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Of ICD-10 and Disappearing Doctors

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

Now that the calendar has turned to February, let me share a truth or two that I hold about the shortest month of the year.

First, Groundhog Day may very well be the dumbest thing I’ve ever seen. People in stovepipe hats standing around an overgrown rat in the cold and dark in order to get the weather report is a poor use of human resources. The only cool thing about this day on the calendar is that my wife’s uncle appeared in the film Groundhog Day playing upright bass behind Bill Murray. The rest of February 2nd can forever dedicate itself to other, more useful things.

One last thing before we get started. There is no cooler birthday on Earth than February 29th in a Leap Year. Here’s to all of those people!

Now, turning my attention to recent health care headlines, two of my favorite topics popped up again in the past week.

First, we have the AMA clarifying what was referred to as “work vigorously to stop” ICD-10 at their meeting in New Orleans back in November. Apparently, the AMA’s approach in this area consists of that tried-and-true standard: The Sternly-Worded Letter. On January 17, AMA CEO James Madara led off his Dispatch Path to Prosperity with a 3-page bulletin to current Speaker of the House John Boehner. Because this particular letter didn’t deal with tax cuts, tort reform, deficit reduction or further punishing poor people, it was set aside for golf and further tanning.

Never an organization to back down from a challenge, the AMA doubled down and sent a 4-page letter to HHS Secretary Kathleen Sebelius which covered basically the same territory as the Boehner letter. I covered this topic in a post at the time, and what I said then still holds true. Rather than spitting into a headwind in a quixotic attempt to stop the rotation of the Earth, the AMA’s considerable resources would be better spent either educating their member physicians about ICD-10 or assisting struggling practices monetarily to ease the headaches of transition. Look for more correspondence in the near future, which will more than likely be followed by a bunch of doctors descending on Capitol Hill on an assigned date to “bring awareness” to the issue. You can also look forward to me yawning and changing the channel.

The second piece of interesting news in the past week came from the OIG. When I reviewed the OIG Work Plan back in October, one item that jumped out at me was the OIG’s plan to look into the impact of physicians opting out of Medicare, both in terms of physician access in certain geographical areas andto be certain that non-participating providers were not submitting claims for payment to Medicare. There has been a slow trend developing regarding physicians who take the “third way”, that being the membership/concierge model. Previous studies by CMS have vastly underestimated the exact number of such physicians nationwide.

It was announced last Friday that the plan to assess the impact has failed due to a lack of data maintained by the MACs on physicians who leave Medicare. CMS has been forced to admit that they have insufficient oversight over physicians who opt out of the Medicare program due to this lack of data. CMS concluded their statement of finding by saying that they “plan to conduct a full evaluation when a complete data source of opted-out physicians is available”.

I challenge the reader to internalize that for a moment, and place that statement against the backdrop of PPACA and the ticking time bomb of a growing primary care physician shortage. CMS is stating that they don’t know for certain who is not participating in the program as they attempt to build a health care delivery structure where every citizen is covered under some type of health insurance. Items such as Medicaid expansion certainly appear tenuous when you can’t reasonably identify which providers will not be there to provide services. CMS has set no time frame to provide a reasonable picture of the opt-out landscape. Between you, me and your computer monitor, that’s a little scary.

The shortest month of the year has begun with big items. As the “Doc fix” witching hour approaches towards the end of the month, February is threatening to make up for in quality of news what it lacks in quantity of days.

I don’t live in a hole, but I predict about 4 more weeks of hand-wringing.

Be sure to keep abreast of all news updates about the Fi-Med RAC Summit this April by visiting the Summit website.

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February 3rd, 2012 | No Comments »

The RAConteur: Acknowledging Shouts of “LOOK OUT!”

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

As you know, I cover RAC and audit issues every Wednesday in this tiny corner of the world wide web. Based on the spike in government audit activity over the last 28 months, I have continued to do this based on my belief that I am addressing a need in the greater provider community. While the Recovery Audit Contractor program has been at the forefront of CMS’ efforts, I have also tried to demonstrate the road map that is followed by the alphabet soup of government audit entities, showing how certain issues rise to the top of the attention chain.

Despite all of my efforts, I have a large ongoing problem, that being my futile attempts to get physicians to pay attention to government audit issues. Perhaps it is the landscape in which large numbers of physicians are seeking employment under the assumed safety of hospitals, but my general feeling is that physicians are largely ignoring the message.

