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American Healthcare: Fighting Through Red Herrings

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

Through a combination of mass misinformation, complete lack of curiosity and laziness, I am noticing of late a tendency of blind acceptance of the way things are. I see people who pass themselves off as “experts” exposing themselves as nothing more than stenographers of conventional wisdom. Any idea that makes anyone remotely uncomfortable must have dirt thrown on it and summarily dismissed.

Let me start the St. Patrick’s Day Weekend reverie by offering a different approach, that being hard work, logic and openness to ideas. As always, I’ll help us all get started with some clarity about the (cue the fireworks, waving flags and citizen salutes to the clouds) American Healthcare System, brought to you by….AMERICA!

I begin with a news release from this week. The Congressional Budget Office (CBO), which theoretically operates in a strictly actuarial capacity, put out a report this week that stated that based on budget estimates, and taking into account our aging population, spending for Medicare and Medicaid could double by 2022. As a reasonable person who likes to discuss how to improve things, my first instinct is to think of ways to avoid this. Since my first instincts are comedic and cynical, I think of quick fixes such as Senior NASCAR, raising the military volunteer age to 85 and a new game show called Canasta for Surgery, but I quickly see the possibly unpopular nature of these ideas.

However, I could argue that at least I’m offering ideas (however twisted) as to how to solve the problem posed by the CBO numbers. What we get from the people in charge of fixing it are recriminations about how everything would be great if the people on the other side of the aisle would just do it our way, plans to obliterate Medicare and Medicaid entirely or (as has been the case for the last 15 years) punting the problem down the road for someone else to fix. You will notice that none of these options remotely resembles a workable solution. We expect a high end pork loin from our legislation, and instead we get scrapple. I eat scrapple, but only because by the time I was old enough to figure out what was in it, I was already addicted, much like virtually every other thing that has been stuffed down our throats in this country over the past four decades.

At the time of his departure, I ruminated about Donald Berwick, the immediate past CMS administrator. Because one side of the political divide decided very early on that they would use Dr. Berwick for rhetorical target practice, Mr. Berwick remained mostly silent during his tenure as CMS Administrator, which ended back on December 2nd. No longer shackled by his office, Berwick has come out in favor of finding a comprehensive vision for the agency free of constant Congressional meddling, underfunding and chronic under-staffing.

In a widely disseminated article this week, Berwick was joined by a number of past employees of the agency voicing similar concerns, chief among them the fact that the average tenure of a CMS Administrator is 14 months. Given the staffing vacuum, it’s a wonder that any CMS initiative is introduced at all. CMS has 4,900 direct employees, with the balance of work farmed out to contractors (we all know my low opinion of MACs and RACs by now, I hope). Even counting the contractors, CMS’ staffing is dwarfed by the Social Security Administration’s 62,000 employees. To pay Social Security benefits, you wait until someone gets old, disabled or insane and you cut a check. Paying a Medicare claim is significantly more complex, but the government employs fewer people to do it, which gives us the abominable payment error rate of the program. Add on the dozens of health care initiatives going on at the agency right now, and we learn a new respect for the employees of CMS for trying as best they can to keep it all straight. If only the Legislative Branch of our government was as solutions-oriented, but there are TV cameras that require their attention.

Finally, I feel I need to respond to the lazy voices in the health information management community regarding my feelings on ICD-10. Among others in our field, I have raised the issue of our health care system preparing itself to step into a new paradigm of being left behind. After two decades of waiting, ICD-10 will be the standard sometime in the next two years (remembering that CMS has decided that they are delaying the October 1, 2013 compliance date). I suggested in 2008, and reiterated recently that ICD-10 should be skipped for ICD-11, given that the worldwide release date by the World Health Organization is now May of 2015.

The popular response to my suggestion, now being widely parroted by professional acquaintances, is three-tiered, with all levels of argument being  so devoid of logic, curiosity and self-awareness that I feel I must now openly mock them.

The first response I get is that ICD-11 is based on ICD-10, and we can’t introduce the former without the latter. This one is as easy to punch holes in as Glass Joe in the classic arcade game “Punch-Out“. Version 5010 of the X12 billing standard was mainly designed for ICD-10. If ICD-11 is based on ICD-10, what’s the problem with skipping? Second, the American Association of Professional Coders (AAPC) is warning coders not to become too familiar with the ICD-10 code set until we get close to implementation. If virtually no one knows how to code a claim using ICD-10 currently, than we are not faced with a Labor of Hercules to skip ICD-10 in favor of the the newer global standard. You need a better reason than perceived codependence to convince me.  

