Washington & West Resources

Written by Cynthia M. Lipsitz, MD, MPH

Best Practice Physician Documentation Tips To Prevent Length Of Stay Denials

The last few days of an acute inpatient stay are prime targets for auditors. Time and again, these days are denied because the “the documentation provided does not support the need for the patient to continue to receive services at the acute inpatient level of care.”

These denials can be overturned with time and the right expertise. The goal, however, is to prevent the denial in the first place. The length of stay does not have to become a loss with appropriate clinical documentation.

Auditors, with their checklists of discharge criteria, are looking for documented evidence of the severity of the patient’s illness (SOI) and the intensity of services (IOS) that the patient requires. (Auditors often begin and end their review with the physician documentation.) If auditors can’t identify this information, written legibly and in terms they can understand, they are likely to determine that the patient “could have received further treatment at a lower level of care.” As a result, the last few days of care are denied.

As most of us know, a key part of preventing denials lies in the hand of our physician’s documentation. But, asking busy physicians to just “document better” or worse yet, face penalties for “poor documentation” is likely to bring on a chorus of “Well, tell me what you want me to write!!”

As a physician who’s appealed hundreds of these denials, and who has also written hundreds of progress notes, I’m convinced that many LOS (length of stay) denials can be prevented.

What if there were some simple rules for LOS notes?

Consider this scenario adapted from actual cases referred to us:

Mrs. Gray, a 65 year old obese diabetic former smoker, had a total knee replacement. She has a postoperative fever and doesn’t feel well. Her orthopedist writes this plan: “Observe over weekend.”

But why does she require observation? Does this plan mean that she needs the Observation level of care? How sick is she? What services does she require? In other words, writing “Observe over weekend” does nothing to support the physician’s reasons for this plan.

What if the physician had written this best practice progress note?

“Assessment and Plan: Postoperative fever: possible sources of fever include wound infection, sepsis, urinary tract infection, or pneumonia. Get chest x-ray, blood cultures x 2, urine culture. Will consult Infectious Diseases for advice on further management. Reassess the patient in 24 hours and consider wound culture. Increase IV fluid rate to 125cc/hr.”

This note incorporates a few simple rules that physicians can follow to improve the documentation of their patient care which will result in fewer denials:

1. Write not only for other physicians, but also for utilization reviewers, coders, and auditors. The days of using the medical record to communicate only with other caregivers are over.
2. Document SOI (severity of illness) and IOS (intensity of services): what makes your patient so sick that she has to remain hospitalized? What services can only be given at this level of care?
3. Treat weekend days just like any others. Reassess patients for potential discharge on an ongoing, daily basis.
4. State why your plan is appropriate – remember the key word BECAUSE, even if you don’t specifically write it. “The patient needs acute inpatient care because the source of her fever is unclear and needs further evaluation with multiple studies and consultations.”
5. Include detailed data to support your decision. Medical decision-making is complex, so write down all the facts that go into your plan.
6. Avoid copying-and-pasting boilerplate statements. Repeatedly using the same justification for continued LOS weakens your arguments.
7. Begin discharge planning as soon as possible.

These simple rules can help you keep your LOS from becoming a LOSS.

Cynthia Lipsitz, M.D.

November 15, 2010

About the Author

Cynthia M. Lipsitz, MD, MPH, is a Senior Medical Reviewer with Washington and West, LLC, an appeals and denials management company.  In this capacity she maintains familiarity with current standards of medical care, Medicare and private payer hospitalization criteria and coverage policies.

Contact the Author: c.lipsitz@washingtonwest.com

Written by Linda Fotheringill, Esq.

President Obama signed the Patient Protection and Affordable Care Act into law on March 23, 2010. Reaction has ranged from jubilation to threats of violence. Meanwhile, various public opinion polls conducted just prior to and after the enactment of this so called massive overhaul of the nation’s health care system reported most citizens opposing the legislation by a slight margin.

