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Archive for February, 2011

Breaking Through The Barriers of Ignorance

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

I have a short patience fuse for ignorance and superstition, whether willful or unfortunate. In a country where the loudest voices, irrespective of education level, are pushed to the front of the public opinion line, I consider myself challenged every day of my life.

This week, the results of a poll conducted this month were released by the Kaiser Family Foundation. In response to the question “As far as you know, which comes closest to describing the current status of the health reform law that was passed last year?”, a staggering 48% either thought that PPACA had either been repealed or simply did not know the status of the law.

I try to think of myself as a teacher of sorts. I sit here, in the man-cave that is my work area, bringing useful information to the world, relating to health care and the world at large, twice a week. I’m empowered by the energy that becomes the power of facts. I long ago turned off cable news and their many offshoots in an attempt to gain greater understanding, rather than a far greater number for my systolic blood pressure. It appears that all of my hard work, self-reflection and vocabulary rattling has gone for naught.

So let me try to tear down the walls around the uninformed. PPACA, as it stands today, February 25th, 2011, remains in place and on schedule to be largely implemented in 2014. Yes, on January 31st, a federal district judge in Florida (much like a judge in Virginia prior to him) ruled that PPACA was unconstitutional, but three other federal judges have ruled that the law is indeed constitutional, including one judge three day ago. Until the Supreme Court rules on the legality of PPACA, the law is in force, and will be so until such a day comes to pass.

The problem with our news media, as it is currently configured, is that the truth is buried under twin towers labeled “AGENDA” and “OMISSIONS”. As an example of the latter, while reading an article on an online website this week, I came across a headline at the bottom of the page stating “Neil Young Dead at 66″. Now I could have gone off half-cocked and told everyone I know that one of my favorite musicians just died and gathered everyone for several beers and a sing-along, but instead I clicked through to the story. As you can see by following the link, it pays to have curiosity and click through to the story. The beers will have to wait.

To believe that the law is not in effect because a couple of lower level judges say so speaks to a wide-ranging ignorance of how the judicial branch of government operates. Might I suggest that those who either think the law isn’t in effect or have no idea start with buying a civics textbook.

Sharing this information won’t stop people from burning down their own houses, crossing against the lights or even begin to assist them in finding Canada on a map, but I feel that any help I can provide to give people knowledge is a help. I’m not a part of some cabal trying to destroy the country from within. I’m just informed.

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February 25th, 2011 | No Comments »

The RAConteur: The Speed of Appeals

Posted by J. Paul Spencer, CPC, CPC-H in The RAConteur™

The Recovery Audit Contractor process is full of pitfalls, not the least of which is the current level of incompetence displayed by the contractors in their determinations. Yet many providers are learning that it is what happens at the end of the review process that can make the most difference in how RAC activity affects your practice financially.

There are three options open to providers when the RAC makes an overpayment determination. There is a discussion period, which is open to the provider for 40 days from the date of the overpayment determination. This time frame offers the provider a chance to submit any additional information to the RAC, as well as offering the opportunity for the RAC to explain their rationale behind the overpayment decision. Second is a rebuttal period for 15 days from the RAC determination. With this process, the provider can bring forth evidence indicating why the RAC overpayment demand would create a financial hardship and should not take place. This process is not meant to be used for additional review of documentation.

It is the last provider option that contains pitfalls depending on provider approach.  The redetermination process is the first level of the appeal process. A redetermination can be opened at any time within 120 days, but must be submitted within 30 days to avoid the RAC-determined offset on the 41st day. Yet it may be in the provider’s best financial interest to let the offset happen. With that sentence, I’ve reached the point of further explanation.

If a provider files an appeal within the first 30 days of the determination, and the appeal is eventually rejected, the provider owes not only the amount of the redetermination, but also owes interest on that amount. Yet, if the entity waits until after the money is recouped, and you file an appeal that eventually overturns the RAC determination, CMS pays the provider interest at a rate of 11.25% every 30 days.