Just this morning, I received yet another reminder of this battle in my e-mail box. I subscribe to updates from multiple sources, most notably Medicare Administrative Carriers for assorted issues of interest to the provider community. Today’s electronic missive comes from WPS, the legacy Part B MAC for Illinois, Michigan, Minnesota and Wisconsin. For a few years, WPS has been a few steps ahead of other MACs with regard to conducting service specific probes on the heels of CERT testing discoveries under their jurisdiction. Of note, CPT code 99233 (Level III Subsequent Hospital Visits) has been on WPS’ radar for nearly two years across multiple specialties. Yet if today’s e-mail is any indication, the message of the importance to attention to review issues continues to fall on deaf ears with regard to the physician community.

WPS looked at this CPT code for the specialties of Neurology and Family Practice. Over the past 15 months, initial probes for these specialties revealed an error rate of 96.24% for Neurology and 89.54% for Family Practice, which quite obviously necessitated a follow-up review for both specialties. While there has been some improvement since the initial probes, a simple glance at the latest numbers show that physicians aren’t giving these reviews proper attention.

For Neurology, 128 line items across 98 claims were selected to review prior to payment. Of these, 102 line items were denied, for a cumulative error rate of nearly 80%. For Family Practice, 157 line items across 100 claims were selected, with 113 line items being denied, for an error rate of just under 72%. These numbers are bad enough, but a closer look reveals that roughly 60% of the denied claims for both specialties were due to physicians not providing the requested documentation for review. This means that 6 out of every 10 complex inpatient follow-up visits were denied because no one opened the envelope and/or read the correspondence inside of it.

I have limited amounts of free time in the coming year. I have people to educate face-to-face, networking opportunities with others in my profession, personal trips to various parts of North America between now and the end of Summer and a 5-year-old to keep on the straight and narrow. Nowhere in my small, handwritten pocket calendar do the words “BEAT HEAD AGAINST WALL” appear. From the moment The RAConteur began in September of 2010, I have been warning providers that the auditing landscape is changing, and not in a way that will be beneficial to either the delivery of care to their patients or their financial bottom line. Perhaps, someday, the physicians of America will begin to take a small step towards increased awareness. Might I suggest that the first part of that process to be the purchase of a letter opener?

Paul Spencer will be a presenter at the Fi-Med RAC Summit in Milwaukee, WI on April 16th and 17th, 2012. Go to the Summit website for further information on this unique educational opportunity. Use promo code “SPENCER” to receive $50 off the registration price for a limited time.

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February 1st, 2012 | 7 Comments »

The RAConteur: The Year Begins With Snafus and FAQs

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

The beginning of a new year always offers hope. We spend the first day of the year resolving to change past behaviors. Subsequently, we spend the second week of the year eating a pint of Ben & Jerry’s, wondering how it all went wrong.  

Those of us affected by the gravitational pull of government audits are entering the new year with two challenges right out of the starting blocks.

One important change that occurred was widely known prior to implementation, but fell apart in execution. Beginning on January 1, Medicare Administrative Carriers (MACs) took over the process of issuing demand letters for Medicare RAC overpayments. Given the fact that the RACs exist because the MACs make claims adjudication mistakes, it was perhaps inevitable that this seemingly simple task would become a problem.

The demand letters, as issued by the RACs, would include multiple claims issues for one provider on one demand letter. The MACs, demonstrating the administrative acumen that launched 1,000 fraud investigations, have been issuing a demand letter for every identified RAC overpayment. This was followed by urgent e-mails from each MAC stating that they were “working with the system maintainer to ensure transactions are aggregated at the provider level on a daily basis”. This is legalese meaning that for the short term, demand letters will pile up in provider mail rooms like vacation junk mail.

The second challenge facing providers has yet to truly reveal itself to the provider community. The Medicaid RAC program has officially reached its implementation date as of January 1, 2012. Because there was very little guidance on the provider level leading up to this date, most providers find themselves in the dark with regard to the Medicaid RAC program, save for what appeared in the Final Rule released back in September.

To fill in the blanks, CMS released an 18-page Frequently Asked Questions (FAQ) document addressing the Medicaid RAC program and what can be expected. In all, there are 53 questions and answers within the pages. As is my custom, I did some reading so you can go do something else. I’ll go in semi-numerical order covering the high points, as some of the questions have information that is duplicative as compared to the Final Rule.

