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The RAConteur: An OIG Preview Of Coming Attractions

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

I’m going to start out today’s post with a confession of a personal shortcoming. I am much more dynamic on paper than I am in person. When I discuss a subject face-to-face with people, I have a tendency to obsess on one topic, much to the detriment of a random listener. I tend to blurt out thoughts without thinking, and based on my fund of bar knowledge, some of those random thoughts are downright frightening and have led to bans in several social circles across the United States.

There are some issues from which I squeeze the life in print, as many of my regular readers will certainly attest. If I had to select one topic which I have revisited more than others in my professional life (restricting our universe to the world of health care), it would be the billing and documentation of evaluation and management (E/M) services. Thanks to the majesty and splendor of the OIG Work Plan, I get another opportunity to write about it again today.

When the latest Work Plan was released last October, the OIG indicated that they would be reviewing trends in E/M coding for claims submitted between 2000 and 2009. In particular, the work plan stated that the OIG would “also identify providers that exhibited questionable billing for E/M services in 2009″. This morning, as I was searching the macabre depths of my mind for today’s topic, I received an e-mail stating that this review has been conducted and finalized.

There were two slight changes from the Work Plan and the released report, that being that the years of E/M data being reviewed was 2001-2010, and the identification of physicians with aberrant patterns being based on 2010 data. The findings of the report should come as no surprise to anyone who has been involved in medical billing consistently over the last decade. In the years surveyed, physicians “increased their billing of higher level E/M codes in all types of E/M services”. The analysis of the billing data identified approximately 1,700 physicians “who consistently billed higher level E/M codes in 2010″. Based on the report, the OIG recommended continued education, encouraging contractors to review physicians’ billing for E/M services and to commence review of physicians “who bill higher level E/M codes for appropriate action”. For those not studied in Apparatchik language, that means audits. Dr. X, meet Mr. ZPIC.

For the last 30 years, physicians in private practice have been feeling the reimbursement squeeze from government and commercial payers. In this environment, the physicians who care most about their reimbursement have been searching for ways to stop the bleeding. One of the easiest ways to do this is to increase reimbursement for the most common service of the practice, which is the face-to-face encounter with the patient. As a result of this philosophy coming to the fore, a cottage industry of consultants promising to increase reimbursement for E/M services by “strengthening” documentation has popped up, often focusing too much on “bullets” and not enough on medical necessity. In the world of the electronic medical record, this type of approach by practices is fraught with risk, especially if the physician is more receptive to a financial message rather than a message centered around compliant documentation. With ICD-10 poised to be shoved down our throats like a Turkish scimitar, documenting for reimbursement is a habit that is best broken sooner rather than later.

In the eyes of CMS and the OIG, the roughly 1,700 providers identified as outliers by this OIG analysis are about to have a rude awakening. Having reviewed tens of thousands of pieces of E/M documentation in my career, and having seen nine years of CERT results that have consistently identified high level E/M services as being coded improperly, there is absolutely no excuse for not knowing the documentation rules for E/M services. I have heard every physician canard (“…but I spend a lot of time with my patients…”, “…but my patients are sicker than others…”, “…these rules are so arbitrary…”, “…how am I supposed to keep my doors open…”, etc.) multiple times from multiple sources, and none of them make sense if your documentation of services is not a true reflection of the scope of the patient encounter. From personal experience, I can tell you that the instances where assumptions made by physicians about the care they are rendering being accurately reflected in their documentation upon initial review are few and far between.

Those of us who exist on the side of physicians have been waiting for the RAC contractors to announce their entry into the E/M universe. The RACs are surrounded on all sides with evidence from other audit entities that E/M services should be targeted. Based on the poor quality of the RAC work product up to this point, it is something of a blessing that the RACs have stayed on the sidelines. There should be no illusions that the RACs will continue with this indifference indefinitely.

I have written and spoken about E/M services in one way, shape or form on just about every day of my health care career. Those who know me are sick of hearing me talk about it, and future acquaintances will respond the same way given time. The OIG report is but another warning shot across the bow of providers who have been taught to game the system through creative coding and documentation techniques. My wife can tell you that I often repeat myself, but this is one topic that must be consistently reiterated based on rampant errors that exist.

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May 9th, 2012 | 1 Comment »

The RAConteur: Medicaid Integrity Update and A Notable Sale

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

Covering the world of government audits in a continuing series of ruminations has the feel of yelling at the ocean. It is an exhilarating feeling until you realize that the ocean is always going to be louder than you are and you’re always going to end up smelling vaguely of dead marine life and salt. Until last week, I had a mostly walled-in desk, so pity my poor co-workers going forward.