As you can see, this changes the calculus of a provider response to a RAC determination. And while I’m on the subject, as it pertains to physicians, it is now long past time that practices get processes in place to respond to RAC requests and determinations. As you can see in the preceding paragraph, adherence to time frames has the potential to make a huge difference on the practice bottom line. Having staff available who can recognize RAC correspondence is essential to the financial health of your practice. More and more, we’re learning that the smallest knowledge gap in response times could be costly.

My long-standing advice to physician practices still stands. If you believe that you have a firm stance for appeal, by all means file an appeal. Being aware of the above time lines can go a long way in determining how you appeal.

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February 23rd, 2011 | No Comments »

Fraud, Stolen Vans and Other Observations

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

In my occupational infancy, I worked in retail as the manager of a camera shop. The month of February was a time of reflection in retail. The Christmas receipts had been counted, the January returns had been calculated and then came February, which meant a lot of nothing. Here’s a little secret I can share with you; President’s Day sales do not bring in bargain hunters. It always seemed odd to me to celebrate the birthday of George Washington by going out and buying an on-sale camera when the product didn’t exist in the 18th century.

If the retail sector has their February doldrums, there has been no such downturn in health care news in the past week.

The first story I read was a story of a van being stolen in Manhattan that contained magnetic tapes with the records of 1.7 million patients and hospital staff over a 20-year period from various New York City hospitals. The van belonged to a company that was contracted to be the medical records vendor for the city. 

There are many rules for survival in New York City, the biggest of which would be “lock the van”. The city has responded by firing the vendor, filing suit against the same and sending out notification letters to all of the people affected (covering 17 languages), offering fraud resolution services and free credit monitoring. As if we needed yet another reminder about weaknesses in the protection of personal information, this story represents one of the biggest data breaches yet, showing all of us that there is still a long way to go, especially when your medical records vendor drives your tapes around in a van as if they are Scooby-Doo.

In further developments, in a joint press conference yesterday afternoon by the Departments of Justice and Health & Human Services, it was announced that 111 people had been arrested for various fraud schemes that led to false billings of $225 million to the Medicare program. The newly ordained defendants hail from Miami, Detroit, Brooklyn, Tampa, Houston, Dallas, Baton Rouge, Los Angeles and Chicago. Due to the success of the Health Care Fraud Prevention & Enforcement Action Teams (HEAT), they have now been expanded in Dallas and Chicago.

The fight against fraud continues unabated, with $4 billion dollars being returned to the Medicare program by the HEAT teams alone in 2010. I eagerly await the upcoming report about the success of the RAC contractors in the past year. In the meantime, it behooves every health care provider to be aware of the expanded audit environment.

This is not to say that there are investigators hiding under your bed, but what slippers have you ever been aware of that breathe? If nothing else, the paranoia will give you something to think about during a slow retail season.

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February 18th, 2011 | No Comments »

The RAConteur: Medicaid RAC Implementation Delayed

Posted by J. Paul Spencer, CPC, CPC-H in The RAConteur™

Rather than wishing you a happy Wednesday, or commenting on the social unrest in the Mideast (funny how I’m sitting in the Midwest, but the Mideast is roughly 6,000 miles away), or letting you know that John McEnroe turns 52 today (YOU CANNOT BE SERIOUS!), I’ll jump right into some news that you may not have been aware of regarding the Medicaid RAC program.

On February 1st, CMS released a bulletin stating that due to concerns about operational issues with states, the original implementation date of April 1, 2011 has been delayed. The bulletin went on to state that when the Medicaid RAC final rule is published, the new implementation date will be included. The final rule is expected to be issued later this year. The comment period for the Medicaid RAC proposed rule ended on January 10, with several entities submitting comments that were similar to one another.

While I had the issue of the Medicaid RAC program fresh in my mind, I have had another problem that I decided to address, that being the lack of information with regard to whom states have contracted with thus far to be Medicaid RAC contractors. If you remember, states had until December 31, 2010 to contract with a review entity to provide Medicaid RAC services. We are now 47 days beyond that deadline, and information on individual RAC contracts is virtually nonexistent.