The second response sounds something like “CMS has so many initiatives going that are built around ICD-10 that adapting it is now inevitable”. As I pointed out earlier in this piece, CMS is understaffed. If the cost of waiting 18 months for the latest and best disease reporting system is that over-burdened CMS employees move on to other timely tasks, the inevitability argument begins to sound a lot like a cult preacher telling you that the end of the world is a week away and that he has something really tasty for you to drink.

Finally, there’s the third argument, which I’ll again puncture like the foil top on a bottle of antifreeze. There’s this belief that an American clinical modification of ICD-11 can’t be available until 2020. Bluntly, this is a lie borne out of acceptance of the current status quo in American Healthcare being the absolute best we can do. ICD-11 will include a clinical modification upon release. What the ICD-10 Final Rule was referencing when they put this idea forth was an industry-approved clinical modification which will enable insurance carriers of all types to more effectively deny claims. Given the long-standing abuses of Big Insurance, what provider advocate in their right mind would argue waiting for that?

Going from ICD-9 to ICD-10 with ICD-11 so close on the horizon has the effect of waiting in a line for 20 years for the expressed purpose of moving to another 20-year line. It displays the quitter’s mentality of someone who has given up asking questions and accepts things the way they are. As St. Patrick’s Day approaches, I know full well how good beer should taste. To those who’ve quit trying, I’ll ask one final question: what do defeat and red herrings taste like?

Paul Spencer will appear at the Fi-Med RAC Summit coming up on April 16th and 17th, 2012. Click here for more information about this unique education opportunity.

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March 16th, 2012 | No Comments »

The RAConteur: Lest We Think The MACs Know What They’re Doing…..

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

A good comedy movie has a way of moving up my all-time favorite film list in a fashion that a drama cannot. Some of the movies on my list are either long-forgotten comedies such as Start The Revolution Without Me, or contemporary slapstick favorites like Dodgeball: A True Underdog Story.

For purposes of today’s posting, I offer another modern favorite of mine: Idiocracy. The plot of this movie centers around a semi-dullard in the Army who takes part in a top-secret project that will leave him in suspended animation for what he believes is a year. The project is forgotten and his hibernation pod opens up 500 years later to a world that has descended into chaos due to widespread rank stupidity. The protagonist is quickly discovered to be the smartest person on Earth by a wide margin.

There are two main reasons why I realize that there are indeed smarter people than myself in this world. The first is that I tend to share a long list of expletives with those in my vicinity whenever I try to build or fix something. The other is that as of yesterday, I’ve been married for seven years.

Yet this does not mean that I am at the bottom of the intellectual food chain. In fact, I can guarantee you that I could identify proof of at least one incredibly stupid action or statement every single day of my life somewhere in the world. We’re still early in 2012 and somebody impregnated Snooki from Jersey Shore, which goes a long way towards insuring continuing diminution of brain aptitude for generations to come.

Looking at the latest updates to the RAC issues lists, I found today’s example that is germane to the health care industry.

2010 was a less-than-entertaining year for the Medicare Physician Fee Schedule. Thanks to the unsustainability of the Sustainable Growth Rate (SGR) formula, political posturing and a series of temporary fixes, providers were faced with four fee schedules during the calendar year. The Medicare Administrative Carriers (MACs) were instructed by CMS to hold claims between all of these fixes due to Congress not fulfilling their legislative duties. Being the gatekeepers of Medicare claim dollars, it was up to the MACs to make sure that claims were paid properly. Over a year later, providers who had been underpaid on claims were still attempting to obtain proper reimbursement for their claims.

On March 5, 2012, more than 2 years after the beginnings of the Incredible Revolving Fee Schedule of 2010, Connolly, the Region C RAC, has now entered the fray with a related approved issue for automated review. Connolly is now reviewing all payments issued in the past three years by the MACs in their region for incorrect fee schedule application for carrier claims.

My biggest problem with the RAC process has always been that the wrong people were being punished for claim payment errors. Hospital providers have been getting bashed over the head with administrative burdens coming from the RAC contractors for very little payoff. The latest AHA RACTrac survey indicates that roughly 66% of all medical records reviewed by the RACs do not result in a determination of an improper payment. Hospitals are being paid pennies per page in copying costs for massive amounts of work that leads to no monetary benefit for the facility. In addition, roughly three-quarters of all appealed claims are still in the appeals process.