The Healthcare Provider community has probably not yet had the time to fully respond as many individuals have not had the time to read, much less digest, the 2,409 page document. As a further deterrent to tackling the Act, it is still subject to change. The Senate is debating significant modifications to the bill in the proposed Health Care and Education Affordability Reconciliation Act (HR 4872) (Reconciliation Bill). After the Senate passes a series of changes to the Reconciliation Bill, it will have to go back to the House of Representatives for a final vote. Also, the Act faces various legal challenges from a number of states. Nevertheless, many legal experts predict that the Act will ultimately be found constitutional and will survive more or less intact.

Whether one is a supporter or not, it is time to reconcile ourselves to the Patient Protection and Affordable Care Act as it will have substantial impact on health care providers, patients, employers and taxpayers as it is implemented over the next eight years.

Of particular concern to Healthcare providers is the expansion of the RAC program to Medicaid mandated by the Patient Protection and Affordable Care Act. By no later than December 31, 2010, States must establish a program to contract with one or more recovery audit contractors for the purpose of identifying underpayments & overpayments and recouping Medicaid overpayments. Payments will be made to contractors only on amounts recovered and will be on a contingent basis. The states may specify the contractor contingency fees for overpayments and underpayments.

The only bright side to RAC expansion to Medicaid is that each state must have an appeal process in place and each state must coordinate recovery efforts with “other contractors or entities performing audits” and federal and state law enforcement agencies.

The expansion of the RAC program to Medicaid is not unexpected given the GAO’s estimate of $18.6 billion per year in “improper payments” and the apparent lack of meaningful financial return from the MIC audits conducted through the Medicaid Integrity Program.[1] The MIC contactors are not paid on contingency. I anticipate that the RAC Medicaid contractors will be far more aggressive in their audit efforts given the fact they are paid on contingency.

Furthermore, the Act mandates expansion of the RAC program to Medicare Parts C and D. Recovery audit contractors are required to be under contract to ensure that every Medicare Advantage plan under part C, and every prescription drug plan under part D, has an anti-fraud plan in effect. The anti-fraud plans must be reviewed along with the prescription drug plan’s estimates of enrollment of high-cost beneficiaries compared to actual numbers of such beneficiaries.

 

Healthcare Providers truly need to tighten their belts as the cost savings and deficit reductions anticipated by the Act will, in my opinion, come in large part from Providers though reduced reimbursement and take backs. As we know, the GAO has reported our nation’s long-term fiscal outlook as “unsustainable”, and the GAO has pointed to alleged “improper payments” in the Medicare and Medicaid programs as a major culprit.[2]

However, many of the so-called “improper payments” are not improper at all. Rather, many denials involve allegations of lack of medical necessity made hastily by after-the-fact reviewers (often without proper qualifications) with the benefit of the 20/20 hindsight of Monday morning quarterbacks. The high overturn rate in the Medicare appeals process is a testament to the inappropriateness of many of these denials. Sadly, I believe these new fiscal pressures will ultimately result in a reduction of the quality of available healthcare despite the promises of those who somehow think we can get more by spending less. Meanwhile, Healthcare providers are advised to make sure they are doing everything possible to prepare for an onslaught of audits and pre and post payment denials.

 

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[1] Appropriations for the Medicaid Integrity Program totaled $105 million by the end of 2008 and will continue at a clip of $75 million in FY 2009 and each year thereafter. Yet government reporting on the fiscal ROI effect of MIC audit activities is sparse. According to the Secretary of Health & Human Services’ June 2009 Report to Congress on the MIP for Fiscal Year 2008, Secretary Sebelius states only that “at the end of FY 2008, preliminary findings from the test audits had identified approximately $8 million in overpayments.”

[2] On April 22, 2009 the GAO released a report showing substantially increasing “Improper Payments”, and noted that Medicare and Medicaid comprise 50% of the reported government wide improper payments in fiscal year 2008. “Improper Payments” reported for 2008 include:

$10.4 billion in Medicare Fee-for-Service

$6.8 billion in Medicare Advantage.

$18.6 billion in Medicaid

According to the GAO, “This Medicaid improper payment estimate represents the largest amount that any federal agency reported for a program in fiscal year 2008.” The GAO notes that “… further work remains to put in place the internal controls necessary to effectively identify and detect improper payments.”

