Health Law Attorney Blog

CMS has issued new guidance expanding on the Fee-for-Service Reimbursement instructions detailed in CR 6960 (which HLP had blogged about here). The earlier change request explained the basic standards stemming from the Section 6404 of the Patient Protection and Affordable Care Act of 2010: services billed more than one year after they were provided would be considered untimely filed and would not be paid.

The new CR 7080, explained in the MLN Matters 7080, sets forth instructions for timely billing for claims that span dates of service (i.e., "from... through..."). In particular, for institutional services, the one-year deadline will be based on the "through" date (the final date included in the claim). For professional services, the one-year deadline will be calculated on the "from" date.

Continue reading "CMS Clarifies Timely Filing Requirements for Claims Including a Span of Time" »

As HLP reported, in April, CMS requested that the RAC for Region D remove an anesthesia care package it had posted to its website. Now, the issue has been re-posted, with some changes:

Under NCCI Edit rules, the anesthesia care package consists of preoperative evaluation, standard preparation and monitoring services, administration of anesthesia, and post-anesthesia recovery care. Anesthesia CPT codes 00100 to 01999 include Evaluation & Management (E&M) services rendered on the day of the anesthesia procedure. If the only service provided is management of epidural/subarachnoid drug administration, then an E&M service should not be reported in addition to CPT code 01996.

The above lacks clarity around two issues: (1) whether this refers to E&M services provided only on the day of the procedure and E&M services billed with 01996; and (2) whether this is being treated as automated or a complex review. As you may recall, CMS directed the removal of the issue when it was written more broadly to include all E&M services billed before and after anesthesia.

You can view the posting by clicking "next" to page 2 of this RAC Info page.

Continue reading "RAC for Region D Posts New Anesthesia Care Package" »

Hospice providers are facing ongoing claims scrutiny, highlighting the importance of compliance. On June 8, 2010, the Centers for Medicare and Medicaid Services ("CMS") held a national outreach session to educate hospice providers regarding specific vulnerabilities involving hospice services, with specific emphasis on the provision of hospice services to beneficiaries residing in nursing facilities.

Two recent Office of Inspector General ("OIG") documents highlight this important issue. First, in September 2009, the OIG published a report entitled, "Medicare Hospice Care for Beneficiaries in Nursing Facilities: Compliance with Medicare Coverage Requirements." This OIG report concludes that 82 percent of hospice services provided to beneficiaries in nursing facilities in 2006 failed to meet Medicare coverage requirements. The report found that most deficiencies were related to the hospice's failure to comply with provisions of the hospice plan of care, failure to obtain valid hospice election statements, and failure to comply with hospice certification requirements. The report states that the information contained therein would be shared with the Recovery Audit Contractors ("RACs"); accordingly, providers may expect that the RACs may target hospices in conducting claims reviews.

A second OIG document entitled, "Medicare Hospice Care: Services Provided to Beneficiaries Residing in Nursing Homes," details the increase in hospice services provided to beneficiaries residing in nursing homes over time. The document further notes the high percentage of hospice patients that reside in nursing facilities who have ill-defined conditions or mental diseases (e.g., Alzheimer's disease, chronic obstructive pulmonary disease ("COPD"), unspecified heart disease, etc.).

These documents, together with the recent educational sessions put on by CMS, highlight the scrutiny under which hospice claims will be reviewed. Accordingly, it is imperative that hospice providers adopt and implement appropriate compliance procedures, not only with respect to technical issues (e.g., plan of care, election and certification requirements), but also with respect to eligibility issues (e.g., fully documenting a given patient's condition and signs and symptoms of decline to establish hospice eligibility, taking into account published Medicare policy guidance and local coverage decisions).

