Prepayment review pilot project recently launched by CMS
Program likely to be expanded for all Medicare claims
As part of its efforts to cut improper payments, the Centers for Medicare and Medicaid Services (CMS) has launched a three-year Recovery Audit program prepayment review demonstration project in 11 states.
The project, which began Jan. 1, 2012, means that in the future, the entire Medicare program may shift to pre-payment review says Steven Greenspan, JD, LLM, director of government appeals and regulatory affairs for Executive Health Resources, a Newton Square, PA, healthcare consulting firm. "The idea is to get the recovery auditors involved in doing prepayment review so CMS doesn't have to chase the money," he says.
The pilot project is being conducted in seven states with a high level of fraudulent claims, and four states with a high volume of short inpatient stays. States included because of a preponderance of fraudulent claims are Florida, California, Michigan, Texas, New York, Louisiana, and Illinois. Pennsylvania, Ohio, North Carolina, and Missouri are included because of short stays. The Medicare Administrative Contractors (MACs) are already performing a small number of prepayment audits.
Elizabeth Lamkin, MHA, chief executive officer and partner in PACE Healthcare Consulting, LLC, based in Hilton Head Island, SC, points out that the prepayment audits are expected to lower the appeal rate, lessening the burden on the provider, and saving CMS money.
Prepayment audits may end up being positive for hospitals because they simply won't get paid up front, rather than having to go through the appeals process when claims are retrospectively denied. In addition, in the prepayment review pilot project, when the auditors determine the stay did not meet inpatient criteria, the hospitals can rebill for 90% of the prepayment review pilot project allowable outpatient claim, instead of losing entire inpatient short-stay claim.
In announcing the project, CMS said it will choose the specific claim types to review and will initially focus on inpatient claims, particularly for short stays as they have high improper payment rates. Hospitals may appeal the prepayment denials through the normal appeals process. (For details on other changes in the Medicare audit process, see related article, below).
Kathleen Miodonski, RN, BSN, CMAC, manager for The Camden Group, a national healthcare consulting company based in Los Angeles, reports that the Florida MAC has announced that pilot project will focus on 11 cardiac diagnosis related groups (DRGs), including stents, pacemaker and defibrillator implantations, and four orthopedic procedures including knee and hip replacement and spinal fusion surgery. Targets in the other states are likely to be similar, she says.
"The demonstration project is based on the premise that as many as 50% of the targeted procedures may be unnecessary, or that physicians are not accurately documenting justification for the procedures," Miodonski says.
Case managers should be aware of the payer mix and volume of the targeted DRGs at their hospital to understand the impact of the prepayment reviews, and develop preadmission and prebilling processes to make sure the medical necessity is documented on the front end and the back end, Miodonski adds. "A lot of hospitals have some form of preadmission review but there are going to be areas where additional resources need to be applied," she says.
When patients are having elective surgery, hospitals have an opportunity to make sure the documentation is in place before the patient comes in, Miodonski says. Recently, the Medicare auditors have denied some surgical procedures because the hospital's documentation did not support medical necessity, although the documentation may have been complete in the surgeon's records. Hospitals need to establish good preadmission processes in the emergency department as well, she adds.
Case management leadership should partner with the administration and physician leaders to educate physicians about the necessity for complete documentation, Miodonski says. In addition, case managers should ensure that preadmission processes do not create delays in scheduling elective surgery, if the hospital is going to make sure the case meets criteria before the procedure is scheduled, she says.
If the auditors deny the procedure, they will issue take-back letters to physician offices and could deny payment for further outpatient care related to the hospital admission, Miodonski points out. This means that hospitals should develop good relationships with the post-acute providers in their area and make them aware that the hospital is taking steps to avoid take-backs.
"If post-acute money gets taken away because the auditors determine that the procedure didn't meet criteria, it could cause a problem with post-acute referrals going forward," she says.
Sources
For more information contact:
- Steven Greenspan, JD, LLM, Director of Government Appeals and Regulatory Affairs for Executive Health Resources, Newton Square, PA. E-mail: [email protected].
- Elizabeth Lamkin, MHA, Chief Executive Officer and Partner in PACE Healthcare Consulting, LLC, Hilton Head Island, SC. E-mail: [email protected].
- Kathleen Miodonski, RN, BSN, CMAC, Manager for The Camden Group, Los Angeles. E-mail: [email protected].
- Joseph Zebrowitz, MD, Executive Vice President, Executive Health Resources, Newton Square, PA. E-mail: [email protected].
