Secure Transfer System »     Client Portal Access »

Posts Tagged ‘Audits’

Reducing Hospital Risk And Exposure

Posted by Lisa Velasquez in Coding and Compliance, Hot Topics, In the Press

I am always searching for great resources for current information about healthcare compliance and there are a couple of  live weekly online shows that I listen to on a regular basis. One of my favorites is “Finally Friday” presented by Appeal Academy. Have you ever heard of this show? Moderators are: Ernie de los Santos, MBA, SSA, SAC-Faculty  Chair at Appeal Academy, Sharon Easterling, MHA, RHIA, CCS, CDIP, CPHM and William Malm, ND, CMAS .

I’ve had the opportunity to listen to some really great discussions. Two weeks ago their guest was Dr. Pahuja, former RAC auditor and founder of Aerolib Healthcare Solutions, who presented the results from his 2-Midnight Rule Quiz (you can take the quiz here). Prior to that show, there was an exceptional presentation by Bill Malm of Craneware who shared this webinar (for FREE) OPPS Final Rule for CY 2014 Overview.

But the show that REALLY caught my attention originally aired Friday, January 31, 2014. The featured guest was Paul Flanagan, JD, MHA, CPC- Compliance Officer for Abington Memorial Hospital in Pennsylvania. Prior to the show Paul made available several free downloads such as slides from the webinar, 39 Watchdogs Lists, PHI Checklist, a Hospital Department Risk Assessment Survey and even a Detailed Compliance Workplan that can be used to plan, document, manage and execute a complete Compliance Workplan for any size hospital.

It was a terrific show with valuable information and great participation by the audience. At one point in the show the discussion addressed problems faced by compliance officers and the best tools and available solutions on the market today. The highlight of the program, for me, was an exchange between Paul Flanagan (Abington Hospital) and Bill Malm (Auditor at Craneware) where REVEAL/md™ was discussed as a solution that Abington Memorial Hospital had found. Described as  ”Elegant” by one of the physicians from Abington, both Paul Flanagan and Bill Malm were in agreement that hospitals live in a silo environment and compliance officers need tools like REVEAL/md. This was not a paid advertisement, but definitely music to my ears as I strongly believe every hospital should be using REVEAL/md.

This was a really great discussion and I hope you will take a moment to listen to the recording in its entirety, but for the benefit of some of our hospital clients currently using REVEAL/md let me share some direct quotes from the show.

(Referring to REVEAL/md) “I think it’s a slick tool…it’s a way to get some powerful analytics to help you look at this risk…” Ernie de los Santos. Moderator.

The reality is, we’re [Compliance Officers] not always bringing the best news…[having something] more visual is helpful…this [REVEAL dashboard] is more palatable to me…” -Paul Flanagan, Abington Memorial Hospital

“I want to say a few things as an auditor. He [Paul] is exactly right. What we struggle with is a lack of direction in the audit. If we do have findings, it’s piecemeal. hospitals live in a silo environment. This software [REVEAL/md] or a well constructed audit plan that is given to the auditors internal and external from a compliance officer is always a welcome outcome…”   -Bill Malm.

(In a discussion about hospital departments) “…..There’s never a cohesive pattern, …there’s never a cohesive outcome. It’s all fragment. Fragment… Fragment… Fragment. The compliance officer has almost taken  a new role in not so much defending the hospital but setting up a pattern of behavior within the hospital where people actually have to have systematic processes that are sustainable and an outcome that is measurable and I think that’s the key.”-Bill Malm.

I’d like to say “thank you” to everyone who was listening to the show that reached out to us to let us know that industry experts were actually having a live discussion about what they liked most about REVEAL/md.  It’s exciting to us… that it is exciting to you!

If you’re hearing about REVEAL/md for the first time and would like to find out more, please email me at or call me at 414-405-5517.

REVEAL/md is the first BI solution that is designed specifically for compliance departments to proactively identify risk. Every year payers audit and recoup millions of dollars from hospitals and medical groups across the country. These auditors utilize specific methods to quickly pin-point what physicians they should focus their review, these same techniques are included in our solution. REVEAL/md helps you look at your physicians like an auditor so you can keep every dollar that is yours.

CMS: What Anarchy Looks Like

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

Among my many musical areas of interest is punk rock, as performed by the original creators between 1976 and roughly 1984. If music was ever in need of someone stepping to the fore with an airing of grievances, it needed to happen in the middle of the self-indulgent, fashion elitism of the disco era.

