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Archive for June, 2012

The Beginning of “Haves-Have Nots” Healthcare

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

I like unintended consequences.

On the surface, that seems like a counter-intuitive statement, but there is something in me that likes chaos by one’s own hand. It helps me realize how highly functioning I am when I see the unintended consequences long before they are in the view of the architect. It is with this belief system that I soldier forward today.

As I write this, the world at large has had roughly a day and a half to digest the rather surprising Supreme Court decision upholding the individual mandate portion of the Patient Protection and Affordable Care Act. What is being glossed over is the part of the Act that was thrown out, that being the penalty that was to be assessed if a state chose not to expand Medicaid coverage to fit the provisions in the Act.

As the law was written, if a state chose not to expand Medicaid coverage to the new eligible populations, the total Medicaid funding for that state could be withheld. After yesterday’s ruling, this is no longer the case. Without a clear thought given to the consequences of this ruling, the Supreme Court has now created a federally-subsidized health system that will be unequal based on the political affiliation of state governments.

It is no secret that the Republican side of the political fence in this country considers PPACA to roughly being equal to appointing Benito Mussolini as our Surgeon General. Remember that it was 26 Republican attorneys general from around the country that were plaintiffs in the many lawsuits seeking to throw it away. In the aftermath of yesterday’s decision, Republicans across the country are doubling down on their enmity towards PPACA, with Republican governors balking at Medicaid expansion for newly eligible beneficiaries.

Let’s think about the backdrop of this for a moment with regard to the amount of federal taxes paid by individual states. We have in place a system that pays smaller states much more in federal tax dollars than the federal government collects in taxes from these same states. As an example, Mississippi, a deep-red Southern state, receives $2.02 for every dollar in taxes paid. In contrast, the state of New York, currently headed by a Democratic governor, gets 79 cents for every dollar of taxes paid. This has created an interesting irony; Republican governors complaining about too much government, while at the same time being the highest beneficiaries of federal largesse on the state level.

With Republican-leaning states making it very clear that they are going to deny Medicaid benefits to newly-eligible citizens in their states, a great awakening awaits Republican governors who have spent the better part of our current president’s time in office railing against the evils of the federal government. Their dream of less federal government is about to come true. Medicaid funding that could have been given to their state will now go elsewhere. The result of this would be less federal dollars and a sicker low-income population. This in turn will lead to hospitals in these states dancing on the brink of failure due to the lack of reimbursement for a needlessly uninsured population.

The solution to Red States suddenly becoming the health care equivalent of leper colonies, to hear Republicans tell it since yesterday’s ruling, is complete repeal of PPACA. There is virtually no chance of that happening when Congress returns from their Independence Day break (one of many). With the Supreme Court’s ruling, Republican governors and attorneys general have created a series of unintended consequences for their states that will begin to clash uncomfortably with their newly-discovered hatred for all things government. The definition of “haves” and “have-nots”, as it pertains to our health care delivery system, is about to undergo an ironic transformation.

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June 29th, 2012 | 2 Comments »

The RAConteur: Special Bulletin: Color Me Surprised….

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

Let’s just get right to it. We all know why I’m here today, rather than making my normal appearance on Wednesdays, and we all know what news we’re all waiting for, so here it is.

In a stunning 5-4 decision, the Supreme Court has upheld the most controversial segments of the Patient Protection and Affordable Care Act. Voting in favor of the law were Justices Breyer, Sotomayor, Kagan, Ginsburg and (the absolute surprise of the day) conservative Chief Justice John Roberts. Dissenting were Justices Kennedy, Alito, Scalia and Thomas.

As I write this, the opinions from both sides are still being read from the bench, but already, there is one big change to the law as dictated by the court. As the law was originally written, Congress would make funds available for the expansion of Medicaid programs, but could penalize states by withdrawing all Medicaid funds from a state if it refused to participate. The Supreme Court has invalidated this provision. As Justice Roberts clarified in his opinion:

“Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.”

Other than this funding change to the mandate, the entirety of the law stands.