About the Author

Linda Fotheringill, Esq., is a founding member of Washington West, LLC, and is a nationally recognized expert on denial and appeals management. Ms. Fotheringill successfully assists hospitals across the country, overturning “hopeless” denials and generating millions of dollars in otherwise lost revenue.

Contact the Author: l.fotheringill@washingtonwest.com

Written by Linda Fotheringill, Esq.

Providers have been scrambling to get their so-called RAC Tracking System in place. But did you know that Medicare Contractors are mandated by CMS to have a Provider Tracking System (PTS)?

The PTS is to assist with CMS’s overall goal of requiring Medicare contractors to analyze provider compliance with Medicare coverage and coding rules and to take appropriate corrective action when providers are found to be “non-compliant”. This sounds generally reasonable. But when contemplating the Medicare appeal process, it is of interest and concern that the provider information within the PTS “should be shared” with the Administrative Law Judge (ALJ) when the provider appeals a medical review determination. CMS’s stated reason for the requirement to “share” the information in the PTS with the ALJ is “to demonstrate corrective actions have been taken by the contractor”. This is quite concerning because the information in the PTS might be unfairly prejudicial to the provider, and could cause the ALJ to decide a case unfavorably due to information unrelated to the particular case being appealed. Therefore, Providers participating in an Administrative Law Judge Hearing on a RAC or MAC denial should obtain copies of any PTS information provided to the ALJ. Once this information is obtained, it should be carefully reviewed to ensure accuracy and relevance to the case at issue.

So what kind of information about your Hospital will be tracked?

CMS requires the PTS to be used to identify all individual providers and to track all contacts made as a result of actions to correct identified problems such as eligibility issues, medical necessity issues, and repeated “billing abusers” that frequently change the way they code their bills to their financial advantage.

The contacts tracked will include Medical Review notifications, telephone calls directly related to probe or complex reviews, and referrals to Provider Outreach & Education (POE).

Contractors are also required to coordinate this information with the Program Safeguard Contractor Benefit Integrity Unit (PSC BI) to assure contacts are not in conflict with benefit integrity related activities. The PTS should contain the date a provider is put on a provider specific edit. Of note is the fact that the contractor is required to reassess all providers on Medical Review quarterly to determine whether the behavior has changed. The contractor will note the results of the quarterly assessment in the PTS.

A variety of interventions could be implemented by contractors to correct perceived inappropriate behaviors. Contractors should use feedback and/or education as part of their intervention, and should make sure that administrative actions are commensurate with the seriousness of the problem identified, after a limited probe is done to understand the nature and extent of the problem. CMS warns that serious problems will be dealt with using the most substantial administrative actions available, such as 100 percent prepayment review, payment suspension, and use of statistical sampling for overpayment estimation of claims. “Small and isolated” problems should be dealt with through provider notification or feedback and reevaluation after notification. And as always, any evidence of fraud could result in referral to the PSC BI unit for possible action.

The message for Providers is to pay close attention to any and all “contact” made by any CMS contractor whether it is notification, outreach, feedback, or a “limited probe”. You do not want to be taken by surprise by the cumulative effect of the contacts – Big Brother is watching.

About the Author

Linda Fotheringill, Esq., is a founding member of Washington West, LLC, and is a nationally recognized expert on denial and appeals management. Ms. Fotheringill successfully assists hospitals across the country, overturning “hopeless” denials and generating millions of dollars in otherwise lost revenue.

Contact the Author:  l.fotheringill@washingtonwest.com

Written by Linda Fotheringill, Esq.

The RAC program is just one of the CMS programs designed to ramp up “benefit integrity” efforts and to otherwise preserve or recoup cash for the trust fund. Providers must be aware of all the alphabet soup measures. Be prepared for the Zone Program Integrity Contractor (ZPIC) program which will come your way in the near future.

What do RACs and ZPICs have in common? They are both relatively new and designed to “find and prevent waste, fraud and abuse in Medicare”. The ZPICS will look at billing trends and patterns, focusing on providers whose billings for Medicare services are higher that the majority of providers in the community.