Still, after five years of activity through the Demonstration and Permanent RAC Projects, the MACs continue to escape the penalties of improper payments. This is despite the fact that the CERT error rate continues unabated with only slight declines, and the RACs having no shortage of improper MAC payments to explore. With Connolly Issue #: C002332011, the continuing incompetence of the MACs is at the top of the RAC issues list for all to see, and we have yet to hear Word One from CMS about what consequences they have outlined for the MACs for continuously churning out a substandard work product.

CMS wants us to eternally expect that claims will be paid by MACs incorrectly, with the consequences falling solely on the shoulders of the provider community. If these circumstances continue unchecked, no one will have to fall asleep for 500 years to wake up to find ourselves squarely in the middle of a rank idiocracy. In fact, as I look out at our current landscape, roughly 8 hours does it for me.

Paul Spencer will be appearing on “Monitor Monday” on March 19th. Click here for more information and to register for the broadcast.

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March 14th, 2012 | 1 Comment »

The RAConteur: Pummeling Them With Paperwork

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

I enjoy inundating people with my large memory bank of useless information. I have inserted myself into a line of work that at first was not that interesting, but has now become an enabling force for my long memory. At moments in the public sphere, the presentation of arcane facts can be quite dazzling. When I’m at home with my wife, I usually hear, “I know; you’ve told me that before”. I desperately need new audiences for my material.

In the RAC universe, we are facing a new reality. Because demand letters are now coming from the MACs, the road map for the handling of disputes of RAC determinations has been redrawn. The new route can be best described as an interstate bypass.

Before it becomes a quaint memory of the past, I’ll remind the reader that the Discussion Period is an opportunity to provide additional information to the RAC to indicate why recoupment based on a RAC determination should not take place. This archaic piece of the process could have been useful going forward, were it not for the fact that Demand letters are now being received long after the RAC determinations, due to address issues within the HIGLAS system.

The rebuttal period, which was designed for the provider to show why a recoupment would cause a financial hardship, is similarly compromised by the new demand letter process. A rebuttal would need to be filed within 15 days of the date on the demand letter. Given that the demand letters now need to be hunted down by RAC coordinators nationwide, unless the 15-day window is expanded, the rebuttal period will die of neglect.

So here we are on the newly drawn road, left only with the Medicare appeal process. Because the overpayment redetermination period is our only path, it becomes important that the submission of documentation be correct from the beginning of the process. The commencement of the appeal provides the opportunity to pummel your MAC with paperwork, so long as it has at least been looked at prior to submission of the appeal.

Before the deluge, it is recommended that the documentation be reviewed to verify that the identified issue is legitimate. If after review, the RAC turns out to have been correct regarding the issue in question, it’s time to allow a recoup. If the RAC turns out to be wrong about the issue in question, you are not quite done. The MACs have recently displayed an annoying habit of reviewing the documentation, overturning the issue identified by the RAC, and then subsequently asking for a recoup on a previously unidentified issue for the same charge. This is your reminder to review the documentation thoroughly prior to sending the appeal.

After this review, if you believe you have grounds for appeal, I stand by the advice that I have dispensed to providers since the beginning of the RAC program, which is to open an appeal and defend it forcefully. The numbers remain on the side of providers until such time as the RACs demonstrate that they know what they are doing, which simply hasn’t happen yet. In the latest AHA RACTrac survey, hospitals reported appealing one-third of all RAC denials, with 74% being overturned in the provider’s favor.

All of the claim information, as well as the demonstrated value of persistence, show that the odds are on your side. CMS has virtually cut off the paths to discussion periods and rebuttals, but that doesn’t mean that you can’t make them suffer. If appeal is the only road available to you going forward, as Todd Rundgren once put it, “just draw a bead on that mother, and drive”.

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March 7th, 2012 | 1 Comment »

The RAConteur: The .0001% Solution

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

Three thousand five-hundred miles and change later, I find myself back at my desk after a productive and enjoyable week off. For an ongoing summation of my time away, feel free to visit this blog. I promise that I spent my time in a mostly virtuous fashion.

I’d like to re-enter the discussion of the audit universe today with another in a stream of salient examples of corporate payola from the Medicare program. Last Summer, CMS launched a new predictive modeling computer system to pre-emptively stop fraudulent Medicare payments. The total cost of the computer system is estimated to be roughly $100 million, with $77 million having been spent thus far. Northrup Grumman and IBM are two of the main corporations behind the system.

