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Even A Decrease Is Still Too High

Posted by J. Paul Spencer, CPC, CPC-H in CMS

I do my level best to live my life as an optimist, but there are two very important caveats to that statement. First, I wasn’t always this way, and I can attribute that to growing up as a fan of the Philadelphia Phillies, a baseball team that has lost a record 10,282 games in their 128-year history.

Second, and more importantly, I have an acute sense of the proper time to ditch the optimism in situations where all hope is clearly lost. If one uses their imagination, one can imagine that in October of 1781, there was more than likely an optimist on General Cornwallis’ British Army staff telling him with great fervor that they could withstand the Siege of Yorktown. One can also imagine this person getting his head smacked prior to being pushed down a flight of stairs by a less-optimistic staff member for not recognizing the reality of the situation.

With these beliefs in tow, I reviewed the latest chest-thumping report regarding the CMS Payment Error Rate that was released this week.

It is with great fanfare that Medicare is proud to announce that the current payment error rate for the Medicare program is 8.6%, which resulted in improper payments estimated to be $28.8 billion. To put this number in context, I myself could earn the amount of money overpaid by just the Medicare program if I were employed at my current salary for well over 500,000 years. Sadly, current averages indicate that I have 33 years of life left, with only a fraction of that time invested in working (kidding….I think).

Yet, golly gee whiz, that’s an improvement, for you see, the error rate in 2010 was 9.1%, resulting in $29.7 billion in overpayments. So instead of one out of every 11 claims being paid incorrectly, now it’s one out of every 12. You know, Jesus found out that Judas was one of his 12 apostles in error, but hey, he figured how much damage could this one guy do since he was outnumbered by the good guys?

The super wonderful skippity-do crazy fun time doesn’t end there, folks. The Medicare Advantage error rate now stands at only 11% for $12.4 billion in improper payments, which is an improvement over the 14.1% rate from 2010. The Medicaid payment rate, said Pollyanna, decreased 1.3 percentage points to 8.1%, or $21.9 billion in improper payments. Medicare Part D, keeping the elderly medicated since 2006, hasn’t had the same amount of time to invest in screwing up payments, so that error rate stands at 3.2%, or $1.7 billion dollars.

Missing from the data is a payment error rate for the Children’s Health Insurance Plan (CHIP), due to currently incomplete data. This error rate will be published in 2012.

As with any report, CMS gives you the highlights and skirts around the real issue. For the part they left out, and for a bit of Friday fun, let’s go to the calculator.

I’m not an accountant, I don’t play one on TV and I look silly with a green visor on my head, but my rough calculations tell me that about $771 billion dollars was paid out of all of these programs in Fiscal Year 2011, with $64.8 billion being paid out improperly. This leaves us with a cumulative error rate somewhere in the neighborhood of 8.4%. This means that the Medicare Administrative Carriers pay one out of every 12 claims incorrectly, and, as a not-so-subtle reminder, without fear of reprisal or punishment.

The bad news is that the financial ship continues to sink. The good news, to hear CMS tell it, is that instead of four people bailing water to keep the ship afloat, we now have five. Meanwhile, the hole where the water is flowing in is in plain sight, the tools are there to fix it, but everybody’s bailing water and ignoring it, saying things are getting better.

I end today not with rosy optimism, but with a plea to the reader to tell me which one of the bailers I need to push down the stairs.

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November 18th, 2011 | 1 Comment »

Changes As The Leaves Fall

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

The last 39 hours of my life, edited for the reader to not include periods of sleep, have been filled with catharsis and increased awareness that time and change keeps coming.

Wednesday evening, I went to a local concert venue to see Bob Mould, a legend of punk rock and college radio, who informed the audience that he turned 50 a week ago. I have been listening to Bob in his many musical permutations for over 20 years, from the frenetic to the introspective, and despite the fact that it was his usual great show, you begin to feel the metaphorical vultures circling when your musical heroes get the AARP card in the mail. I’m still struggling internally with how I feel about this fact.

Yesterday, I spent the day at a seminar put on by the Wisconsin Medical Society regarding upcoming changes to the Medicare program. With the idea that change can be either good, bad or ugly, depending on how it is approached, I present an assortment of changes for the coming year, complete with hypnosis exercises to temporarily distract you from just how terrible the results of some of these changes could be.

As you lay back and begin to relax, I can at the very least start with some good news for providers with specialty designations of primary care, internal medicine, pediatrics and geriatrics. Beginning in January, and extending through the end of 2015 (dire Mayan calendar warnings not withstanding), physicians and mid-level providers with these specialty designations are eligible for a quarterly bonus of 10% if at least 60% of the allowed charges are from certain E/M codes. In the same time frame, general surgeons are also eligible for a 10% bonus if they perform surgical services with a 10 or 90-day global period in a Health Care Professional Shortage Area (HPSA).

As I swing a pocket watch in front of your eyes and you feel your eyelids getting heavier, I bring you news of an expansion of preventive care in the Medicare program. Beginning January 1, 2011, Medicare beneficiaries will be eligible for an annual wellness visit. While this development is long overdue, there are three problems with this benefit, the first of which is that any Medicare contracted provider can perform this visit. As only one visit is allowed per year, it will be up to aging patients and frustrated office staff to track one visit in a 12-month span. Second, the “Welcome to Medicare” visit and the new annual wellness visit cannot both be paid within the same 12-month period, which becomes yet another tracking headache. Finally, the documentation standards for the annual wellness appear to be just as onerous as the “Welcome to Medicare” visit. For me, this provides a training opportunity. For the physician community, this represents an opportunity to yell and give dirty looks to the person providing the training.

