www.connollyhealthcare.com/RAC/) has several listed-some for hospital outpatient services and others related to durable medical equipment (DME). Most relate to the number of units that should be billed for specific drugs.
Those interested in finding out more should check the approved issues listed on their region's RAC website.
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February 22, 2010
Question:
When a RAC performs DRG validation, what is it that's being reviewed?
Answer:
DRG validation requires that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary's medical record. RAC reviewers will validate for the specific MS-DRGs (listed under "approved issues" on their websites) for principal diagnosis, secondary diagnosis, and procedures affecting or potentially affecting the DRG.
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February 15, 2010
Question:
What is the maximum number of medical records a RAC may request?
Answer:
Through March 2010, the cap will remain at 200 additional documentation requestions (ADRs) per 45 days for all providers and suppliers. From April through September, those who bill more than 100,000 claims to Medicare will have a cap of 300 ADRs per campus unit, per 45 days.
After the first six months of FY 2010, CMS will allow the RACs to request permission to exceed the cap. The RACs must request approval from CMS on a case-by-case basis and affected providers will be notified before receiving additional requests.
For more on this, see http://www.cms.hhs.gov/RAC/Downloads/DRGvalidationADRlimitforFY2010.pdf.
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February 8, 2010
Question:
I work in a state covered by the Region A RAC. Can you tell me whether
it has approved any issues for audit yet, and where I can locate them?
Answer:
For Region A (www.dcsrac.com
), the following 10 MS-DRG issues have been approved (as of January 19,
2010).
- Ventilator support: MS-DRGs 3, 4, 207, 870, 927, and 933;
- Tracheostomy: MS-DRGs 3, 4, 11, 12, and 13; and
- Pulmonary edema and respiratory failure: MS-DRG 189.
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February 1, 2010
Question:
Our hospital administration is organizing an internal team to investigate
our financial vulnerabilities before the RAC arrives. Can you offer suggestions
on what our initial steps should be?
Answer:
The recovery audit contractors (RACs) are focusing on improper payments,
and the reasons for these fall into a combination of the following:
- Medically unnecessary services;
- Potentially inappropriate settings;
- Incorrect coding; and
- A combination of all three.
To reduce the risk of improper payments from the above, hospital teams must re-evaluate, and revise as necessary, their current internal auditing and monitoring program of inpatient MS-DRGs. Your self-auditing program must be able to analyze for appropriate resource consumption and correct coding. Financial managers must focus on areas of improper payment opportunity; plan for corrective action; and measure and report results.
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January 25, 2010
Question:
To prepare for RAC review, which MS-DRGs would you recommend that we review?
Answer:
A preparatory review should be conducted on your highest volume and highest revenue MS-DRGs. Most likely, these will be the sepsis DRGs and the major small and large bowel procedure DRGs. Although lower volumes, the extensive and non-extensive operating room (OR) procedures unrelated to principal diagnosis may result in high dollar recoupment because of the high relative weights of these MS-DRGs. This is the same for the major chest and the respiratory system OR procedure MS-DRGs.
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January 18, 2010
Question:
The RAC in our region is Connolly, Inc. I have heard it will be doing a
DRG validation review. Can you provide any more details on this or a source
of this information?
Answer:
Recently, Connolly, Inc.-the recovery audit contractor (RAC) for Region C-announced a list of 24 MS-DRGs as approved by CMS. It has now scheduled these MS-DRGs for DRG validation and discharge disposition review. At this time, medical necessity is excluded from the review. The RAC indicated that the review applies to the following states Alabama, Colorado, Florida, Georgia, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.
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January 11, 2010
Question:
Will CMS require RACs to post all HCPCS/CPT codes included in their audits
on their websites?
Answer:
The Statement of Work for the Recovery Audit Contractors (RAC) requires
CMS approval on all new issues prior to widespread review. As a condition
of approval, all RACs are required to post the new issue to the RAC website
prior to releasing demand letters and/or additional documentation requests
(outside of the sample of 10 claims). At this time CMS requires a description
of the issue, dates of service, a link to the applicable policy and the
provider type impacted. CMS encourages all RACs to post affected codes when
less than five codes are present for the issue.
