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February 8, 2013

Will CMS Double Down on the Success of the Recovery Audit Program?

bloglogo2.jpgAccording to CMS, between October 2010 and December 2012, the RACs collected $3.8 billion in overpayments. As the nearby chart makes clearOverpay_Chart.jpg, the volume of amount collected each quarter has continued to increase, the result of the ever increasing number of issues approved for review by CMS as well as the RAC's increasing expertise in discovering alleged improper payments. There is little doubt that CMS considers the Recovery Audit Program to be a financial success or that it will continue to expand.

The Change to the Time in Which CMS Can Collect an Overpayment.

In May 2012, the HHS-OIG released a report entitled "Obstacles to Collection of Millions in Medicare Overpayments" detailing its findings on how well CMS and its contractors were doing in collecting previously identified overpayments. In hook.jpgresponse to the OIG's contention that CMS was not doing a good enough job collecting identified overpayments, CMS claimed that part of the problem was that its collection activities were hampered by the limitation in 42 U.S.C. § 1395gg which restricted recoveries of overpayments from providers to those overpayments made within the last 3 years, even though 42 C.F.R. § 405.980(b) permits a CMS contractor to reopen a paid claim for any reason within 1 year of the date of the initial determination and within four (4) years of the date of the initial determination if there is good cause. The OIG report recommended that CMS ask Congress to change the recovery period in § 1395gg to a period greater than the reopening period set forth in § 405.980. In § 638 of the recently enacted American Taxpayer Relief Act of 2012, the law passed to avoid the "fiscal cliff," Congress responded to the OIG recommendation by changing the recovery period in § 1395gg from 3 to 5 years, 1 year longer than the reopening period in § 405.980.

The current Scope of Work (SOW) for the Recovery Audit Contractors provides that:

The Recovery Auditor shall not attempt to identify any overpayment or underpayment more than 3 years past the date of the initial determination made on the claim.

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November 20, 2012

Is the Inspector General Biased Against Medicare Providers? - A Recent Report Says YES!

bloglogo2.jpgIn 1978, Congress passed the Inspector General Act "[t]o create independent and objective units to provide leadership and coordination and recommend policies for activities designed (A) to promote economy, efficiency, and effectiveness in the administration of, and (B) to prevent and detect fraud and abuse in, such [Government] programs and operations;..." A November 14, 2012 report issued by the Health and Human Services Inspector General arguing for "improvements" in the activities of Medicare Administrative Law Judges suggests that the Inspector General is anything but "independent and objective."

The OIG's report is based upon an analysis of appeals decided by ALJs between bias.jpgOctober 2009 and September 2010 (fiscal year 2010). The OIG found that providers filed 85% of the appeals decided, that the ALJs rendered fully favorable decisions in 56% of the appeals (62% of all Part A appeals but 72% of Part A appeals filed by hospitals). The OIG calculated that about two-thirds of the ALJs rendered fully favorable decisions in between 41 and 70 percent of the appeals they considered. The question raised by these statistics is why is there such a large discrepancy between the decisions reached by the QICs in their review of the claims and the ALJs, since presumably both groups had the same information and were interpreting the same regulations. The obvious answer is that either the QICs or the ALJs are not doing their job correctly.

One might suspect that the first step in finding out which group is incompetent would be to have an independent entity review a statistically valid sample of the appeal records and improve.jpgoffer an opinion as to whether the decision of the QIC or the ALJ was correct. Surprisingly, the OIG did not do that. Instead, the OIG appears to have assumed that the decision of the QICs was correct and then makes suggestions as to how to "improve" the decision making of the ALJs so that it will be more in line with that of the QICs. The result of such improvements, of course, will be a savings to the Government and reduced payments to providers. In case it is ultimately determined that the ALJ's decisions are in fact correct, another "improvement" suggested by the OIG is that CMS impose a fee only on providers who want to appeal to the ALJ with the hope that this will result in fewer providers filing fewer appeals.