What is different about the ZPICs? The main difference is that the ZPICs are not bounty hunters. That is they do not work for contingency fees and instead are paid by CMS. However, the ZPICs will more than likely need to perform to standards established by CMS in order to justify the lucrative contracts. (For instance, AdvanceMed Corporation was awarded a $107,957,737.00 five year contract for Zone 5. A CMS source indicated that each of the 7 Zones will receive a contract in the one hundred million dollar ballpark, which adds up to over a $700,000,000.00 taxpayer price tag.)

Also, the ZPICs have a bite that can be much worse than the RACs. This is because the primary goal of the ZPIC is to identify cases of suspected fraud, develop them thoroughly, and take immediate action. Pre & Post payment reviews, suspension of payment, denial of payments, and the recoupment of “overpayments” are some examples of the administrative actions that may be taken. The real bite is that all cases of potential fraud will be referred to the Office of Inspector General (OIG) for consideration and possible initiation of criminal or civil prosecution, civil monetary penalty, or administrative sanction actions.

In a recent conversation with a CMS source, it was comforting to hear that the ZPICs & CMS are expected to differentiate between “borderline” cases and cases that are “truly egregious”. The borderline cases will most likely be dealt with by an “administrative” action, thereby avoiding perhaps the more draconian measures such as treble fines or even imprisonment. According to the CMS source, “We recognize that most providers are good providers.” Thank goodness for that.

A Brief History:

Originally, CMS program “integrity efforts” (i.e., responsibility for detecting “fraud & abuse”) were assigned to CMS fiscal intermediaries and carriers. In 1999, CMS began transferring the responsibility to Program Safeguard Contractors (PSCs are transitioning to the new name of ZPICs). The enactment of section 911 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) mandated a change in CMS’ contracting structure by phasing out the fiscal intermediaries and carriers and phasing in the Medicare Administrative Contractors (MAC) for CMS Medicare claims processing.

As a result of the adoption of the MAC strategy, CMS is reassigning the ZPIC jurisdictions so that workloads align with the new MACs. The intent of these realignments is to have one ZPIC responsible for the detection and deterrence of “fraud, waste, and abuse” across all claim types. CMS anticipates that the ability of a ZPIC to analyze data across all claims types will vastly improve identification of potential fraud.

CMS has established seven (7) jurisdictional zones for the ZPICS which are designed to align effectively with multiple MAC jurisdictions. They are:

• Zone 1 ZPIC – California, Nevada, American Samoa, Guam, Hawaii, and the Mariana Islands.
• Zone 2 ZPIC – Alaska, Washington, Oregon, Montana, Idaho, Wyoming, Utah, Arizona, North Dakota, South Dakota, Nebraska, Kansas, Iowa and Missouri.
• Zone 3 ZPIC – Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, and Kentucky.
• Zone 4 ZPIC – Colorado, New Mexico, Oklahoma, and Texas. Contract awarded to Health Integrity, LLC
• Zone 5 ZPIC – Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia. Contract awarded to AdvanceMed Corporation, but under dispute.
• Zone 6 ZPIC – Pennsylvania, New York, Maryland, Washington D.C., Delaware, Maine, Massachusetts, New Jersey, Connecticut, Rhode Island, New Hampshire, and Vermont.
• Zone 7 ZPIC – Florida, Puerto Rico and Virgin Islands. Contract awarded to SafeGuard Services, LLC

To date, only the ZPICS for Zone 4 and 7 are operational, and have been so since February 1, 2009. CMS has not released the date by which all contracts will be awarded, but a CMS source did state that CMS is actively working on awarding the contracts.

Sources of Data for ZPICs

ZPICS are required to use a variety of techniques, both proactive and reactive, to address any potentially fraudulent practices.

Proactive techniques will include the ZPIC IT Systems which will combine claims data (fiscal intermediary, regional home health intermediary, carrier, and durable medical equipment regional carrier data) and other data to create a platform for conducting complex data analysis. By combining data from various sources, the ZPIC will be expected to present an entire picture of a beneficiary’s claim history regardless of where the claim was processed. The primary source of this data will be the CMS National Claims History (NCH).

