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The RAConteur: Whose Myths are These?

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

There is a famous political quote from the late former New York Senator Daniel Moynihan, who stated “You’re entitled to your own opinion, but you’re not entitled to your own facts”. When I watch what passes for news nowadays, I tend to think Senator Moynihan was ahead of his time.

While I usually cover non-audit health care issues on Fridays, CMS released a document this past Monday that was so riddled with self-pity and abbreviated clarifications, it must have been written by a 4-year-old.

The title of the document is “Medicare Fee-For Service Recovery Audit Program Myths”. The document contains 14 so-called myths, but at least half are issues that I have never heard raised by a reputable source, and the remainder appear to be the incomplete thoughts one would expect from someone currently between lithium refills. My jaw ended up hanging so far beneath my face at the conclusion of these four pages that nothing short of a point-by-point rebuttal is warranted. Without further ado, we begin:

Myth 1 – RACs deny every claim that they review- I have never heard anyone make this claim, though I am sure that some hospitals feel this way based on the way RACs tend to hyper-focus on some facilities in the same way that armed robbers look at unarmed urban liquor stores. CMS goes into a tortured explanation of the CERT study to refute this, but the explanation ends up going nowhere. The Part They Left Out: According to the AHA, two-thirds of all RAC documentation requests do not lead to the determination of an improper payment. Duck-hunting in the dark offers a better accuracy percentage than this.

Myth 2 – RACs have a contingency fee between 30 and 50 percent – Anyone who had this perception would have been so far separated from the RAC Statement of Work that it would be quite obvious that they have no day-to-day contact with the RAC program and its process. The Part They Left Out: While the RACs are paid on a contingency fee basis (up to 12.5% at the high end for CGI), the rest of the integrity contractors (MIC, ZPIC) are paid flat fee contracts for a fixed time period, and their rate of success is actually worse than the RACs.

Myth 3 – Every RAC denial is overturned on appeal - To prove that this is false, CMS provides appeal data from FY 2010, seemingly forgetting that we are currently in FY 2013 and that according to the AHA, more than 71% of all appeals filed by their RACTrac participating hospitals have yet to be finalized. Of the ones that have, hospitals are winning 3/4 of the time. CMS has responded to this success rate by attempting to eliminate the ALJ level of appeal, where most of their losses are occurring. The Part They Left Out: Remembering that over 40% of all RAC determinations are appealed, CMS’ elucidation of this “myth” appears rather combative.

Myth 4 – RACs have non-clinicians conduct review of medical records – The response to this “myth” is classic deflection. The memo states “Fact: Each RAC employs certified coders, nurses, therapists and a physician contractor medical director (CMD)”. The last time I checked, clinical decisions are made by doctors, with nurses and therapists defined as “ancillary providers” and coders defined as “those people who tell me I’m billing something wrong”. Unless the lone CMD at each contractor, armed with candy dispensers full of Dexedrine and crystal meth, has a hand in every RAC determination, then the fact that non-clinicians are conducting review of medical records is not a myth! The Part They Left Out: CMS goes on to state that a RAC org chart is submitted “as part of the proposal and identifies the number of key personnel and the organizational structure of the [RAC] effort”. These charts were not offered as an addendum to this memo, so the “myth” actually stands as fact, given that the ratio of employees for each RAC remains a mystery to the provider community.

Myth 5 – RACs create their own policies and are not bound by CMS regulations, NCDs or LCDs – Again, no one dealing with the RAC process ever made this claim. The claims that they are actually making, particularly as it applies to the enormous number of denials for short stays, is that the CMS regulations are poorly written and inadequately clarified. Additionally, the MACs, whenever they make an attempt at clarification, have clouded key issues to such a degree that they can’t answer provider inquiries regarding past guidance they have provided. The problem has gotten so bad that NGS, an affected MAC, won’t allow any recording of their teleconferences based on past embarrassments. The Part They Left Out: The ALJs seem to have a good grasp of the issues involved, but because they more often find in favor of providers, CMS’ game plan, as stated previously, is to take them out of the game.