There is no doubt that over the years, the Inspector General has identified significant inefficiency and waste in the operation of the Medicare program and put out of business many unscrupulous individuals who saw the Medicare program as nothing more than their private pot of gold. The OIG's effectiveness is due, in large part, to the belief by many that its findings and recommendations are based upon an objective analysis of the facts. When they are not, I believe it is incumbent on all those who participate in the Medicare program to do whatever is necessary to expose the OIG's bias and insist that it remain neutral and objective in promoting economy, efficiency, and effectiveness in the administration of the Medicare program.

Please contact us if we can be of any assistance with issues with ALJ appeals or in helping to resolve an issue with any of the legion of CMS auditors in the Medicare-Medicaid Audit World.

October 8, 2012

What Concerns the OIG About MACs and RACs

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for bloglogo2.jpgLast week the Department of Health and Human Services Office of Inspector General released its fiscal year 2013 Work Plan describing the issues it intends to investigate during the fiscal year beginning October 1, 2012. In the section of the Work Plan devoted to Parts A and B of Medicare, the OIG identified its concerns with the operation of the Medicare Administrative Contractors (MAC) and the Medicare Recovery Audit Contractors.

The OIG's Concerns With the Performance of the MACs

OIG seal.jpgIn addition to being concerned about CMS' ability to adequately monitor and assess the performance of the various MACs, the OIG is concerned with whether the MACs have consolidated all Part A and Part B edits within their jurisdiction, have developed and tested final edits, implemented and used initial, local system, and medical review edits and evaluated edit effectiveness. On a related subject, the OIG is also concerned about Part B claims that were suspended for manual prepayment review on the basis of system edits but on which the reviews were not conducted. According to the OIG, because manual review is more timely and costly to the contractor, some suspended claims might not be reviewed but paid inappropriately. In sum, the OIG believes that the MACs may be paying too many improper claims.

The OIG's Concern With the Performance of the RACs

Records.jpgAs opposed to its concern with the MACs' performance in specific areas, the OIG Work Plan does not identify any specific concern with the performance of the RACs. Rather, the Work Plan states that the OIG intends to "review the extent that Recovery Audit Contractors (RAC) identified improper payments, identified vulnerabilities, and made potential fraud referrals in 2010 and 2011." The OIG will also review CMS' actions in resolving RAC-identified vulnerabilities, addressing potential fraud referrals, and in evaluating RAC performance in 2010 and 2011. Apparently the OIG does not believe that the problems with the RAC program identified by the American Hospital Association, the American Medical Association and other professional organizations as well as some members of Congress warrant investigation.

The Concerns of Others With the Performance of the RACs

Since its inception, the structure of the RAC program has been the subject of considerable unfavorable comment by Medicare providers. In an April 3, 2012 letter, the leaders of 35 professional organizations representing doctors expressed their opposition to CMS' plan to have RACs conduct prepayment reviews because "[t]he program's contingency fee structure inappropriately incentivizes the Recovery Auditors to conduct "fishing expeditions" that are exceedingly burdensome for physician practices" and because "[t]hey [Recovery Auditors] are incapable of efficiently or accurately conducting prepayment review."

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October 1, 2012

Evaluation and Management Codes - The Newest Audit Target

bloglogo2.jpgOver the past couple of weeks there has been considerable press attention to the fact that over the last 10 years bills submitted by doctors to CMS for evaluation and management services have increasingly used E/M Codes 99214 and 99215 in place of lower cost 99211 and 99212 codes, coupled with the possibility that the increased use by hospitals and doctors of Electronic Health Record (EHR) software as the result of the CMS EHR incentive program, has resulted in increased fraudulent billing by providers. Although press reports conflate the two issues, they do not appear to be related.

Reports on Evaluation and Management Billing

report.jpgIn May 2012, the HHS OIG released a report entitled "Coding Trends of Medicare Evaluation and Management Services" in which it analyzed Evaluation and Management coding for (1) established patient office visits, (2) subsequent inpatient hospital care, and (3) emergency department visits. It found that the use of codes 99214 and 99215 increased 17% between 2001 and 2010, the use of codes 99232 and 99233 increased 6 and 9 percent, respectively between 2001 and 2010, and the use of code 99285 rose 21 percent, increasing from 27 to 48 percent of billings during the same period.

