Medicare CERT Audits: The Physician’s

Perspective

Brian S. Parsley, MD2nd Vice President AAHKSClinical Associate ProfessorBaylor College of Medicine Houston, Texas

Disclosures

2nd VP for AAHKS

Orthopaedic Surgeon in Private Practice

Strong Patient Advocate

Who Do We Serve?

The PATIENT

We Want to Get It Right

Outline the Rules and We Will Follow Them!

We Want to Maintain Access to Care for Our Patients.

We are in this Together!

Medicare Claims Data

Medicare receives over 1.2 Billion claimsper year. This equates to:

• 4.6 million claims per work day, or •575,000 claims per hour •9,580 claims per minute •160 claims per second

Terms You Should Know

MAC: Medicare Administrative Contractor. ▪ US is split into ten regions for purposes of Medicare

claims administration. MACs are private companies that serve as contractors performing claims administration for Medicare.

▪ Each MAC has some level of latitude in the interpretation and application of the rules based on regional determinations.

CERT: Comprehensive Error Rate Testing. ▪ CERT audit program is designed to monitor the

performance of MACs and to ensure that they are administering claims properly. CERT audits result in annual reports of the rate of improper payments made to hospitals. A high error rate for a particular procedure on the Part A hospital side may lead to increased scrutiny of Part B physician claims.

Terms You Should Know

RAC: Recovery Audit Contractor. ▪ A RAC is an independent medical collection agency that works for

Medicare to review overpayments and underpayments to providers.

▪ RAC’s are paid 9-12.5% contingency fees for the overpayments they recover.

▪ RAC’s have the ability to analyze claims with payment dates reaching as far back as October 1, 2007.

LCD: Local Coverage Determination. ▪ MACs define LCDs for different procedures. The LCD tells you what

Medicare will cover in its MAC jurisdiction. For example, they define what constitutes medical necessity for a specific procedure, and no procedure will be covered if it is not found to be medically necessary.

▪ Failure to follow the requirements of an LCD will result in an overpayment, which could be sought after an audit and refunded to CMS.

Medicare Audits

MAC-Generated Prepayment Audits

MACs have always had the authority to audit claims in order to reduce their CERT error rates. In late 2011, at least three MACs initiated audits that targeted

specific orthopaedic procedures with high error rates in their jurisdictions.

MAC Audits have looked at documentation requirements of non-surgical interventions prior to total joint replacement.

MAC has launched a prepayment audit program affecting orthopaedic codes, including those for total joint replacements in Florida. if problems are found with the Part A claims, then payment will

be denied, and the MAC may then perform a post-payment audit of the Part B physician services claims related to the problematic Part A claims and deny payment.

Error Rates and Improper Payments

Provider Compliance Group, CMS Office of Financial Management

Goals set by President Obama:

To reduce the Medicare FFS improper payment rate from 12.4% to 8.5% by Nov 2011 and 6.2% by Nov 2012. Identifying past improper payments through

data analysis. (Audits) Correcting past and improper payments

through post pay review. (Audits) Preventing future improper payments

through provider education.

Improper Payments

Is it fraud? (Intentional falsification or deceit to obtain payment)

Is it abuse? (CMS: when doctors or suppliers do not follow good medical practices that can result in unnecessary costs to Medicare)

Is it a pattern of disregard for regulations?OR Is it hospitals and physicians providing appropriate care

to their patients but unable to comply with a myriad of confusing, vague technical Medicare documentation and billing rules despite their good intentions? How does CMS tell the difference? How do providers protect themselves?

Improper Payments vs. Fraud

ALL FRAUDULENT CLAIMS ARE IMPROPER PAYMENTS BUT ALL IMPROPER PAYMENTS ARE NOT FRAUDULENT CLAIMS!!!!!

MOST ARE DUE TO IMPROPER DOCUMENTATION!

Improper Payments vs. Fraud Improper payments: est. 3% to 10% of total healthcare

expenditures nationally.

Improper Payment Elimination and Recovery Act 2010 (IPERA) - Signed by President Obama on 7/20/2010

FY 2010: Feds recovered more than $4 billion thru these enforcement efforts.

$2.5 billion represented recoveries under the False Claims Act, the largest amount in the history of the DOJ.

Affordable Care Act (ACA) provides tools for enhanced fraud prevention and prosecution.