Today I have some updates with regard to government audits that, while not related to the RACs, give us small windows into where government audits are going, and, more importantly, who’s pulling the strings.

I covered two recent OIG reports on the Medicaid Integrity Program on a recent episode of Monitor Monday podcast, but I’ll give you a quick synopsis for purposes of brevity. There was an OIG report released back in February with regard to how well the Review Medicaid Integrity Contractors (MICs) were performing their tasks. The report found that the review MICs completed 81% of their assignments, but had limited input into what specific leads were forwarded to the audit MICs. The review MICs created 114 reports identifying 113,378 unique providers. CMS then filtered that information and targeted 244 providers for audit. The report recommended that the quality of data given to the review MICs improve, as well as allowing the review MICs more input in the selection of audit leads.

This first report led into another, released roughly one month later, regarding audit MIC performance. The report showed that 81% of review audits conducted between January 1 and June 30, 2010 did not lead to the identification of an overpayment. Additionally, 11% of assigned audits were completed and $6.9 million in overpayments were identified, with $6.2 of that coming from collaborative audits between the review MICs, audit MICs, state fraud control units and CMS. The report recommended that further collaborative audits be initiated.

This past Monday, the OIG issued a 5-page addendum to the February report on the Review MICs to further clarify the status of the 244 providers targeted for audit by CMS. It turns out that in the second half of 2011, CMS assigned 161 of the 244 providers targeted to the audit MICs. As of February 1, 2012, 127 of these proposed audits have been completed. From this universe of targets, only 25 audits uncovered overpayments, totalling $285,629. This number represents less than 1% of the estimated $33.5 million in potential overpayments identified by the review MICs at the time of referral of these cases from CMS to the audit MICs.

Once again, we see clear and compelling evidence that a CMS audit initiative is plagued by poor data and substandard execution. It is also worth remembering that some portion of the minuscule amount identified as overpaid will be appealed by providers successfully, which further decreases the total amount of overpayment collections under the Medicaid Integrity Program.

Switching gears, I took note of an interesting financial transaction that affects government health care audits in a small fashion. It was announced on Monday that Thompson Reuters reached agreement on a sale of their health care division to Veritas Capital for $1.25 billion in cash. Thompson Reuters had been previously identified as the Medicaid RAC contractor for the state of Indiana. This is an interesting purchase for Veritas, a company that has made a rather salutary living in the world of government contracting (mostly in areas of defense) since 1992. Some of Veritas’ owned entities have had a less-than-sparkling record with contracted tasks in war zones over the last decade. If some of these patterns repeat, the health care providers in Indiana are owed our collective sympathies.

As the waves continue to crash, and as the salt sea air continues to invade my nostrils as my voice grows weak against the tide, I leave the reader to ponder the intricacies of the world of government audits. I recommend having some tequila handy, as it’s not a gentle subject.

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April 25th, 2012 | 2 Comments »

The RAConteur: Catching Up On A Big Omission

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

Needless to say, the past three weeks have been an interesting time in the health care arena. Today, in the third day of arguments before the Supreme Court, the question of whether the entire Patient Protection and Affordable Care Act should be thrown out if one section of the law is found to be unconstitutional will be debated. Two recent reports released by the OIG cast doubt on the effectiveness of the Medicaid Integrity Program. In such an environment, significant news on other fronts is easy to miss.

One such update came to the RAC world about two weeks ago that I now need to address, albeit in a tardy fashion.

Very quietly, CMS announced that as of March 15, the annual limit for documentation requests increased to 2% of all claims submitted in the prior year, divided by eight. This raised the maximum number of eligible requests for providers with less than $100 million in DRG claims to 400 every 45 days, from the previous limit of 300. For providers over that dollar mark, the limit has been increased from 500 to 600.

For the majority of the provider community, the sudden increase in records requests came as an unwelcome surprise. Whatever their sins with regard to the RAC program, CMS had been good up until now about telegraphing changes to the provider community. This particular announcement was released quietly on March 13th with an effective date of 48 hours after its release.

When we combine this change with the shift of demand letters from the RACs to the MACs, it’s time to call out CMS for attempting to game the system for better audit results. Knowing that the success rates of provider appeals remains sky-high, and knowing that 67% of what the RACs request in complex review leads nowhere, CMS had to adjust the house rules to their favor by making it harder for facilities to respond to the program. RAC coordinators nationwide, in addition to dealing with having to track down demand letters, have now seen their number of requests dramatically increase.

