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Archive for November, 2010

Update: Physician Pay Cut Delayed One Month

Posted by J. Paul Spencer, CPC, CPC-H in Industry Updates, J. Paul Spencer, CPC CPC-H, Medicare Fee Schedule

Acting on a bill passed by the Senate prior to the Thanksgiving break, the House of Representatives today passed, by a voice vote, a one-month delay in the implementation of a 23.1% reduction of the Medicare physician fee schedule.

The next deadline to present itself will occur at the end of the calendar year, where a combination of cuts in CMS’ final rule amounting to 26.8% is set to take effect for 2011.

The Senate Finance Committee is currently working on a bill seeking a one-year delay for these looming cuts in order to allow the next Congress to work on a long-term solution to the Sustainable Growth Rate formula, a “balanced budget” contrivance of Congress from the 1990’s, which ironically has shown itself to be unsustainable. With a newly elected Congress pushing austerity measures at all costs, and a lame duck session about to adjourn permanently prior to the holidays, a solution would not seem to be forthcoming.

November 29th, 2010 | No Comments »

Updates: Red Flags Rules & the Medicare Physician Fee Schedule

Posted by J. Paul Spencer, CPC, CPC-H in Fi-Med Services, Medicare Fee Schedule

In the coming season of giving, where the profound significance of ancient events in Middle Eastern deserts is reduced to commercial exchanges of clothing and electronic equipment between family members, most of our heads are plunged deeply into personal schedules related to parties, dinners and assorted drinking engagements.

Beyond this frivolity lies the cold hand of reality for those of us involved in health care, namely the year-end litany of oncoming regulations and news updates.

With 2010’s relentless focus on the Patient Protection and Affordable Care Act, a few less notable regulations have tended to fall out of focus. One of the biggest of these is the five-times-delayed Red Flags Rules from the Federal Trade Commission.

To refresh everyone’s memory, the Red Flags Rules instruct anyone who is defined as a “creditor”, to establish internal identification processes, or “red flags” (get it?) for preventing identity theft. The FTC has insisted from the time of introduction of the rules that physicians fall under the definition of “creditor”, as they are rarely paid in full at the time of service.  

On May 21, 2010, the AMA, along with the American Osteopathic Association and the Medical Society of the District of Columbia, filed suit in federal court in an attempt to stop the FTC from applying the rules to physicians. Their central argument was that the FTC, in defining physicians as creditors, exceeded its regulatory authority. The filing of this suit followed an earlier case involving the American Bar Association (ABA), which sued the FTC using the same reasoning, and eventually won. This ruling is currently being  appealed by the FTC. On June 25, the FTC and the stated plaintiffs in the May filing agreed to a delay of rules implementation for physicians until 90 days after the decision in the ABA case. A look at the calendar of the D.C. Court of Appeals for the remainder of 2010 shows that oral arguments in the appeal of the ABA case are not currently scheduled.

On August 17, the Council of Medical Specialty Societies filed a motion to intervene as plaintiffs in the AMA suit, stating that only a small portion of the physician community is represented by the originating parties filing suit. A decision on this motion has yet to be released.

The result of the above pending litigation currently adds up, once again for the physician community, to “delay”. With the latest FTC-stated deadline for enforcement of the Red Flags Rules being December 31, 2010, odds are that the question of physicians being covered under these rules is a long way off. However, while not currently mandated, I would find it to be a good idea for physicians’ offices to develop policies to ensure that the patients they are treating are indeed who they portend to be upon presentation for services.

In other, more immediate news, the U. S. Senate passed a one-month extension of the current Medicare physican fee schedule this week. If the House passes this pending legislation prior to December 1st, a scheduled 23% reduction in the fee schedule will be delayed until January 1st, which will then combine with a previously legislated 6.1% reduction to form the Mecha-Godzilla of all physician cuts.

Enjoy time with family (even that weird uncle), the good food and (if you’re a Dallas Cowboys fan) the bad football this Thanksgiving.

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November 24th, 2010 | 1 Comment »

The RAConteur’s Thanksgiving Prayer

Posted by J. Paul Spencer, CPC, CPC-H in J. Paul Spencer, CPC CPC-H, RAC / Recovery Audit Contractors, The RAConteur™

Thanksgiving is that one day of the year when we all give thanks for dead, flightless birds soon to be consumed, vegetable casseroles of a brownish hue that we see once a year and fashion changes since 1620 that have resulted in no one having to wear hats with buckles on them.