As of the end of 2011, this grand investment has halted exactly one payment for $7,591. On a related note, there was a fly in my house the other day, so I called a company with a wrecking ball rather than reaching for a flyswatter.

Like any other human being, I like being proved right from time to time. I observe every governmental investment in something new and flashy through the lens of what’s in it for private enterprise. Being a citizen of a kleptocratic oligarchy, I have become far too used to industry skimming tax dollars out of the till for no apparent payback. We have all seen this with the rather poor RAC results after nearly 2 1/2 years of audits, with successful provider appeal rates still astronomically high. Given the reams of anecdotal evidence, it makes perfect sense to me that private enterprise gets a government check for very little demonstrated benefit.

I like things that work, and one method that has worked well among CMS’ many blind skeet shooting expeditions is human investigations. The Health Care Fraud Prevention and Enforcement Action (HEAT) Team continues to see tremendous success from their efforts. Through the first 8 days of February alone, the HEAT teams either released indictments or gained guilty verdicts against entities involved in roughly $139 million in health care fraud. Yesterday in Texas, an indictment was unsealed on seven defendants involved in over $375 million in either phony or unnecessary home visits. As part of the investigation into the physician at the center of the fraud, 78 home health care agencies found their Medicare payments suspended. I don’t know about you, but this represents success to me. I’m fairly certain that the payroll of the government-employed human investigators is significantly lower than $77 million.

The deputy director of Medicare’s anti-fraud program called the act of judging their efforts solely from payment suspensions as “unsophisticated”. I find this wording to be alarmingly typical of the institutional arrogance I encounter as a citizen whenever I ask questions about why someone is being paid by tax dollars for providing nothing. Predictive modeling, if designed properly, holds great promise. Yet if the brains of Northrup Grumman and IBM can’t get immediate results in the year 2012 right out of the gate, it bears asking, “who can?”.

When all of the checks are cut, Medicare is in need of much better than a 1/10,000 return on investment.

Paul Spencer will be presenting at the Fi-Med RAC Summit in Milwaukee, WI on April 16th and 17th, 2012. Visit the Summit website for further information.  

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February 29th, 2012 | 1 Comment »

Random Thoughts As I Fasten My Seat Belt

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

This afternoon, I’m embarking on my latest of many long-distance automobile journeys. I’m driving first from suburban Milwaukee, Wisconsin to Reading, Pennsylvania (the town that the first railroad on the Monopoly board is named after), where I’ll be picking up one of my oldest friends, music blogger and master librarian Curtis, along with a portion of his vast musical instrument collection. From there, we head to Marietta, Georgia to interface with another old friend, musician and noted watchmaker-to-the-stars Steve, to record what will be my first full-length album of any quality in Steve’s home studio (just off his dining room; Steve’s a confirmed bachelor).

As I get ready to encounter the wonder and horror of the American roadways in equal parts, news directly and indirectly related to our health care system will not pause to await my return. In fact, if the last week is any indication, I’m beginning to realize why Godot never bothered to show up.

Since I’m in a musical state of mind, allow me to begin with the all-too-familiar case of  the death of Whitney Houston. Until the complete autopsy and toxicology reports are introduced with great fanfare into the 24-hour news cycle, I am left to put pieces together based on assorted widely released reports. The reports thus far seem to point to a death from prescription drugs, rather than the illegal drugs she had admitted using in her past in interviews conducted during her lifetime.

There is perhaps some good that can come out of one more celebrity death in a long line stemming from misuse of prescription drugs. Responding to an epidemic of prescription drugs obtained illegally and sold on the street, as well as the well-publicized deaths of Houston and others, the State of New York is now looking at instituting real-time reporting of prescription data from pharmacies around the state. Anyone who wants to fill a prescription anywhere in the state at any time would be checked through the proposed database. The person’s demographics and history of drug utilization would be reviewed, with suspect prescriptions denied on site.

Realizing that there are 50 states, it should be noted that even if such a system is put in place, it will be a small beginning. It continues to be a sad commentary that people with the financial wherewithal to poorly self-medicate will continue to do so until some type of national database is put into place.

In other news, HHS Secretary Kathleen Sebelius announced yesterday that the provider compliance date  for ICD-10 will be pushed back from its current date of October 1, 2013, it what appears to be a massive cave to the AMA and other shrill elements on the provider side. In her statement, Sebelius made reference to “administrative burdens” and the intent to work with the provider community to “re-examine the pace at which HHS and the nation implement these important improvements to our health care system”.