We are only 3 months into 2012, and the early returns for government audits are looking bleak, both for the contractors conducting audits and the facilities affected by their actions. This latest salvo by CMS is another in an ongoing attempt to justify the existence of audits by guaranteeing their success. It would be naive to think that this course correction by CMS will be their last attempt at changing the rules.

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March 28th, 2012 | 1 Comment »

And That Only Took Nine Years

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

One of the nearly forgotten geniuses of early cinema was Buster Keaton. While Charlie Chaplin was satisfied with one or two Keystone Kops chasing after him, followed by humanizing close-up shots, Keaton’s films thrived on a constant state of anarchy breaking out around him. Since he was a master of silent movies, I offer this as a short example.

Ninety years ago, when the above film clip was made, it was understood that constant chaos was restricted to the movies. Because the layers of bureaucracy that exist today were nowhere to be found, outbreaks of people with conflicting information and goals were rare. Twenty minutes of cable news is really all you need to see that those carefree, Charleston-filled days have disappeared for good.

As if I needed more reminders of the chaotic times we live in, yesterday’s e-mail gave me another one, and as is expected if I’m writing about it in this space, this particular example is from the world of health care, under the section marked “Medicare Administrative Contractors”, subsection “Comprehensive Error Rate Testing”, under the paragraph labeled “OW! THE STUPID! IT BURNS!”.

As we should all be aware, the CERT program has been around since 2003. Its main purpose is to determine an error rate for claims payment. A constant area of focus under the CERT program has been Evaluation & Management (E/M) services. This is due to the consistently high error rates for these services, particularly CPT codes 99214 for established office patients, as well as 99223 and 99233 for high-level new and subsequent hospital visits, respectively.

There are two sets of E/M documentation guidelines. In 1995, CMS released the first set of guidelines that were tailored more towards primary care. The specialists soon revolted, stating that under the 1995 guidelines, system-focused examinations were under-represented. Responding to the drumbeat of dissatisfaction, CMS created a new set of guidelines in 1997 designed for specialists.

In addition to the vast differences in examination guidelines, there was one other unique difference between the two sets of guidelines. In documenting the history of present illness (HPI) for a patient, the 1995 Guidelines stated that four elements of HPI (of eight to choose from) were needed to justify either a detailed or comprehensive level of service. For the 1997 Guidelines, providers have the choice of either four elements of HPI or the status of three chronic conditions.

WPS, the Medicare Part B Legacy Carrier for four states in the Midwest, sent an e-mail blast out yesterday stating that “based on a communication received from CMS several years ago”, WPS was incorrectly applying the standard of the status of three chronic conditions to providers who used the 1995 guidelines. Unfortunately for providers, the CERT contractor was not privy to the same communication, and was correctly applying the guidelines as written. WPS went on in the e-mail to state that beginning with all dates of service on or after April 19th, the status of three chronic conditions for HPI will be applied only to documentation utilizing the 1997 guidelines.

The upshot of this is that providers who have for years believed, based on guidance from CMS parroted by WPS, that their documentation was correct, may have been receiving CERT errors and been responsible for overpayments because two independent contractors were being given conflicting information and guidance from CMS. It took roughly nine years to figure this out.

The last four months have been horrible for my perception of government audit efforts to strengthen federal health care programs. In November, the OIG released a report stating that based on poor data, there was no way to measure the effectiveness of the work product of the ZPIC contractors. Next came the latest AHA RACtrac study released in February, stating that 66% of all complex review requests for documentation from the RAC contractors do not lead to the discovery of an improper payment. Then came an article stating that CMS’ use of their highly-vaunted and quite expensive predictive modeling system has led to the savings of exactly $7,591 through the end of 2011. This week, the OIG released a report on the Medicaid Integrity Program which stated that 81% of MIC audits either did not or are unlikely to identify an overpayment. Finally, we have yesterday’s e-mail missive from WPS.

I want to state firmly that I am in favor of expunging fraudulent activity from the Medicare and Medicaid program. As an advocate for physicians who want to do the right thing, in addition to being an aging taxpayer who still has an outside chance of utilizing the Medicare program someday, I have clearly defined reasons for wanting audits to work effectively. As we stand right now, audits alone will never save the program if they continue to operate in today’s substandard fashion. It is hoped that nine years from now, the Buster Keaton-like chaos of the present day has evolved into something resembling organized and rational behavior.

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March 23rd, 2012 | 2 Comments »

ICD-10, Part C, Schizophrenia and Monkee Memories

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

I have now reached the end of my first week back from vacation. Upon my return, my e-mail box was full of updates both inside and outside the world of medicine, so allow me to fill your heads with assorted wisdom.