The Medicare Data WarehouseRepository of all Medicare claims

• All Medicare auditors have access to Medicare Data Warehouse

• Data mining at will for Parts A, B, C, D

• Auditors input results of reviews

• Red flag suspicious activities also alerts other auditors

• Public disclosure required by ACA ( the public will know that you or your hospital has been audited).

How Does This Process Work?

MAC: Medicare Administrative Contractor

The MAC pays all Medicare providers except for DME – allows claims matching.

MAC‘s Role in audit process Performs provider education Adjusts payments after CERT, RAC (and other

audit) review Beginning Jan. 1, 2012 – Sends Demand Letter

▪ –Applies recoupments and corrects underpayments▪ –Limited information on Demand Letter

Supplies information to Data Warehouse Notifies RAC when account receivable is created

▪ –N432 remittance notice sent to hospital

MAC: Medicare Administrative Contractor Audits

Reviews conducted by clinicians (nurses, physical therapists, etc) and certified coders

Pre pay review: Claims that are found to be improper are denied and no payment issued.

Post pay claims that are found to be improper –overpayment is recouped –underpayment is paid back

Suspected fraud: Referral for investigation

CERT: Comprehensive Error Rate Testing

CERT evaluates MAC‘s payment error rate

Claims are randomly selected Post payment only CERT auditor reviews medical

records Reviews conducted by at least one

nurse Claims paid incorrectly are scored

as ―”errors” No documentation error: Failure to

submit record Insufficient documentation Lack of medical necessity Incorrect coding Other errors (duplicate payments / no

benefit category / other billing errors)

CERT: Comprehensive Error Rate Testing

Computes and reports error rates. Nationally By Contractor By Service By Provider Type

CMS and contractors analyze MAC error rate data and develop Error Rate Reduction Plans

Payments adjustments by CERT are referred to MAC

Payment adjustments are made by MAC Appeals go to MAC Provides ”targets” for future RAC issues

What Is Next?

The RAC Audits have been implemented

Recovery Audit Prepayment Review Demonstration Project is on the horizon

Is This A Hospital Problem? You bettcha!

It can affect the cost of borrowing It raises the costs to hospital It increases the cost of care

Purchase of new equipment Maintenance of facility/ equipment Staffing ratios and salaries to attract

good staff Marketing (information in the public

domain)

Is This Just a Hospital Problem? No! Physician payments are now coming under

review. If the hospital is denied then you will be

denied Physicians are now being audited directly

What Criterion is Utilized?

CERT Standard for Knee/ Hip Replacement Comprehensive Error Rate Testing (CERT) Notice #14632

Followed CERT audit and denial of inpatient hip and knee replacements

Affects Part A providers and physicians in Colorado, New Mexico, Oklahoma and Texas

“The CERT contractor stated that favorable audit findings would have required medical record documentation clearly demonstrating that the patient has end-stage joint disease and should have included evidence of prior failed conservative therapy.”

CERT Notice 14632

CERT Standard for Knee/ Hip Replacement Documentation expected (physician, ARNP,

RN, PT, OT) Preoperative joint examination findings showing

end-stage joint disease requiring joint replacement. Peoperative significant loss of range of motion or

joint deformity. Operative findings supporting end-stage joint

disease, including bone-on-bone disease. Documentation that patient needed adaptive skills

or an assistive device to maintain mobility. Preoperative radiographs showing end-stage joint

disease. CERT Notice 14632

DOCUMENTATION, DOCUMENTATION, DOCUMENTATION

CMS Wants to know what YOU are thinking Accurate and complete documentation in the

physician records as well as the hospital records is the key

A medical evaluation must be performed. The evaluation should include: clear documentation of the patient’s functional status documentation of the patient’s mobility and pain. evaluation may be done all or in part by the surgeon. the surgeon must sign off on the report and

incorporate it into their records.

What Is My Hospital Requiring Now?