If you’re not already on your way to another domestic destination for the Thanksgiving holiday, I’d like to share with all of you this list of little thoughts of thanks, offered from myself on behalf of physicians everywhere to my great all-knowing, sarcastic supreme being that is watching you with mocking disdain from the coffee cup on your desk (BOO!).

Thanks to CMS, for doing such a bang-up job of encouraging the RACs to pursue underpayments in addition to overpayments that the ratio of identified overpayments to underpayments now stands at 9 to 1.

Thanks to the RAC Validation Contrators, whose continuing silence in clarifying the definition of “good cause” insures that the RACs can look at any issue for any reason whenever they feel like it.

Thanks to admitting physicians, whose incomplete and non-specific documentation of a plan of care provides an unnecessary level of challenge and jeopardy to the reimbursement of every facet of inpatient care in the RAC environment.

Thanks to the Patient Protection and Affordable Care Act, a statute that makes the expansion of RAC activity into Medicaid the law of the land, thereby incrementally increasing the already stratospheric administrative cost of healthcare.

Thanks to the now-incarcerated Armenian mob, and all past, present and future health care criminals like them, without whom we would have no need for RAC contractors in the first place.

Thanks for the RAC Contractor websites, each one of which is different, varies in the amount of useful information, and provides navigation experiences so divergent as to render each of them useless on many levels.

Thanks for the lack of scheduled provider outreach sessions for the last calendar year across the nation, which forces every health care provider to scramble for information on the aforementioned oh-so-helpful websites.

Thanks for postmark dates on Additional Documentation Request letters that vary from the dates on the letters themselves by as much as a week, thereby shortening the amount of time a provider has to respond to the request within the statutory time frame. 

Finally, thanks for a health care system where doctors have to increasingly worry about keeping past revenue to such a degree that it interrupts the pursuit of future revenue. I’m sure that after we all overeat on Thanksgiving, thereby endangering our health, it will be that much easier to find a doctor that has the time to counsel us on proper nutrition.

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November 23rd, 2010 | 4 Comments »

Checking Into The Hospital…..Permanently

Posted by J. Paul Spencer, CPC, CPC-H in J. Paul Spencer, CPC CPC-H, OIG Issues

I type today’s blog post while under the influence of antibiotics. Yesterday, the two-week cough I’ve been battling was diagnosed as bronchitis. All things being equal, I’d rather be home in my bed, dog and cat close by, sleeping it off, but duty beckons.

I’m not quite sick enough to be in a hospital, but after coming across an OIG report that was released this week, I may not want to visit one for a while.

The OIG released an 81-page report entitled Adverse Events in Hospitals: National Incidence Among Medicare Beneficiaries. For purposes of the report, the OIG looked at statistics for all Medicare patients discharged from a hospital during the month of October, 2008. Of the patients in the sample, it was found that 13.5% experienced an adverse event during their hospital stay, including 1.5% that suffered an event that contributed to their death. The cost of these adverse events to the Medicare program for this single month were estimated at $324 million. In addition, the reports determined that 44% of these adverse events were either clearly or likely preventable.

While numbers for one month do not establish a pattern, multiplying the results of this study out to one year shows that roughly 1.6 million Medicare beneficiaries have an adverse event during a hospital stay, resulting in nearly $4 billion in costs to the program.

The main focus of the Obama administration in reducing costs to the Medicare program has been to attack the inherent fraud throughout the system. While this is a noble goal, this report shows that there are indeed many ways to reduce the number of dollars exiting the plan on a daily basis.

Many efforts currently in their infancy are aiming to tie reimbursement to outcomes. A report with numbers such as the ones above shows that there is indeed a long way to go in achieving this goal.

November 19th, 2010 | No Comments »

The RAConteur: Place of Service, or “Where Are You?”

Posted by J. Paul Spencer, CPC, CPC-H in J. Paul Spencer, CPC CPC-H, OIG Issues, Place of Service, RAC / Recovery Audit Contractors, The RAConteur™

People I know like to criticize my driving. I drive fast, I drive aggressively and I make no apologies for it. The sooner that the rest of the world learns to stay out of my way, the better.