On September 15, 2012, the Center for Public Integrity released a study entitled "How doctors and hospitals have collected billions in questionable Medicare fees." This article purports to report on the Center's analysis of data obtained from CMS on Evaluation and Management billing as well as how the widespread adoption of EHR may be contributing to fraudulent upcoding by hospitals and doctors.

monitor.jpgOn September 21, 2012, the New York Times published an article entitled "Medicare Bills Rise as Records Turn Electronic" referencing both the May OIG report and the Center for Public Integrity article. The Times' article, which purported to analyze CMS data from the American Hospital Directory, pointed out the same trends as the earlier reports, but attributed the difference to hospitals converting from paper records to EHRs. The Times article apparently prompted a strong letter from the Secretary of Health and Human Services and the Attorney General to the CEO's of five hospital trade associations. In their letter of September 24, 2012, the Secretary and Attorney General warned against the use EHR software to commit healthcare fraud and threatened prosecution for fraudulent billing. The American Hospital Association responded the same day as did the Association of Academic Health Centers.

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September 21, 2012

Are All Providers Equal in the Eyes of the ZPICs?

bloglogo2.jpgZone Program Integrity Contractors (ZPICs) are charged with detecting fraud, waste and abuse in Medicare Parts A, B, C, D, Durable Medical Equipment, Prosthetics, and Orthotics Suppliers (DMEPOS), Home Health and Hospice agencies (HH+H), and Medi-Medi (a partnership between Medicaid and Medicare designed to enhance collaboration between the two programs to reduce fraud, waste and abuse). In conducting their work, money.jpgZPICs are not limited by time as to the claims they may review or the number of documents they may request "to identify cases of suspected fraud, develop them thoroughly and in a timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not inappropriately paid out and that any mistaken payments are recouped." In carrying out their responsibilities, ZPICs do not conduct random audits. Instead ZPICs rely on data analysis to detect high frequency of certain services as compared with local and national patterns, trends of billing, or other information that may suggest the provider is an outlier. ZPIC audits may also be triggered by employee or beneficiary complaints to the Office of Inspector General hotline, fraud alerts, or information received from a MAC or other contractor and law enforcement agencies.

The World of Medicare Contractors

As the number of stand-alone health care providers continues to decrease, the number of corporate relationships between companies hired by CMS to ensure the integrity of the Medicare program and Medicare providers continues to increase. The result of this consolidation is the growing possibility that these relationships will not be detected or adequately addressed by CMS, with the result that complaints of wrongdoing against some providers will not be investigated as vigorously as complaints against other providers.

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July 28, 2012

The Significance of Getting Paid More Than You Bill

Thumbnail image for Thumbnail image for Thumbnail image for bloglogo2.jpgOn July 18, 2012 the HHS Inspector General released an audit entitled Review of Medicare Payments Exceeding Charges For Outpatient Services Processed by Wisconsin Physicians Service Insurance Corporation in Jurisdiction 5 For The Period January 1 2006 Through June 30, 2009. The audit analyzed 2,197 line items on claims for outpatient services paid by Wisconsin Physicians Service (WPS) in which the amount paid by Medicare was more than $1,000 greater than the provider's bill and in which the line item billed for more than 3 units of service. The audit found, among other things, that incorrect units of service were reported on 1,182 line items resulting in overpayments to the providers of at least $4,411,569.

stock-photo-14852469-paid-invoice.jpgExamples cited by the OIG include one provider who billed Medicare for an incorrect number of service units on 114 line items in which the provider billed between 640 and 656 service units rather than the correct 32 service units. As a result of these errors, WPS paid the provider $219,518 when it should have paid $10,097, an overpayment of $209,421.

Another provider billed Medicare for an incorrect number of service units on 72 line items. Rather than billing between 1 and 3 service units, the provider billed between 42 and 45 service units. WPS paid the provider $178,308 when it should have paid $7,941, an overpayment of $170,367.

1314903_medical_doctor.jpgWhen questioned by the OIG about the errors, the providers attributed the incorrect payments to clerical errors or to billing systems that could not prevent or detect the incorrect billing of units of service and other types of billing errors.


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