Secure Transfer System »     Client Portal Access »

Posts Tagged ‘OIG’

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.

Tags: , , , , , , , , , , , , , , ,
February 3rd, 2012 | No Comments »

OIG Report Provides Dark View of the Afterglow

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

Like every other person for whom the majority of his or her life exists as fading objects in a rear view mirror, I have a tendency to think about the world that has surrounded me during my existence. On the surface, I should have a very hard time thinking fondly about the 1990’s. I spent the first half working in the insurance industry and the second half ensconsed in a slow-motion traffic accident of a first marriage. Yet the one thing that the ’90s had going for it was a brief window of time when the country was seemingly free of a big threat to its existence. From the moment in 1989 when the Berlin Wall was torn down, to September 11, 2001, the United States enjoyed a time when thoughts of the sudden annihilation of a large portion of its population did not hang over every major decision.

The 9/11 attacks had the effect of changing that perception for the balance of my life. I remember having a conversation a few days after the attacks with someone I knew at the time, talking about how best to prepare for similar incidents in the future. I felt that every community should have a disaster plan similar to the air raid wardens of World War II or the nuclear attack drills of the 1950’s, which would integrate public employees and buildings, along with the local health infrastructure, to provide an organized and coordinated response to such incidents.

Instead, we received the “War on Terror”, color-coded paranoia and the Big Brother-esque overreach of the Patriot Act. I stopped being optimistic shortly after that. Perhaps it’s my tendency to watch old post-nuclear science fiction films during my late-night fits of insomnia that informs my decision making, but when I heard the head of the Department of Homeland Security tell me that my best defense against future attacks was plastic and duct tape, I was immediately skeptical about our country’s ability to handle future disasters.

It was with all of this in mind that I read a 44-page report released this week from the OIG entitled Local Public Health Preparedness for Radiological and Nuclear Incidents. The report was commissioned based on the belief of our current national security apparatus that the greatest danger to America is a terrorist attack utilizing a nuclear weapon. To assess planning and coordination in the event of such an incident, the OIG requested information from 40 localities from around the country, representing the largest metropolitan areas in and around cities in 23 states, totalling just over 50% of the total population of the United States. The findings of this report clearly show that preparedness for radiological and nuclear incidents is far behind where it needs to be.

Thirty-six of the 40 surveyed localities have conducted some type of risk assessment for a disaster. Because the OIG report did not specifically name the four localities that did not, I am unable to tell anyone specifically to begin digging holes for your survivalist bunker. Of the 36 that did conduct a risk assessment, 30 specifically identified non-power plant related radiological/nuclear incidents as a threat, with 24 of those determining the specific threat level. Taken as a whole, this means that there are 16 major population centers in the country that have not fully determined the risk of a nuclear attack in their area. Only four of the 40 localities have identified radiological incidents as a high-priority threat, but only one had a specific plan in place to respond to such an incident.

The OIG assessed the preparedness of each locality in five areas of responsibility in public health: Monitoring of the population for exposure, decontamination, planning for laboratory analysis, fatality management and communications. Only 21 of the forty had any sort of public health plan in place in case of a nuclear incident that encompassed any one of these areas, but only two localities had plans that included all five. Perhaps the scariest thing to me was that only 8 major population centers in the United States have fatality management plans to limit the amount of exposure to the surviving population emanating from those that will have already perished in such an attack. Knowing this bit of information suddenly reminds me that thoughts of a zombie apocalypse are not as rib-tickling as they were prior to the release of this report.  

When the issue of greater coordination with federal, state and local partners was assessed, only 16 localities have plans that coordinate with any one federal department, with 10 coordinating with their state agencies and 14 coordinating with local entities such as hospitals, county health departments or other emergency medical personnel.

Taking all of this information into account, I have determined that the community health plan for most population centers in the event of a nuclear event consists of three steps: hoping for survival, fitting your vehicle with a plow attachment to move the bodies out of the street, and concluding with more hope for survival. I know it’s hard to see my face in that this is written material, but it is important for you to know that I didn’t crack a smile when I wrote that last sentence.

Chances are fairly good that when you drive home tonight, you’ll pass an older public building with a faded sign that says “Fallout Shelter” on it. There was a time in America, corresponding to the existence of a country known as West Germany, when that sign was brand new, painted a bright yellow, with everyone in the community having acute awareness of what it meant. Perhaps you’re even old enough to remember a “duck-and-cover” drill, the CONELRAD system, the letters ”CD” standing for “Civil Defense” rather than “Compact Disc” or some other quaint custom that kept the idea of the dangers of radiation exposure in the forefront of your mind.

