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Archive for July, 2011

The RAConteur: The Dangers of EMR

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

Transistorization is a fact of life on Earth. Over the last 500 years, concerns regarding tasks that were once seen as time-intensive, or were deemed dangerous or impossible due to limitations based on distance, have all but disappeared. The computers of the 1950s now fit in the palm of your hand and operate at twice the speed. Jules Verne wrote the novel Around The World In 80 Days in 1873, not realizing that in the future, we could do it by commercial airliner in about 48 hours.

Getting to this point in the Great Human Interchange wasn’t easy. Computer makers have come and gone, planes have crashed, Pintos have exploded, and don’t even get me started on the Yugo. 

In the realm of our health care delivery system, we find ourselves on the brink of one such innovation (with the forceful assistance of government incentives) with the proliferation of electronic medical records (EMR). While the positives of such a system, with regard to portability, simplicity and legibility, holds great promise, the dangers of such a system are becoming apparent with regard to audit risk.

The term “cloning” has popped up in the world of chart auditing since the dawn of the EMR. In an attempt to shorten the training time involved with perfecting the use of an electronic record, physicians are becoming comfortable with one template for documenting patient visits. As a result, doctors have developed the dangerous habit of repeating the same portions of a medical record verbatim across multiple patients.

For a moment, I challenge the reader to think about this fact and juxtapose it with the audit landscape developing in front of us. It used to be that if an insurer wanted to review records on a given charge, the entity would request one record and judge it on its own merits.

This way of auditing is now the exception rather than the norm. In the RAC universe, if you are a solo practitioner, ten charts can be requested every 45 days. In addition, under the RAC statement of work, the contractors are allowed to use extrapolation methods once an error is uncovered. Apply these auditing trends to cloned documentation of services, and the repayments will add up at a rate that endangers the practice.

The one intangible during the implementation of an EMR is clinical judgment. There isn’t a medical record in existence that can accurately reflect clinical judgment in the absence of physician input. The moments that count for an EMR are in the beginning stages of use. An investment of time at the front end into building multiple templates based on patient condition will bring the peace of mind that comes from reduced audit risk. The unexpected bonus is that the provider will end up creating a medical record that will provide an actual record of clinical assessment, rather than a record with manufactured bullets full of facts that have been created to fit a narrative.

With the proliferation of technology comes an accompanying wad of useless information that is easily shared. Yet no information is more important than a patient’s medical records. One size does not and cannot fit all. The clinical and financial implications are simply too important to simplify a medical record to one template.

The RAConteur will not appear in this space next week, as I embark on my own version of an around-the-world tour by driving from Milwaukee to St. John’s, Newfoundland, Canada and back. Look for the next posting on Wednesday, August 10th.

Slippery Slopes Begin With Snake Oil

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

It is usually a small idea, conjured up with the best of intentions, that leads to slow-motion, protracted disasters. In the 20th Century alone, we had the Treaty of Versailles that inadvertently led to the rise of Hitler and the massive loss of life that was World War II. The noble fight against the threat of communism led to net negatives as atomic weapons, Joe McCarthy and the Vietnam War.

And then came Medicare.

Started in 1966 as a way to provide health care to those over 65 years of age, Medicare has recently become a prisoner of the sudden urge by some in Washington to never see another increase in the nation’s debt limit. One side is insisting on massive cuts to Medicare and Medicaid reimbursement as part of any deal to raise the limit. The other is cowering and caving in a corner like a battered spouse trying to reach the phone to call for help.

In the bipartisan slouch toward debt default, we are hearing a number of tried and true terms blurted out, the most toxic of which is “means testing”, the idea being that if you have a lot of money, you probably don’t need assistance from the government in the form of Medicare coverage or a Social Security check. This idea was introduced in the late ’80’s and early ’90’s as part of now-ancient budget discussions, and it led not to implementation, but to hundreds of well-heeled, impeccably-dressed old people taking to the streets to protest the impending loss of their nickel-slot-machine money. The idea was quickly abandoned, as the elderly vote angry and often.