Pre certification and approval of DRG 470 patients prior to posting on surgery schedule

Screening for sufficient data to justify surgery

This effects both Medicare and commercial insurance patients

The Methodist Hospital Medicare Joint Precertification Clearance Form Total Joint Replacement- Knee

Patient Name: _______________________________ D.O.B.: _____________________

Indication: Osteoarthritis

Medical Necessity Criteria: Pain at Knee (All criteria must be met)

Increased with initiation of activity Increased with weight bearing Interferes with ADLs

Findings at Knee (All criteria must be met)

Pain with passive ROM. Pain scale score: ______ Limited ROM Crepitus Joint effusion/swelling

Arthritis at Knee by x-ray (Minimum of 2 criteria must be met)

Subchondral cysts Subchondral sclerosis Periarticular osteophytes

Joint subluxation Joint Space narrowing

Non-surgical Treatment Attempts (All criteria must be met) NSAID (Minimum of one attempted for 4 weeks)

NSAIDs attempted: ________________________ Duration NSAID was attempted: ___________

Contraindicated/not tolerant for 4 weeks due to: History of allergic reaction Anticoagulant use History of PUD

Other: ________________________________________________________________

Physical Therapy (12 weeks) Physical Therapy or Home Exercise Program Duration therapy was attempted: __________

Contraindicated/not tolerated for 12 weeks due to: Excessive pain experienced by the patient

Other: _________________________________________________________________

External Joint Support (12 Weeks) External Joint Support attempted:

Cane Crutches Knee brace/sleeve Other: _________________

Duration external support was attempted: _______________________________

Contraindicated/Not tolerated for 12 weeks due to: Excessive pain experienced by the patient Unstable gait contributing to increased risk for falling/injury

Other: _______________________________________________________________________

Physician Signature: _______________________________________ Date: _____________ ***Please fax back to the TMH Resource Center (713-790-2620) prior to scheduling the procedure. Forms must be faxed before 2 pm to receive same day response.

Clear Documentation Improves Likelihood of Payment

Chief Complaint: End stage osteoarthritis, right knee, for knee replacement.

History: Patient has had bilateral osteoarthritis, gradually progressive over 10-15 years. Most recent X-ray (7/22/11), right knee shows joint space near obliteration along with marginal osteophytes and subchondral sclerosis. Has been treated as follows: Ibuprofen 400 mg QID since January; PT 3 x week from 3/15/11 to 6/30/11. Patient started using a cane in May. Right knee pain is continuous at level 3/10 with 6/10 on ambulation. Sometimes pain keeps him up at night. No longer able to climb the five steps to his front door. Knee pain and stiffness limit walking to less than 25 yards without resting.

Physical Exam: Bilateral knee deformity consistent with severe osteoarthritis. Right knee reduced to less than 90 degrees. Unable to rise from a chair unassisted.

Impression: Worsening pain, deteriorating range of motion and significant interference with function. Current therapy ineffective. Total Knee Replacement is only option for pain control and functional restoration.

Orders: Admit to inpatient care for right TKR.

Operative Report

MUST be dictated for transcription within 24 hours

Operative findings should support the diagnoses; describe pathology observed in detail.

For your and the surgical assistant’s benefit, describe the need for any surgical assistance.

Include type of metal or ceramic surface of prostheses, orthopedic devices, use of cement and rationale for biological products. Include every item used in this description.

Describe any complications and how handled intraoperatively.

Discharge Summary Report RECOMMEND dictating within 24 hours of discharge for

optimal coding.

This intended to be more than a recap of the surgery performed.

If complication occurs, THEN DOCUMENT IT IN THE D/C

OP patients discharged the day of surgery also must have pertinent information filled in the form.

If referred for Extended Recovery or Observation, a Discharge Note should be written on a Progress Note form with the correct DATE and TIME to document the proper flow of assessment and care provided during this period.

What Is Being Done To Help You? AAOS is working actively with CMS nationally

and the Regional MAC’s to Clarify & modify the documentations requirements To try and delay the enforcement process until our

members and our hospitals are better educated on the process and expectations

Assisted in the development of a MLN Matters with CMS that was sent to all Medicare providers in Sept

Supply YOU the membership with an informational piece and documentation form to utilize

Help to develop a draft LCD for Regional MAC’s to utilize

Tips to Avoid Denial of Claims: Properly Documenting Medical Necessity

Tips to Avoid Denial of Claims: Properly Documenting Medical Necessity

MR should contain enough information to support the determination that the total joint procedure was reasonable and necessary =presence of advanced DJD

Currently, audits show medical records commonly lack documentation that justifies the need for payment.

Not Fraud and Abuse but lack of Documentation!!

Do You Have EHR? USE IT! Set up templates to ask the questions that

you need to include and allow for comment sections so that you can explain yourself

Describe the treatment plan with as many dates

Add X-ray detail check-offs

Instruct your office personnel on the importance

It Ain’t Over Until The Paperwork is Done

Show Me The Money!

Thank You