Since this is a health care forum, I ask the reader to save a thought for how they believe their local health infrastructure would respond to such an attack. We find ourselves in an era of consolidation of health care resources under the ACO model that is designed mainly to reduce cost. While IT initiatives have mentioned such things as better coordination of care and improved public health reporting, all of these good intentions will crumble during a cataclysmic event without a disaster plan in place in the communities surrounding the hospitals. The OIG report shows that many areas don’t  have one that is adequate. Additionally, if the recent breakup of the band REM didn’t already drive the point home for some of you, know that the relatively tranquil and naive days of the 1990’s are an increasingly distant memory on the roadways of our lives.

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.

Tags: , , , , , , , , , , , , ,
January 27th, 2012 | 1 Comment »

Healthcare & The Value Of Memory

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

Back in 1966, Brian Wilson of the Beach Boys decided that he no longer wanted to tour with the band, instead wanting to concentrate on composition. The band needed someone to fill in on bass and the ridiculously high harmonies usually supplied by Brian for an upcoming tour of Japan. They found a man who was born in Arkansas to fulfill the task, but he only lasted on that one tour. This same man went on to record with a studio band named Sagittarius, before littering the pop and country charts for many years afterward with assorted hits under his own name: Glen Campbell.

Tomorrow night in Milwaukee, I am going to see Glen Campbell perform in concert, but the occasion will more than likely be bittersweet. The man who has given his music to the world for a majority of my lifetime is on his final tour, having recently been diagnosed as being in the early stages of Alzheimer’s Disease. It is not lost on me that all of the facts in the above paragraph, which my lifetime of music as a hobby has allowed me to commit to memory, will someday be foreign to the very person who made them possible.

As someone who has been involved with the health care industry for over 20 years, I have learned that based on the sheer volume of facts that inundate me on a daily basis, it has become nearly impossible for me to forget key elements of my job. As the cost of health care has become a central focus for cuts in a post-war economy, a number of  memories of failed policies of the past are skipping to the front of my mental line. Nowhere is this memory more acute that in the realm of physician reimbursement from the Medicare program.

Forty-one days from now, a song-and-dance act that has been running longer than Cats will repeat itself, as the increasingly polarized sides of our government once again raise the curtain on this year’s performance of Doc Fix. There are slight casting changes with every performance, but the script is the same. In the torch-lit Temple of SGR, an automated computer program threatens to take money away from the white-coated sailors on the HMS Doctor. As the sailors fight off armies of infirmed elderly waving checkbooks from behind the wheels of their Buicks, an unlikely set of heroes, wearing bad suits and American Flag lapel pins, short circuit the program with a stack of paper. As they stand in the setting sun, they promise to one day rid the world of the computer, but vow to be ready for anything else it plans to offer.

Oklahoma it ain’t……

Medicare reimbursement has gone from “pay everything” at the beginning of the program in 1966, to RBRVS and Gramm-Rudman-Hollings reductions in the ’80’s, subsequently to SGR in the late ’90’s, and finally to a yearly hostage crisis, with the only missing element seemingly being the security camera shot of Patty Hearst with a machine gun. We know this because it has affected us all in one form or another over the years and we have internalized the memories of the negative results of every one of these “solutions”.

Might I suggest that the solution doesn’t lie with finding a new payment methodology, but in finding savings from outside contractors for the Medicare program that (because I have it committed to memory) continuously take money needlessly from the program.

You can start by eliminating Medicare Part C. Virtually all of the “preventive benefits” offered to patients under these plans are now codified into traditional Medicare, which leaves Medicare Part C as nothing more than a government subsidy designed to prop up the insurance industry with billions of dollars that it doesn’t require for its survival.

Next we can go to Average Wholesale Price for reimbursement under Medicare Part D, rather than Average Sale Price. Additionally, pick one formulary and take the program out of many of the same hands that currently pollute Medicare Part C.

As for fraud investigations, leave in place predictive modeling and the HEAT teams, because these methods are actually getting to the root of the problem and are returning ill-gotten dollars to the Medicare program. When it comes to outside entities, we need not develop memories of the Recovery Audit  Contractors, because their abhorrent work product is currently on display for all the world to see. Roughly 2/3rds of everything they do is dedicated to purposeless paper shuffling, rather than the detection of actual improper payments. One marvels at the thought of the massive celebrations that would result if the RACs suddenly disappeared. Farther up the chain, the ZPICs on average collect about 2% of everything they extrapolate as an overpayment, but we don’t really know the actual number because the OIG has stated that the baseline data to measure their performance is fatally flawed. This reminds me that until that data is purified, the ZPICs will continue to mainly operate as a middle man for government-sponsored subsidies to the legal industry. Ask your typical taxpayer if that is something they wish to continue.