Continue reading "Hospice Providers Face Claims Scrutiny" »

The Office of Inspector General ("OIG") today published a report regarding overpayments identified made to inpatient rehabilitation facilities ("IRFs") from 2004 through 2007. According to the report, of the claims reviewed by the OIG, the vast majority (i.e., 213 out of 220) of transfers from an IRF to another facility were improperly coded as discharges. The reimbursement to an IRF that discharges a patient surpasses the reimbursement to an IRF if it transfers a patient to another facility. Accordingly, the OIG predicted that if its findings were extrapolated to non-reviewed claims, it is possible the Centers for Medicare and Medicaid Services ("CMS") made $34 million in overpayments with respect to this issue. The OIG recommended that CMS review all claims in the sample frame and recover any overpaid amounts.

Continue reading "OIG Identifies Inpatient Rehabilitation Facility (IRF) Overpayments" »

It looks like the days of "voluntary" compliance programs for the health care industry are coming to an end. Specifically, Section 6401(a)(7) of the Patient Protection and Affordable Care Act ("PPACA" or the "health care reform bill") included provisions mandating compliance programs as part of the Medicare enrollment process.

According to the health care reform bill, providers or suppliers within particular industries or categories, as yet unspecified, must have a compliance program in place as a condition of enrollment. Regulations will be issued which will specify the required elements of compliance, timelines and other details regarding implementation. Until the regulations are actually adopted, we will not know whether and when individual physicians will need to demonstrate that they or their group has a compliance program in place and what that compliance program must look like.

The concept of mandatory compliance is not new. For example, last year, New York providers, including physicians that meet certain financial thresholds with regard to Medicaid billing activity became subject to mandatory compliance obligations as a result of the New York Office of Medicaid Inspector General regulations. The New York regulations closely resemble the compliance program elements recommended by the Office of Inspector General ("OIG") in its voluntary compliance guidance documents. It will not be surprising if the new federal regulations also closely mirror the compliance program guidance of the OIG.

Although the implementing regulations under the health care reform bill have yet to be issued, we are encouraging physicians and other health care entities to undertake a renewed focus on compliance activities. For those smaller health care providers who never formally implemented compliance, the time has come to make compliance a top priority. We say this not necessarily because of the health care reform provisions mentioned in this article but based on what we as health care attorneys have seen and experienced with health care providers who have been subject to the increased health care enforcement environment and the ramping up of audit activity. Specifically, we have been involved in defending numerous Medicare audits as a result of the Medicare Recovery Audit Contractor Program (RACs), Medicare Program Safeguard Contractor/Zone Program Integrity Contractor audits (PSCs or ZPICs), Medicaid audits and other payor audits. We have also seen an increase in investigative activity and the use of other enforcement tools such as prepayment utilization review. In many cases, the government overpayment demands are extremely significant as a result of the use of statistical sampling and extrapolation techniques utilized in the audit process. Furthermore, the health care reform bill strengthens the federal government's ability to enforce the federal fraud and abuse laws, including by clarifying aspects the federal Anti-Kickback Law to the benefit of the federal government, requiring providers to report and return overpayments within tight timeframes, providing for the expansion of the Medicare RACs, and requiring the establishment of a national fraud and abuse data collection program.

Top 3 Compliance Tips

Given this health care environment, we recommend that physician practices begin to focus on compliance. Importantly, physicians can begin to proactively undertake compliance activities now without expending a significant amount of financial resources. For example, at a minimum, we recommend that physicians do the following:

1. Improve Documentation - Evaluate Current Documentation Standards and Increase Documentation: We cannot emphasize enough the importance of taking a critical look at your documentation. It is our experience that documentation issues comprise the main reason for overpayment demands made by Medicare or other payors. While physicians may truly believe that they are documenting enough information to support their services, the reality is that Medicare and other payor auditors expect and demand a much higher level of documentation. Given the increased audit and enforcement activity, physicians are well advised to critically evaluate their documentation standards and make improvements in this area.

2. Review and Stay Apprised of Applicable Medicare Local Coverage Decisions: In order to be in compliance, physicians must understand the playing field including knowing the rules that apply to the services billed by the practice. Physicians are responsible from a legal perspective to know the Medicare rules that apply to the services that they render. It is important that you regularly check the policies posted on the Medicare Carrier website to ensure that you are reporting and documenting services consistent with the published rules. You can access this information at www.WPSMedicare.com.