If all of you can now grab your welding masks, safety goggles or other appropriate eye wear, this is a short warning that I’m going to gloat now, and I want to save all of your corneas from the supernova of my past brilliance.

Begin your journey of enlightenment by clicking here. Next, scroll down to the attached document in the lower right-hand corner. On September 24, 2008, during the comment period of the proposed rule for ICD-10 implementation, I submitted a recommendation to CMS stating (admittedly, in sometimes clumsy language usage) that ICD-10 should be skipped altogether and that the American health care system should instead prepare for the worldwide release of ICD-11 in 2014. As you can see by my comments from 41 months ago, I theorized that if ICD-10 was instead chosen as the standard, the United States would find itself exactly where it finds itself right now, that being the rest of the civilized world using the sleek, up-to-date disease, symptom and morphology coding system, while the United States putts along with the AMC Pacer.

When the Final rule was released in mid-January of 2009, CMS stated that a clinical modification for ICD-11 would not be ready until the year 2020, so my idea was not feasible. I know this is going to be hard to believe, but your government didn’t tell you the entire truth in this case. ICD-11 will include a clinical modification upon release, so the 2020 timeline is talking about an “American” clinical modification that would enable domestic insurance carriers to more easily deny claims.

Admittedly, since my comment, the World Health Organization has moved back the ratification date of ICD-11 to May of 2015. Yet if ICD-10 implementation is going to be delayed to a date extremely close to one year before the global ratification date of ICD-11, can anyone tell me what the point is of forcing ICD-10 on to the American health care delivery system to stay current with the rest of the world for roughly 12 months? The further we push back ICD-10 compliance, the worse of an overall investment it becomes. To put it in a more popular context, if I want a smart phone, I could go out right now and buy a  smartphone and be needlessly frustrated about missing features, or I can wait for the latest version to come out a few months from now and be happy and up-to-date. To me, this is all about getting everyone frustrated for no apparent reason, and I feel very comfortable telling everyone within earshot that I warned CMS about this.

For those of you who want a peek into the future, here is the working alpha version of ICD-11. Bluntly, as a coder, I find it to be a superior system to ICD-10, but given that I am turning 46 in two months and we’ll be over 20 years into global ICD-10 implementation by the time the United States decides to put it to use, I am predicting today that I’ll never use ICD-11 as a coding system in my occupational lifetime. 

America. Feel the exceptionalism!

Paul Spencer’s Friday blog on industry issues will return on March 2nd. Until then, if you want a chance to meet Paul Spencer, as well as a chance of winning an IPad, consider registering for the Fi-Med RAC Summit on April 16th and 17th, 2012. Visit the Summit website for more details.  

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February 17th, 2012 | 4 Comments »

The RAConteur: Questionable Results, Repercussions and SGR (Just For Kicks)

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

There’s no longer any way around it; I need a vacation.

According to the calendar, we now have 301 days left until the theorized Mayan Apocalypse. In the last week, the news cycle in the real, personal and professional worlds that surround me have taken a marked turn for the weird. It’s time to get out of here and explore such things as music, grilled meats and beverages unfit for your children.

Before I lock the doors of my car to prevent further interruption, I have a few updates involving government audits and (since I’m here and I have the floor) a timely news update about the “Doc Fix”.

First, CMS released the RAC results from the first quarter of Fiscal Year 2012. For the last month of 2011,  $422.7 million in corrections were identified. Of the four regional contractors, HDI (soon to be HMS) in Region D set the pace with $152.7 million identified. The total for the quarter represents the highest quarterly number yet to be reported under the RAC program. When reviewing these regularly reported numbers, remember that these do not include completed appeals and, more importantly, do not include any estimate of the administrative costs to providers for every documentation request from the RACs that ends up going nowhere

Yet, there’s more to the story…

If you remember, in the final quarter of FY 2011, there were $76.6 million in underpayments identified, with Connolly, the Region C contractor, identifying $60.7 million from that total. Suddenly, we have evidence of a shift in strategy, as the combined total for underpayments plummeted to $24.9 million, with Connolly only identifying $2.6 million in underpayments in the last quarter. You’ll excuse the provider community in Region C for their muted response to this bit of news.

One other issue involving RACs that has come to the surface of late has to do with the MACs taking over the demand letter process. For many months, RAC coordinators nationwide, especially those affiliated with hospital systems stretched across many miles, worked diligently to centralize RAC correspondence under one address. Thanks to the Healthcare Integrated General Ledger Accounting System (HIGLAS) not being able to store more than one address per provider number, all of that hard work has now been undermined. All demand letters are now going to the payment address for the facility in question.