FAQ 5 asks what a state can do to prepare providers for Medicaid RAC audits, and whether physicians will need to implement new compliance procedures due to the program. The answer was that states should be “as informative as possible” about implementation, with the minimum information being the name of the RAC contractor with contact information, when the RAC will begin to identify improper payments and “a general description of the scope of its RAC program”. From what I’ve seen, while more than 50% of the states have an identified Medicaid RAC contractor, information on the contractors emanating from the Medicaid programs themselves is virtually absent.

The second part of FAQ 5 was answered with what I found to be curious wording; “We do not expect that providers will have to undertake any major activities to prepare for Medicaid RACs”. We have all seen the glaring weaknesses of the Medicare RAC program, and if current appeal trends continue apace, we are in for about 5 solid years of endless paper shuffling. For CMS to once again soft-peddle the effect of expanding the process on providers to Medicaid borders on irresponsible.

FAQ 10 was the next to catch my eye. Already, there are auditing entities that have gained more than one state RAC contract. This particular FAQ focused on the need for a unique Contractor Medical Director that is licensed in the state covered by the contractual agreement. To illustrate, let’s say Company A has contracted with states B and C to do the Medicaid RAC work. Because these are two separate contracts, Company A would have to hire two full-time Medical Directors, with one being licensed to practice medicine in State B and the other being licensed in State C. However, the FAQ does make one distinction. If States E, F, and G wish to be bundled into one contractual arrangement with a contractor, more than one Medical Director may not be necessary. CMS indicates that the volume of claims in this particular arrangement could be a determining factor in deciding how many medical directors are needed.

FAQ 13 is the “Who’s The Watcher?” Question, asking how CMS will monitor and evaluate Medicaid RAC programs. Apparently, CMS will conduct program integrity reviews, collect a State Program Integrity Assessment and review overpayments collected, with states being required to “comply with reporting requirements as specified by CMS”. Note the big divergence from Medicare in this case. There is no single Validation Contractor to judge the work product of the Medicaid RACs, as is employed for the Medicare side. I’ve spoken about the comic nature of the RAC Accuracy scores in the last Report to Congress on RAC activities in the past, so I am on the fence as to whether this is either a good or bad thing at the present time.

This issue dovetails nicely into FAQ 17, which asks whether states are required to perform quality assurance of the RAC work product. States ”should” determine how it will validate the accuracy of overpayment determinations and include it in the Statement of Work in their RAC contract. Given that there are 50 states and 5 territories, all with different ways of measuring effectiveness, we should not expect one overarching accuracy score for the Medicaid RAC program as a whole, but rather dozens of bits of individualized data. 

FAQ 19 is the Duplication Question, asking how CMS will enforce multiple integrity efforts in addition to the Medicaid RAC, and how duplication of efforts can be avoided. With whitewash brush in hand, CMS states that they “intend to make every effort to incorporate and consolidate questions related to program integrity into scheduled reviews so as not to overburden states”. To be clear, there is nothing in that statement that gives any indication at all as to how CMS will avoid duplicate integrity reviews, thereby reducing provider burden. It is a new standard by which to measure a non-answer.

There were several FAQs about potential conflicts of interest, notably in cases when the RAC contractor already performs an integrity function in that state. CMS warns states to be cognizant of conflicts that may reveal themselves, but does not specifically ban one entity from performing multiple integrity functions for a single state.

I’ll wrap up the review with FAQ 28, which is of particular interest. What happens if a State does not receive any responses to its RAC Request for Proposal? CMS presents the options of either requesting an exception to the program, or “consider partnering with other states in order to attract a RAC” (I call this “The Wingman Option”). There are a few states who have requested exceptions to the RAC program, according to the Medicaid RACs At-A-Glance website created by CMS, but it is unclear whether these states have done so based on their inability to find a RAC contractor.

I recommend downloading the FAQ document, reviewing what I have omitted and keeping it safely on file, until such time as certain states catch up to the implementation date, now 10 days in the past. We need not hit the ice cream just yet, for all is not (quite) lost.

Paul Spencer will be appearing at the Fi-Med RAC Summit on April 16 and 17th in Milwaukee, WI. Information on this unique learning opportunity can be found here.