So to review, here’s what we have:

  • People without insurance are required to purchase coverage. This is also known as the “individual mandate”. Those who do not would be subject to a tax. This will be equivalent to roughly 6% of the entire adult population;
  • Because the individual mandate has been ruled constitutional, the question of “severability”, or separating the mandate from the rest of the law, is a moot point;
  • Children up to age 26 can be covered under their parents’ plans;
  • There will be no such thing as a “pre-existing condition” as of 2014;
  • Medicaid will expand its definition of covered individuals to broaden the coverage pool;
  • Medicaid RACs can now operate freely in order to detect improper payments from Medicaid plans across the country;
  • New payment models that apply to hospitals can go forward uninterrupted; and finally,
  • John Paul Spencer has the equivalent of a four-egg omelette on his face

 

Had I placed a high dollar bet on what today’s decision would have been, I would be declaring bankruptcy about 15 minutes from now. This is why my wife Leslie does the books in our house, and I type here for the general entertainment of the masses.

The decision that was released within the past hour is going to change things. There will certainly be attempts by one-half of Congress to overturn the entire law, but that path faces an impossible road in the short term based on the party make-up of the Senate and the White House.

I leave it to others to determine the political “winners and losers” of today’s decision, but the American health care system has been changed permanently with today’s decision. Cue your inbox, grab the popcorn and let the rhetorical games begin.

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June 28th, 2012 | 1 Comment »

Big Paychecks, And The People Who Cash Them

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

I’d like to preface today’s rumination by apologizing in advance for a possible lack of clarity. While I usually only get about 4 or 5 hours of sleep per evening, last night’s total is probably closer to 20 minutes. I find that I suddenly am unable to raise my right arm past the 20-degree mark for reasons unknown to me, which rendered sleep impossible last night. I can usually take a fair amount of aches and pains, but today, in addition to operating on lack of sleep, I downed three ibuprofen for the first time in about four years before leaving the house. I can therefore make no claims to the mental organization of today’s post, and all of my head slaps today will be restricted to the rhetorical variety. Now that we have been introduced to the wonder that is my right shoulder, let us press on!

The topic of money is on my mind this morning. Given the realities of the healthcare system in the United States, money will always enter the discussion at some point, but I’d like to talk about money today in the setting of it being a corrupting influence as applied to American healthcare. Two interesting tidbits of information related to money in healthcare crossed my path this week, and both point to the folly of our system’s current path.

First, Modern Healthcare released the results of salary research regarding the CEOs of industry trade associations and advocacy groups, such as the American Hospital Association and America’s Health Insurance Plans. For 2010, the average compensation for executives heading these groups was $969,000, which represented a 12.1% increase from the year before. This alone would raise eyebrows, but this increase happened as revenues for these associations fell on average by 4.4%.

The name at the top of the earnings list is an exceptional example of the corrupting influence of money. Billy Tauzin, the retired head of Pharmaceutical Research and Manufacturers of America (PhRMA), the lobbying arm of the drug industry, “earned” a total of $11.6 million in 2010, despite having stepped down from that position in the middle of the year. Prior to his time at PhRMA, Tauzin was a congressman from Louisiana who took the lead in crafting the legislation that created Medicare Part D. That legislation was written very much to the advantage of the pharmaceutical industry. Specifically, the bill restricted the traditional buying power of the government by forcing it to pay Average Sales Price for prescription drugs, rather than the taxpayer-beneficial Average Wholesale Price. Being the gift that keeps on giving, the drug companies thanked the principal architect with a generous salary that began only months after the passage of the legislation. It is worth noting that of the $11.6 million paid to Tauzin in 2010, $9.2 million was classified as “other payments”. PhRMA refused to disclose the nature of these payments, so I’m happy to define it for you. Whenever you see the words “other payments” in relation to a salary package, you are probably making an accurate guess when you assume that this term is being used as a country club euphemism for “kickback”.

While we’re on the subject of ill-gotten paychecks, let’s turn our collective attentions toward one of the more parasitic entities currently occupying our financial system, that being check cashing companies. The Department of Justice announced last week that four such businesses were charged with money laundering in connection with payments that appeared to be going to health care entities, but were in actuality shell companies set up to benefit foreign nationals to the tune of $50 million in a two-year period. For their trouble, the check cashing businesses received millions of dollars in “other payments” (see how that works now?). Two of these check cashing agencies were in Los Angeles, one was in New York and one was in my old hometown of Philadelphia in a neighborhood in the northeastern section of the City of Brotherly Love that also boasts unusually high rates of sketchy legal claims for injuries allegedly sustained from the local mass transit system.