As you feel all the tension disappear from your neck, shoulders and spine with your eyes completely closed, listening to the cool, clear water running in the happy place of your mind’s eye, I remind you again of the major expansion of payment audits. The Obama Administration has vastly expanded the audit programs centered around the Medicare and Medicaid programs, in addition to the expansion of the Recovery Audit Contractor program into Medicaid in 2011, there is also a relatively new and aggressive entity referred to as the HEAT Task Force, a combined effort by the Department of Justice and the Department of Health & Human Services to make the combating of health care fraud a cabinet-level priority. Recent testimony pegged the amount of fraud in the Medicare system at $54 billion for 2009. The stated goal is to reduce this number 50% by 2012. For those of you in the reading audience who aren’t calendar enthusiasts, there are only 435 days left until 2012. Things are about to get nasty in the audit world.

As you watch glitter-throwing sprites flit above marzipan flowers and waterfalls of pure, sweet Merlot wine, the biggest change is one that has yet to be corrected, this being the ongoing threat of drastic percentage reductions to the Medicare Physician Fee Schedule. Without action in the upcoming post-election, lame duck sessions of Congress, a 23% reduction is set to be implemented on December 1st, 2010. Thanks to the ongoing fire drills of Spring with regard to this issue, we know that CMS can place a hold of ten working days on claims, which makes the actual deadline to fix this life-altering decrease December 14th. As if this wasn’t enough, the fee schedule for 2011 currently includes an additional reduction of 6.1% which takes effect January 1st. It remains to be seen whether the last session of the current Congress will be in the mood to alter a landscape that puts the health care, and by extension the lives, of Medicare beneficiaries, at risk. The Senate being the place where useful legislation goes to die, you’ll pardon me for my skepticism this time around.

When you open your eyes, you will remember everything. Welcome back to the new reality. A snifter of brandy and a few Valium can be found on the small table near the exit.

October 22nd, 2010 | 4 Comments »

Court Ruling Obliterates “Good Cause” for RAC Audits

Posted by J. Paul Spencer, CPC, CPC-H in CMS, Hot Topics, RAC / Recovery Audit Contractors

Life is nothing without meaning.

As a demonstration of this statement, imagine for a moment that everything in your life that has some kind of fixed value or representation suddenly shifts. Here are a few illustrations to help you: the nickels in your pocket are now worth nine cents, the dishwasher in your kitchen is now used for the cleaning of clothing and your family dog is now an animal known as a boopwiffle.

To the best of our abilities, we have attempted to assign shape and definition to everything that exists. The moment of debate occurs when someone else applies a different set of definitions to things in our world with a long-established value. Depending on the new person’s definition, the result is either a clearer understanding of the things that surround us (such as someone like Copernicus or Galileo) or a complete and total breakdown of established order, leading to chaos. Last week, a judicial decision was handed down from a U. S. District Court in a case involving a hospital and a Recovery Audit Contractor that, if left to stand, could hold dire consequences for all providers of medical services paid by the Medicare program.

In February of 2009, CMS issued Change Request 6157, that stated that a contractor could go back as far as 4 years to reopen an initial determination on a claim, provided that the contractor has ”good cause” for the reopening. Specifically, this update clarified what constituted new and material evidence needed to substantiate good cause. The Change Request stated that the information has to be something that was not readily available at the time of initial determination. There was a key passage in this document that was at issue in last week’s case:

“A contractor’s decision to reopen based on the existence of good cause, or refusal to reopen after determining good cause does not exist, is not subject to appeal.”

The plaintiff in this case sued the Department of Health & Human Services, stating that a RAC auditor reopened a claim 20 months after the initial determination without sufficiently providing just cause for the reopening. The final decision of the judge was that a decision by a contractor to reopen a claim is not subject to appeal, regardless of whether “good cause” exists.

In summation, this decision means that RAC’s and ZPIC’s no longer have to follow any rules for the reopening of claims. No appeal rights are available to any provider to force the disclosure of a reason for claim reopening and no court can provide relief. Any contractor can reopen any claim at any time for any reason, and CMS isn’t interested in monitoring contractor reopenings to determine whether good cause exists.

While the RAC program as designed on paper was to find both overpayments and underpayments, there is no financial incentive for the RAC’s to identify both with the same veracity. If one factors in that RAC’s keep anywhere from 9% to 12.5% of all overpayment dollars collected depending on geographic area, the judge’s decision has devastating potential.

If I were to identify one silver lining with regard to the RAC’s, it would be the success rate of appeals of RAC determinations. Currently, 8.2% of all RAC decisions have been appealed by providers with a success rate of 64.4%. This indicates a high error rate on initial determination, and provides a great argument for internalizing an inherent mistrust of any RAC determination. Thanks to a short-sighted court decision, appeals against a RAC as it relates to the administration of statute are limited. Yet if the decision of the RAC as it relates to the payment determination for services seems incorrect, anecdotal evidence strongly suggests that it is, and that’s worth an appeal.

I can’t promise that the process is as easy as taking your boopwiffle for a walk around the park, but half of survival is the art of making yourself an unappealing target for predators. An aggressive response is a provider’s best defense against continued RAC audits.

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August 6th, 2010 | 2 Comments »