Among other sources, RACs are expected to report cases of suspected fraud. A RAC denial resulting in a Provider repayment will not necessarily prevent a ZPIC and /or the OIG from investigating and prosecuting, if appropriate, allegations of fraud or abuse arising from the overpayment.

Medical Review Determinations

ZPICS can conduct medical review of charts to determine, among other things, whether the service submitted was actually provided, and whether the service was medically reasonably and necessary.

Based upon the review, ZPICs can down code or deny, in part or whole. It is not comforting to note that ZPICs are not required to have a Physician review a claim in order to deny the claim. Nurses will more than likely be conducting the medical reviews. It is therefore imperative to plan to evaluate every ZPIC denial, and to appeal vigorously all inappropriately denied claims as the consequences can be more significant than a loss of revenue.

About the Author

Linda Fotheringill, Esq, is a founding member of Washington West, LLC, and is a nationally recognized expert on denial and appeals management. Ms. Fotheringill successfully assists hospitals across the country, overturning “hopeless” denials and generating millions of dollars in otherwise lost revenue.

Contact the Author: l.fotheringill@washingtonwest.com

Written by Linda Fotheringill, Esq.

Many providers are planning to appeal all claims wrongfully denied by the RACs, and are also attempting to calculate the financial impact of potential RAC denials within their facility. Therefore, the timeframe within which one can expect a final decision is critical to forecasting.

Unfortunately, due to the variable nature of the 5 Level Medicare Appeals Process, it is not possible to nail down a specific timeframe within which a final decision can be expected. For instance, the reviewing entities (i.e., Fiscal Intermediaries/MACs, Qualified Independent Contractors, Administrative Law Judges, and the DAB/Medicare Appeals Council[1]) are given 60 to 90 day timeframes to reach their decisions. However, the entities cannot always meet the time goals and the Provider’s only remedy is to advance to the next level which may not be advantageous. Furthermore, Providers may wish to file all appeals promptly, but may not be able to do so due to sheer volume or staffing issues. Therefore, each claim could easily take from 12 to 24 months to go through to a decision at Level 5. (The American Hospital Association provides a beautiful flow chart of the Medicare Appeals Process on their website.)

If there is any silver lining to this situation, it may be that most claims will more than likely be resolved by Level 3 (if not before), which is the Administrative Law Judge Hearing. In my opinion, there will be relatively few claims that are appropriate to appeal to Level 4 and Level 5, which will shorten the timeframe for a final determination.

Why do I say this?

First, this has been the case historically in the RAC Demonstration. According to the January 2009 “Update to the Evaluation of the 3 Year Demonstration”, out of 274,952 Part A claims with overpayment determinations and 42,794 appeals, only 197 claims went to Level 4, and there was only a 32.8% favorable determination rate for providers at all appeal levels combined. (Statistics were not provided as to whether any claims were filed in U.S. District Court – Level 5.)

Another factor to keep in mind is that in order to go to Level 4, the Medicare Appeals Council Review, your request must be granted by the Medicare Appeals Council (“AC”). In other words, the AC can take a number of actions, including denying or dismissing your request for review. In general, the AC will only review a case if:

(1) There appears to be an abuse of discretion by the administrative law judge;

(2) There is an error of law;

(3) The action, findings or conclusions of the administrative law judge are not supported by substantial evidence; or

(4) There is a broad policy or procedural issue that may affect the general public interest.

Finally, it has been my personal experience that most Administrative Law Judges do their best to carefully consider the evidence presented in order to come to a thoughtful conclusion about the case. The ALJ’s decision is provided in a detailed written format and rarely contains opinions that rise to the level of an “abuse of discretion”, “an error of law”, or a conclusion “not supported by substantial evidence”.

What Does This Mean? It means that many, if not most, of your RAC denials which involve determinations as to whether medical necessity criteria were met may not meet the AC standard for review of the ALJ decision. (Assuming, of course, that your ALJ carefully considered the evidence and appropriately applied the law.)