I compare the two above examples of behavior and find very little difference between the two. When we are constantly on the receiving end of political pontifications regarding how the Medicare Trust Fund is being depleted and that “fraud” needs to be tackled, my natural follow-up question at this point would be to define fraud. Is it someone gaining undue financial advantage through the submission of false claim information, or is it legislation that is sold to the country’s citizens as a great benefit to them when the fine print clearly says something else entirely? I am here to argue that both are fraud. Theft that just happens to be codified into our laws is no different than an organized theft from a storefront. The only difference is that one group comes with high-dollar attorneys and an infrastructure of friends in high places. It’s important to remember that just because the dollar amount on a paycheck appears on a respected organization’s check doesn’t necessarily make it money earned honestly.

If my shoulder wasn’t so sore, I’d collectively smack these thieves upside the head.

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June 22nd, 2012 | No Comments »

The RAConteur: ….And Medicaid Isn’t Working, Either

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

It is somehow fitting that today, the first day of Summer, serves as the birthday of Brian Wilson, the now-70-year-old musical engine behind the great songs of The Beach Boys. I’d love to be at the beach right now, belly-surfing like a seal in the semi-clean waters that surround the North American continent, but this dream will have to be deferred for today. I’ll give you a song you can listen to to put you in that place while I document the latest audit atrocity.

I made reference in a past posting about the poor showing of the Medicaid Integrity Program, as reviewed by the OIG. The two reports from the OIG seemed to criticize the selection of audit targets by CMS that were eventually referred to the Audit Medicaid Integrity Contractors (MIC). The biggest suggestion that came out of those reports was for CMS to pursue collaborative audits between CMS, the OIG, the MIC’s and the individual Medicaid State Fraud Control Units.

In the past week, criticism of the program came from another portion of the Oversight Universe, that being the Government Accountability Office (GAO). According to a report released on June 14th (just in time for Flag Day), conducting Medicaid fraud audits since 2008 has cost the government $102 million, and has led to the collection of less than $20 million. Unlike the previous OIG reports, the GAO pointed a finger at the data retrieved from the Medicaid Statistical Information System (MSIS), which CMS has used to identify audit targets.

The MSIS system includes raw claims data, but excludes such important elements as “to which provider do these suspect claims belong?”. Remember kids, the only way you can identify anything in this world is to give it a name in a form you can recognize, as I learned when I was small when someone told that the instrument I was playing was in fact a trumpet, and not a “blowy, push-button thingy”.

As an additional point, the GAO indicated that the National Medicaid Audit Program is desperately in need of redesign, which is a fact that the Medicaid Integrity Group (MIG) has acknowledged and attempted to commence. To date, no details have been reported to Congress as to what changes are being made and why. The GAO criticized the audit program for its lack of transparency based on this, as well as other related factors.

Providers continue to feel the jellyfish-like sting from an alphabet soup of government audit initiatives. The many programs serve mainly as a burden to providers who wish to do the right thing, but instead encounter programs whose design predetermines their ongoing failure. Like waves crashing on the sand at nightfall, every type of audit repaints claims data with a heavy and indifferent brush. With various government agencies finding problems with the design and execution of government audits, it appears providers have very little opportunity to move away from the surf to safety anytime soon.

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June 20th, 2012 | No Comments »

The Greatest Undiscovered Country

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

I hold a special place in my consciousness for explorers. It is to my great personal disappointment that while the history books celebrate people who have challenged any notion of human limitation, the people who have pulled the levers of power throughout the ages, without fail, see people such as Galileo, Leonardo Da Vinci and R. Buckminster Fuller as a threat to the status quo.

Thanks to the work of pioneers spread over past centuries, we have a better understanding of the universe around us, but many undiscovered frontiers remain for human exploration, such as deep space, or the deepest parts of our planet’s oceans. There is perhaps no more fascinating undiscovered country than one that lies inside all of us, that being the human brain. Medical researchers have been making incredible progress into the workings of the brain over the last two decades. To put it into context, it is within the last century that mental illness was treated with inhumane methods such as insulin shock therapy or, far worse, prefrontal lobotomy.