The problem with means testing is that whenever a recognized government benefit is restricted in any way, shape or form, it opens the door to either further cuts or outright elimination. We could state philosophically that anyone who reaches retirement with $5 million in assets shouldn’t receive any benefits from Social Security and/or reduced Medicare benefits. Three years from now, someone will suggest $4.7 million, then $4.3 million and so one until one day, some third-generation sociopathic Senator says “IT’S A BOONDOGGLE AND IT NEEDS TO BE ELIMINATED!”.

Meanwhile, a population of the elderly, which by any credible metric leads far and away with regard to health care utilization, is left uninsured or chronically underinsured. The appeal of Medicare to the insurance industry as a whole is that the sickest portion of the population isn’t in their actuarial universe, save for those patients under Medicare Advantage (a topic I covered in an earlier post). The non-elderly are increasingly receiving less and less for their health care premium dollar from major insurers. Imagine Grandma having to pay a $2000 deductible before the insurance picks up any costs. Or worse yet, imagine her skilled nursing facility stay being found to be “not medically necessary” based on the opinion of an insurance apparatchik. Suddenly, as end-of-life care kicks in, $5 million in assets doesn’t seem like a sufficient amount of money.

We should take care of the elderly population in this country not because we feel obligated to do so, but rather that a society that considers itself decent and humane would think of this as a cornerstone of its existence. Unfortunately, since the introduction of “trickle-down economics”, our country has devolved into a select few at the top of the economic ladder stating “I’ve got mine, good luck getting yours”. Such a society existed in 1789 in France, and if my memory serves, that didn’t work out so well for Marie Antoinette and the others at the top of that particular ivory tower. I would remind those who currently pull the financial strings that the omnipresent nature of Home Depot and Lowe’s stores make it easier in the modern age for people to buy pitchforks, as well as oil for their torches. 

The strident opponents of the Patient Protection and Affordable Care Act, many of whom are on the “Cut Medicare” side currently, are having mixed results in courts around the country. Knowing that outright repeal cannot be achieved, they are looking for a back door. Cutting Medicare and Medicaid as part of the debt limit argument is seen as a political victory in this group’s eyes, as they can undermine health care reform by underfunding part of the law before implementation, thereby rendering it virtually useless to its goal of providing coverage to those who truly need it.   

So continue to watch the political follies as once again, those who can’t afford it get punished for not having a rich lobbyist friend with a check arguing for their ongoing health needs at the negotiation table. As for myself, after next Wednesday’s posting on RAC issues, this space shall remain empty until August 10th, when I return fresh from my 2,600- mile automobile journey across Eastern Canada. I figure that a country that provides ice hockey, beer, doughnuts and a people-friendly health care system in such abundance deserves to be taken out for a test drive.

The RAConteur: Issues Lists Take The Summer Off

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

Summer in the United States is a time for taking vacation, but it is understood that vacations are for people. Business, in theory, is never supposed to sleep, let alone take a day off.

No one should be lulled into the idea that the RAC contractors are taking a season off from audit activities. Last week’s quarterly report made that abundantly clear. Where there does appear to be a respite in RAC Land is in the realm of new issues being added to the respective lists of the four co0ntractors.

For the month of July, a grand total of 9 new issues have been added across all four RAC contractors. CGI, in Region B, has added 5 since the beginning of the month, with Regions A and C adding two each. Most revealing is that HDI, the Region D Rac, hasn’t added a new issue since June 27th.

As I covered in a previous post, the RACs have ramped up their hiring for future audits. Take this temporary slowdown to with either a grain of salt, a calm before the storm or the guy who’s responsible for adding things to the list being in Disneyland with mouse ears on his head. The RACs are giving providers quite a bit of work to handle in the current environment despite the lack of new issues, and we all are under no illusions that the RACs are going away.