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January 11th, 2012 | No Comments »

The RAConteur: Finally, One Bad Idea Dies

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

We now find ourselves four days into the year the Mayans marked as the end of the world (or not). Despite all evidence surrounding us to the contrary, it is in our conditioned nature to hope for the best in any coming year. An ancient calculation of a lethal comet notwithstanding, I can start 2012 off with at least one piece of good news.

Back in November, CMS announced that on January 1, they would begin a demonstration project wherein the Recovery Audit Contractors would review claims before they are paid in 11 states with high established error rates. Yesterday, almost as quickly as it was announced, CMS decided that this project has been delayed until further notice. CMS instead stated that it will provide 30 days notice in the future before implementing the project.

I stated at the time that based on the quality of the RAC work product to date, it hardly seemed like a good idea to expand their audit mission when the contractors clearly have not shown the baseline acumen necessary for post-payment review, despite the vaunted “accuracy scores” that were reported in the RAC Report to Congress back in September.

It’s a short piece of good news to start off the year, but given the administrative burden the RACs have already placed on hospitals due to complex review, even the smallest flicker of light in a storm is welcome.  

 

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January 4th, 2012 | 4 Comments »

The RAConteur: Well, Look What Disappeared……..

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

A few nights from now, we’ll say a none-too-soon goodbye to what has been a challenging year on many fronts, but especially so (AGAIN) in the world of health care. Had it not been for a last-minute budget “deal” last week, physicians would be facing a 27%+ cut at the beginning of January. Remember that number, because it’ll make another appearance at the end of February in between invective and other Congressional nonsense.

As it applies to the subject matter of today’s blog, we have seen an almost tenfold increase in RAC activity in the past year. The RAC program, in a perfect world, would be returning money to the Medicare program that has been improperly paid. CMS has been quick to trot out preliminary results to show the success of the contractors. As a taxpayer and as someone who has been in the industry for 22 years, to paraphrase the words of Robin Williams in Awakenings, I would agree with them if they were right.

The RAC program is showing itself to be a wasteful pursuit, but like the reckless, fedora-wearing, Canadian Club-soaked shooter at the craps table at 2 AM that metaphorically defines those who direct government appropriations, CMS is all in on expanding the program to Medicaid despite facts in evidence.

I originally planned to do a review of physician issues being reviewed by the RAC contractors in this space today. As part of that process, I thought I would take a look at the RAC FAQs on the CMS website to see if there have been any glaring changes to report. Stop the presses, for did I ever find one!

In the past, the following question and answer appeared under the RAC FAQs:

“Q: I received an additional documentation request (ADR) letter from a Recovery Audit Contractor (RAC) for an issue that is not approved on their website.  Do I need to submit the record?

A: RACs may request a small sample of records to assist CMS in determining if an audit concept is consistent with Medicare policy and should be approved for widespread review. Providers must still submit the requested documentation to the RAC within the expected time frame to avoid having that claim denied. The RAC will complete its review of the claim and issue a review results letter within 60 days.”

Much like Jimmy Hoffa, Amelia Earhart and the World Series hopes of the Chicago Cubs, this particular FAQ has disappeared.

On the surface, this would appear to be good news. A more reactionary reader might move to the conclusion that the RACs are no longer allowed to do reviews outside the scope of the reviewed issues lists on their respective websites. That would be a knee-jerk – and possibly costly – mistake.

For the actual answer to this question, we have to go to the revised RAC Statement of Work released back in September. I direct your attention to Page 11 under bold item #6 (why did I just get a flashback of the classic television show The Prisoner?) entitled “Random selection of claims”. According to this paragraph, the Recovery Auditors are statutorily prohibited from selecting claims randomly for review for any purpose “other than to establish an error rate”. The RACs must use data analytic techniques to conduct “targeted reviews”. I can’t speak for the reader, but the longer I look at those two sentences, I come to no other conclusion than the fact that the FAQ above disappeared has no effect on RAC operations going forward.

In order to determine that an issue should be added to an approved listing, a RAC has to first do analytics followed by establishing a reliable error rate for the issue in question. Truthfully, the only way to do that is through the type of small claims sampling used to reach a determination for widespread approval as described in the Incredible Disappearing FAQ.