The development of the human memory keeps one from being fascinated by the latest shiny pocket watch issue being pendulated in our faces by the self-absorbed politician of the moment. Much like Glen Campbell, there may come a day that the many facts parading in our minds will begin to slip away. Until that day comes, in the realm of health care, memories are not just a rudimentary tool of assistance, but a blunt weapon against the many forces attempting to shove unwelcome schemes into an arena currently collapsing from the bad ideas of the past.

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.

Tags: , , , , , , , , , , , , , , , , , , , , ,
January 20th, 2012 | 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.

Tags: , , , , , ,
November 16th, 2011 | 2 Comments »

Medicare Fraud Beyond the Most-Wanted List

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

I have, for many years, believed that I was Russian in a past life, mostly due to my love of cold, snowy, cloudy days and the writings of Dostoevsky and Tolstoy. When someone says they were someone in a past life, they have an annoying tendency to think that they were, of course, someone in royalty. Odds are very strong that I was not a member of the Romanov family. I’m much more of a realist, so I was more than likely a serf who died of consumption, but I was a well-read serf nonetheless.

My love of the eternal winter was tested this week with a snow storm in my part of the world that left a five-foot snow drift between my back door and the garage that holds my car. Once the digging stopped yesterday, I noticed that everything around me resembles not so much a Midwestern town, but rather one enormous bobsled track built just off the banks of the Barents Sea.

Of course, one cannot think of Dostoevsky without returning to themes of crime, punishment and incarceration. Making the rounds yesterday in health care news was the announcement of OIG’s Most Wanted List for health care fraud. As with any most-wanted list, the list of high-dollar violations by just these ten fugitives is extensive, with the amounts adding up to close to $125 million from just these ten individuals. The OIG states that over 170 people are wanted on charges related to health care fraud and abuse, and that number is restricted to the crooks that they’ve discovered.

What is amazing about this particular batch of miscreants is that with the exception of the one primary care doctor who decided that it was his life’s dream to become a prescription drug kingpin, the balance of the list consists of providers that are somewhat off the front lines of the medical delivery system. The biggest violators on the list were running HIV clinics in Florida and getting kickbacks from phantom patients. Others were involved in rehabilitation, home health nursing and durable medical equipment.

So why, given the list of “specialties” of these particular offending parties, as well as long-established patterns of fraud from these same areas, are audit contractors focusing on hospitals and physicians?

I keep returning to the ongoing theme of the successful appeal rate under the RAC program of 64.4%. The Recovery Audit Contractors are trumpeted as an “anti-fraud” measure, but they have referred all of two cases to the OIG for further investigation. The RACs spend the balance of their time doing clerical work that in the end is really only leading to changes in the way legitimate providers of health care services document treatment. The successful appeal percentage tells me that when the RACs believe they’ve found a problem, they are wrong.

RACs are not looking at claims for hospice care and home health, and their DME areas of focus have been merely repetitive of efforts already undertaken by the OIG and the four DME contractors. This is because the RACs are mostly looking for statistical aberrations in billing, and have no specialty focus. It is left up to the HEAT teams and the OIG to ferret out the criminals running enterprises in ancillary care.

The mistake was making the RACs responsible for geographic regions, rather than issues requiring attention. Right now, you have 4 RACs who are basically following each other’s lead as to what issues they review, and the lists, when compared side by side, are beginning to look the same. This all but insures that the biggest fraud areas are ignored in favor of statistically low-hanging fruit that may or may not be correctly identified as an incorrect payment.

What if we had RACs based on types of claims instead? You would have a Part A RAC for hospitals, a Part B RAC for physician claims, a home health RAC, a DME RAC and so on. With this model, two things happen that immediately give the program teeth. First, we have the beginnings of a wider net into areas that aren’t currently being investigated. Second, if a RAC is only handling Part A claims for hospitals, you staff it with coding and medical experts that are focused solely on hospital claims. After all, one of the big complaints about the RAC Demonstration Project, which was repeated in comments regarding the Medicaid RAC program, was that qualified staff was lacking in the RAC offices to understand billing, documentation and medical indications for reimbursed services. Specialization, rather than regionalization, would give the RACs much-needed gravitas in this area. Until then, the RACs will hire coders regardless of level of specialization, which has so far lead to our current appeal success rate.