Just accept this as a brief reminder that the RACs have barely begun to scratch the surface, despite the current “issue pause”. In the spirit of summer vacation, I’ll make today’s post brief as well, until next week……

The RAConteur: Second Quarter RAC Results Released

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

In a late Thursday news release, CMS made available the second quarter results of the Recovery Audit Contractor program.

Similar to the results from the first quarter of 2011, the numbers were released as a one-page newsletter on the CMS website in the Recovery Audit Program section. Confirming my suspicions after the release of the last notification of this type, CMS now clearly labels this as a quarterly newsletter. As an added feature from the previous release, financial results are now divided by contractor, which illustrates the veracity of contractor efforts and allows for comparison. In order to match the federal fiscal year, the newsletter identifies results for the “3rd Quarter, FY 2011″. The report also shows totals for the entire fiscal year of 2011 to date.  

Between April 1st and June 30th, a total of $233.4 million in overpayments were recovered from providers. This number represent an overall increase of 26% from Quarter 1 to Quarter 2 in 2011. Additionally, this dollar amount also represents nearly 43% of all overpayments collected since the beginning of the permanent program in October of 2009. There cannot be clearer evidence presented to the provider community that the RACs are just scratching the surface with regard to recovering overpaid dollars to Medicare providers.  

Of the four contractors, HDI, the Region D RAC, appears to be leading the way with regard to activity, as measured in dollars. HDI collected $112.2 million in overpayments (48% of the overall quarterly total) and returned $33.7 million in underpayments to providers (60% of the overall quarterly total). For fiscal year 2011, HDI has accounted for 41% of all payment corrections under the RAC program. Connolly, the Region C RAC, comes in second at 22.5%, followed by CGI in Region B at 20%, and DCS in Region A, clocking in with 16.5% of the total.

As with the previous quarterly newsletter, there was a short listing of the top RAC issues for each region. The top issues for Regions B and C have not changed from the previous release. Region B still lists the DRG validation issue of an extensive operating room procedure that is unrelated to the principal diagnosis for the stay, leading to misreporting. Region C continues to see the problem of durable medical equipment (DME) provided during an inpatient stay being erroneously reimbursed separately from the Part A services most prominently.

In the last newsletter, Region A indicated that their top issue was the miscalculation of total hours for patients on a ventilator. The new top issue for DCS has been the medical necessity of inpatient stays related to renal and urinary tract disorders. In Region D, last quarter’s top issue of separate DME reimbursement was shared with Connolly. Currently, HDI has identified minor surgeries being billed as inpatient services as their top issue.

As with the last news release, the news isn’t completely bleak. The identification of underpayments to providers have also spiked. A total of $55.9 million was returned to providers in the second quarter, which is a whopping 247% increase from the first quarter. This amount represents nearly 52% of all dollars returned to providers since the commencement of the permanent program. This trend can only be seen as a positive offshoot of increasing RAC activity.

While there have been some formatting changes, two important items are still missing from the quarterly newsletter, and both of these issues have to do with the quality of the work product emanating from the RACs. CMS continues to obscure the numbers related to provider appeals of RAC determinations behind a wall of secrecy. Aside from the now long-expired RAC demonstration project, no one outside CMS has any idea of the percentage of claims appealed, the appeal success rate or the amount of overpayment dollars removed from the total dollars recovered. Until this information is compiled, we remain tied to the AHA RACTrac survey results, which to date have not been updated for the 2nd quarter of 2011. These results indicate that the RACs are on a steep learning curve, but a definitive measure from CMS could further quantify this belief.

Additionally, CMS is not sharing the cumulative quality scores of the contractors, as compiled and provided to CMS by the RAC Validation Contractor. We can glean only a perception of RAC work product from the AHA survey, but the score is also supposed to take into account issues such as overall provider relations and the accuracy of communications with the entities the contractors are auditing. We are left with only anecdotal evidence in these areas that is simply too small to provide an accurate picture of quality.