Recently, brain science was dealt an unexpected blow. A brain storage freezer for the Harvard Brain Tissue Resource Center located at McLean Hospital in Belmont, Massachusetts was discovered to have failed on May 31st, leading to the irreparable damage of 150 brains that were stored inside. Of the brains that were stored in this particular freezer, 54 had been designated for autism research, which represents one-third of all brains stored by the brain bank for such a purpose. Researchers are looking into whether the DNA from the affected brains can be salvaged for genetic research.  

According to Autism Speaks, an advocacy organization that encourages increased research into autism and related disorders, 1 in 88 children have been diagnosed with autism in the United States. This number has increased since the 1980’s in part due to better early detection and diagnosis. A loss of this magnitude is expected to delay the progress of research into the root causes of autism, a disorder that in recent years has been particularly susceptible to false roads towards a solution, based on the possibility of external causes of the disease. Autism research funding is artificially low as compared to the prevalence of the disorder in society. It goes without saying that the loss of one-third of banked brains reserved for research is potentially devastating.

Despite the constant interaction I seem to have with those who refuse to use their brain power to its full potential, I consider the brain to be the most important of the great undiscovered frontiers that lie before us. I can sit here and offer mostly fictional conjecture about what may lie beyond our planet’s boundaries, but even if I somehow have already guessed correctly, it is a hypothesis about a world or a way of existence that could lie several billion light years away, significantly out of reach from physical contact.

In contrast, my brain lies behind my irritated Spring sinuses, below my forest of hair, between the satellite dishes I call my ears, always with me, operating my fingers as I type this and even now, germinating the next idea about to burst forth (the value of said idea remaining a mystery). It would stand to reason that humans should someday gain a better knowledge of how a brain operates, perhaps even (as is my ultimate hope) reaching the point of improved self-manipulation and regulation, leading to optimal function.

I have known people in my life affected by disease processes of the brain, and I clearly see the importance of research leading to cures. While the loss of these samples delays research into brain-based disorders, it offers me a moment to reflect on the near-criminal lack of benefactors and research dollars dedicated to the misuse of organically healthy brain tissue, and the promise that lies in the greatest undiscovered country. Improved function of a healthy brain is indeed a threat to the status quo, but one look at the world in its current form shows that the way things are could benefit from a new and explorational approach.

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June 15th, 2012 | 1 Comment »

The RAConteur: The Status of Medicaid RACs

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

There are times in my life when excessive quiet is unwelcome. Living two blocks away from a major metropolitan hospital is a challenge to the sleeping habits of others, but as a person who went to sleep this morning just after 3 AM who subsequently awoke around 7 for work, ambulance sirens have no effect on my sleep patterns.

There is one area of the government audit universe that has maintained an eerie quiet in 2012, despite the fanfare that accompanied its creation. The Medicaid RAC program, already harboring a secondary implementation date of January 1, 2012, continues to be plagued by delays in certain states. Yet through the silence, anecdotal evidence is beginning to filter out that the Medicaid RAC program has begun in earnest.

To date, information has reached me from two human sources that Medicaid RAC audits have begun in three states: Connecticut, Kansas and New Jersey. I am attempting as best as I can to determine what audit issues are being reviewed in these states, but I can relate that all three of these states have one thing in common.

HMS, who has emerged as a major player in the Medicaid RAC universe, is the Medicaid RAC for New Jersey and Connecticut. Kansas, which was the first state nationally to enlist a Medicaid RAC, has HDI, the Region D Medicare RAC contractor and a subsidiary of HMS as of late in 2011.

To date, HMS is the finalized or intended Medicaid RAC contractor or subcontractor in 18 states, with HDI handling Kansas under HMS’ corporate umbrella. For providers of all types, I would fully expect that Medicaid RAC activity will soon begin in the following states under HMS’ purview: Alabama, Delaware, Indiana, Maine, Michigan, New Mexico, New York, Oregon, Pennsylvania, South Carolina and Tennessee. These states all have finalized contracts with HMS, and based on its activity in Connecticut and New Jersey, it is reasonable to expect that the remainder of the dominoes will soon begin to tumble.

There are two states worth mentioning that are so far behind the Medicaid RAC curve that the futures of their respective programs is in doubt. In Arkansas, a Request for Proposals (RFP) for a RAC contractor was originally released in April of 2011. The responses to the RFP were of such a poor caliber that the state has declined to enter into a RAC contract. A similar situation exists in Texas, where CGI, the Region B Medicare RAC contractor was originally awarded the Lone Star State’s contract, but the contract was later withdrawn. Texas later issued a new RFP, but this was also withdrawn on May 8th.