One of the founding principles of the punk rock movement was the idea of skipping revolution and going straight to anarchy. In the post-Watergate era in America, and as the post-World War II excesses of the upper economic echelons continued in Great Britain, the idea of being completely leaderless held a certain appeal for many, including me. That personal fascination ended abruptly in 1994, when the events in Rwanda showed the world in stark terms what anarchy actually looks like. Nations, organizations and institutions need stable leaders and a cultural direction, mainly because to leave the human race to their own devices invites the worst of all possible scenarios.

It was with this philosophy in mind that I came across a story this week regarding Marilyn Tavenner, the current Acting Director of CMS. Due to archaic procedural rules in the U. S. Senate (seemingly designed to insure gridlock), it was announced that there would be no confirmation hearings to remove the “Acting” portion from her title. As a reminder, based mostly on political pie fights, CMS has had only acting directors since 2006. Ms. Tavenner is the 5th such temporary director in that time period.

CMS is now deeply submerged in multiple initiatives designed to transform the government health benefit payment model from one of consumption to one based on the quality of the outcomes. Most of these initiatives have come into being with the agency lacking long-term leadership. It has indeed been a difficult task to bring forth such things as ACOs, increased audit initiatives, mandatory medical records and ICD-10 when the average tenure length of leadership at CMS over the past 12 years is one year and 73 days. Looking at that number, it reminds one more of the random length of a prison sentence rather than a legitimate term of leadership.

As the story linked above clearly demonstrates, Ms. Tavenner does not appear to be as polarizing a figure as her predecessor. She has admirers on both sides of the aisle, which is admirable given the rhetorical gulf between the two sides in Congress. On the surface, there is no logical reason why her installation as a “permanent” agency head should be postponed. Given that based on averages, Ms. Tavenner is more than likely just about half way through her term as acting director, the nonsensical nature of the delay is compounded.

By their inaction towards the needs of CMS and the people who rely on the Medicare and Medicaid programs running smoothly, the Senate is giving us another window into the world of anarchy, albeit a less violent example than the streets of Rwanda in 1994. As announcement e-mails from CMS regarding new initiatives slowly fill my inbox, I head into the long holiday weekend wondering who or what will run CMS the next time the Anarchy Train comes to town. As a pointedly-named punk band of yesteryear once put it, “It’s coming some time, maybe”.

The RAConteur: The Long Autumn Begins Early

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

Since I’ve moved to the Midwest from my homeland of the East Coast, I have become much more accommodating. This morning, on my way to the office, I was in the right-hand lane of traffic next to an exit ramp. A driver was coming off the exit ramp into the slight congestion that lay beyond. She stopped in the middle of the exit ramp, and I allowed space for her to pull in front of me.

Ten seconds went by, then twenty, then thirty and the driver sat there, seemingly unable to comprehend that a space had been made available to her. Perhaps she believed it was her moment of rapture that would sweep her into the sky on a flaming, Pegasus-drawn chariot to a magical spot 10 feet from her destination, but she wasn’t moving. I briefly revisited the colorful language I tend to use when behind the wheel and left her in the dust.

With some people, it doesn’t matter how many times you wave your hand, fire warning shots or shout “LISTEN TO ME!”;  no warnings are heeded and those who put forth alerts are left to view the consequences from afar. As a person who documents the progress of government audits in this space on a weekly basis, I know this feeling all too well.

While I tend to focus on recovery auditor issues on Wednesdays, a press release hit my inbox this afternoon that reminded me that this is far from the only effort to stamp out fraud and abuse in the Medicare program.

The Departments of Justice and Health & Human Services jointly announced the latest charges from the HEAT team initiative. Ninety-one individuals in 8 cities were charged for their participation in fraud schemes that resulted in roughly $295 million in false billings.

While these numbers are gaudy based on their scope, the HEAT initiative has been busy since its inception, having charged individuals with nearly $1 billion in false claims billing.

In the meantime, the recovery auditors have been ramping up operations almost exponentially. CMS set an aggressive goal of identifying nearly $1 billion in improper payments in the calendar year of 2011. Through nearly three quarters, the contractors have identified just short of $700 million, which means that over $300 million will need to be collected between now and the end of the year.