In short, this means that Level 3 will more than likely conclude the appeal process for most of your claims. Hopefully, you will receive a Favorable Determination from the ALJ, and you can begin the process of recouping your lost revenue

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[1]

The Departmental Appeals Board (DAB) is a Board established in the Office of the Secretary of the U.S. Department of Health and Human Services (DHHS) whose members act in panels to provide impartial review of disputed decisions made by operating components of the Department or by its ALJs. The Medicare Appeals Council is a division of the DAB.

About the Author

Linda Fotheringill, Esq., is a founding member of Washington West, LLC, and is a nationally recognized expert on denial and appeals management. Ms. Fotheringill successfully assists hospitals across the country, overturning “hopeless” denials and generating millions of dollars in otherwise lost revenue.

Contact the Author:  l.fotheringill@washingtonwest.com

Written by Linda Fotheringill, Esq.

The RACs certainly have our attention. However, the MACs (e.g., Fiscal Intermediaries, Carriers and Medicare Administrative Contractors) deserve equally as much or even more of our attention. Consider this:

The CMS June 2008 Program Evaluation of the RAC Demonstration reported $992.7 million in overpayments collected from providers. But additionally, in a similar time period, the Medicare claims processing contractors (i.e., the MACs) in New York, Florida, and California corrected over $13 million in improper payments and prevented an additional $1.8 billion in alleged improper payments by denying claims before they were paid. Unlike RACs, which perform revisions only after a claim has been paid, Medicare claims processing contractors may automatically review claims or choose claims for medical review before they are paid. The $1.8 billion figure includes both automated and complex prepay review.

The math alone indicates that the MACs may be of more concern to Providers than the RACs. Additionally, the MACs can impose “severe administrative action” such as 100 percent prepayment review, payment suspension, and use of statistical sampling for overpayment estimation of claims.

Despite the evidence of the significant financial impact of MAC activity, Providers appear to be less reactive to the MACs as compared to the RACs. For instance, CMS has reported that providers chose to appeal only 14% of the Claim RAC determinations with 4.6% overturned on appeal.[1] By comparison, from FY 2005 to FY 2007, the Medicare claims processing contractors in all States denied 312 million claims and Providers chose to appeal only 4 % of those determinations (12.2 million claims). Only 2.3 percent (7.2 million claims) were overturned on appeal.

Query: Are MACs more capable than RACs of determining alleged improper payments, or are Providers more complacent with respect to MAC denials and/or unprepared to respond to MAC denials?

So what is a Provider to do?

I suggest that if you have not done so already, convert your “RAC Team” into a “Medicare Team” to expand the scope of your preparedness and prevention activities. Further, a “RAC Tracking Tool” is probably not sufficient. Optimally, all Medicare denials should be tracked on one platform.

One task on your Medicare Team’s agenda should be reviewing the Medicare Program Integrity Manual, which will provide information on the various Medical Review (MR) programs.

CMS contracts with carriers, fiscal intermediaries (FIs), Zone Program Integrity Contractors (ZPICS – formerly Program Safeguard Contractors), and Medicare Administrative Contractors (MAC) to analyze data, write local coverage determinations (LCD), review claims, and educate providers. All of these entities are referred to by CMS as Medicare “contractors.”

Contractors may perform medical review functions for all claims appropriately submitted to a Medicare fiscal intermediary, Medicare carrier, Part A and B Medicare administrative contractor (A/B MAC), and durable medical equipment Medicare administrative contractor (DME MAC).

The goal of the Medical Review program is to identify and address billing errors concerning coverage and coding made by providers.

With respect to “errors”, CMS acknowledges that most errors do not represent fraud since most errors are not acts that were committed “knowingly, willfully, and intentionally”. However, CMS states that in situations where a provider has repeatedly submitted claims in error, the MR unit shall take additional action. Examples of additional actions include the following:

•  Provider notification or feedback and reevaluation after notification,
•  100 percent prepayment review,
• Payment suspension, and
•  Use of statistical sampling for overpayment estimation of claims.