This opens up multiple cans of worms. If the RAC coordinator now has to flag down demand letters from several locations, any dreams of opening up a discussion period within 40 days begin to disappear. This is ironic, in that CGI, the Region B RAC,  publicly stated at an outreach session in Wisconsin recently that they would like to see providers request discussion periods more than they currently do, based on the numbers in the region being low. Given the new hurdles encountered with demand letters, it’s hard to see how CGI gets their wish on that count.

Second, appeals that are now filed prior to recoup on the 41st day after the date on the demand letter will drop dramatically. Any savings that CMS may have hoped to gain from this fact is negated by two realities, one being the 10.5% interest rate every 30 days on successful provider appeals, and the other being the fact that providers are winning a lot of RAC appeals.

Finally, my e-mail inbox has been lighting up today regarding an imminent and (once again) temporary fix to the Sustainable Growth Rate cuts set to take hold on March 1st. The Deal of the Moment delays the scheduled cut until January 1, 2013 (a full 20 days after the scheduled Mayan Apocalypse), when physicians will face a cut of 35% if SGR has yet to be repealed by that time. The money for this latest desperate edition of the extension is coming mostly from reductions in Medicaid spending.

It has been a busy Leap Year February. I now happily leave you to the audit wolves for a fortnight.

The RAConteur will not appear next Wednesday, February 22nd. It will return on February 29th. In the meantime, consider meeting Paul Spencer live at the Fi-Med RAC Summit on April 16th and 17th in Milwaukee. Visit the Summit website for further details.

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February 15th, 2012 | 2 Comments »

The RAConteur: Early Previews of a Long Summer

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

Over the first six weeks of 2012, RAC coordinators nationwide have learned the hard way about the lack of effectiveness of an advanced warning.

Late last year, it was announced that the responsibility of issuing demand letters was being transferred from the RAC contractors to the Medicare Administrative Contractors (MACs). As the process revealed itself in January, what seemed like a simple transfer of duties has turned into mayhem. Information as simple as a common mailing address for RAC requests has been lost in the transfer, leading to short-term disintegration of the established RAC process.

In the past few weeks, two signal flares of changes on the horizon related to RAC activities have been announced by CMS that have the potential to cause a similar disruption.

On January 26, CMS released Change Request 7673. According to this document, effective July 1, 2012, the Multi-Carrier System (MCS) will include edits for common improper payment issues identified by the RAC contractors. These issues include pulmonary diagnostic procedures on the same date as an E/M encounter, IV hydration procedure reporting as it relates to total time, new vs. established patient services, and incorrect reporting using the -62 modifier.

These edits are mostly the result of findings from automated reviews, which I have stated before could be determined by training a pigeon to hit a button. It should also be pointed out that every one of these issues could be solved on the provider end with education of the billing staff. Remembering to place a -25 modifier on E/M services on the same day as unplanned pulmonary diagnostic procedures could be the solution to the first issue indicated above. If there is a certified coder on your staff, this person should know this and has no reason to be unaware of how to correctly use a modifier in this situation.

The second warning sign was one we all briefly became aware of at the end of 2011. To hearken back to a few weeks ago, CMS announced that the planned demonstration project that would have enabled Medicare RAC contractors to conduct pre-payment audits was being delayed from its original implementation date of January 1, 2012. CMS has now subsequently announced that these type of audits should begin “on or around June 1, 2012″.

Upon the initial announcement of prepayment audits, there was consternation throughout the industry that a complex review process that by some sources is unsuccessful in their task 67% of the time was now going to expand into prepayment audits due to the “success” of post-payment review. I for one am not setting aside my animus towards the RAC program simply because prepayment audits have been delayed by 5 months. The Medicare RAC program has demonstrated itself to be the solution to Medicare overpayments in the same way that random placement of land mines on highways is the panacea to rush hour traffic congestion. The simple task of changing which entity sends out demand letters has led to 6 weeks of chaos. How can I possibly believe that adding difficult tasks to the work that is clearly overwhelming those who are doing it will lead us all to a good place? 

Add to this the fact that RAC contractors now appear to be chasing underpayments based on the promise of higher contingency fees, and 2012, the alleged year of the Mayan Apocalypse, appears to have its first plague ready to go in the starting gate. It is worth noting that getting advanced notice of turmoil is never a guarantee of a solution to the problem.

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.

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February 8th, 2012 | 1 Comment »

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 and to 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 in quality of news for 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 »

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