What follows is a Q & A, via e-mail, with Angela Brice-Smith, the director of the Medicaid Integrity Group at CMS, on this very subject. The part of Q in the following mini-drama is played by yours truly:

Q: “…Is there expected to be a listing on the CMS website of the RAC contractors by state?…

A: “…we are working on a transparency initiative to provide greater information to the public on the progress the States are making to establish and implement Medicaid RACs. There will likely be a mix of public reporting by us and by the states.”

The e-mail ended by stating that I was going on a “tickle list” for info on Medicaid RACs. One hopes that the tickling doesn’t go on too long, as I barely know these people.

As with all RAC issues, I’ll keep you posted as more information becomes available or as I discover it, whichever comes first.

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February 16th, 2011 | 1 Comment »

The Explosion of “Mini-Med” Waivers

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

One of my favorite songwriters is Tom Waits. Early on in his career, he wrote a song called “Step Right Up“, which is a fictionalized sales pitch for an unidentified product.  The song is filled from beginning to end with every single throwaway line you’ve ever heard from someone trying to sell you something.

At the very end of the song, Waits can be heard saying, “The large print giveth and the small print taketh away”. It is hard for me to hear that line and not think about the Patient Protection and Affordable Care Act.

Limited benefit plans, or “mini-med” plans, are currently being widely offered by employers. These plans are known by their high deductibles, low annual benefit maximums, limited range of coverage and trails of dead. These plans are expected to disappear in 2014, as state exchanges begin to take the place of this type of “coverage”.

One of the provisions of PPACA had to do with granting one-year waivers related to these employer-sponsored health insurance plans that provided less than the minimum mandated annual benefit maximum of $750,000. In order to have been granted a waiver for 2011, an employer-sponsored plan must certify that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage. In addition, the companies must inform their employees that their benefit plan does not meet the minimum annual benefits mandated by PPACA.

When this provision was added to the legislation, it was expected that these waivers would be filed mostly by small employers with inadequate overhead to provide a wider range of benefit options to their employees. Of the 733 companies that were granted waivers, the majority of entities that requested waivers are union benefit plans. While that was somewhat surprising, there is one population on the list that falls closer to the column marked “Outrageous”.

Over 700,000 of the 2.1 million employees that fall under companies who requested a waiver are employed by major insurance carriers, including Aetna, Cigna and various offshoots of Blue Cross coverages. Insurance companies are now fighting tooth and nail to offer substandard insurance to their own employees.

Despite that saber-rattling from some quarters about repeal of the health care law being important to keep the costs for small businesses under control, here we have a case where major players in the health insurance market, all of them profitable enterprises by any available selected metric, looking their employees in the eye with a straight face and telling them that their health care plan doesn’t meet the minimum coverage standards under PPACA. I find it hard to believe that any of these entities are on the brink of financial collapse. It is more an instance of a large employer having the fiscal ability to cover their employees at the minimum standard, but choosing not to.

I have no illusions that PPACA, as currently written, reduces long-established finger-pointing, with health care providers stating that insurance companies limit treatment options, or the same insurers returning serve by stating that the costs of care are overinflated. Yet we must realize that for this or any health care reform to work effectively, everyone needs to come to the table with some degree of honesty. For an Aetna or a Cigna to come to the government, hat in hand, stating that they can’t afford to cover their employees at a minimum mandated standard, is patently ridiculous. In the case of Aetna, and their outgoing CEO Ronald Williams, who made over $85 million in total compensation over a five-year period, it borders on criminal.

The small print does indeed “taketh away”, but it strikes me that once again, as has been the established pattern over the past 30 years, the subtraction is coming from those closer to the bottom of the economic ladder.

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February 11th, 2011 | No Comments »

The RAConteur: Physician RAC Experiences

Posted by J. Paul Spencer, CPC, CPC-H in The RAConteur™

It has been an interesting week in the news, with a revolution in Egypt, a Super Bowl winner being crowned (being in Wisconsin, I think I heard something about that) and the news that a diet of junk food lowers your IQ. I take exception  to that last item. I myself had a donut for breakfast and it tasted very much goodly.

There was another news item that caught my eye. A few industry news sources reported that the American Medical Association spent $22 million in 2010 for lobbying activities on Capitol Hill. Most of this money was focused on heading off the adjustments to the Medicare Physician Fee Schedule.