Myth 6 – RACs can review as many claims as they want from a provider – CMS goes on to state that the maximum number of requests per 45 days is 400. Actually, providers with over $100 million in payments can have up to 600 charts requested every 45 days, based on the ADR limit update effective on March 15, 2012. The Part They Left Out: CMS conveniently ignores semi-automated review in addressing this issue, as there is no limit to the number of claims that can be selected under semi-automated review. Hence, RACs indeed can review as many claims as they want from a provider, making this CMS myth (you guessed it) a non-myth.

Myth 7 – RACs don’t have physicians on staff – If you exclude the one solitary CMD strung out on stimulants, then yes, the RACs don’t have physicians on staff conducting complex reviews. While we’re on this topic, I think it’s worth questioning the motives of any physician, nurse, therapist or coder who makes it their life’s work to make the lives of hospitals a Hell on Earth with their activities. Is this really what you want to do for a living? As a certified coder, anyone with credentials similar to mine who is working for a RAC isn’t trying very hard to build a career in my opinion. The best people who happen to find themselves under the umbrella of these organizations eventually leave, partly because that identified as “fraud” is usually CMS-induced ignorance  (see notes under Myth 5) and partly due to wanting to have their souls cleansed and in good repair as life’s end draws near. The Part They Left Out: RACs have been going after hospitals primarily, but when Part B claims are reviewed, I would say that the odds of a specialist having their clinical documentation reviewed by a physician of the same specialty are practically nil, making appeals virtually automatic.

Myth 8 – RACs are focusing complex reviews on Critical Access Hospital claims – CMS goes on to state that “Recovery Auditors have not completed any complex reviews on Critical Access Hospital claims”. The automated reviews continue, and who knows whether any semi-automated reviews have been conducted? I would say that this statement of “myth” is perhaps best described as a half-truth. The Part They Left Out:  I appeared on a broadcast of Monitor Monday back in September where the administrator from Pushmataha Hospital in Oklahoma related that he had elevated his complaints to his congressperson, as Connolly was picking them apart financially. In addition, he is having to go to his community and beg for tax increases because he can’t get funding to keep his doors open. If a rural population being served by a hospital is threatened by RAC activity, it matters not that they lack the imprimatur of the CAH designation. It means that care for an under-served population is being threatened just so someone can wave poorly-estimated RAC dollar results in all of our faces to pound their chests about how they are funding health care reform.

Myth 9 – RACs do not tell anyone what they are reviewing – Anyone connected with the RAC program knows that there is an approved issues list on the RAC websites. This is yet another example of a myth that no one has profligated. The Part They Left Out: Medicaid RACs are not required to provide approved issues listings for the audits they are conducting, so when it comes to Medicaid, it is indeed true that the RACs do not tell anyone what they are reviewing.

Myth 10 – RACs do not issues (sic) detailed results letters – I’d like to pause to state that the garbled word usage in this myth, along with the appearance of the word “rational” in explaining myth 9, where the word “rationale” would have been more appropriate, tells me that this whole memo was a panicked rush job. With regard to this myth, The results letters I have been made aware of do not go into dramatic detail, but rather contain “canned” language from a template explaining a general reason for a claim denial based on the approved issue being applied. The Part They Left Out: If you are ever able to have a conversation with the actual reviewer of your documentation who retroactively denied your claim, consider yourself lucky.

Myth 11 –  RACs do not issue timely denial letters – This is actually not a myth. The MACs took over the process of issuing demand letters back in January, and the timely issuance of letters has been an ongoing issue for most of 2012. The Part They Left Out: CMS lists this issue as a myth, but in the ensuing paragraphs beneath it, they do not refute it, but rather use twisted language about the importance of timely issuance based on appeal time lines. There are some RAC claims that have been in the appeals process for over two years and have only reached level 3 out of 5, so I think it best that CMS not descend into pontification about the importance of appeal time lines.

Myth 12 – RACs outsource all the medical review to staff in India and the Philippines - Again this is the first that I have heard of this, so this is actually a myth. The Part They Left Out: PRGX is a RAC subcontractor here in Region B. They have subcontractor status because the quality of their work product was sub-par during the demonstration project. Region B has the highest appeal overturn percentage, and I am sure that a number of those issues can be traced to the subcontractor rather than CGI. Maybe outsourcing overseas would provide a better result than an entrenched government contractor who fought the permanent RAC awards? A man can dream.