When not present, CMS recommends that providers use the applicable policy to locate the affected codes.
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January 4, 2010
Question:
How long is the RAC discussion period?
Answer:
The discussion period begins with the time of notification (demand letter for automated reviews and the review results letter for complex reviews) through the time recoupment occurs. The discussion period normally requires written notification to the RAC. The discussion period does not extend the provider's appeal timeframes.
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December 28, 2009
Question:
Will critical access hospitals (CAH) be subject to RAC reviews? If so,
how will the funds be recouped?
Answer:
Yes, CAHs are subject to RAC review. Any adjustments will be reflected on the final PS&R. If the cost report has already had a final settlement, the amount will be demanded and then offset against future claims if not paid in full by the provider.
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December 21, 2009
Question:
I heard that recovery audit contractor (RAC) medical record request limits
will be based on my 2007 claims volume, then I heard on 2008. Which is it?
Answer:
Originally, CMS announced that limits in the current year would be based
on 2007 claim volumes. Then it announced that limits in the remainder of
the fiscal year ending September 30, 2009, would be based on claim volume
in the 2008 calendar year.
Its original plan was to use the previous calendar year's volume to calculate
the following fiscal year's limits. In other words, it envisioned using
claims paid from January 2007 through December 2007 to develop limits for
October 2008 through September 2009. Claims paid in calendar 2008 would
then drive limits in fiscal 2009, calendar 2009 would drive fiscal 2010,
and so on.
However, the RAC program was subject to a several-month delay while various
contract issues were being resolved. By the time CMS was ready to resume
work in February 2009, claim data for all of 2008 was available. Recognizing
that many providers have grown or contracted due to changes in the economic
environment, CMS decided to use the most current figures available to us
instead.
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December 14, 2009
Question:
If we receive a demand letter from a recovery audit contractor (RAC) because
a service didn't meet Medicare's medical necessity criteria for an inpatient
level of service, can we re-bill all the services on an outpatient claim?
Answer:
Providers can re-bill for inpatient Part B services, also known as ancillary services, but only for the services on the list in the Medicare Benefit Policy Manual. That list can be found in Chapter 6, Section 10, at http://www.cms.hhs.gov/manuals/Downloads/bp102c06.pdf. Rebilling 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 claims is 15 to 27 months from the date of service. These normal timely filing rules can be found in the Medicare Claims Processing Manual, Chapter 1, Section 70 at http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf.
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December 7, 2009
Question:
Do recovery audit contractors (RACs) look for underpayments? If so, what
happens if they find an underpaid claim?
Answer:
Yes, RACs do identify underpayments as well as overpayments. In situations where a RAC identifies both overpayments and underpayments for a provider, the RACs offset the underpayment from the overpayment. In situations where a RAC identifies an underpayment for which there is no overpayment from which to offset, the RACs will inform the Medicare payer who will proceed with the claim adjustment and payment to the provider. For more information on underpayments and RACs, see MLN Matters article SE0617at www.cms.hhs.gov/MLNMattersArticles/download/SE0617.pdf.
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November 30, 2009
Question:
What is the reimbursement procedure and rate for photocopy charges associated
with records for recovery audit contractors (RAC) audits?
Answer:
RACs are required to reimburse PPS providers and long-term-care providers. The reimbursement rate is 12 cents per page for reproduction of medical records. According to the Centers for Medicare & Medicaid Services (CMS), facilities are not required to submit vouchers to the RAC requesting payment. Rather, the RACs will automatically issue payments to the hospitals for photocopying charges. RACs are required to pay for copying on a monthly basis. All checks should be issued within 45 days of receiving the medical record.
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November 16, 2009
Question:
How should the RAC be notified when a provider has performed a self-audit?
Answer:
When a self-audit identifies improper payments, the provider should report those to the appropriate Medicare claims processing contractor. Contact your Medicare payer for the exact information necessary for the self-referral.