When I get into a car, I know exactly where I’m going. I don’t own a GPS device. I map it out before I leave the house, and arrive on time. If you have no idea where you’re headed or how to get there, what are you doing in a large, multi-ton piece of metal racing down the highway? At this point, you are no longer a responsible driver. You have now become a potential battering ram, and if I happen to be on the road at the same time, I shall be more than happy to give you a stark visual reminder of what you can do with yourself and your car.

Thanks to technology, we have a number of ways to find our exact location on the planet at any time of the day or night. We can now also share that with friends and acquaintances thanks to cell phone applications. As an example, I type this from my current location of Latitude 43.0582351° North and Longitude 88.0474888° West.

Apparently, determining one’s whereabouts are not quite so easy for physicians.

As part of the automated review process, the RAC contractors have been comparing place of service codes on physician claims and finding that the same beneficiaries are incurring hospital outpatient services on the same date. This leads to a recoupment of the difference between reimbursement of a claim at the higher non-facility rate and the facility rate.

The results of an OIG review of 100 non-facility services from 2007 was released on July 28, 2010 by CMS. The services were selected from a universe of claims where a correlating facility charge existed for the same patient on the same date of service. Of the services reviewed, only 10 were found to have the correct place of service on the claim. The OIG estimated from this review that CMS overpaid physician claims to the tune of $13.8 million. As a result of this review, CMS is referring over 484,000 physician claims of this type to the RACs and other recovery entities to pursue overpayments.  

This appears to be a fairly easy fix. Before performing services in a place of service, ask yourself three questions: where am I, will a facility billing be generated for the services I am about to perform and (if you don’t know the answer to number two) am I responsible for the expense of this space that I currently occupy. Are we in an office or an independent or hospital-owned surgical suite? It’s not that difficult when broken down to the bare minimum.

I’ll equate this to driving. In the same way that you should know where you’re going in your car, if you don’t know where you are and what your costs are for performing the services you are about to deliver, why are you examining me?

November 17th, 2010 | No Comments »

The Physician Fee Schedule: The Final 18 Days

Posted by J. Paul Spencer, CPC, CPC-H in Industry Updates, J. Paul Spencer, CPC CPC-H, Medicare Fee Schedule

One hobby of my youth, since neglected to a large degree, is as a coin and currency collector. As a 10-year-old, I took great pride in knowing what famous American graces every level of paper currency, despite the fact that anything above the occasional $100 bill would never appear in my hands.

We are a money culture. From the 5-year-old with a lemonade stand to the pensioner complaining that in their day they could buy the entire restaurant for $5, you are hard-pressed to find someone who doesn’t realize the necessity of money in their lives. Income becomes the determining factor in what you eat, what you wear, the quality of the roof over your head, how you get around and how you spend your ever-diminishing spare time.

Now let’s say that your biggest source of income warns you that without a legislative fix, 23% of the money you receive will disappear in 2 1/2 weeks. I am guessing that a range of emotions would fill your head, many of those being negative.

Welcome to the world of your physician.

On December 1st, the Medicare conversion factor is set to decrease by 23% percent from its current jury-rigged levels stemming from temporary fix legislation passed in June. Without modification, this will be followed in short order by an additional 6.1% cut on January 1st. Fixing the problem now falls to a lame duck session of Congress, many members of which will be more focused on tax cut legislation, cleaning out their desks and preparing resumes for jobs in the lobbying industry.

Whenever this yearly threat raises its head, I am always amazed at the relative silence coming from the patient population most served by the Medicare program. Physician advocacy organizations make their usual statements, complete with adjectives such as “catastrophic” thrown in for good measure, yet nary a sound emanates from the patient population.

The Medicare program offers many things, but the most important of these is buying power. Without Medicare, the budgets of the rapidly-expanding population of older citizens would be forced to find other coverage options that would more than likely not be as forgiving to their limited budgets. A world where Medicare reimbursement is reduced by 24% forces physicians into a position of not accepting appointments for new or established patients with Medicare as their primary coverage, based on reimbursement suddenly being out of line with practice expense.

It is a mistake to think physicians are immune to the sudden income hit, but  people who rely on the omnipresence of Medicare acceptance as the main driver of personal health care decisions face an uncertain (I could go so far as to use the somewhat macabre word “abbreviated”) future. Insurance coverage buys access. Without access, the oldest and sickest among us are suddenly most at risk.