Myth 13 - RACs deny Inpatient Rehab Facility claims because the care could have been given in a less intensive setting - CMS does not refute this in subsequent paragraphs. They only explain the rationale for such denials. Remember kids, it’s only a myth when someone says three little words: “that’s not true”. The Part They Left Out: Whenever I hear the word “rehab”, I immediately think of my colleague Nancy Beckley, an expert on the subject. In a brief phone call today, she reminded me of the widespread denials for IRFs that occurred during the RAC Demonstration Project related to joint replacements being “not medically necessary” for stays. Every one of these denials was reversed on appeal, and the contractor, (wait for it) PRG Schultz, now known as (you guessed it) PRGX was “penalized” into subcontractor status. Not surprisingly, the issue of joint replacements being not medically necessary is rearing its head again, so expect this “myth” to soon come true in spades.

Myth 14 – RACs target providers who are part of CMS demonstrations – CMS explains that any hospital can be targeted, but I have heard anecdotal evidence that strongly suggests that hospitals who entered into demonstration projects and then exited (more than likely because they wanted their appeal rights back that were negated by participation in the demonstration) suddenly and mysteriously see a jump in ADR requests. The Part They Left Out: RACs are ripping the daylights out of hospitals, but physicians and DME suppliers (!!) are getting all but a free pass, based on current issues lists. We are now three full years into the permanent RAC program. It certainly appears to me as if the RACs continue to focus their work on the claims with the highest dollars, rather than the claims with the highest error rates. I would call that “targeting”.

Perhaps the late Senator Moynihan’s quote could be sligthly altered in this case to read, “You are entitled to your own opinions, but you are not entitled to your own facts, and based on your lousy facts, I find what you proudly label ‘myths’ to be highly questionable as well”.

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December 21st, 2012 | 3 Comments »

Fraud Investigators Get A Place For Their Stuff

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

As time passes and I crawl ever closer to my eventual expiration date as a life form, it becomes almost second-nature to think about people that exist only in memory. One person that we lost in the last few years was comedian and social critic George Carlin, who during his career catalogued his observations to thousands of audiences, sometimes in pointed and indelicate language that will not be shared in this forum.

One of his famous routines dealt with needing “a place for your stuff” and the way humans create artificial supply lines of similar items, based mostly on time, place and need. When your stuff outgrows your space, you get a bigger space, which allows you to get more stuff, and so on. Eventually, it becomes hard to keep track of where you stuff is and what stuff is needed at present.

CMS works a lot like this. With every new initiative (for the purposes of making a point, I’ll call this “new stuff”), CMS has been losing command control of their goals. There are many examples of this, but the provider community is feeling the largest burden in the realm of the multiple audit entities chasing waste, fraud and abuse.

Up to this point, the alphabet soup of contractors have been successful mostly in creating a nearly-unmanageable administrative burden for providers. Rather than acknowledge what providers are going through, CMS is instead doubling down, expanding audit activities in order to meet a pre-determined dollar projection, then declaring success.

This week, CMS announced the opening of the new Program Integrity Command Center, which can be viewed as CMS’ first logical attempt to bring monitoring of the Medicare Trust Fund into the modern age. For the first time, claims info will be monitored in real time to detect payment errors before they happen, rather than the current “pay-and-chase” model.

I see this as a positive development, but one question is lingering in my mind. Once the Command Center shows success, will the need for the outside contractors (ZPIC, RAC, MIC, QIO) someday disappear? If CMS is just at the beginning stages of real-time fraudulent claim detection, it stands to reason that there will one day no longer be a need for retrospective auditing.

Yet this is not the view from the ground. Hospitals negatively affected by the RAC process continue their upstream efforts, while further expansion of the number of records that can be requested from a facility during a 45-day period lay on the horizon. ZPIC auditors continue their particular brand of beyond-the-pale investigative techniques on providers who may have made mistakes without intent. The Medicaid RAC program is just coming out of the box in a handful of states.

As if that were not enough, long-standing government contractors who, as I explained in a recent post, never really go away, now find themselves in the sights of outside investors, who see the fees that the contractors collect  for their services and smell an easy way to get a continuous cash flow, courtesy of taxpayers. It amounts to an investment bet that CMS will never be able to get their house in order with regard to program integrity. As we have learned from contemporary American History, nothing keeps things from changing faster than a well-healed entity with a monetary stake in the status quo. 