Today’s news from the HEAT team, as well as the aggressive goals yet to be achieved by the RAC program, are CMS’ attempt at firing warning shots. I am seeing that larger organizations are getting the message, but much like the car I left behind this morning, smaller providers may find themselves having a hard time dealing with the traffic of investigation if they don’t start paying attention as the warmth of Summer gives way to the Autumnal Death Cycle.

The RAConteur: The Screaming Baby Behind You

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

To most of the country, I am clocking in just in time with this week’s observations on the continuing travails of the Medicare RAC program.

The reason for this is that for the past few days, I was a speaker at the 2011 Physicians RAC Summit in Houston. Today, I flew home. Air travel, as it is currently configured in the United States, is an activity only slightly less enjoyable to me than stuffing a scalpel blade-first under my big toenail. Today’s flight headed down the rating scale exponentially with a direct flight back to Milwaukee that featured two crying children in the row of seats directly behind me. Thanks to a storm front that just passed over our area, the plane teetered onto the runway during final approach, as distressed travelers sunk their finger nails into their armrests. If I have anything to say about it, I believe I experienced my last plane ride today.

If there was one takeaway from the RAC Summit that I can share with each of you, it is the fact that medical providers feel that they are akin to my flight experience today. If you are enrolled in a government health care plan, and you accept payments from these plans, you have become an unwitting hostage to audit programs and structures such as the RACs. A provider these days is very much like an exhausted man returning home from a business trip in a sealed mode of transportation as the children around him scream, only in an allegorical sense, the screaming is actually in the form of additional documentation requests.

When such a gathering of professionals occurs in one place, such as what occurred at the RAC Summit, the largest lesson that can be gleaned is that it doesn’t have to be that way. The analytical tools are available to defend providers from these types of audits. In addition, as the RACs are currently configured, odds are very strong that the provider has the upper hand with regard to appeals. The numbers from independent organizations reveal that the RACs are on a learning curve as they ramp up operations.

Think of the RACs as a baby hydra. Their dangerous, serpent-like heads are not fully developed, which gives the experienced swordsman ample opportunity to severely injure one of the heads, but it will eventually heal itself. To put it another way, the cabin door to the airplane isn’t completely sealed, and providers are not permanently trapped, with a rocky flight being the result. Time remains before the RACs increase their workloads to include every provider it can possibly bring into their universe. The skills to survive and thrive are available, while the screaming baby briefly naps.

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.

The RAConteur: A Little Attitude Goes A Long Way

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

There are few things so regretted in this life as warnings that go unheeded. For most of us, warnings of impending threats take us out of our comfort zone.  We are too absorbed in how things are that we’d rather not take the time to think about where we might end up. A short jaunt through history gives us many examples of the consequences of such fence-sitting behavior.

With this in mind, let me try to make something as clear as I can. The RACs are coming for physicians this year, they will move quickly and every physician in the country should be ready for the onslaught. Before you ask, no, I’m not paranoid, no, the sky is not falling and no, there are no paint fumes floating in my vicinity 

As I have covered in a previous post, the lists of approved issues for widespread review located on the websites of the 4 RAC contractors is not a finite list of what RACs are currently reviewing. I can now report via anecdotal evidence that a practice in the Western United States has learned this the hard way, as they have received a large volume of medical records requests from HDI, the RAC contractor for Region D. This is quite obviously a probe audit for an issue(s) that the RAC suspects can return high dollars in contingency fees.

The most important step a medical practice can take in advance of impending RAC audits is to be prepared. The preparation I’m speaking of is not so much on the administrative side, such as making sure office staff can recognize a RAC request, responding quickly, and knowing the time lines for appeal. If I can dip into my lifelong love of ice hockey for a moment, I can describe what I mean in emotional terms.

There’s an old saying in ice hockey, particularly as it pertains to forwards on the offense trying to score; take the shortest route to the puck, and arrive there in ill humor.  I’d like to suggest that every medical practice in the country take a similar stance when it comes to RAC audits.

It’s time to reintroduce the facts currently in evidence. In the RAC demonstration project, 64.4% of all appealed claims were overturned in favor of the provider. Roughly stated, until a new set of numbers is presented, the RACs are guilty until proven innocent with regard to the quality of their work product. It’s one thing to adhere to documentation request and appeal time lines with a mix of foreboding and exhaustion, but it’s quite another to view a RAC audit as exactly what it is; a raid on today’s coffers for yesterday’s perceived mistakes.