The Most-Wanted List is a welcome development in the fight against health care fraud, but it will take more than a small cadre of investigators from the Department of Justice and the OIG to find the worst offenders. With legitimate providers under the microscope, the worst of those committing Medicare and Medicaid fraud might as well be under a Siberian snow drift. Enjoy digging through to discover them with your shovel,  because as it currently stands, no one knows how to operate the brand new plow.

Tags: , , ,
February 4th, 2011 | 1 Comment »

Court Ruling Obliterates “Good Cause” for RAC Audits

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

Life is nothing without meaning.

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

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

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

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

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

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

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

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

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

Tags: , , , , ,
August 6th, 2010 | 2 Comments »

Reports Are Falling From The Sky

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

Here in Milwaukee, we had our first snowfall of the season overnight. While it wasn’t enough to keep me at home today, it was just enough to make the process of getting from here to there just slightly more time-consuming. For someone like me, who operates in this world of ours thinking that a great deal of the world functions specifically to be in my way, it was a typical morning.

As the calendar turned to December earlier this week, I am also reminded that snowflakes are not the only thing  falling from the sky. With the approach of a new calendar year, a number of news releases, reports, pending legislation, industry updates and warning shots are coming from the federal government. Some of these began implementation at the beginning of the fiscal year on October 1, but it helps to review the regulatory landscape on a regular basis. With that in mind, here’s a portion of what we know:

  • The OIG Work Plan - While some of the usual suspects appeared once again on the OIG work plan for fiscal year 2010. there were a few new and not-so-new things that jumped out at me. OIG is again looking at the unbundling of laboratory tests. One of the most surprising bits of news this year was the large fine levied against Quest Diagnostics for violating bundling rules, mainly because this company, under its previous incarnation as Smithkline Beecham Clinical Labs, faced a 9-figure fine for similar violations back in 1996. The OIG has now officially decided to revisit this topic. Other targets of the OIG in the coming year will be E/M services performed in the global period of a surgery, a review of the current payment system for ambulatory surgery centers, practice expense for radiologists, the effects of payments for services referred by excluded providers, and a multi-layered review of claims related to durable medical equipment.
  • The OIG Semiannual Report – In addition to this year’s Work Plan, the OIG just released their semiannual report, which reports a total of almost $21 billion in program savings and recoveries. For fiscal year 2009, the OIG recovered just short of $4.5 billion through investigations and audits. The savings portion of $16.5 billion came through recommendations for putting agency funds to better use which were finally implemented long after they were suggested during the last administration.
  • The 2010 Conversion Factor - Quietly over the Thanksgiving holiday, the projected conversion factor for 2010 was lowered from 28.4061, which represents a 21.2% cut from 2009, to 28.3895, bringing the total cut from 2009 to 2010 to just short of 21.3%. In past years, there has been last-minute legislation passed that eliminated projected cuts to the conversion factor. This year, the urgency to address this issue has disappeared in a wave of uncivil, unproductive and distracting arguments about the future of health care in the United States. With the New Year 4 weeks away as of today, it may be in the best interests of all Medicare Part B providers  to make financial preparations for the coming year that assume a 21.3% reduction in Medicare reimbursement. If this cut is rescinded on the cusp of January, those that have planned ahead will be that much better off.
  • Medicare Fee-For-Service (FFS) Error Rate – CMS reported that the error rate for claims payments under Medicare FFS plans more than doubled from 3.6% in 2008 to 7.8% in 2009. This was a result of increased scrutiny of claims for these plans. This FFS error rate works out to $24.1 billion dollars in improper payments.

 

With the rancor currently displayed in the Legislative Branch of the government, coupled with the attention-deprived caterwauling that defines the 24-hour cable news environment, it will not be the occasional regional snowfall making December a treacherous time for our industry. Much like the Buick-driving senior citizen in a hat, these and other reports will make the best attempt at getting in the way of a pleasant holiday season. As always, look for an opening, give it some gas and do your best to leave it in the dust, but be aware that you’ll more than likely see them again.

Tags: , , , ,
December 4th, 2009 | 2 Comments »

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

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

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

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

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

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

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

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

So why do we now have the RAC program?

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

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

It gets worse.

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

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

Tags: , , ,
May 4th, 2009 | No Comments »