If you ask any reputable provider of service, you invariably come to agreement that the bad players must be removed from the field, but you also get unanimous feedback that states that the current audit climate isn’t working. Now that CMS has found a place for their stuff, I look upon the news with a lot of resignation given the current climate, but also with a little bit of hope that this will someday be looked upon as the beginning of the end of a dark era for providers of medical care in the United States.

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August 3rd, 2012 | 1 Comment »

Vultures Team With Blind Skeet-Shooters To Fight “Medicare Fraud”

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

At this point, it’s safe to say that you all have an inkling of how I think and the direction from which I approach topics related to health care. I have presented facts regarding issues that affect those with a financial stake in our health care system, which let us not forget includes doctors and patients (remember them?).

I have been critical of government “anti-fraud” efforts, mainly because a payment error isn’t always indicative of fraud. Sometimes, as we would expect with a confusing behemoth of a system such as ours, typical human error rules the day. I have been a certified medical coder for 14 years and I can tell you that every once in a while, two digits get transposed, not because I have a diabolical plan to buy a classic, mint-condition Ferrari Daytona by padding my wallet one office visit at a time, but because I’m human, imperfect and make mistakes. For further evidence of this, I direct your attention to the file marked “Marriage, First”.

It was with these thoughts in mind that I read a press release from CMS that hit my e-mail box yesterday. CMS proudly announced that they will now be teaming with assorted insurance carriers, insurance commissioners, the OIG, the FBI and an alphabet soup of insurance industry anti-fraud front groups to fight health care fraud with something of a united front. The partnership has the stated short- and long-term goals of information sharing, the ability to stop payments for the same patient on the same date from payers in different cities and using technology to predict and detect fraud schemes long before the damage is done.

There is one problem with this approach, as I see it. The two main players in this partnership, CMS and the insurance industry, are approaching the partnership with opposing sets of guiding principles.

The government, in the form of CMS and the Obama Administration, wants to eliminate waste, fraud and abuse in government healthcare. The Administration is desperately in search of good news news with regard to bringing improper payments under control, so much so that contracted entities such as the Recovery Audit Contractors (RACs) and the Zone Program Integrity Contractors (ZPICs) are now the beneficiaries of rules of combating overpayments deliberately tilted in the favor of the auditor. This is being done for no other purpose but to achieve the desired monetary results for CMS. After that, claiming success becomes a fait accompli.

On the other hand, the insurance industry wants to provide premium value to its stockholders. It is naive to think that the insurance industry has a goal that revolves around anything other than maximizing profits and retaining the maximum amount of  money in premiums by consistently lowering the amount paid in benefits to health care providers and patients. When approaching the partnership from their particularly odious side of the fence, working with the government to lower “fraudulent” payments makes perfect sense.

To justify the partnership, CMS goes on to state that the partnership builds on efforts that, “have resulted in a record-breaking $10.7 billion in recoveries of health care fraud over the last three years”. Disputing that stated collection total, line-by-line, would provide fodder for my writings through the end of the calendar year. In other news, I turned approximately 25,000 years old on my last, record-breaking birthday, but bear in mind that I am human and prone to error.

Somewhere in CMS’ press release, facts go unstated. There are a lot of improper Medicare payments going out the door, the problem needs to be brought under control, and we need a fresh approach. Yet, if the goal of CMS is to build the trust of the provider community regarding payment integrity, teaming with the carrion-chewing vultures of the insurance industry may not be the best approach. Trust will come only when all participants in the process are devoid of a profit motive for conducting activities.

That sound you just heard was me not holding my breath awaiting that circumstance.

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July 27th, 2012 | 2 Comments »

The RAConteur: ZPIC Contracting Conflicts

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

I ask the pardon of my readers for the brief absence from this space. Due to work-related volumes, the Fi-Med blog has been delayed, but we now return to bring you the latest in audit news and healthcare trends.

As I have opined in this space previously, a virulent orthodoxy has embedded itself into the halls of Washington, D.C., and slowly to the rest of the country, that private enterprise can always perform basic tasks better than the government can on its own. A deep look into every Cabinet-level agency can find some example of bureaucracy run amok, yet with the blood-lust for private contracting in all areas of government, a new paradigm has emerged. What was once a government that worked slowly, and within a set of defined rules, is now in the hands of a private sector that fights to justify its existence as a contract holder by any means necessary. As a codicil to this shift, it appears that once a company receives a government contract, there is no behavior so egregious that the contractor doesn’t stick around in one form or another doing something at the expense of taxpayers.  