3. Monitor Billing/Coding Personnel: Physicians should understand that they are legally responsible for the services that are submitted to Medicare and other payors under their NPI numbers regardless of whether or not coding and billing responsibilities are delegated to others including billing companies or internal coders and billers. Thus, physicians must carefully monitor coding and billing performed by others to ensure that the services are being submitted in a compliant manner. In some cases, this may involve hiring experts such as compliance auditors to assist in identifying any areas of risk for the physician.

Continue reading "A Renewed Focus on Compliance: Health Care Reform Measures, Increase Audit Scrutiny and More Reasons Why Compliance Matters! " »

On June 14, 2010, CMS published a report entitled, "The Medicare Recovery Audit Contractor (RAC) Program: Update to the Evaluation of the 3-Year Demonstration Program." This report contains statistics through March 9, 2010 and includes updated appeals data.

The new report reveals a much lower number of appeals than had previously been reflected. Specifically, the new report states that providers chose to appeal 12.7 percent of the RAC determinations made in the demonstration program (76,073 claims appealed). Previously, CMS reported that 22.5 percent of the RAC determinations made in the demonstration program were appealed (118,051 claims appealed). According to CMS, this number decreased for several reasons:

• First, the previous method of totaling claims counted claims appealed to multiple levels of appeal at each stage of appeal. The revised figure counts each appealed claim once, regardless of whether the claim was appealed through multiple stages of appeal.

• In addition, duplicate claims were identified and removed.

• Appeals withdrawn by the provider were removed from the total.

• Finally, claims reversed by the claims processing contractor when additional documentation was submitted were removed from the total.

From the provider's perspective, it is unclear why claims reversed when additional documentation was submitted to the claims processing contractor were removed from the total. These claims constitute denials made during the RAC demonstration program that were overturned on appeal. The failure to include these claims paints a picture that the RAC was more accurate in its claim denials than it actually was.

Even with the omission of this first-level appeals data, the numbers still reflect that when providers chose to appeal claims, they oftentimes were successful. For example, of the 76,073 claims appealed, according to CMS's calculations, 48,993 claims were overturned on appeal, constituting an overall appeals success rate of 64.4 percent.

Notably, despite the fact that the RAC demonstration concluded in 2008, there still may be claims decided favorably that are not included in these statistics. The Administrative Law Judges were overwhelmed by the volume of appeals they received. As recently as April 2010, our office alone received dozens of favorable decisions arising from RAC denials made during the demonstration program, which would not have been included in the most-recent CMS data.

Continue reading "CMS Issues The Medicare Recovery Audit Contractor (RAC) Program: Update to the Evaluation of the Three-Year Demonstration Program" »

On June 9, 2010, the Office of Inspector General (OIG) published a report regarding inpatient rehabilitation facility (IRF) payments made in 2006 and 2007. According to this report, over half of the claims reviewed (i.e., 113 out of 200 claims) resulted in overpayments, because the providers failed to submit patient assessment instruments within the requisite time frame (27 calendar days). The OIG indicated that if the results of the study were projected, it is possible that the Centers for Medicare and Medicaid Services ("CMS") overpaid approximately $20 million. The OIG recommended that the non-sampled claims immediately be reopened and reviewed and overpayments collected.

Continue reading "CMS Identifies Inpatient Rehabilitation Facility (IRF) Overpayments" »

Last month, we published a post regarding the new protocols that CMS is requiring RACs to use on Remittance Advice (RAs) when identifying and recouping overpayments. CMS has also issued the additional Transmittal 659, which sets forth the two-step process of utilizing RAs to report amounts to be recovered.