There are two types of self-audits. One is commonly called a voluntary refund and is claim-based. If the required information is included along with the amount of the improper payment, the claim will be adjusted by the contractor. The RAC will be aware of the adjustment, but the refund does not preclude future review.
The second type of self audit may involve the use of extrapolation. If extrapolation is used, the claim processing contractor will review the case file to determine if it is acceptable. The contractor will accept or deny the extrapolation for the issue identified by the provider. If the claim processing contractor accepts the extrapolation, those claims in the universe will be excluded from RAC review.
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November 9, 2009
Question:
If our hospital performs a self-audit before our RAC review, will the claims
included in our self-audit be excluded from RAC review?
Answer:
Here's what the Centers for Medicare & Medicaid Services (CMS) have to say about that topic. If a provider self-discloses a payment error and the claims processing contractor confirms that a payment error exists and the sampling/extrapolation methodology used was correct, then the RAC will not review these claims. The contractor will exclude the self-disclosed claims in the RAC data warehouse.
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November 2, 2009
Question:
Since RACs are focusing on medical necessity, what advice can you provide
on ensuring that hospital admissions meet those guidelines?
Answer:
In order for admissions to be considered medically necessary under the Medicare program, the patient must have a condition requiring treatment that can only be provided in an inpatient setting. If the patient can safely receive treatment in a less intensive setting, such as outpatient observation, the patient should not be admitted.
A RAC-ready hospital should have a process and system in place for taking care of patients who do not require acute care hospitalization, every day of the week, 24 hours per day.
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October 26, 2009
Question:
Under what circumstances can a recovery audit contractor (RAC) make a finding
that an overpayment or underpayment exists without requesting medical records?
Answer:
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 review must:
- Have clear policy that serves as the basis for the overpayment ("clear
policy" means a statute, regulation, national coverage determination,
coverage provision in an interpretive manual, or local coverage determination
that specifies the circumstances under which a service will ALWAYS be considered
an overpayment);
- be based on a medically unbelievable service; or
- occur when no timely response is received in response to a medical record
request letter.
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October 19, 2009
Question:
When requested by a RAC, how long does a provider have to submit medical
records?
Answer:
Providers must respond within 45 days to a RAC request for medical records. They may request an extension at any time prior to the 45th day by contacting the RAC.
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October 12, 2009
Question:
Will the RAC review evaluation and management (E&M) services on physician
claims under Part B?
Answer:
Yes, the review of all E&M services will be allowed under the RAC program. The review of duplicate claims or E&M services that should be included in a global surgery were available for review during the RAC demonstration and will continue to be available for review. The review of the level of the visit of some E & M services was not included in the RAC demonstration. CMS says that it will work closely with the American Medical Association and the physician community prior to any reviews being completed regarding the level of the visit and will provide notice to the physician community before the RACs are allowed to begin reviews of E&M services and the level of the visit.
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October 5, 2009
Question:
Are RACs reviewing only Medicare records or also Medicaid?
Answer:
Recovery audit contractors focus on the Medicare program and Medicaid integrity
contractors (MICs) focus on the Medicaid program. On its website (http://www.cms.hhs.gov/medicaidintegrityprogram/),
the Centers for Medicare & Medicaid Services provides details about
these audits, which are underway in selected regions of the country.
According to the above web site, CMS has two broad responsibilities under
the Medicaid Integrity Program:
- Hire contractors to review Medicaid provider activities, audit claims,
identify overpayments, and educate providers and others on Medicaid program
integrity issues; and
- Provide effective support and assistance to states in their efforts to
combat Medicaid provider fraud and abuse.
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September 28, 2009
Question:
When will the RAC for New Jersey start its audits?
Answer:
Diversified Collection Services (DCS) (http://www.dcsrac.com/), the Medicare recovery audit contractor for Region A, which includes New Jersey and other states in New England and the mid-Atlantic region, has initiated automatic audits of three types of Medicare claims for durable medical equipment (specifically for pharmacy supply and dispensing fees). DCS is the last of the four RACs to begin automatic audits.