The AMA, as an organization, has been putting most of their organizational might towards insuring future reimbursement. In addition to their efforts on the Medicare Fee Schedule, the AMA has been active with an initiative that grades the major health insurance carriers on their claims activities. While this is a noble goal given the extraordinary level of proven malfeasance in the insurance industry, we now face a two-tiered reality with regard to physician reimbursement. Physicians are not only having to go to extremes to insure current reimbursement, but now find that dollars already received and reinvested in their practices are in jeopardy thanks to an expanded audit environment that includes RACs, MICs, Medicare Risk Adjustment and special investigation units from commercial insurance companies.

By comparison, as it pertains to the RAC program, the American Hospital Association has had their pulse on the RAC program with the AHA RACTrac Initiative. This program is an ongoing survey of its member hospitals that tracks their RAC activity on several levels, from the number of records requests to the rate and success of appeals of negative RAC determinations.

Up to this point, there has yet to be an entity that collects this same data sets for physicians. It would seem to make sense that the AMA collect this data, but this has yet to occur.

In the absence of information, I received an e-mail this week from an independent entity who surveyed their client base on the level of RAC activity. Approximately 80% of the respondents to this survey identified themselves as medical practices. While the survey was rather small, the most revealing result is that 32.3% of overpayment determinations were later overturned on appeal. This number shows that the RACs are still on a learning curve for their reviewing skills.

Like many others, I eagerly await the overall results of the RAC program from 2010, along with those of other governmental audit initiatives. The detailed results should be released sometime in the next two months. In the meantime, my ongoing advice to physician practices stands. If you believe that the RAC contractor has made an incorrect determination, fight it. Even the most die hard junk food junkie has a few IQ points remaining to figure that one out.

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February 9th, 2011 | 1 Comment »

Medicare Fraud Beyond the Most-Wanted List

Posted by J. Paul Spencer, CPC, CPC-H in Health Care Fraud

I have, for many years, believed that I was Russian in a past life, mostly due to my love of cold, snowy, cloudy days and the writings of Dostoevsky and Tolstoy. When someone says they were someone in a past life, they have an annoying tendency to think that they were, of course, someone in royalty. Odds are very strong that I was not a member of the Romanov family. I’m much more of a realist, so I was more than likely a serf who died of consumption, but I was a well-read serf nonetheless.

My love of the eternal winter was tested this week with a snow storm in my part of the world that left a five-foot snow drift between my back door and the garage that holds my car. Once the digging stopped yesterday, I noticed that everything around me resembles not so much a Midwestern town, but rather one enormous bobsled track built just off the banks of the Barents Sea.

Of course, one cannot think of Dostoevsky without returning to themes of crime, punishment and incarceration. Making the rounds yesterday in health care news was the announcement of OIG’s Most Wanted List for health care fraud. As with any most-wanted list, the list of high-dollar violations by just these ten fugitives is extensive, with the amounts adding up to close to $125 million from just these ten individuals. The OIG states that over 170 people are wanted on charges related to health care fraud and abuse, and that number is restricted to the crooks that they’ve discovered.

What is amazing about this particular batch of miscreants is that with the exception of the one primary care doctor who decided that it was his life’s dream to become a prescription drug kingpin, the balance of the list consists of providers that are somewhat off the front lines of the medical delivery system. The biggest violators on the list were running HIV clinics in Florida and getting kickbacks from phantom patients. Others were involved in rehabilitation, home health nursing and durable medical equipment.

So why, given the list of “specialties” of these particular offending parties, as well as long-established patterns of fraud from these same areas, are audit contractors focusing on hospitals and physicians?

I keep returning to the ongoing theme of the successful appeal rate under the RAC program of 64.4%. The Recovery Audit Contractors are trumpeted as an “anti-fraud” measure, but they have referred all of two cases to the OIG for further investigation. The RACs spend the balance of their time doing clerical work that in the end is really only leading to changes in the way legitimate providers of health care services document treatment. The successful appeal percentage tells me that when the RACs believe they’ve found a problem, they are wrong.