Obviously, it is of critical importance for your “Medicare Team” to implement a process that ensures claims are not repeatedly submitted in “error”. Hence the need to

A) Vigorously defend and appeal all wrongfully denied claims, and

B) To track all Medicare denials on one platform for feedback purposes.

A Few MAC Facts to Consider:

1) MACs can request documentation from a third party if the MAC simultaneously solicits the same information from the billing provider or supplier. Some examples of third parties are a physician’s office (e.g., if claim is for lab, x-ray, or Part A service requiring medical documentation), or a hospital (e.g., if claim is for physician’s inpatient services). (Beneficiaries are not third parties.)

But here is the problem:

If information is requested from both the billing provider or supplier and a third party (i.e., a Physician’s office) and no response is received from either within 45 days after the date of the request (or extension), the contractor will deny the claim, in full or in part, as not reasonable and necessary.

If information requested from both the billing provider or supplier and a third party and a response is received from one or both, but the information fails to support the medical necessity of the service, the contractor shall deny the claim, in full or in part, using appropriate denial codes.

Therefore, payment of a hospital’s inpatient Part A Claim could depend upon a physicians’ office supplying requested documentation in a timely manner. Since so much is at stake with a simultaneous request for documentation, the Medicare Team should consider implementing a process to follow up with the other party to ensure compliance with the documentation request.

2) MACs may choose to deny claims without reviewing attached or simultaneously submitted documentation “(1) when clear policy serves as the basis for denial, and (2) in instances of medical impossibility.” It is concerning that CMS defines “clear policy” as follows:

“The term “clear policy” means a statute, regulation, NCD, coverage provision in an interpretive manual, or LCD that specifies the circumstances under which a service will always be considered non-covered or incorrectly coded. Clear policy that will be used as the basis for frequency denials must contain utilization guidelines that the contractor considers acceptable for coverage.”

In my experience, utilization guidelines, LCDs and even NCDs are often subjective and open to interpretation. If MACs choose to decline review of “simultaneously submitted documentation”, it appears that even a Provider appeal may not be reviewed. Accordingly, an appealed claim may not receive any type of fair consideration until the Administrative Law Judge level.

In conclusion, our plates are full with RAC preparedness, but there is every reason to expand the scope of our efforts to comply with the challenges presented by other Medicare contractors.

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[1] CMS June 2008 Program Evaluation of the RAC Demonstration

About the Author

Linda Fotheringill, Esq., is a founding member of Washington West, LLC, and is a nationally recognized expert on denial and appeals management. Ms. Fotheringill successfully assists hospitals across the country, overturning “hopeless” denials and generating millions of dollars in otherwise lost revenue.

Contact the Author:  l.fotheringill@washingtonwest.com

Written by Linda Fotheringill, Esq.

I can be crystal clear about one thing; no one should participate in claims or billing practices that are abusive or fraudulent. First of all, it’s just wrong. Also, let’s not forget the punishment that can be imposed by the federal government when an individual or hospital is considered guilty of fraudulent practices. We’re talking a range that goes from restitution, to treble fines, to exclusion from participating in the CMS programs, to imprisonment. (Yes, that’s right, there have been Hospital executives that have spent time in the big house.)

So why do I bring this unpleasant subject up? It’s because of the mounting frenzy of RAC preparedness that includes aggressive self-auditing to uncover all potential problem areas. Hence, the title for this piece. Let’s make no mistake about this point; when an improperly billed claim is discovered through any auditing means, the matter should be self-disclosed. Pure and simple.

The not so simple parts are:

1) What is the right amount of auditing for CMS compliance purposes, and

2) What should a Provider do when there is a question on any given case as to whether CMS criteria for medical necessity have been met?

Let’s start with question #1.

Questions regarding the right amount of auditing for CMS compliance purposes are arguably answered for the most part in The Office of Inspector General’s Compliance guidance for Hospitals, released in 1998, and Supplemental Compliance Program Guidance for Hospitals published in the Federal Register, Vol.70, No.19, January 31 2005. The suggested compliance program is not mandatory. However, to my knowledge, (even before the advent of the RACs) wise and responsible hospitals have implemented compliance programs that follow the many recommendations of the OIG.