The provider community is doing its level best to keep up with changes and adjustments to government audit programs. In order to keep all of our heads above water, it is in the best interests of CMS to let us know not only when new issues appear under the RAC FAQs on their website, but also to let us know when things have been redacted and why. CMS did not bother to do this in this particular case, but providers should know that as far as RAC review types are concerned, nothing has changed.

…For now…

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December 28th, 2011 | 1 Comment »

The RAConteur: Are We Looking In The Wrong Place?

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

It’s time once again to look at some numbers.

Being so close to reaching the end of yet another calendar, this is the traditional time when all entities take a step back and talk about what they’ve accomplished in the last year. Since it’s one of my favorite topics, let’s take a look at government audit activities. As is my custom, I’ll also be happy to tell you what the numbers actually represent.

I have already covered the reported numbers for RAC activity for Fiscal Year 2011 in a previous post. For today’s missive, I thought I’d focus on three sets of numbers that came out of the Executive branch over the past month.

Let’s start with a big number. On the 15th of November, the Office of Management and Budget (OMB) announced that agencies throughout the government cut improper payments by $17.6 billion. Roughly $1.1 billion of this money came from reductions in the payment error rate under the Supplemental Nutrition Assistance Program (or “SNAP”; I grew up calling this “food stamps”) and Pell Grants for higher education, but the balance overwhelmingly was under the different branches of the Medicare program, with a cumulative savings of $12 billion from Medicare Parts A, B & C. Isn’t it amazing that faulty bombers costing billions are allowed to let slide, but the government’s anti-fraud focus is squarely on activities such as eating, wellness and making yourself smarter?

Next, we go to money collected due to government-wide anti-fraud efforts. On December 13th, another report was released with great fanfare by Vice- President Joe Biden which showed fraud recoveries totalling $5.6 billion across all agencies. To add to this number in the coming year, HHS is asking Medicare Part D plans to crack down on painkiller fraud, notably excessive prescribing of OxyContin. If the way people drive in front of me is any indication, these should be target-rich investigations. 

Which, thanks to the inevitable trickle-down, brings us to anti-fraud efforts for CMS. Over $2.9 billion dollars in fraudulent payments was recovered in Fiscal Year 2011. Over $1 billion of that total has come from the HEAT team activity that was expanded to nine cities during the Fiscal Year. I am critical of audit entities in this space for not showing the proper aptitudes in their tasks, but as a taxpayer, I am 100% in favor of the HEAT team approach. The providers that are being perp-walked by these joint HHS-Department of Justice strike forces are literally scum-of-the-Earth thieves, and there shouldn’t be one person in their right mind bemoaning the fact that they are taken off the field in a HEAT dragnet.

Going further, the government announced that $2.8 billion in fraudulent payments had been collected from qui tam, or “whistleblower” cases, which stands as a new record for such suits. Of that number, $2.4 billion was the result of fraud committed against federal healthcare programs. The number of whistleblower suits reached an all-time high of 638 in FY2011. As people begin to know the rules, they become more likely to realize that what is going on around them is illegal. As a compliance officer, I can tell you that this can be either a good thing or a bad thing, depending on the person doing the finger-pointing. It is yet another salient reminder to make sure that all employees in organizations that receive remuneration from Medicare know why things are happening. If they don’t, they should always be aware of the reporting structure for problems within your organization.

If you haven’t internalized the idea by now, let me reiterate it. It’s a new world out there. Medicare checks suddenly have quite a few more strings attached than they used to at the beginnings of the program. There’s is a lot more to worry about, and loading up on Tums isn’t going to make the issues disappear. The numbers above keep getting larger. Do your best to make sure that future numbers such as these affect someone else.

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December 21st, 2011 | 2 Comments »

Goodbye, Dr. Berwick (And With Him PPACA?)

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

The final day of any job is a challenge.

I’ve been a bit of an occupational nomad in my life, so in looking back on instances when  I’ve left one job for another, the only feeling I have is an awkward one. I can remember being given cards that everyone in the office signs saying “Good Luck” or “Best Wishes”, followed by a drink or two after work, accompanied by hollow promises of keeping in touch that never come to pass. Given where I have landed in my life, none of these memories fill me with any sense of regret.

Today, someone in Washington, DC is experiencing one such last day of work. Donald Berwick, the head of CMS, leaves his post today. In his brief time as the appointed head of the agency, Dr. Berwick attempted, against nonsensical political headwinds, to reshape the future of health care delivery in the United States. Based on his impressive resume of accomplishments, we shall more than likely here from him again in the future in a capacity outside government.