Out West, Wyoming, Idaho, Montana and Utah continue to pursue a four-state solution for their RAC activities. Meanwhile, Minnesota and Wisconsin are considering the same type of group arrangement for Medicaid RAC issues here in the Upper Midwest.

Clearly, with so many states not mentioned above, it is safe to say that the balance of the states are operating in an eerie silence as the provider community awaits first contact with the Medicaid RAC process. At that future point in time, the sound of an ambulance siren will be somewhat redundant.

Click here for a recent interview with Fi-Med’s Jared Krawczyk regarding our data analytics capabilities.

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June 13th, 2012 | No Comments »

The Return of Liniment and Leeches?

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

We live in a world of hyper-progress. I exist in a country that has turned the idea of “planned obsolescence” into an art form. As a glaring example, it was only 26 months ago that Apple’s first version of the iPad went on sale in the United States. Chances are, if you still own an inaugural version of this device, there are many things that it can’t do in today’s data infrastructure, leaving you frustrated. With each passing day, things that surrounded me have disappeared completely, never to return. Some things I miss, but I chalk up not seeing them as the price of progress. I also accept it as an inevitable cloud that grows ever larger over the aging process.

The human being, as it relates to the idea of obsolescence, is another matter entirely. In a famous episode of The Twilight Zone, Rod Serling provided a coda that said “any state, any entity, any ideology that fails to recognize the worth, the dignity, the rights of man, that state is obsolete”. Coming as it did in the days of the Cold War, this could be translated as an attempt by one political side to point out the anachronistic approach of their main political antagonist, in this case the Soviet Union. Yet the aging of any organism, at some point, will reach such a point that normal function and evolution, for all intents and purposes, stops.

In human beings, life itself is not the only thing that slams on the brakes. Every one of us who is employed hopefully goes forth with the realization that the skills and tools that we have used as part of our working lives will someday become obsolete. Because I am surrounded by the world of medicine, I think about the evolution of procedures and diagnostic tools, as well as treatment methods. Technology and intensive study have broadened the horizons of medicine at a faster rate than ever before. Consider for a moment that the 1926 Nobel Prize for Medicine went to Johannes Fibiger, who believed that parasitic worms were a direct cause of cancer. It took only a few years to determine that his theory was incorrect, and looking back on it 86 years later, knowing what we now know about cancer, the thesis seems particularly outdated.

Harboring all of these thoughts in my mind on a daily basis (along with sports statistics, band lineups from the 1960’s and other random bar trivia facts), it was with particular interest that I read a piece of proposed legislation from the House of Representatives. Last Friday, the Physician Reentry Demonstration Program Act was introduced by suburban Baltimore congressman John Sarbanes. If enacted, the law would establish a demonstration project for retired physicians to re-enter the working world as primary care providers. Specifically, the law would issue grants to encourage the creation of programs that assist physicians in transitioning back into clinical practice. Databases would then be created for the programs. In addition, assistance would be offered to granted entities for assessment and credentialing of physicians reentering the patient care world. The bill focuses on physicians who have been out of their area of specialty for two years or more.

Because the country is facing a critical shortage of primary care physicians, particularly as the Baby Boom population ages, Sarbanes’ legislation can be viewed as an honest attempt to address the problem, but knowing what I know about the world of physicians, I have a couple of questions. First, after one full year of inactivity, any Medicare provider is automatically terminated from the program. If that provider wants to resume billing the Medicare program, he or she must begin the credentialing process again, with new numerical identifiers being issued to that provider. Anyone who has dealt with the wonder and the majesty of the latest version of the Medicare credentialing process can tell you that it is anything but succinct. Additionally, with identity theft being at the root of many Medicare fraud cases, what controls would need to be put in place to ensure that the retired physician coming back into the clinic isn’t actually an elaborate front for criminal activity?

Second, in a world of hyper-progress, when merged with the inevitable truths related to the passage of time and its unavoidable effects on an organism, how quickly can a reentering physician be trained and brought back up to speed with present-day clinical protocols? Suppose for a moment that a paradigm shift occurs for primary clinical practice in the interim time between retirement and rehiring. This isn’t as difficult to imagine as you may think. Prescription drugs appear and disappear with increasing rapidity and genetic testing holds the promise of fundamentally changing existing treatments for long-established conditions. The suddenly-reintroduced clinical physician may find himself or herself at a critical disadvantage at a time in his or her life that is not particularly conducive to change. Suddenly, liniments, leeches and carbolic smoke balls aren’t going to cut it.   