With respect to auditing, the Supplemental Compliance Program Guidance asks the following:

•  Has the hospital developed a risk assessment tool, which is re-evaluated on a regular basis, to assess and identify weaknesses and risks in operations?
• Does the risk assessment tool include an evaluation of Federal health care program requirements, as well as other publications, such as the OIG’s, CPGs, work plans, special advisory bulletins, and special fraud alerts?
• Is the audit plan re-evaluated annually, and does it address the proper areas of concern, considering, for example, findings from previous years’ audits, risk areas identified as part of the annual risk assessment, and high volume services?
• Does the audit plan include an assessment of billing systems, inaddition to claims accuracy, in an effort to identify the root cause of billing errors?
• Is the role of the auditors clearly established and are coding and audit personnel independent and qualified, with the requisite certifications?
• Is the audit department available to conduct unscheduled reviews and does a mechanism exist that allows the compliance department to request additional audits or monitoring should the need arise?
• Has the hospital evaluated the error rates identified in the annual audits?
• If the error rates are not decreasing, has the hospital conducted a further investigation into other aspects of the hospital compliance program in an effort to determine hidden weaknesses and deficiencies?
• Does the audit include a review of all billing documentation, including clinical documentation, in support of the claim?

So to answer the question of how much auditing is necessary, a hospital should carefully consider whether their hospital has a Compliance Program in place that has been following the recommendations of the OIG. If so, it might not be necessary for the Hospital to undertake additional auditing measures specifically in preparation for a RAC audit, and additional resources can be focused on compliance prospectively. On the other hand, if you do not have a robust Compliance Program in place, now is a very good time to start.

Now, for Question #2. What should one do when there is a question on any given case as to whether CMS criteria for medical necessity have been met?

This is a situation that will arise frequently because Medicare criteria and documentation requirements are very often subjective and therefore open to interpretation. For example, Medicare’s Inpatient Rehabilitation “screening” criteria cannot be relied upon to deny a claim. Rather, Medicare states:

For determinations about reasonableness, medical necessity, and appropriateness of setting, the QIO’s physician reviewer is expected to make a determination on the basis of their knowledge, expertise and experience, and upon an assessment of each beneficiary’s individual care needs rather than a fixed criteria.

Given the subjective nature of medical necessity criteria and the unique circumstances for each patient, reasonable minds can differ as to whether a case meets criteria. To illustrate this point, consider the fact that to date, 34% of the cases appealed in the RAC Demonstration project have been overturned – mostly at the FI/Carrier and QIC levels. [1] My point is that the same case can produce differing conclusions – often depending on just who is conducting the review and how the case is presented.

Another illustration of just how difficult it can be to ascertain whether medical necessity criteria is met is my recent experience conducting a clinical appeal writing workshop for experienced nurses. We utilized an actual case of a denied inpatient admission for a patient that presented to the ED with chest pain. (PHI was carefully redacted of course.) The FI indicated that Observation was appropriate rendering the inpatient stay ‘not medically necessary”. Our group of experienced nurses concluded that the Chest Pain decision tree tool developed by a QIO was not very helpful, and the group split evenly on whether the case met inpatient criteria. (Interestingly, this particular case was ultimately won by the Provider at the Administrative Law Judge level.)

So, given the subjective nature of medical necessity determinations, when there is uncertainty about any reviewed or audited case, a second opinion may be helpful. The organization or individual rendering the second opinion should have expertise and experience with Medicare criteria and the Medicare appeal process.

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1. Only a small fraction of the appealed cases were taken through to the Administrative Law Judge Level, and there is no data of which I am aware that explains this fact. However, anecdotal evidence suggests the reason may have been related to lack of expertise and resources rather than a lack of belief in the merits of the appealed case. I believe that the number of overturns would have been much higher had most of these cases been appealed all the way through to the Administrative Law Judge level. My firm’s experience is a success rate in the 68% to 100% range, although we generally must go all the way to the Administrative Law Judge to get a fair consideration of the case. There, the provider must prove the medical necessity and/or compliance with Medicare criteria by a preponderance of the evidence.