• Step I: Reversal and Correction to report the new payment and negate the original payment (actual recoupment does not happen at this step)


• Step II: Report the actual recoupment

Additionally, please visit the HLP's RAC page, or contact Abby Pendleton, Esq. or Jessica L. Gustafson, Esq. at (248) 996-8510.

Medicare requires that services provided/ordered must be authenticated by the author with either a hand written or electronic signature (stamps are not acceptable), although there are a few exceptions: (1) facsimiles of original written/electronic signatures are acceptable for the certification of terminal illness for hospice; (2) some orders do not need to be signed, for example, clinical diagnostic tests are not required to be signed; (3) in cases where other regulations and CMS instructions have signature requirements, those requirements take precedence.

On March 16, 2010, CMS published CR 6698, which updates signature requirements and adds E-Prescribing language. As of April 16, 2010, the signature requirements are applicable for reviews; however, the requirements are effective retroactively for Comprehensive Error Rate Testing (CERT) for the November 2010 report period.

According to CR 6698, AC, MAC, and CERT reviewers shall proceed to signature assessment only if the criteria in the relevant Medicare policy cannot be met but for a key piece of medical documentation which contains a missing/illegible signature. ACs, MACs, RACs, PSCs, ZPICs, and CERT contractors shall give deference to other regulations and CMS instructions regarding signatures, and if the relevant regulation is silent on whether the signature must be dated, the reviewer shall ensure that the documentation contains enough information to determine the date on which the service was ordered.

Keep in mind that a handwritten signature is a mark/sign by an individual on a document to signify knowledge, approval, acceptance, or obligation. If the signature is illegible, ACs, MACs, PSCs, ZPICs, and CERT shall consider evidence in a signature log or attestation statement. If the signature is missing, the order shall be disregarded. If the signature is missing from any other medical documentation, a signature attestation from the author of the medical record entry shall be accepted.

At this time, AC, MAC, CERT, PSC, and ZPIC reviewers shall NOT accept as a valid order any controlled substance drugs that are ordered through any E-Prescribing system (reviewers shall only accept hardcopy pen and ink signatures in that case). However, reviewers will accept as a valid order any Part B drugs, other than controlled substances, ordered through a qualified E-Prescribing system. Also, AC, MAC, CERT, PSC, and ZPIC reviewers shall accept as a valid order any drugs incident to DME, other than controlled substances, ordered through a qualified E-Prescribing system.

Continue reading "Updated Signature Guidelines for Medical Review Purposes" »

Centers for Medicare and Medicaid Services ("CMS") reported yesterday that it realizes that fiscal intermediaries haven't been providing sufficient detail on remittance advices (RAs) when recouping overpayments identified by RACs to allow providers to track and update their financial records. In response to that complaint, CMS issued CR 6870 and the corresponding MLN Matters 6870, which outlines clear protocols for how carriers must report when an overpayment has been identified, and when recoupment begins.

Providers can familiarize themselves with this protocol by reading the MLN Matters, and understand how to review their RAs for RAC activity and accurate financial records.

Continue reading "Carriers Recouping Overpayments Identified by RACs Must Follow Precise Reporting Instructions" »

The New York state attorney general's office announced yesterday that it recovered more than $283 million and obtained a record of 148 Medicaid fraud convictions in 2009. This information is detailed in an Annual Report submitted to the Secretary of the U.S. Department of Health and Human Services. The report highlights the cases, settlements, and convictions of the AG's office, including civil settlements with licensed home health care services and certified home health care agencies totaling $51.7 million and 25 criminal convictions; settlements with pharmaceutical companies for off-label marketing, kickbacks, misreporting prices, and other fraud; and a $15.6 million judgment against two dentists who operated a mobile dentist business and who knowingly employed an individual with a prior felony conviction.