The verbal warning shots being fired in advance of Congress reconvening this coming Monday tell me that a temporary fix is on the table, but exists somewhere near the bottom of the legislative priority list behind tax cut extensions, judicial appointments and campaign finance reform legislation. The AMA plans to inundate Congress with blunt reminders of what is at stake in this debate. I challenge Medicare patients to do the same as third party stakeholders. It has never been easier to contact your current representative in Congress and have your feelings known. With the holiday season and sunsetting careers converging in the same space, the physician pay fix needs to be closer to the top of the agenda, and many voices make a chorus.

November 12th, 2010 | 2 Comments »

The RAConteur: After the Money is Gone

Posted by J. Paul Spencer, CPC, CPC-H in J. Paul Spencer, CPC CPC-H, RAC / Recovery Audit Contractors, The RAConteur™

I read a news story yesterday that, as a fan of music, immediately filled me with a sense of loss.

A warehouse in San Carlos, California owned by Neil Young caught fire early Tuesday morning, causing $1 million in damage and the loss of roughly 30% of his personal collection of memorabilia from his nearly 50-year career in music. 

I thought for a moment about the enormous scope of Neil’s career when I heard this news, starting as a musician in Ontario, playing with a band called the Mynah Birds in Buffalo with a young Rick James (!) as the lead singer, moving on to groundbreaking work with Buffalo Springfield, his stints with Crosby, Stills & Nash, appearances at Woodstock and Live Aid, “Heart of Gold”, his concerts for the Bridge School in San Francisco and on and on. Neil’s memorabilia collection spans a time in music that is forever gone, never to return, never to be repeated. Once a special moment has come and gone, it either exists in memory or in history, if anyone was lucky enough to be there to photograph it, commit it to tape or write about it. As a 19-year-old kid who was in the sun-baked crowd at Live Aid in Philadelphia in 1985, watching Neil Young play “Only Love Can Break Your Heart” with Crosby, Stills and Nash by his side, I felt Neil’s loss yesterday emotionally, if not financially.

In a roundabout way, Neil Young’s warehouse catching fire becomes a great teaching moment for medical providers about RAC audits, and about carrier recoups in general. When a provider receives a letter in the mail demanding money back for past medical services due to audit, it is not as if those dollars are sitting in a desk drawer, a safe deposit box or the safety of the physician’s wallet. The money is gone! The expense of being a medical provider requires that dollars collected for past procedures be reinvested across many things, from utilities to employee salaries, from medical supplies to new diagnostic equipment.

The threat posed to any medical provider’s bottom line from retrospective audit cannot possibly be overemphasized. Any money recouped as part of this process is taking a piece not of the past, but the present. It makes the idea of preemptive self-defense that much more important.

Based on the results of RAC audits up to this point, the very clear takeaway is the importance of documentation to medical reimbursement, from the very first patient encounter to the last. As the RACs have expanded into complex reviews for medical necessity, hospitals are learning too late that the hospitalist program they currently have in place is convenient in the short term, but not so much in the long term. RACs are starting inpatient reviews of certain DRG’s at the very beginning of the process, that being the plan of care as documented by the admitting physician. If the care provided does not match the admitting plan, the stay is being invalidated, which affects not only the hospital’s reimbursement for care already provided, but every individual Part B provider involved on the same case.

As a physician, you went through a decade of challenges and training that instilled confidence in the treatment you provide. I now offer you a new challenge, which is to approach the documentation of the services you provide not with a sense of dread of paperwork, but with a swagger and arrogance about its contents. Document in the patient’s medical record with the knowledge that no other person in this patient’s life is capable of putting together a plan of care for the person’s health but you. Be defensive, be arrogant, be verbose and be confident. Seize the opportunity to put your years of training in a narrative format. It’s not only your privilege, but as it turns out, your best defense from an unseen entity attempting to make financial decisions on your practice’s behalf.

How do you want to feel on the way home? Do you want to feel fear or confidence about your chosen course in life? Make your practice a testament to your path and legacy, and not something you look back upon as a constant act of firefighting against payers that chipped away at what you wanted to build. Build your defenses with walls of impenetrable documentation, which constructs a story not only of dedication to medical regimen, but of financial well-being.