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September 21, 2009
Question:
How many total RACs will be operational when implementation is complete?
Answer:
The Centers for Medicare & Medicaid Services (CMS) says it will have four recovery audit contractors (RACs) in place by 2010. Each RAC will be responsible for identifying overpayments and underpayments in approximately 25 percent of the country. The new RAC jurisdictions match the jurisdictions of the durable medical equipment Medicare administrative contractors. For the RAC jurisdiction map, go to http://www.cms.hhs.gov/RAC/Downloads/Four%20RAC%20Jurisdictions.pdf.
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September 14, 2009
Question:
In preparation for RAC review, where can I find the MS-DRGs with the highest
improper payments?
Answer:
The Centers of Medicare & Medicaid Services' (CMS) Comprehensive Error
Rate Testing (CERT) reports (published in May 2008) identify the 184 diagnosis
related groups (DRGs) with the highest improper payments. A crosswalk of
these DRGs to MS-DRGs results in a total of 384 high-risk MS-DRGs. (For
the CERT report, go to http://www.cms.hhs.gov/CERT/CR/itemdetail.asp?filterType=none&filterByDID=
99&sortByDID=1&sortOrder=descending&itemID=CMS1221863&intNumPerPage=10.)
You will need to review the entire database of MS-DRGs that CERT has identified
as "at-risk" for improper payments, and then customize your internal
monitoring and audit strategy appropriately. Focus on cases with high volume,
high relative weight, highest improper payment risk, and one day length
of stays (LOS). The ultimate goal is to perform data analysis against these
"at-risk" MS-DRGs to customize an internal monitoring and auditing
plan designed to identify, resolve, and prevent future improper payment
risk.
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September 7, 2009
Question:
What are RACs finding as the highest reasons for improper payments?
Answer:
As you said, the recovery audit contractors (RACs) are focusing on improper
payments, and the reasons for these fall into a combination of the following:
- Medically unnecessary services and potentially inappropriate settings
is responsible for 60% of the improper payment dollars ;
- Incorrect coding is responsible for 30% of the improper payment dollars
; and
- Other reasons (insufficient documentation sent or no documentation sent)
is responsible for 10% of the improper payment dollars.
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August 31, 2009
Question:
To prepare for RAC reviews, what can a hospital do?
Answer:
To reduce the risk of improper payments, hospital leaders must re-evaluate their facility's current internal auditing and monitoring program. Although it may have worked in past, it may need to be adjusted to meet the demands of the future, including the recovery audit contractors (RACs). Designing a self-auditing program that can analyze for appropriate resource consumption and correct coding is a primary step. Financial managers must understand areas of improper payment opportunity; plan for corrective action; and measure and report results.
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August 24, 2009
Question:
I heard that the RACs will be reviewing claims for clinical social work.
Is this true?
Answer:
Yes, last week, Connolly Healthcare, the recovery audit contractor (RAC) for Region C, stated the following (approved by the Centers for Medicare & Medicaid Services). Clinical social worker services rendered during a hospital inpatient stay will not be paid separately under Medicare Part B because they are art of inpatient prospective payment system. What this means is that social works will need to get their reimbursements from the facilities. This affects the state of Florida only according to this RAC's website.
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August 17, 2009
Question:
What RACs have started doing audits?
Answer:
At the time of this writing, two Medicare recovery audit contractors (RACs)
have begun their work. The first announcement came from Connolly Consulting
(Region C), which will begin seven automatic audits, including hospital
outpatient codes, in South Carolina (but no other states in its region).
For more, go to http://www.connollyhealthcare.com/RAC/pages/approved_issues.aspx.
The RAC for Region D also has initiated automated audits to verify the accuracy
of seven hospital outpatient and physician codes on Medicare claims paid
since Oct. 1, 2007. The Region D states are Alaska, Arizona, California,
South Dakota, North Dakota, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana,
Nebraska, Nevada, Oregon, Utah, Washington and Wyoming. For more, go to
http://racinfo.healthdatainsights.com/Public/NewIssues.aspx.