The Centers for Medicare and Medicaid Services, based on their independent contractors, has under its umbrella some of the worst examples of this behavior. It is a seldom-spoken truth that CMS contractors never really go away, but rather metamorphose into something else that takes its money from the government in the form of a contract for services.

The Office of Inspector General overseeing the Medicare program released a report on July 9th that shines a light on the shell games that go on with Medicare contractors, in this case with Zone Program Integrity Contractors (ZPIC). The OIG decided to take a look at the relationships between the ZPIC contractors and their subcontractors to assess conflicts of interest that could hinder their work product.

In reviewing the contractors, the OIG identified 10 actual conflicts and 1,451 possible conflicts with the companies who are now either contractors or subcontractors under the ZPIC program. These conflicts were related to contractual relationships either with CMS or with other contractors of CMS that provide various other services. In most cases, the companies analyzed did not consider these internecine relationships to be actual conflicts, more than likely because CMS does not have a written policy for reviewing conflict of interest information.

Now, let’s combine this information with another OIG report that was released this past November, which showed that data issues between CMS and the ZPIC contractors has severely hindered the work product of the ZPIC program. This same report stated that over the history of the Program Safeguard Contractor (PSC) and ZPIC programs, less than 2% of all dollars identified as fraudulent have been collected by the contractors.

The picture that is beginning to emerge on the ZPIC program is beginning to look less like Ansel Adams and more like Ralph Steadman. What we have are contractors, aggressively going after identified “fraud” targets, that may very well have a monetary interest in pursuing one target over another, at the expense of the entire Medicare program. With actual results rating so low on the completion scale, I may very well have stumbled upon the best example of private enterprise siphoning contract funds out of CMS for no other reason than to prop up private industry to satisfy orthodoxy. Unfortunately, it is taxpayers and medical providers attempting to do the right thing that pay the penalty under this belief system.

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July 18th, 2012 | 2 Comments »

The RAConteur: Another Opinion on Government Audits

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

Given the increasing incompetence in our society, I feel that with each passing day there are more jobs that I myself could perform. Yet there is one exception, and that would be the job of sports referee. It takes either a special level of off-the-chart arrogance regarding your own skills or a deep-seeded self-hatred to be a referee. Every decision that a referee makes guarantees that one-half of the participants in the sporting contest will come away hating you.

In the world of government audits in the last week, we heard from one such policy referee, that being the General Accounting Office (GAO).

The GAO is officially the investigative arm of Congress. It operates as the actuarial governor on Congressional legislation, reviewing the receipt and payment of public funds to gage the financial impact of legislation. Much like a referee, the reports released by the GAO tend to briefly alienate political factions based on whether the reports fit a particular party narrative. A report released last Wednesday was no exception.

The GAO chastised the Department of Health & Human Services for not implementing past recommendations to reduce improper payments from the Medicare program. The most prominent of the GAO’s recommendations was CMS demanding automated prepayment edits of the Medicare Administrative Contractors (MACs) in order to identify improper claims. This recommendation was first brought forward in 2007 and remains an elusive goal.

In addition, the GAO wants to see payments to Medicare Advantage plans to reflect the correct health status of the beneficiary in question. Risk Adjustment Data Validation (RADV) audits have revealed that the Medicare Part C plans have been claiming more dollars than they are entitled to based on patient condition, so this GAO recommendation should gain some traction. In addition, the GAO wants to see the current Medicare Advantage Quality Bonus Payment Demonstration halted, as it claims the design of the program precludes it from yielding meaningful results.  

It is one thing for the Senate Finance Committee to request input from stakeholders on how to avoid waste, fraud and abuse in the Medicare program. It is quite another for the GAO to state that there is more that CMS could do to fight improper payments, in addition to RACs, ZPICs and predictive modeling technology, all of which have been shown to be failing in their own unique ways. The injection of the GAO as an impartial observer into the debate should be welcomed by a provider community left shell-shocked from audit activity. For this one time, everyone should rejoice in the arrival of the referee.