So far, based on the CMS numbers (minus appeals data), the RAC contractors have recovered almost $547 million dollars in overpayments to providers since the beginning of the permanent program on October 1, 2009. The issues lists on the RAC websites continue to expand. Given the recent spike in activity, I project that this number will reach well over $1 billion by the end of 2011. Considering that the RACs have barely begun to scratch the surface with Part B services, I see this number skyrocketing as the issues lists expand.

The RAConteur: A Positive Change (For A Change)

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

Subtle changes happen all around us every day. We blink, time has gone by, and we suddenly don’t recognize what has happened, unless the change leads to something very good or very bad. Everything in the middle tends to be piled one on top of the other until one day, nothing is familiar.

On April 1st, there was a small change implemented by Connolly Consulting, the Region C RAC regarding reported overpayments which I’m happy to say is positive, but is a harbinger of many steps to come.

Prior to the above date, when a review results letter was sent to a provider by Connolly, an overpayment amount was indicated. What providers were not aware of was that the amount indicated on the demand letter was only a projected recovery amount. It turns out that Connolly and the MAC contractors in Region C were not utilizing the same calculation tools to determine DRGs, which led to significant differences between the estimated amount on the demand letter from the RAC, and the actual recoupment amount from the MAC.

We’ve been told from the beginning of this process that the RACs were using proprietary software to identify improper payments. One wonders why CMS missed the important step of verifying that the dollar amounts from the RACs and the MACs matched.  

As of April 1st, to avoid confusion, Connolly is no longer placing a projected recovery amount on review results letters. For those providers not existing in Region C, I believe I have just opened up the following can of worms. Until it is verified that this practice isn’t happening in the other three RAC regions, I highly recommend that the amounts indicated on review results letters be compared to the amounts recouped by the MACs. Go forward on the assumption that the amounts determined by the RACs are estimates only, otherwise there is a very unpleasant pile of subtle surprises waiting for your provider at the end of the road.

Incentives For What Exactly?

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

The old joke states that you can tell when politicians are lying to you when their lips are moving. Time was you could count on at least one person in government to deal with you honestly. Judging from the week we just had in health care news, and political news in general, those days have come to an abrupt end.

The Healthcare Financial Management Association concluded their Annual National Institute last week. The keynote speaker for this conference was Peter Orszag, who was the former head of the Office of Management and Budget who followed the tried and true Washington career path by landing in the Wall Street offices of CitiBank.

During his time in the Obama White House, Orszag was one of the behind-the-scenes architects of the Affordable Care Act. The combination of the legislation, combined with the placement of Donald Berwick at CMS, led some on the other side of the fence to yell “RATIONING!” and “DEATH PANELS!”. I have no idea what the latter term denotes, outside of some select episodes of The Twilight Zone, but the concept and meaning of health care rationing is pretty clear to everyone involved.

At the HFMA ANI, Peter Orszag spoke in favor of rationing and lowering costs, providing anecdotal examples from other countries of the success of this approach. Just as quickly, Orszag stated that due to political paralysis, this approach would never work in the United States. Instead, the focus should be on comparative physician research (such as CMS’ Physician Compare website) and provider incentives.

Let’s stop right here and think about the provider incentive piece of this equation for a moment. Currently, providers are being given incentives to report PQRS and for implementing an electronic medical record. Some physicians received incentive payments for prescribing electronically. All of this is wonderful, as long as there are standards as to how all of these elements are utilized.

Let me use the example of the electronic medical record. This has been in place with some organizations for over a decade. The potential to use it properly to document a patient’s overall and specific health is there, but in the end, it relies on humans to input information. As a chart auditor, I am seeing too many examples of a provider putting one template in place and seeing that as the be-all and end-all of documentation of patient illness. What it leads to, in actuality, is the careful crafting of medical information to fit statutory requirements. We are told that EMRs, at the end of the journey, will share useful information with multiple medical entities. I guess no one thought this through enough to realize that useless information can also be widely shared.

If we take all of this into account and work backwards to the subject of comparing physicians against one another, Orszag’s Theorem begins to unravel. If providers are generating useless information en masse, it no longer becomes a matter of comparing good physicians to bad physicians, but rather physicians who have learned to game the system for payment incentives compared to those who haven’t, rendering comparison worthless.