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August 10, 2009
Question:
If a RAC issues a full inpatient denial, will other associated claims,
such as physician evaluation and management services, also be denied?
Answer:
According to the Centers for Medicare & Medicaid Services (CMS), recovery audit contractors (RACs) "at this time" will not automatically deny claims that are associated with a full inpatient denial. However, says CMS at http://www.cms.hhs.gov/RAC/, these claims may be reviewed individually, and there may be a need to fully/partially adjust the claim based on the documentation submitted.
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August 3, 2009
Question:
For RAC reviews, is there an order of which services will be reviewed first,
or is it random?
Answer:
On June 26, CMS posted information on its web site related to its phase-in strategy by review type. CMS states that it does not have a phase-in strategy by provider type and that all provider types are available for RAC review once provider outreach has occurred in the state. A schedule of provider outreach can be found at http://www.cms.hhs.gov/RAC/Downloads/CMS%20Provider%20Outreach%20Schedule.pdf.
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July 27, 2009
Question:
Where can I find information about the 2010 ICD-9 codes?
Answer:
Information about these codes, which take effect on October 1, 2009, can be found at http://www.cms.hhs.gov/transmittals/downloads/R1770CP.pdf.
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July 20, 2009
Question:
A co-worker heard that the AMA issued corrections to the 2009 CPT codes
recently. Where can I find these?
Answer:
On May 5, the American Medical Association posted a 14-page document that lists changes to the 2009 CPT Manual. For this document, go to http://www.ama-assn.org/ama1/pub/upload/mm/362/2009cptcorrections.pdf.
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July 13, 2009
Question:
Does transfer disposition 02 only apply when the transferring facility
is responsible for getting the patient to the receiving facility (e.g.,
putting the patient in an ambulance, helicopter, etc.)? Or does it still
apply when a patient says they will drive/fly/transport themselves to the
receiving facility, with the transferring facility having no way of knowing
if the patient actually arrived?
Answer:
The facility has to actually transfer the patient as that is what the disposition code states. If the patient is transporting themselves to the receiving facility, it is not a transfer.
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July 6, 2009
Question:
Name one documented intervention by CMS or CMS contractor that positions
a hospital to reduce improper payment risk and be RAC-proof?
Answer:
The Hospital Payment Monitoring Program (HPMP) Compliance Workbook, March 2008, is designed to give practical guidance to improving resource utilization and correct coding in the hospital. You can download it at http://www.hpmpresources.org. Check for it under Tools in the left column.
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June 29, 2009
Question:
For discontinued procedures that qualify for the coding of either modifier
73 or 74, can you please clarify whether or not the hospital can separately
bill for opened but unused supplies that were intended to be used during
the course of a procedure that was discontinued after the patient was taken
to the operating/procedure room. We want to know if we can bill for these
supplies in addition to billing the modifier-appended procedure.
Answer:
The short answer is yes, bill for all costs associated with the procedure. The longer explanation can be found in the Transmittal 442, which the Centers for Medicare & Medicaid Services (CMS) issued on January 21, 2005, at http://www.cms.hhs.gov/Transmittals/downloads/R442CP.pdf , which summarizes the use of modifiers 52, 73 and 74 for reduced or discontinued services. This transmittal includes Chapter 4, Section 20.6.4 (Use of Modifiers for Discontinued Services) of the online Medicare Claims Processing Manual.
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June 22, 2009
Question:
We need help with a procedure code. We have come across the description
of "chest wall mass" numerous times but we do not know if it would
be appropriate to use 19260 because the ribs are involved, or would you
consider mass the same as tumor? Please give me your advice.
Answer:
Without seeing the operative report, this is a difficult question to answer,
but here is what the American Medical Association's CPT Assistant states
for this code: Excisions or resections for chest wall tumors including ribs,
with or without reconstruction, with or without mediastinal lymphadenectomy,
are reported using codes 19260, 19271, or 19272, as appropriate. Codes 19260-19272
are not restricted to breast tumors and are used to report resections of
chest wall tumors originating from any chest wall component.