Be prepared: Medicare auditors increase scrutiny CMS pushes contractors to be more aggressive The Centers for Medicare and Medicaid Services (CMS) has set dollar goals and quotas for its auditors, and is holding their feet to the fire to aggressively review hospital claims, as the agency increases its focus on reducing improper payments. In its most recent Statement of Work, CMS changed the name of the Recovery Audit Contractors (RACs) to Recovery Auditors (RAs), and expanded their scope of work to include all providers and not just acute care hospitals. The agency requires that RAs have monthly phone calls with CMS to discuss how many claims they should review, and if they don't meet their workload quota, the work may be assigned permanently to another CMS contractor, according to Elizabeth Lamkin, MHA, chief executive officer and partner in PACE Healthcare Consulting, LLC, based in Hilton Head Island, SC. "We're seeing a lot of audit activity and it's likely to increase even more, putting providers under increasing scrutiny for quality and compliance. Hospitals need to make a paradigm shift in how they operate because what they have done in the past will no longer work. The hospital administration, financial staff, clinical, and medical staff must work together as equal partners to coordinate care, and ensure long-term compliance," she says. Hospitals have a false sense of security if they feel like they are not experiencing a lot of RA activity, Lamkin says. "Not all activities are around chart review. Automated reviews take place 24 hours a day, seven days a week, and even if they are small claims, they can add up to a lot of money," she says. CMS is encouraging its auditors to use extrapolation if they find a pattern of claims errors, she says. "Extrapolation may be cost effective for low dollar claims that require a complex review and have a high rate of error. Originally, the auditors could not recover money if the claim was less than $10. Now even small claims can be reviewed under extrapolation," she says. Joseph Zebrowitz, MD, executive vice president, Executive Health Resources, a Newton Square, PA, healthcare consulting firm, adds that compliance is the best defense to a government audit. "Case managers should ensure that there is an excellent utilization review process in place and be sure that when the patient is discharged, the status on the chart is correct and the documentation clearly supports it," he says. Hospitals need to be 100% concurrent in assigning status, and consistently applying InterQual and Milliman criteria, Zebrowitz says. If there are any questions about medical necessity, case managers should refer the case to the physician advisor for second level review and document it, he adds. Hospital personnel need to be careful not to overuse outpatient status, because it is believed to be safer, or overuse inpatient status, and hope that the hospital does not get audited, Zebrowitz advises. "Program compliance must be rigorous at all times." he adds. Case managers and physicians should be well educated on the impact that getting the status right up front can have on the patients, as well as on the hospital's bottom line, he says. "There are significant ramifications to inappropriately classifying Medicare beneficiaries as observation including cost and their right to important Medicare benefits," he says. It's not necessary to have case managers review admissions 24 hours a day but they should conduct a review the day the patient comes into the hospital, Zebrowitz says. He reports that many hospitals have case managers in the emergency department reviewing admissions until 11 p.m. Lamkin adds that 100% of inpatient admissions should be reviewed within 12 hours. "Complete and accurate documentation is the only thing that can help a hospital win on appeal," she says. Steven Greenspan, JD, LLM, director of government appeals and regulatory affairs for Executive Health Resources, adds that in the demonstration project, the RACs concentrated on a relatively narrow group of medical diagnosis related group (DRGs) for complex review. Now, CMS has approved more than 570 DRGs for medical necessity, he says. The procedures the RAs are concentrating on vary from region to region, Greenspan says. "All seem to get around to the same issues eventually, but each one has the flavor of the quarter," he says. He advises case managers to log into their RA's website to check on the focus and make sure their hospital is concentrating on the issues approved for their region, as well as checking the websites of other RAs to determine what has been approved in other regions. Lamkin adds that the admissions care managers, and the physician advisor for case management, should work together to ensure that the bed status is correct, and that the documentation is accurate and complete. She recommends that the admission care manager should review every inpatient and outpatient admission for appropriate bed status and place of service. Inpatient review should be done within 12 hours, and outpatient reviews before the patient receives services. Clinical documentation specialists, typically part of the health information management department and partner to care management, should conduct ongoing chart reviews for accuracy of clinical documentation, and make queries to physicians in real time. Educate physicians on which of their charts fail to meet criteria for bed status and work with them to improve documentation on admission orders and inpatient procedures. "Hospitals need to devote the staff needed to ensure compliance on the front end, that bed status is correct and that documentation of intensity of service and severity of illness is complete and accurate," Lamkin says. This improves coding and reduces appeals and bill holds on the back end, and reduces the time it takes to respond to RA denials, she adds. Zebrowitz adds that hospitals should no longer think of case management as a cost center rather than a compliance center. "I'm seeing a change in thought as forward-thinking hospitals are putting more resources into utilization review, rather than decreasing staff. Hospitals that look at case management as an unnecessary expense and cut staff are going to pay a significant price," he says. |
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