Continue reading "New York AG's Office Recovers More Than $283 Million In Medicaid Fraud" »

In a recent development for the anesthesia community, HealthDataInsights ("HDI"), the RAC for Region D, removed the anesthesia care package issue from its approved issues list. In January of 2010, the RAC vendor posted the following issue:

Under NCCI Edit rules, the anesthesia care package consists of preoperative evaluation, standard preparation and monitoring services, administration of anesthesia, and post-anesthesia recovery care. Anesthesia CPT codes 00100 to 01999 (except 01996) include Evaluation & Management (E&M) services rendered on the day before anesthesia (pre-operative day), the day of the anesthesia and all post-operative days. CPT code 01996 includes E&M services on the same day as the 01996 service only. Physicians can indicate that E&M services rendered during the anesthesia period are unrelated to the anesthesia procedure by submitting modifiers 24, 25, 57 and/or 59, depending on claim specific circumstances, on the E&M service. Only critical care E&M services are payable during the anesthesia post-operative period. The post-operative period is defined as the day immediately following the anesthesia service and any subsequent days during the same inpatient hospital admission as for the anesthesia service.

Today, HLP partner Abby Pendleton noted that the issue was no longer posted on the approved issues list and spoke with the CMS RAC project coordinator for HDI, who confirmed that CMS directed the removal from HDI's approved issues list. CMS couldn't provide additional details about why this information has been removed, but anesthesia providers should stay tuned.

Continue reading "RAC Vendor For Region D Removes Anesthesia Care Package Issue from Approved List " »

As Medicare providers and suppliers are acutely aware, the Centers for Medicare and Medicaid Services ("CMS") has determined that the use of Recovery Audit Contractors ("RACs") is a "cost-effective" way to identify and correct improper payments, in part as a result of the contingency-fee-based structure of using these auditors. Primarily because of the program's cost-effectiveness, Section 302 of the Tax Relief and Health Care Act of 2006 made the RAC program permanent required its operation nationwide.

The RAC program soon may be expanding even more. In Section 6411 of H.R. 3590, the "Patient Protection and Affordable Care Act" (i.e., the health care reform bill), Congress has proposed to expand the RAC program, specifically the use of contingency-fee-based RAC contractors, to audit not only Part A and Part B Medicare claims, but also to review Medicare Advantage (Part C), Medicare Prescription Drug (Part D) and Medicaid claims. This bill is in line with a recent White House Memorandum which states President Obama's support of the use of "high-tech bounty hunters" to help find health care fraud in government-run Medicare and Medicaid programs.

The House of Representatives passed H.R. 3590 on March 21, 2010. The bill was approved by the Senate last December and was signed into law today, March 23, 2010. It is unclear which provisions will survive a separate "compromise package of changes" to the bill.

The HLP will continue to provide updates as any changes to the RAC program are adopted and implemented.

Continue reading "Get Ready: The RAC Program Soon May Be Expanding" »

The Medicare Recovery Audit Contractor ("RAC") program has a strong supporter in President Obama. On March 10, 2010, Obama signed a White House Memorandum, which states his support of the use of "high-tech bounty hunters," such as RACs and Medicaid Integrity Contractors ("MICs"), to help root out health care fraud in government-run Medicare and Medicaid programs. The Memorandum directs federal departments and agencies to intensify their use of private auditors to discover and recapture improper payments.

Continue reading "President Obama Emphasizes Support of RAC Program" »

The Office of Inspector General (OIG) released a report discussing some of its recent findings regarding the Recovery Audit Contractor (RAC) 3-year demonstration program. The report revealed that between March 2005 and March 2008, the RACs "referred two cases of potential fraud to the Centers for Medicare & Medicaid Services (CMS). However, CMS reported that it received no potential fraud referrals from RACs during this period." The OIG learned that the RACs were not properly trained in detecting fraud and recommended to CMS that it do the following: "(1) conduct followup to determine the outcomes of the two referrals made during the demonstration project, (2) implement a system to track fraud referrals, and (3) require RACs to receive mandatory training on the identification and referral of fraud." CMS has accepted and agreed and has already begun to adopt these recommendations.

Continue reading "Recovery Audit Contractors (RAC), Fraud Referrals, Recommendations" »