RACs are not looking at claims for hospice care and home health, and their DME areas of focus have been merely repetitive of efforts already undertaken by the OIG and the four DME contractors. This is because the RACs are mostly looking for statistical aberrations in billing, and have no specialty focus. It is left up to the HEAT teams and the OIG to ferret out the criminals running enterprises in ancillary care.

The mistake was making the RACs responsible for geographic regions, rather than issues requiring attention. Right now, you have 4 RACs who are basically following each other’s lead as to what issues they review, and the lists, when compared side by side, are beginning to look the same. This all but insures that the biggest fraud areas are ignored in favor of statistically low-hanging fruit that may or may not be correctly identified as an incorrect payment.

What if we had RACs based on types of claims instead? You would have a Part A RAC for hospitals, a Part B RAC for physician claims, a home health RAC, a DME RAC and so on. With this model, two things happen that immediately give the program teeth. First, we have the beginnings of a wider net into areas that aren’t currently being investigated. Second, if a RAC is only handling Part A claims for hospitals, you staff it with coding and medical experts that are focused solely on hospital claims. After all, one of the big complaints about the RAC Demonstration Project, which was repeated in comments regarding the Medicaid RAC program, was that qualified staff was lacking in the RAC offices to understand billing, documentation and medical indications for reimbursed services. Specialization, rather than regionalization, would give the RACs much-needed gravitas in this area. Until then, the RACs will hire coders regardless of level of specialization, which has so far lead to our current appeal success rate.

The Most-Wanted List is a welcome development in the fight against health care fraud, but it will take more than a small cadre of investigators from the Department of Justice and the OIG to find the worst offenders. With legitimate providers under the microscope, the worst of those committing Medicare and Medicaid fraud might as well be under a Siberian snow drift. Enjoy digging through to discover them with your shovel,  because as it currently stands, no one knows how to operate the brand new plow.

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February 4th, 2011 | 1 Comment »

The RAConteur: Medicare Parts C And D RACs Now On Drawing Board

Posted by J. Paul Spencer, CPC, CPC-H in The RAConteur™

Fresh off a day of digging out of a major Midwestern snow storm (the reason for a 1-day delay in posting), I bring you a quick update on the Medicare RAC program.

Back on December 27th, in what could be considered an end-of-year news dump, CMS released a request for comments for the expansion of RAC activities to include Medicare Parts C & D.

Comments will be accepted until February 25th, but as is my lot in life, I’m happy to offer a little bit of a window into Medicare’s thought processes at the moment.

In the world of Part C, also known as Medicare Advantage, there currently exists no useful cost control model. As I pointed out in an earlier post, the current error rate for Medicare Part C stands at 15.4%. If ever there was a portion of the Medicare program in need of stronger controls, this would be it. With these statistics in mind, it was with a high level of surprise that CMS is asking for comments regarding the potential for Part C & D plans to include RAC activities within their plans to identify overpayments.

This statement wouldn’t have caught my attention were it not for the fact that later in the notice, CMS requests information on successful overpayment recoupment models in managed care that “may already exist” in the commercial sector and whether these models could be applied to Part C. Looking at the wording in an impartial manner, this appears to be CMS telling all the world that they have no idea what commercial insurers utilize to control costs. Further, how is current Part C claims data being stored that CMS seems to have no clue as to how to mine it for improper payments?

With Part D (The Medicare Prescription Drug Plan), comments are being requested mostly on topics such as the level of reinsurance sudsidies received by Part D contractors from CMS. Part D contractors receive payments based on utilization of benefits by certain beneficiaries. How these payments are verified within the RAC framework appears to be a challenge for which CMS is requesting assistance.  

It is no secret that I view RACs in two ways. As a taxpayer, I see them as a necessary evil, yet as a physician advocate, I view RACs as something of a suddenly untethered parade float. I know it’s big, overinflated and is going to crash somewhere, but waiting for it to land leaves a sickening feeling in my stomach. We are a long way from seeing a final rule related to Parts C & D in the Medicare program, but the taxpayer side of me sees it as long overdue.

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February 3rd, 2011 | 1 Comment »