November 10th, 2010 | No Comments »

The RAConteur: Medicaid RAC Proposed Rule Released

Posted by J. Paul Spencer, CPC, CPC-H in J. Paul Spencer, CPC CPC-H, RAC / Recovery Audit Contractors, The RAConteur™

A tried and true tradition of the Executive branch of the U. S. government is the “Friday News Dump”. With the idea that it becomes too late for national news outlets to update their lead stories, Cabinet departments save the news with potentially the biggest impact until late on a Friday afternoon, hoping that the late discovery of the same buys time for a response from the releasing agency.

An issued statement this past Friday afternoon from CMS was no exception to this rule. In a last-minute news dump, CMS unceremoniously released the proposed rule regarding Recovery Audit Contractors for Medicaid programs across the country. Much of the information in the proposed rule mirrors what was learned with the release of the first preliminary guidance letter from CMS to State Medicaid Directors on October 1, 2010, but landed with a thud all the same.

Section 6411 of the Patient Protection and Affordable Care Act (PPACA) requires states to contract with 1 or more Medicaid RACs by December 31, 2010. States are mandated to submit a State Plan Amendment (SPA) by this date indicating the establishment of the Medicaid RAC program, along with the contingency fees to be paid to the selected RAC(s) for the state. The goal of the proposed rule is a Medicaid RAC implementation date of April 1, 2011, with CMS seeking comment on this date.

States can request an exception from any part of the Medicaid RAC program, but the proposed rule reiterated that CMS foresees granting exceptions “rarely, and only under the most compelling of circumstances”.

It’s worth noting that the official release date of this proposed rule to the Federal Register is listed as November 10th. Based on the 60-day comment period for all proposed rules, the comment period ends 9 days after the states must either have a contract in place with a Medicaid RAC or have a request for exception from the program on file with CMS. I translate this to mean that commenting on the Medicaid RAC contract is taken off the table, but the implementation date of April 1st will most likely lead to a large quantity of comments during the period.  

The proposed rule goes into great detail about the contingency fees to be paid under the Medicaid RAC program. Unless a state provides ample justification for an exception based on existing state law, no state will be able to pay a contingency fee that is higher than the maximum allowed under the Medicare RAC program, which is currently 12.5% for a five-year period ending July 1, 2014. If state law mandates a higher contingency fee for similar services, a federal match will not be paid to the state plan on any amount above the Medicare RAC fee maximum.

As with the Medicare RAC program, states must amend their plans to provide incentives for the identification of underpayments to Medicaid providers. The total contingency fee paid to the Medicaid RAC for both underpayments and overpayments cannot equal more that the total amount of overpayments collected by the contractor. This is not to say that the current incentives for the identification of underpayments are working on the Medicare side of the RAC program. The current ratio of identified overpayments to underpayments stands at 9:1.

In reporting the amount of overpayment dollars collected, states would report only the net amount after payment to the contractor of contingency fees for both overpayments and underpayments is taken off the top from all dollars collected. After this amount is determined, the State is required to refund the Federal share of the net overpayment amount to the Federal government. The proposed rule would also require that states issue a report describing the effectiveness of their Medicaid RAC program.

The proposed rule wishes to give states options on setting up appeals processes for providers. Rather than one standardized Medicaid RAC appeals approach, CMS is requesting comment on giving states the option of either utilizing an existing process for provider appeals of RAC determinations or creating a new one specifically for the state’s RAC program. These particular passages in the proposed rule have the potential of creating over 50 unique appeals processes, one for each state and territory covered by the Medicaid program. It doesn’t take long to realize the potential administrative nightmare that is created when a standard format for Medicaid RAC appeals does not exist.  

The proposed rule once again makes clear that the establishment of a Medicaid RAC does not replace existing audit efforts by the state plans. Going further, the states are expected to mandate coordination efforts between the Medicaid RAC and other audit entities to minimize the risk of overlapping audits of the same issue by multiple audit entities. CMS also wishes not to jeopardize the outcome of ongoing fraud investigations via duplication of audit. It amazes me that states will be mandated to share information on ongoing audits with the RACs, yet the RACs, being for-profit entities, will more than likely not return this favor. CMS is finding that the Medicare RACs, due to the financial incentives for identifying overpayments, are generally not referring suspected cases of fraud to CMS for further investigation. I look forward to CMS strengthening their language with the RACs regarding referrals to CMS and the OIG for further investigation of suspect providers in the realm of fraud.