As you can see, it does not say anything about "with or without ribs."
We have not seen this code used much, so we would recommend that you also
look at codes related to excision of lesion of skin, or subcutaneous benign
or malignant depending upon pathology.
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June 15, 2009
Question:
How are RAC denials identified on remittance advices?
Answer:
When the carrier/FI/MAC makes reimbursements, they issue a Remittance Advice
to the provider, listing each reimbursement along with a code, signifying
the reason behind the credit or debit.
To make it easier to track adjustments made due to the findings of recovery
audit contractors (RAC), the Centers for Medicare & Medicaid Services
(CMS), code N432 (adjustment based on recovery audit) will be assigned.
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June 8, 2009
Question:
In terms of RAC recoupment of improper payments, where does my hospital
(in Illinois) fall?
Answer:
A ranking of all 51 states for estimated collection by recovery audit contractors (RAC) can be found in Table 8 of a May 2008 report entitled The Comprehensive Error Rate Testing Findings at https://www.cms.hhs.gov/apps/er_report/edit_report_1.asp?from=public&reportID=9. In this list, Illinois is ranked fifth with a projected improper payment of $229,430,967.
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June 1, 2009
Question:
When OIG performs an audit and finds that a payer issued overpayments,
is the provider/supplier always required to pay back the amount overpaid?
Answer:
Depending on the violation and the dollar amount, the provider will generally negotiate a repayment. What they usually try to do is determine if there is an area that they may have under billed or been under paid and try to reduce the dollars.
If the provider is found guilty of fraudulent billing, there may be additional fines applied. It all comes down to the final determination of the violation and then what the attorneys can negotiate. Many times a facility will waive a court hearing and plead to a lesser charge and then the government and the payer agree to a repayment term.
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May 25, 2009
Question:
What are the appropriate codes to report the repair of durable medical
equipment (DME)?
Answer:
In order to distinguish between the repair or nonroutine service of beneficiary-owned DME and oxygen equipment, two new K codes were announced by the Centers for Medicare & Medicaid Services in Transmittal 443 (February 13) at http://www.cms.hhs.gov/Transmittals/downloads/R443OTN.pdf. These codes took effect for claims with dates of service on or after April 1, 2009:
- K0739 - Repair or nonroutine service for durable medical equipment other
than oxygen equipment requiring the skill of a technician, labor component,
per 15 minutes
- K0740 - Repair or nonroutine service for oxygen equipment requiring the
skill of a technician, labor component, per 15 minutes
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May 18, 2009
Question:
I am looking for coding guidelines related to bariatric surgery. Can you
help?
Answer:
In early May, the Centers for Medicare & Medicaid Services (CMS) issued two transmittals (R100 NCD and R1728CP) related to national coverage of surgery for diabetes. information contained in these transmittals applies to all hospitals and physicians who bill Medicare carriers, fiscal intermediaries (FIs), or administrative contractors (MACs) for bariatric surgery procedures. For these transmittals, go to http://www.cms.hhs.gov/Transmittals/downloads/R1728CP.pdf and http://www.cms.hhs.gov/Transmittals/downloads/R100NCD.pdf.
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May 11, 2009
Question:
What are the outpatient therapy caps for 2009?
Answer:
The Centers for Medicare & Medicaid Services (CMS) has updated a chapter in the Medicare Claims Processing Manual to include the 2009 outpatient therapy cap exceptions. The revised chapter is included as an attachment to Transmittal 1678 (http://www.cms.hhs.gov/transmittals/downloads/R1678CP.pdf). It gives the following financial limitations on outpatient therapy services: $1,740 in 2006, $1,780 in 2007, and $1,810 for 2008. For 2009, the annual limit on the allowed amount for outpatient physical therapy and speech-language pathology combined is $1,840; and the separate limit for occupational therapy is $1,840. CMS also reminds providers to issue the advance beneficiary notice (ABN) to beneficiaries before the cap is reached.