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May 16th, 2012 | 3 Comments »

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: Other (Wide) Shoes Begin To Drop

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

I thought I’d begin today’s rumination by dispensing a bit of just-uncovered wisdom; having wide feet in and of itself does not guarantee that one is standing on steady ground. Allow me to offer one literal and one figurative example.

This morning, I was making my usual run to purchase a 44-ounce unsweetened iced tea at my local Speedway store (a Midwestern gas station-mini-mart chain) against the backdrop of rainfall in the Greater Milwaukee region. I took about four steps into the store and promptly slipped on a wet spot on the floor, quickly losing footing under my size 12 wides. I was able to catch myself before I made any more of a rush hour spectacle of myself. To Speedway’s credit, this morning’s iced tea was complimentary due to the apologetic clerk’s self-flagellation for not putting down a mat across the floor, thereby keeping my lifetime record of never hiring an ambulance-chasing attorney intact. Little did she know I’m a singer and not a dancer…

Upon my arrival at the office this morning, I was greeted by an article that should be of great interest to all providers adversely affected by government audits. A representative of the Senate Finance Committee told an audience at the just-concluded Health Care Compliance Association conference in Las Vegas that the Committee will soon be issuing an open letter to healthcare providers. The purpose of the communique is to solicit advice on the best ways to prevent waste, fraud and abuse in Medicare, Medicaid and their many offshoots.

On April 24th, this same committee held a hearing entitled “Anatomy of a Fraud Bust: From Investigation to Conviction”. It was at this hearing that Senator Orrin Hatch (R-Utah), the ranking minority member of the Finance Committee, announced his intention to solicit provider input. In the absence of the letter, the Committee has apparently been inundated with complaints from providers regarding auditing tactics. The bulk of the ire has been focused on the Zone Program Integrity Contractors (ZPIC) and that less-than-popular ongoing scourge of the hospital community, the RACs.

As the reader knows, I’m more than happy to share clearly defined opinions of both of these outside contractors. Bluntly, gathering the organized input of the provider community is overdue. Yet I would caution the reader, as I did with another such open letter issued last week, to consider the source of the request and the backdrop under which it occurs. The committee hearing from the 24th was commenced with two agendas. On one side was Senator Max Baucus (D-Montana), attempting to point to successes of government audits in the hope of propping up the thesis that states that fraud & abuse collections will pay for health care reform. On the other side is Senator Hatch, whose party’s ultimate mission is to vastly redesign the Medicare program into some kind of an amorphous voucher program.

Given this, there are reasons not to trust the motives of the minority portion of the Committee on this particular subject, but we are all fully aware that the RAC and ZPIC processes appear to be deliberately designed so that providers are at a disadvantage. The RAC program in particular has been problematic in that CMS continues to tweak the program to make it harder for providers to respond to incorrect audit findings in a cost-effective manner. As the majority of the contentious issues revolve around short hospital stays and observation status, it would appear that the RAC program could be formally concluded if CMS would only clarify these standards. It would be much more cost-effective for all concerned than the current model. To complicate matters, the boastful and glowing quarterly reports on RAC results that have been released by CMS thus far crumble under the realities of provider appeal results.

Yet something is missing. One set of entities that is more responsible than any other for Medicare’s haphazard payment practices appears once again to be avoiding the spotlight. I speak of the Medicare Administrative Contractors, who have been allowing Medicare benefits on claims that had no business being paid for decades, all without consequence. If the effect of a set of policies is studied in the absence of studying the cause, only half of the story has been written. Providers would be wise to consider this in any testimony or remarks submitted to the committee.

While this announcement was being made, I came across interesting news on a live broadcast by the RACMonitor team from the same conference. They had a guest on their broadcast yesterday afternoon stating that she has now seen Medicaid RAC activity in the states on New Jersey and Kansas. While the fate of the Medicaid RAC program now hangs on the looming Supreme Court decision regarding PPACA, it is no less distressing to learn that activity that has done very little for the Medicare Trust Fund is now reaching into Medicaid with their error-prone tentacles.

I saw more than just my own wide feet drop in the last day and a half, and only my own dealt directly with rain and iced tea. With regard to the other two, I am less than thrilled at the beginnings of the Medicaid RAC program given recent history, but I couldn’t be happier that the RAC and ZPIC contractors and their processes are finally being put under a credible and critical microscope.

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May 2nd, 2012 | 3 Comments »

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 »

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 »

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