Dr. Berwick’s brief time period in his post had to do neither with his abilities for the task nor on-the-job failures during his tenure. The reason Dr. Berwick is suddenly seeking other employment is that he committed the sin of voicing publicly that maybe , just maybe, there are other health care delivery systems in the world that do a better job in certain areas than the United States in the realm of promoting the general welfare. For daring to study the American health care problem with an academic’s path of contrasting, comparing and then arriving at a solution, he is being sacrificed at the chest-beating alter of American Exceptionalism.

Attempting to move the conversation forward, attention is now being focused on Dr. Berwick’s replacement. Marilyn Tavenner has  been nominated to the job having followed a much different occupational path. She worked her way forward in her career solely as an employee of HCA, a for-profit hospital chain with a checkered history with CMS, from a hospital nursing position to their national head of outpatient services. She left the company in 2006 to be the head of Health & Human Resources in the state of Virginia. She is known mostly for her pragmatism, which given the enmity in the current configuration of Congress is a virtue that one side of the aisle will promote while the other side will do everything in its power to exploit.

Provider organizations are falling all over themselves praising Tavenner as an able replacement for Berwick and urging her confirmation by the Senate, something Dr. Berwick never attained because he dared to express an educated opinion.

Ms. Tavenner is left with multiple initiatives created during Dr. Berwick’s tenure that have caused equal parts consternation and confusion within the hospital community. Given her background, a number of these initiatives will more than likely see extensive revision as part of a “pragmatic” approach to satisfy that constituency.

Hanging like the Sword of Damocles above this news is the fact that the Supreme Court has promised a ruling on the constitutionality of the Patient Protection and Affordable Care Act by May of 2012. Ms. Tavenner, in a very short time. could find herself going from the inheritor and fine-tuner of the status quo to the person guiding the transition of CMS right back to the place it occupied in 2008. In either case, the task in front of her is not enviable. Perhaps she and Dr. Berwick can talk about it all over drinks later this afternoon before they never see each other again.

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December 2nd, 2011 | 3 Comments »

The RAConteur: The Hidden Danger of Semi-Automated Review

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

I’d like to warn the reader that, for the second day in a row, I’m about to relate a real life issue to my extensive experiences in watching classic television. Yes, I have a fascination with old television, but rest assured, I’m not a complete vegetable.

There is an episode of Rod Serling’s classic television show The Twilight Zone entitled “The Man in the Bottle”. It is a variation on the tried and true rub-the-lamp-for-the-genie story. A nice, elderly couple who own a pawn shop (NOT likely, but suspend disbelief, it’s television) buy a bottle for $1 from someone in the neighborhood and in it is a genie who offer them four wishes. As one can imagine, every wish has consequences and despite the possibilities, the couple ends up right back where they started, which is down on their luck, but wiser and seemingly happier.

The most innocuous of objects all around us pose dangers. On my desk, I could sever a finger in the desk fan, give myself a shock in one of the many outlets here in the Man-Cave or I could give myself a nasty dose of reflux from the bottles of Tabasco on my left. Our job as sentient beings is to view everything around us with skepticism, realizing that there is inherent danger if something is misused.

Which brings my meandering mind to (obviously) semi-automated review of paid claims by recovery auditors.

In the updated RAC Statement of Work, we see the semi-automated review method codified for the first time as a legitimate audit tool, but the dangers of this method to the provider community, in my opinion, have been painted over in an attempt to make the dogs playing poker somehow appear to be the Mona Lisa.

First, there’s the administrative burden and its cost. There is a cost to the provider with regard to automated review results, as this type of audit turns up over-payments. With complex review, there are costs to disputing a negative result. Yet there are boundaries to the administrative burden to providers in the form of limits on the number of requests and the ability to be reimbursed for copies of medical records.

Because a semi-automated review begins with a fully automated review and evolves to a complex review at the RAC’s discretion, there are no limits to the number of records that can be requested in a given time frame. Additionally, when the review goes from automated to complex, there is no reimbursement to the provider for copies of records. Anyone with 100 IQ points who can read a map can see where this is going. This has the potential to be devastating to providers, in particular small physician groups.