At the point where the largest payer of insurance claims is also the biggest threat to the existence of your practice, it’s time for all physician advocates to find a very large chip to place on your shoulder, if one currently does not exist. Go back to the very beginning of the process for a moment. First, the Medicare Administrative Carriers reimbursed your claims incorrectly. Given that none of the MACs have been removed due to this type of common malfeasance, what do you think the odds are that a RAC who makes a large amount of audit mistakes will be removed? The RACs are mercenaries, conducting raids on your practices via paper bomb. Are you going to respond by doing whatever they say given the current evidence of incompetence, or are you going to fight back by utilizing the rules of the game to make their lives miserable?

The warning shots have been fired. The RACs have arrived on your shores. If you get an additional documentation request from your RAC contractor, take the shortest route to the envelope and arrive there in ill humor.

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.

Recovery Audit Contractors, Part I: The Dawn Of A Bad Idea

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

We now find ourselves in the month of May. This time of year is a unique time for all of us. The new baseball season is in full swing, the rains of April bringing forth a world of color from flower beds everywhere and the days begin to give us a little more sunlight, bringing with it the anticipation of summer days ahead.

And me? Lo and behold, I’m a Winter guy. For me, Spring brings with it the promise of allergens, bugs (my only pathological fear) and the promise of the long humid days that continually aggravate both of my afflictions. Fear not, for a predilection for Winter makes me uniquely suited to be a compliance officer in these difficult times.

Being “blessed” with my chosen Spring temperament will suit me well in the coming days, months and years for the Recovery Audit Contractor program, which has now become known (fittingly) by its medieval torture device of an acronym – RAC.

Before I delve deeply into why the RAC’s are a fundamentally flawed idea whose time has apparently arrived, we must first gain perspective about how we have been brought to this point.

When we look to the government as a safeguard against the loss of tax dollars, we learn very quickly that there are portions of the U. S. Government that are not suited to the task. When we get to the individual department level, in many cases it becomes easy to draw sides both for and against a department continuing on the same path.

This cannot be said of the Office of Inspector General for the Department of Health & Human Services. The OIG has been a department section whose recoveries in dollars to the Medicare program have far outpaced their annual operating budget for many years. Billions of dollars have been returned to CMS per year due to the efforts of the OIG, with nearly $6 billion returned in the fiscal year of 2008 alone.

So why do we now have the RAC program?

The previous administration brought forward a philosophy, demonstrated in excruciating detail by companies such as Halliburton and Blackwater, that unfettered capitalism, in the form of independent government contractors, is the solitary panacea to all of the government’s ills as a structure. Rising out of this set of beliefs comes the RAC program, which in the sales pitch sounds like a fine way to return money to the Medicare program, until the fine print is magnified.

For every dollar returned to CMS through the RAC program, 22 cents will go to the contractors who discover the overpayments. As a taxpayer who pays into the Medicare program, I would be happy to pay some portion of recovered monies to a contractor if it was bringing forward a new and as yet unheard-of method of forensic auditing on its own that would lead to the return of dollars to a taxpayer-funded program. Instead, the RAC’s will make all of their incorrect payment determinations from CMS-proprietary computer software. All the contractors need do is enter data, run reports and send out letters either demanding overpaid dollars or requesting medical records. Apparently, this type of revolutionary thinking is worth 22% of recovered dollars to a federal program I pay into twice a month.

It gets worse.

The RAC program was designed for four regional contractors, each covering a different listing of states. When the permanent contractors were selected for the RAC program in October of 2008, two contractors who had been part of the Demonstration Project in previous years filed a grievance for being excluded from the permanent program. The settlement between the government and these orphaned contractors states that these two contractors will now work as subcontractors for two Permanent RAC contractors. Without conducting a single permanent audit, the program already has 50% more hands in the till than originally designed.

If common sense were entered into this complex equation, the shelf life of the RAC contractors would be fairly short. As it stands now, the RAC’s are here to stay, and are about to become an uncomfortable part of life for every portion of our healthcare delivery system. In the concluding part of this post, I’ll give the reader a blueprint for what is coming at the end of this month with regard to RAC activities, as well as a preview of best practices going forward should you be the recipient of correspondence from a recovery audit contractor.