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May 4, 2009
Question:
Does CMS have any guidelines for providers in relation to authentication?
Answer:
Yes, the Centers for Medicare & Medicaid Systems (CMS) implemented new provider authentication requirements that took effect on April 6. Certain data elements are now required for authentication. These relate to written inquiries and all calls made to Medicare contractor contact centers (including interactive voice response systems and customer service representatives.)
You must provide the following three data elements for authentication: 1) your national provider identifier (NPI), 2) your provider transaction access number (PTAN), and 3) the last five digits of your tax identification number (TIN). For background and specifics, see Transmittal R24COM at http://www.cms.hhs.gov/transmittals/downloads/R24COM.pdf.
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April 27, 2009
Question:
If a bilateral procedure is performed more than once per day, what modifier
can be used for billing?
Answer:
Occasionally, a bilateral procedure is performed more than once per day on the same date for the same patient, according to Transmittal 1702 (http://www.cms.hhs.gov/transmittals/downloads/R1702CP.pdf). As long as the bilateral procedure performed is medically necessary and appropriate, hospitals can report one of the bilateral procedure codes with modifier 76 (repeat procedure or service by same physician) so that the claim will be processed accurately. Note, however, that the Centers for Medicare & Medicaid Services expects these types of claims to be uncommon and will be monitoring claims to ensure that is the case.
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April 20, 2009
Question:
Can you provide any billing guidelines related to when prosthetic and orthotic
devices are provided in a hospital outpatient setting?
Answer:
With only a few exceptions, prosthetic and orthotic devices, medical and surgical supplies are provided incident to a physician's service by a hospital outpatient department. Although you should not report codes for these supplies, you should submit the associated charges on your Medicare outpatient claims for surgical procedures performed. (The exceptions include the status indicators [SIs] of H [pass-through device categories and therapeutic radiopharmaceuticals] and N [items and services packaged into APC rates]).
In Transmittal 1702, CMS also includes the following guideline about prosthetic or orthotic devices that include fittings, adjustments, or other necessary services: Do not bill a visit or procedure code to report the associated charges because the code for the device already includes those services. For the transmittal, go to http://www.cms.hhs.gov/transmittals/downloads/R1702CP.pdf.
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April 13, 2009
Question:
What is the proper way to bill devices included in kits?
Answer:
The Centers for Medicare & Medicaid Services (CMS) provide the following
guidelines to bill for pass-through devices and non-pass-through devices
included in kits:
- Some kits contain individual items that separately qualify for transitional
pass-through payments. Hospitals should separately bill these using applicable
HCPCS codes, but they should not bill for supplies contained in the kits.
- For devices without pass-through status that are packaged into the kits
with other items, CMS gave the following guidelines:
o Report the total charge for the whole kit in your line-item charge for
the associated device/device category code. (The assigned codes without
pass-through status are packaged into the ambulatory payment classification
[APC] and paid as part of the procedures for which the device is used.)
o Report charges for other items that may be included in the kit on a separate
line on the claim.
o Use the same revenue code to report all components of the kit.
o Continue to report all HCPCS codes that describe packaged items and services
provided, unless CPT instructions or CMS provide other guidance.
The above information can be found at http://www.cms.hhs.gov/transmittals/downloads/R1702CP.pdf.
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April 6, 2009
Question:
Does Medicare cover thermal intradiscal procedures (TIPs)?
Answer:
On January 15, 2008, the Centers for Medicare and Medicaid Services (CMS) initiated a national coverage analysis (NCA) on TIPs. It concluded that, effective for services performed on or after September 29, 2008, the evidence does not demonstrate that TIPs improve health outcomes and that the procedures are not reasonable and necessary for the treatment of low back pain. Therefore, TIPs are noncovered. For more on this, see Transmittal 97 (December 9, 2008) at http://www.cms.hhs.gov/Transmittals/downloads/R97NCD.pdf.