Sarbanes’ bill is very much a first draft, and his party affiliation, as it applies to the current political makeup of the House of Representatives, promises a rocky road for the proposed legislation. Yet even in the absence of CAS (Congressional arteriosclerosis; I just thought that up; evolution!), the realities behind Sarbanes’ modest proposal may sentence it to an eternity in the starting gate. Chalk another one up to progress.

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June 8th, 2012 | 1 Comment »

The RAConteur: CMS’ Ongoing Appeal Fairy Tales

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

It is inevitable that once in all of our lives, each one of us shall receive bad news. As a result, people are suckers for apparent happy endings. As a relevant current example, television talent competitions are stocked to the rafters with contestants that have heart-touching back stories and only fair-to-middling talent, which goes a long way to supplying a false sense of security in a populace that has been conditioned to accept bad news as normal. In reality, happy endings are few and far between, there are no magical winged ponies or unicorns and people are not suckers solely in the realm of desiring such a happy ending.

For all of these reasons, I exist in life as something of a cross between a spirit guide and interpreter, leading all of those within my sphere of influence toward a higher truth by finding the illusions implanted in other things. It is in this capacity that I come to you today, and since it is Wednesday, the subject today is the CMS version of the effectiveness of the Recovery Audit program.

On June 1, without fanfare (as has been their habit lately), CMS released a one-page appeals update for the RAC program. If you concentrate on just the numbers in the report, you would come to the sugar-coated conclusion that the percentage of claims overturned on appeal for all denials stands at 2.7% for Fiscal Year 2011, which concluded on September 30, 2011. The total number of dollars overturned, to hear CMS tell it, was $37.9 million. If the update stopped there, the prince and the princess would live happily ever after. Unfortunately, the update contains small print that in this case deflates the entire argument.

On the update, below numbers showing the number of claims with overpayment determinations and the numbers appealed, CMS includes this phrase:

“The number of claims that have been appealed is limited to claims originating in FY 2011, with appeals initiated through 9/30/2011. Each level of the appeal process has statutory time frames that provide due process to providers. Since these time frames extend beyond the end of the fiscal year, each update will represent a snapshot in time to ensure accurate data.”

The translation to this is that the numbers in the CMS update address only completed appeals that began during the last fiscal year. In CMS’ zeal to deliver good news, they have left out an enormous universe of appeals still in process. According to the latest AHA RACTrac survey report that was released on May 10th, seventy-five percent of RAC appeals are still in process, many at the 2nd or 3rd level. Suddenly, when we get a full view of the appeal picture, CMS’ representation of the success of the RAC program comes off as less than truthful.

The timing of the release of this report requires some critical thinking as well. I wrote a few weeks ago about the U. S. Senate Finance Committee requesting “white papers” from all interested stakeholders with recommendations on how to reduce fraud, waste and abuse in the Medicare program. The Committee’s deadline for submissions is the end of June.

CMS has been teetering along a carefully-drawn line of their own design that at all times brings forth a public stance that is best distilled by the phrase, “Remain calm. All is well”. With outside entities such as the General Accounting Office, the OIG and the AHA generating report after report stating that the current multi-tiered approach to improper payments is failing at all levels, CMS is becoming desperate to present evidence that shows that the opposite of the reports is true. From the Centers’ vantage point, even a small, carefully-crafted version of good news is worth reporting. Unfortunately, what CMS has produced is the stuff of legend; not quite true, not quite false and leaning heavily towards exaggeration.

The problem with this approach is that CMS is not Babe Ruth. There will be no miracle two-home-run games for the sick child, no called shot and no bigger-than-life persona that can magically turn the disease-infested plague drama that is current anti-waste efforts into a happy story for the ages. I exist today to tell you that CMS’ RAC appeal numbers do not add up. If this post has helped just one person avoid being a sucker for a day, I consider my journey a success.