It was the end of the day yesterday, and a client of mine from Georgia forwarded me the latest provider bulletin from Blue Cross Blue Shield of Georgia. I had only reached page 2 when my eyes and brain slowly began to fry. The bulletin began by addressing “myths” about ICD-10. This was followed by the following paragraph:

“Myth #1: Reimbursements will be lower under ICD-10 than ICD-9.

In considering ICD-10’s impact to reimbursement, certain assumptions should be made. First, that institutions and professional providers will bill accurately using ICD-10. Second, that health plans will pay accurately against the data submitted on a claim. To the extent that ICD-10 codes influence reimbursement methodologies, there may be a legitimate fluctuation in reimbursement. However, we have not seen evidence of material fluctuations. Organizations should focus on gaining predictability into what those fluctuations may be and how to address them.”

Allow me to translate all of that fancy evasive language for you into Spencerese:

“It’s up to you to know the code set, we are not going to assist you in doing that on claims and any drop in reimbursement is your own fault.”

I could go into a long, colorfully-worded dissertation about how this attitude is typical of the American insurance industry as a whole, but I write this blog under the umbrella of my employer and I don’t currently have a beer in my hand. Catch me at the next Happy Hour and I’ll be happy to share my opinion with you, provided that you’ve left your children out of earshot.

We tend to hear a long, steady, droning tone from both the Executive and Legislative branches of our government with regard to fraud and abuse in the Medicare and Medicaid programs. We are well aware of what is being done (mostly unsuccessfully) for Medicare Parts A & B. Last Friday, the OIG released a report about fraud and abuse efforts for Medicare Part C, commonly known as Medicare Advantage. To whom that advantage goes has yet to be determined. The review looked at 170 of the 188 organizations that offered Part C plans in 2009. The results of this review also captured Part D benefits, as most Part C plans also offer prescription drug benefits.  

The OIG found that 19% of all Part C plans reviewed did not identify a single instance of fraud and abuse. Further, 3 of the organizations offering plans accounted for 95% of all reported fraud and abuse incidents.

By any metric, this appears to be low. As part of reviewing this report, it is important to consider that CMS does not require Part C carriers to report on fraud and abuse efforts. With this information in tow, the fact that any cases were referred at all is something of a miracle. The OIG prefaces this report stating that Medicare Advantage is now a significant part of Medicare based on costs and enrollment. Based on Part C organizations doing very little in the way of fraud and abuse, I would say that the costs are higher than anyone currently imagines.

The next piece of news of interest has to do with a revolutionary treatment for schizophrenia taken directly from the modern age of electronic devices. One of the most common symptoms of schizophrenia is auditory hallucinations, commonly referred to as “hearing voices”. In many cases, the perceived voices can be louder than the voices of people in the room speaking to the afflicted party.

On the heels of studies at a Norwegian university of how the schizophrenic brain processes speech, a cell phone application has been developed specifically to train the schizophrenic brain to hear one voice over the other. The main goal is to give the afflicted patient the control over the voices, rather than the other way around. It is somewhat humbling to think that 50 years of semi-reliable pharmacology could possibly be set aside with a set of headphones plugged into a smart phone. I eagerly await further testing  of the application on more subjects.

I’d like to end today’s post on a personal note. We are all probably aware of the sudden death this week of Davy Jones, best known as a member of the ’60’s prefab band the Monkees. My wife Leslie is a huge Monkees fan, and saw them on what will more than likely be their final tour this past summer as it came to Milwaukee. Our home office is adorned with different photographs of Leslie standing with every Monkee save for Michael Nesmith.

The final episode of the television show The Monkees ended with an appearance by a single solitary figure with a 12-string guitar singing an original composition entitled “Song to the Siren”. The singer’s name was Tim Buckley, and he remains my biggest vocal influence whenever I open my mouth and hit a note. In fact, I have recorded a cover of this very song that will appear on a friend’s album release sometime this year.

On March 13, 2000, in a long-deleted Yahoo Music group dedicated to Tim Buckley, I met Leslie and began a conversation about music. Five years later to the day, we were married, an affliction that Leslie continues to suffer from to this very day.

To me, Davy Jones isn’t simply a teen idol of yesteryear who won’t be around any longer. Rather, he is one of the many musical catalysts who have surrounded either me or my wife over a period of years that provide a bond between us that solidifies with each passing day. No, I still don’t know what the chorus of “Daydream Believer” means, but yes, it does have meaning beyond words in my life. With that, I bid Mr. Jones a fond and peaceful farewell.

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March 2nd, 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 »

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.

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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.

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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.

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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.

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February 4th, 2011 | 1 Comment »

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