Incentives can either encourage compliance or encourage cheating, depending on the gatekeeper. We are learning that the hard way with regard to our educational system in the post-”No Child Left Behind” world in glaring terms this week. Orszag went on to state that malpractice reform could start with a safe harbor philosophy of “if the doctor follows the treatment protocol, they won’t get sued”. Suppose you have a patient who has no mental capacity to understand the treatment they are receiving? In the world of electronic medical records, how easy would it be for a less-than-moral doctor to document that he followed the treatment protocol for the patient in this scenario? An electronic medical record, when applied here, gives a doctor a “Get Out Of Jail Free” Card, and, because EMR is standardized, makes him harder to find as a compliance risk among the good doctors who are actually following protocol.

Orszag can at least be credited with trying to bring forth ideas that exclude the financial input of private enterprise. As Paul Ryan’s plan to turn Medicare and Medicaid into a voucher program controlled by the insurance marketplace continues to age, fewer people like it, and no amount of lipstick makes that particular pig look or smell any better. Left out of all conversations is how best to address the medical needs of the patient, which in a way can’t be all that surprising. When all parties are brought to the negotiating table, who has the smallest bankroll among doctors, hospitals, insurance companies, patients and the government?

As a footnote to today’s post, CMS released their proposed rule for the physician fee schedule for 2012, which included a 29.5% cut across the board. We’ve been through this before. The Sustainable Growth Rate is unsustainable, a lot of doom-and-gloom ink will be wasted, and at the last minute, the Senate will do nothing on a permanent solution due to institutional paralysis, a temporary fix will be passed and, once again, the can gets kicked down the road. This concludes all of my current and future analysis of the proposed rule. I’m going to spend my free time on more noble and intellectually stimulating pursuits, such as trimming my nose hair and cutting the lawn.

The RAConteur: Divination Via Job Listings

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

I lived for nine years in the city of Philadelphia. At a certain point, when you are an urban dweller, all the sirens, traffic and distant midnight rumbles of metal trash can lids become a sort of urban symphony. After a while, the constant passing of cars, with a little imagination, becomes like the waves of the ocean. My wife, in contrast, is from a town of 1,100 on the Illinois / Wisconsin border. I once stayed over night in that town, and it was too quiet. An owl hooted outside the window, and I immediately thought we were under attack from nature, much like the less-than-classic 1970’s film Day Of The Animals.

I don’t trust quiet. Noiseless environments invite startling clatter by their very existence. The question I get more than any other is “When do you think the RACs will start auditing physicians?”. Aside from some scattered issues here and there, individual doctors have been spared RAC wrath. It was with these thoughts in mind that I reviewed the the RAC issues lists this morning (desperate for a topic, to be brutally honest), and found that three of the four contractors have been slow to add approved issues of late.   

The one exception to the silence is DCS Healthcare, the Region A RAC, which has spent the last month slowly expanding the number of medical necessity issues listed for inpatient hospitals. This comes on the heels of nearly reaching the end of the list of DRGs to validate.

Being one who distrusts quiet, I decided to dig deeper. In a world where RAC contractors must have their own websites, this isn’t as hard as one might think. I began with a basic question; are they hiring?

I went in alphabetical order, starting with CGI, the Region B RAC. What stood out about CGI’s list is that of the 13 auditing positions currently open with the company, four are for nurse auditors. Given that CGI currently has one of the worst auditing success rates of the contractors, according to the latest AHA RACTrac survey, it doesn’t surprise me that any expansion of their workforce would include people with direct clinical experience. The remainder of their careers list provided no insight into future targets.

Next up was Connolly, the Region C RAC. While there were over a dozen positions for healthcare auditors, one particular listing, for a Medicaid investigator, stood out, as Connolly has yet to announce that they have been contracted by any state to be a Medicaid RAC contractor. Stay tuned on this front.