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June 6th, 2012 | 2 Comments »

The RAConteur: Two Sets Of Results, Two Realities

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

For purposes of comedy, the art of exaggeration can be a powerful force. After the passage of nearly 80 years, the reason that roughly five generations of American males continually find The Three Stooges funny is that we understand that Larry, Moe and Curly (and sometimes Shemp – great hair!) are exaggerated exceptions to the male species (mostly).

If I have to choose one entity to single out for their ongoing gifts of exaggeration, I would choose CMS and their cheerleading minions, particularly when it applies to the realm of government audits. On March 18th, with a conspicuous lack of fanfare, CMS released their RAC results for the first quarter of 2012. This follows on the heels of the latest AHA RACTrac survey, which was released on May 10th. When comparing the reports side-by-side, it doesn’t take one long to determine which report is rooted in reality and which is located in a land where lollipop trees dot the landscape.

First, we’ll look at the CMS interpretation of events. The latest CMS quarterly report states that just short of $650 million in improper payments was identified between January and March of 2012. The leading contractor for the quarter was HDI in Region D with $237.5 million in corrections. CGI in Region B came in a distant fourth with only (HA! – only) $65.6 million. These numbers bring the fiscal year to-date total to $1.072.6 billion corrected. Further, it raises the total dollar corrections under the RAC program to $2.1 billion going back to Fiscal Year 2010. As with all previous newsletters of this variety, these are gross dollar amounts, which do not take into account successful provider appeals of RAC determinations.

When CMS saw these numbers, they smiled as a rainbow appeared overhead, signaling that all was right with the world. They walked alone into the setting Western sun and they lived happily ever after. Meanwhile, hospitals heard the sputtering of chain saws coming to a stop, as another vital limb was severed deep within the basement chasms in yet another pyrrhic attempt to remedy the situation…..

The CMS fairy tale is counteracted by the AHA RACTrac survey’s Silence of the Lambs-like documentation of atrocities.

The statistic stating that 2/3rds of all complex reviews do not lead to the discovery of an improper payment held steady for another quarter. Any RAC coordinator can tell you that if 2/3rds of their ADR requests go nowhere, the new $25 dollar maximum for record reimbursement enacted back in April almost guarantees that the simple act of responding to a RAC request incurs a loss to the facility.

Hospitals reporting to the RACTrac survey reported that they are appealing one-third of all RAC denials, with a reported success rate on those appeals of 75%. In addition, 75% of appealed claims are still buried in the Medicare appeals process, as hospitals increase the number of claims going to the administrative law judge level and beyond.

Let’s do a fun mathematics exercise right now to put these last two factoids into perspective. Let’s say we have 100 ADR requests. We know that 67 will not lead to the determination of an improper payment, which leaves 33 claims that are improperly paid. One-third of these determinations, or 11, are appealed by the provider. With seventy-five percent of 11 (and I’m rounding down) being 8, and adding this total to the 67 complex reviews that had no determination, we can now state that 75% of all RAC complex reviews do not conclude with the determination of an improper payment. This is a stunning statistic, but believe it or not, the whole of the RAC situation only gets worse.

The RACTrac survey went on to state that 96% of hospitals reporting data to the survey have spent at least $10,000 managing the RAC process, with a minority of those hospitals having spent over $100,000 on RAC work. In the realm of provider outreach, feedback and education, 59% of hospitals have yet to receive education related to avoiding payment errors from CMS or its contractors. Given that the top issues in each region have to do with short stays in the hospital, and the amorphous rules related to observation vs. inpatient, the lack of clarification is leaving a gaping void full of errors that could easily be filled if only someone (ANYONE!) from CMS or their contractors would step up to address the issue.

On January 3, CMS moved the demand letter process from the RAC contractors to the Medicare Administrative Contractors (MACs). Thanks to the problems encountered with this change, nearly half of all hospitals reporting to the RACTrac survey now name “not receiving a demand letter” as the biggest RAC process problem. I might add that based on my research into this subject for a recent webinar, I have found that CMS is providing neither the time nor energy to tackle this problem.

There are too many public voices in the healthcare reform sphere who are referencing only the CMS-issued RAC results and claiming victory in the fight against Medicare waste. As the Three Stooges showed throughout a long career of exaggeration, sometimes the only solution to rank stupidity is a good, solid open hand across the face. My right hand measures 8 inches to the tip of my middle finger. Anyone with a larger hand is free to jump in line ahead of me.

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June 1st, 2012 | 4 Comments »