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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.

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.

CMS Clarifies Predictive Modeling

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

I’d like to start this post today by stating categorically that it is a frustrating experience when one types out an entire blog post, follows that by clicking the “Save Draft” button, and in an instant watches a few hours of work disappear. Such is my current predicament. When you read everything below, bear in mind that this is my second pass at today’s topic, much like any clone, there will be things that are just not right, or that represent a horrible attempt at finishing something hastily. Setting this aside, I hope that you find the following information useful.

While I was out of the office for a few days, I received an e-mail from CMS about a topic I covered only briefly in the past. With a special article serving as clarification, CMS went into further details about predictive modeling techniques currently being utilized to reduce the payment of fraudulent claims, and what this will mean for providers, their patients and networks.

Let me quickly type in an overview of what this means before Word Press explodes.

All claims from June 30th, 2011 and after are being fed into CMS’ predictive modeling technology. The information from the claims is then diced, sliced and analyzed Jetsons-style with regard to provider and patient utilization. This leads to the building of profiles not only of providers, but patients as well.

After all of these high-speed calculations comes the assigning of risk scores based on the data collected. Those entities coming up with higher risk scores will be subject to payment delays, followed by a site visit, reviews of claim histories and interviews by CMS analysts at its discretion. If, after analyst intervention and inquisition, the billing is found to be “innocuous” (you know, like a quilting bee or the Lions Club), that outcome is recorded into the predictive modeling system and the payment for the claim(s) in question is released as usual. 

Now the rough part.

If an analyst finds indications of the not-so-innocuous (you know, like Tony Soprano or Dr. Jekyll), these cases will be referred to CMS’ Center for Program Integrity, the MAC involved and the ZPIC contractor in that particular geographic zone. The result could be targeted denials, revocation of billing privileges, and that classic cinema verite production entitled “A Raid”, featuring veteran co-stars Records Seizure, Perp Walk & Civil Penalty.

The main thrust of this new method is the fact that false claims investigations are no longer a guess, or reliant on someone blowing the whistle on an illegal practice. The government is now using the same types of pre-screening methods that used to be reserved for banks and credit card companies to catch the cheaters in the Medicare program. As a taxpayer, I would say this is about 45 years overdue. As a physician advocate, what I do for a living with regard to practice analytics and documentation review just became very interesting.

The RAConteur: A Slight Detour Into ZPIC World

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

Something about this year’s version of Autumn isn’t quite right. Usually by this time, the cold air has rolled in, there is a little more color to the trees and the general and inescapable aroma of natural death begins a process by which I channel my inner Viking warrior and slowly bring the entire world under my grasp.

For some reason, none of this has happened yet. So instead of donning leather armor, setting sail with 50 men in a drakkar and drawing a broadsword from its scabbard to smite my territorial enemies, I’ll give you an update from the world of government audits.

While this space is normally dedicated to RAC issues, I’d like to turn my attentions today to the Zone Program Integrity Contractors (ZPICs). 

For some months, I have been aware that Cahaba Safeguard Administrators was to be awarded the federal contract for ZPIC activities for Zone 3 on the ZPIC map, which consists of the states of  Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio and Kentucky. This past Friday, in a release that I can only surmise was timed to the beginning of federal Fiscal Year 2012, Cahaba was awarded the contract for Zone 3 and Zone 6, which consists of all of the states in the Northeast from Maine to Maryland. A RAConteur hat tip goes to Penny Osmon of the Wisconsin Medical Society for forwarding me this announcement. A not-so-subtle reminder that none of us work or act alone.  

Being a natural skeptic, nothing that the federal government does surprises me anymore, but there was one notation in the announcement that I found fascinating. The contracted fee that CMS is paying the ZPIC contractor amounts to nearly $92 million.

With the RAC program, the contractors are paid a percentage based on what they collect. The ZPIC contractors are paid up front for providing anti-fraud services, and what they collect is added to the year-end totals for everything collected by the OIG to recover payments.

In general, the ZPICs (and their predecessors, the Program Safeguard Contractors) refer much more for overpayment collection to the OIG than what is actually collected at the end of the process. Between fiscal years 2003 and 2007, the total collections were never more than 2%. This is because the ZPICs/PSCs love to extrapolate after identifying an error, and better health care attorneys have shown improvement in refuting these methods of determining a total provider overpayment.

The main point here is that when paid a flat rate, a government contractor should provide at least that much in value. With the new methods of predictive modeling and increased claim-to-claim comparisons, it should be fairly easy for the ZPICs to prove their contracted worth. As those of us who have been unfortunate enough to have dealt with the RACs thus far, an auditor’s value is only as good as the integrity of their results. Future outcomes of ZPIC audits have just become very interesting to me.

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.