If the story ended there it would be your run-of-the-mill tragedy, but leave it to me to point out the potentially catastrophic. Remember that according to the RAC FAQs, recovery auditors can look at any issue at any time to probe whether it is cost-effective to add that issue to their approved issues lists. So if a RAC does an automated review, and suddenly feels that they can collect more money than any currently approved issue, they can request as many records as they want to for any reason under the cover of a “probe review”, and based on how the RAC rules are currently written, there’s nothing that a provider can do about it. The diplomatic among us would refer to this as a “loophole”. Decency precludes me from telling you how I refer to this away from the bright lights of this blog.

Whenever there is a law written, somewhere there is someone trying to find a way to avoid the consequences of legislative wishes. CMS has for unknown reasons built a wormhole into the universe of recovery audits based on the open-ended nature of semi-automated reviews. It is left up to the provider community to monitor the monetary effects of this on their organizations. That is, if there’s any organization left to protect after the RACs have a field day abusing this quirk for all it’s worth.

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November 23rd, 2011 | 4 Comments »

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 »

The RAConteur: The Bad Gets Worse

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

When a thing or a process is found to be non-functional, I am faced with only two choices. I can either accept the fact that the time and money I’ve invested have not yielded results and scrap it, or I can double down on my investment, stomp my feet, insist it’s going to work, berate everyone but myself, yell at clouds, throw Jell-O around the kitchen, kick the dog, tell the neighborhood kids to get off my lawn and lock myself in the closet for three days so I can sit alone, feeling superior about my principles.

CMS proved this in spades with a news release yesterday. To preface today’s post, all of the readers know my feelings about the RAC program. The automated review process is working, but that process is something that could be done with ten trained chimpanzees hitting a button and is only necessary because the MACs don’t have proper edits in place to avoid the improper payments in the first place.

Complex review, to put it mildly, reminds me of this, based on the chaos it creates for the provider community. At the root of the problem is the appearance of a lack of qualified documentation review specialists to conduct complex reviews in a proper fashion. This leads to a higher-than-necessary success rate for provider appeals. 

CMS announced yesterday that a demonstration project will begin on January 1, 2012 that will include the RACs performing pre-payment reviews of claims “that historically result in high rates of improper payments”. The project will focus on the states with the highest percentage of incorrect claims or error prone providers, which are California, Florida, Illinois, Louisiana, Michigan, New York and Texas. Four states with high percentages of short hospital stays (Missouri, North Carolina, Ohio and Pennsylvania) will also be included in the demonstration.

CMS is investing heavily in pre-payment review, especially when it comes to the predictive modeling technology that was rolled out this past Summer. The problem I see here is that we have a uniquely imperfect model in the RACs as a vessel to recoup improper payments after the fact, and now we’re going to expand that model into the realm of pre-payment audits. While as a taxpayer, I appreciate CMS’ zeal to protect the financial integrity of the Medicare program, I have definite reservations about the RACs taking on another task when it is painfully obvious to me, as a provider advocate, that they don’t have a solid hold on their original work order.

I don’t think it is accidental that this initiative is being announced only two months after the whitewash that is the RAC Report to Congress was issued. If you’re telling the political establishment (a group known for its acute case of issue ADHD) that the RAC accuracy scores are fabulous, it makes it easier to introduce further initiatives under their administrative umbrella. I think we can predict where this project will end up.

There was some other news from the Office of Inspector General this week in the world of audits. The OIG was conducting a review of the Zone Program Integrity Contractors (ZPICs) in Zones 4 and 7 (Health Integrity and SGS, respectively) and found that the CMS’ workload reporting data was neither accurate nor uniform, which rendered a conclusive review of their activities impossible. Similar findings were found with the ZPIC predecessor, the Program Safeguard Contractors, more than 10 years ago when the OIG was similarly attempting to conduct a review of their activities.

Remember that the total collections by the PSCs were never more than 2% annually from 2003 to 2007. If there are problems with the workload data that are similar to those from the good old days, can we then surmise that the total collections by the ZPICs that are up and running are less than stellar, or (worse yet) can’t even be reasonably determined to be lousy?

For the provider community, it’s been an ugly learning curve getting used to increased government audits. It is even uglier when an inefficient process is doubled in size and scope. Today’s post took a long time to construct because I was busy ducking out of the way of CMS’ Jell-O. Hopefully it didn’t land on you.

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November 16th, 2011 | 2 Comments »

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