It promises to be a spirited comments period as we head into the holiday season.

November 8th, 2010 | No Comments »

The Uncertain Future of Healthcare Reform

Posted by J. Paul Spencer, CPC, CPC-H in Health Care Reform, Hot Topics, J. Paul Spencer, CPC CPC-H

I have no interest in astrology whatsoever. Letting something like this run your thought process for the day is akin to planning your retirement around Powerball. In those rare instances when I read my horoscope, it’s always at the end of the day, and surprise, it’s always either wrong or so generalized that I find it hard to believe that someone in charge of a checkbook paid money for someone to write it.

Making predictions always makes one look either terribly uninformed or incredibly lucky, but rarely intelligent. It is with this thought in mind that I observe the posturing and chest-thumping currently on display in the handful of days since Tuesday’s midterm elections, particularly with regard to the Patient Protection and Affordable Care Act (PPACA).

On one side, we have the Republicans, whose plan is nothing short of repeal. On the other side, we have the Democrats, who are making preliminary arguments along the lines of “we set this up as an entitlement, not as discretionary spending, so repeal would be quite the trick”.

So let me give you the evidence-based answer of what will happen with PPACA. Congress is a corporate brothel, so the lobbyist with the biggest check gets the most service, so wait and see who writes that check.

That was simple. Now, let’s move on to the other reality that no current or future legislator has the courage to address, because it’s not a problem for which they are receiving large checks to form an opinion, which is the ticking time bomb of the Medicare Physician Fee Schedule.

Beginning on December 1st, physicians are facing a 24.1% cut in reimbursement. As I stated in a previous post, the actual deadline for this cut, based on what occurred earlier this year, is December 14th, due to 10-day hold that can be put in place statutorily by CMS. If that wasn’t enough, the initial decrease is followed by a cut of an additional 6% on January 1st.

It is the outgoing Congress that must deal with this problem, in between self-anointed extended vacations for Thanksgiving and the holiday season. Congress does not reconvene until November 15th, and the biggest “burning issue” of the lame duck session (in a country where the current U6 unemployment rate is 17%) has become extending tax cuts for the richest 1% of America’s population. Under Eisenhower, this group’s tax rate was 91%. It now stands at 36%, but expires at the end of the year and threatens to go to 39%. Apparently, the prospect of doctors being forced to delay care to existing patients, or perhaps cease care to new Medicare patients, is not as urgent as the possibility of a river of crocodile tears from billionaires. Did I mention that in addition to going bed at 7 in the evening, the elderly, the majority of whom are Medicare beneficiaries, tend to vote angry and often?

Legislators like to selectively shout “FRAUD!” when they want to demean a federal program that they do not like. Given this, I can say with great confidence that whatever the future of the PPACA, I would find it incredibly surprising if the extension of internal and external audits were rolled back in any fashion. The RACs, MICs, ZPICs and CERT programs are here to stay. As long as Medicare is in existence, acting as a third rail in any political discussion, both sides will have an interest in controlling the dollars flowing out of the program. Successful return of federal funds back into Medicare that never should have left is something everyone can agree upon.

I’m fully of the realization that I’m not previewing a romantic television miniseries here, but rather a bloodsport along the lines of Rollerball. I don’t suggest popcorn and a drink, or for that matter food of any kind, as the viewer has a good chance of seeing it again in pre-digested form. I know that I don’t write lobbying checks for a living, so any result we see will benefit someone in a suit in addition to being completely devoid of reason and accountability. In the eternal words of H. L. Mencken, “ Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule – and both commonly succeed, and are right”.

November 5th, 2010 | No Comments »

The RAConteur: Everything’s On The Table

Posted by J. Paul Spencer, CPC, CPC-H in J. Paul Spencer, CPC CPC-H, RAC / Recovery Audit Contractors, The RAConteur™

I have made a minor career out of being the keeper of a large amount of what I refer to as “bar knowledge”. For the uninitiated, bar knowledge is classified as those obscure facts which cause arguments in bars which are eventually solved by the least likely person in the bar, who usually doubles as the person with the most drinks consumed.