Finally, I took a look at HDI, the Region D RAC. It has been nearly seven weeks since HDI added a new issue to their website listing. In looking at their open positions listing, it was easy to see why. HDI is currently in need of a medical director, provider services director, coding validation director and client implementation director. With such a seeming vacuum at the top of their company structure, it may be some time before a new issue is added to their list.

The second most common question I receive with regard to RAC contractors is “Do you have any idea how many people the RACs employ to look at claims?”. After doing a little searching this morning, I can tell you that while I can’t put a definitive number to that question, assume that the number you have in mind will continue to grow. With contingency fees come incentives to look at as many issues as is humanly possible. The only element missing is to find humans to fill the silence.

The Abbreviated Life of an Initiative

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

I’d like to start today’s rumination with some equations based on life span and time. I beg the reader to stay with me as I do some quick calculations.

The common house fly has an average life span of 15 to 30 days. As of today, I have been alive for 16,500 days on this planet (yes, I count them; my last fatalistic thread hanging on for dear life). The average life span of a male in America is roughly 75, so if I was a fly with a maximum life span, I would be roughly 20 days old right now.

Now given that I am 16,500 days old, that would mean that if we broke up a human life into 30 segments, with each segment equal to 1 day in the life of a fly, we come to the point where each human-fly segment is equal to roughly 825 days in real time. As well as being an appealing mathematical exercise, this becomes a great way to transistorize your own past. As an example, if I were a fly, my first marriage would have only lasted for about a day and a half. If only……….

In the world of health care this week, we had a further demonstration of the brevity of a lifespan. In the  New York Times on Sunday, June 26th, there was a story regarding a CMS initiative to send out “mystery shoppers” to gage the simplicity of getting an appointment with a doctor. The article was based on a proposed rule that was released by CMS close to two months ago for public comment.

The study was to include a series of three telephone calls by “patients” to 4,185 physician offices in 9 states. The first of these calls would have been from someone posing as a patient that has commercial insurance attempting to get an appointment. The second call would have been from someone with the same medical problem as the first, but with a government insurance plan. The third call was to be from someone who clearly identified themselves as being from the Department of Health and Human Services, with the person asking what type of insurances the office accepts. At the conclusion of the call cycle, the answers would have been compared, with the goal being a determination of what percentage of physicians perhaps discriminate due to type of coverage.

I used the past tense in the above paragraph because this initiative was scrapped by CMS on Tuesday. That’s roughly 48 hours from the pages of The Gray Lady to the cemetery, a time frame envious of your average house fly.

The present day is a lousy time to be a primary care physician. Currently, there stands in the American health care system a dire shortage of internal medicine and family practice physicians. If the Patient Protection and Affordable Care Act stands as written (and the 6th Circuit Court of Appeals ruled that it should this week), there will be a population of over 40 million people suddenly insured through a combination of expansion of Medicaid and new or established state exchanges, and every one of them will suddenly have a desire for a doctor’s appointment. This will be in addition to the patient volume already experienced by front-line providers, who on average spend a paltry 12 minutes with their patients during a visit. Given that the new population will be under penurious government fee schedules, you can excuse providers for their lack of excitement about the Affordable Care Act.

As if this most obvious of challenges isn’t enough, expanded audits by multiple independent contractors will soon pose a direct threat to the monetary health of the practice. With CMS’ announcement of the addition of predictive modeling technology being added into the mix, physicians are now financially at risk both prior to and after claim payment being received, making it virtually impossible to draw up a budget for a medical practice. 

With all of this as a backdrop, there was quite a bit of blow-back to the “mystery shopper” proposal, with criticisms of ”over-regulation” and “government spying” increasing in volume as comments were submitted. This was in spite of the fact that CMS guaranteed that the collected data from the survey would have remained confidential.

Thus we conclude this week’s abject lesson in abbreviated life spans. As I face the last ten fly-days of my life, it is with the knowledge that some flies, as well as an assortment of government initiatives, have shorter existences than others. Enjoy it while you can.