As an example, one of my oldest friends in the world is also an airline pilot. Based on his connection to me, the company for which he performs this task wishes to remain anonymous. He was on a two-day layover in San Francisco, which gave him an opportunity to enjoy the nightlife of the City by the Bay. My phone rings at about 10 PM (8 PM on the coast), and it’s my friend asking me to settle an argument.

“What was Traffic’s first album?”, he asked. Of course, I knew that the answer was Mr. Fantasy, which was Steve Winwood’s first record with someone other than the Spencer Davis Group (I almost digress). My friend won a free drink, and I returned to my television program.

Some people are geniuses, other people just know a lot thanks to numerous fateful intersections with information. I’m very much in the latter category, but I’m told I have a little more personality than the average genius. I’ve found that bar knowledge has a habit of enlightening people quickly, which is something genius simply cannot do. One of the greatest books ever written, A Brief History of Time by Stephen Hawking, takes years to digest based on the weight of its intellectual heft.

Knowing I’ll never be a genius is quite freeing actually, in that my mind is designed to read and retain minutiae most people find meaningless. For purposes of this space, I came across a great example while researching RAC requests.

For me, there is a big blank spot in the RAC process, and that can be formed as a simple question: what audit issues do the RACs want to look at that have yet to receive CMS’s widespread approval? When an issue is approved, the issue appears on the listings compiled on the websites of the four RAC contractors, but the RACs and CMS are not sharing information about what issues are under consideration for widespread audit.

In an e-mail response to my inquiry on the subject yesterday,  Scott Wakefield, the CMS Project Officer for RAC Regions A & B stated “The nature of any issue for widespread review may change significantly during Board review of the evidence provided by the RAC, therefore, the CMS New Issue Review Board does not publish a list of review issues pending approval”. While this is polite, concise government-speak that is covered more easily by the word “NO!”, there is a phrase in that answer that should catch your attention, and that phrase is “…evidence provided by the RAC…”. If an issue isn’t on the approved issues list, how is the RAC gaining evidence?

Exploring further, I found the following RAC FAQ on the CMS website: 

Question: I received an additional documentation request (ADR) letter from a Recovery Audit Contractors (RAC) for an issue that is not approved on their website.  Do I need to submit the record?

Answer: RACs may request a small sample of records to assist CMS in determining if an audit concept is consistent with Medicare policy and should be approved for widespread review. Providers must still submit the requested documentation to the RAC within the expected timeframe to avoid having that claim denied. The RAC will complete its review of the claim and issue a review results letter within 60 days.

Since I’m not a genius but rather a grand high exhalted keeper of bar knowledge, let me simplify this for you. The approved issues lists are nice, but the RACs can look at anything at any time if they identify a targeted claim as an issue they want approved. Clarifying further, respond to all additional documentation requests in a timely fashion, no matter what issue may be at stake!

If you take this information and combine it with information previously learned regarding what constitutes “good cause” for audit, and the conclusion that I reach is that every issue is on the table for RAC audit. This allows for the following scenario to happen. A RAC identifies an issue it believes should be approved for widespread review. It sends ADR’s to affected physicians and the review results show some aberrations, but not enough, in the view of the CMS New Issue Review Board, to approve the issue for widespread review. For the providers who are determined to have been overpaid based on the RAC testing their theories, one consolation is that the information is not forwarded to the administrative carrier for adjustment until CMS approves the issue for review. If the issue is not approved, a letter will be sent to the provider stating that the audit for the affected claims has been closed.

The last gap in my bar knowledge database has to do with issues for which widespread review is rejected based on the evidence furnished by the RAC. If pending approvals are not published, it would stand to reason that rejected issues are not published as well. Utilizing deductive reasoning, I would say that based on the scope of fraud previously identified in government health care, it would not be in CMS’ personality profile to inform providers of issues that are not being reviewed. To cover all my bases, Mr. Wakefield responded to my latest question on this issue, saying “No, rejected issues are not made public”. If a provider receives a letter stating that the audit has been closed, archive it and share the issue (PHI excluded) with anyone who will listen. This is how we’ll all learn what has not been approved.

The particular bar knowledge shared with you today isn’t as enticing as knowing album titles for info seekers on a bender in Frisco, but it’s hoped that it was just enough to illustrate the new reality of the RACs having the mandated ability to look at anything it wishes for any reason.

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November 3rd, 2010 | 2 Comments »