MEDICARE TRENDS AND CONCERNShoranmm.com/wp-content/uploads/2014/11/Zimmit-2014... · 2% . SNF...

MEDICARE TRENDS AND CONCERNS

www.zhealthcare.com Toll Free: 877-SNF-2001

Tel: 732-970-0733 Fax: 732-970-0736

Sheryl Rosenfield RN, Director of Clinical Services Intercounty HMM Seminar November 13, 2014

ZIMMET HEALTHCARE SERVICES GROUP, LLC

Life Expectancy at Birth (2011)

2


65+ and 85+ Population Projections

3


Federal Spending Breakdown (2014)

4

Medicare, 14%

Medicaid, 8%

Social Security, 23%

Net Interest, 7%

Defense, 17%

Discretionary, 16%

Other Mandatory, 14%

Other Health, 1%


Medicare Spending Concentration

Source: MedPac

Total Spending 2006 = $401 Billion Total Spending 2012 = $562 Billion

Prescription drugs provided

under Part D

Home Health

Inpatient Hospital

DME 2%

SNF

Other Hospital

Physician Fee Schedule Managed Care

Hospice 2%

31%

5%

12%

9%

5%

14% 16% 3%

Other

Prescription drugs provided

under Part D

Home Health

Inpatient Hospital

DME 1%

SNF

Other Hospital

Physician Fee Schedule

Managed Care

Hospice

Other 25%

5%

12%

8%

6%

12% 24%

3% 3%

5


Medicare $ Distribution

14% 23%

32% 32%

46% 28%

19% 7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

6 or moreconditions

4 or 5conditions

2 or 3conditions

Zero or 1condition

SpendingBeneficiaries

6


The Cost of Readmissions

Source: MedPAC 7


The Case for Managed Care

• US healthcare spending is highly disproportionate to other countries

• Outcomes and longevity are unfavorable despite cost difference

• Tremendous variation in regional cost, quality and utilization of care, especially in PAC

• Managing the small % of high cost patients and reducing re-hospitalizations would generate large savings

8


Poor Candidates Marginal Excellent

Candidates

Many LTC hospitalizations

High % of Part A $ from LTC

High Part B in-house therapy

Low MA rate

Few LTC hospitalizations

Low % of Part A $ from LTC

Low/outsourced therapy

Higher MA rate

9

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• Who is managing the process? – Complex rate structures – Case management and MCO liaison – Cost of Care (per diem / episodic/ PMPM) – Market power – Maintaining traditional acuity scoring – Clinical integration across venues – Risk tolerance

Business Issues

10


ZHSG Managed Care Audits

• Rate structures over 5 years old • No follow up on incorrectly paid claims

(contract/billed/paid rate mismatch) • Individual therapy minutes (often in excess of rate

authorized rate level • Failure to receive timely prior authorization • No case management on Rate Exclusions • Denials not appealed • No follow up on Part B payments • Failure to manage non-reimbursable co-pay and bad

debt 11


Managing Managed Care

• Operations: from admission to discharge • Protocols • Administrative policies and procedures • Billing • Audit

12


PAC Spending Growth ($B)

27

33 34 38

42 44 49

52 56

58 62 62

12 15 15 17 19 20

22 24 26 27 31 30

8 10 10 11 13 13 15 17 19 19 18 19

5 6 6 6 6 7 6 7 6 6 6 7 2 3 3 4 4 5 5 5 5 5 6 6

0

10

20

30

40

50

60

70

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

All PACSNFHHAIRFLTAC

13


Transaction Activity

• LTC was only healthcare sector to experience increase in transaction activity (up 20% from 2012)

• Healthcare reform has initiated a shift from nursing homes to at-home managed care and community care

• ACA encourages care coordination and population health management

• Operators have changed their business model • Increase in mergers and acquisitions to broaden the scope

of services offered and reduce costs

14


CMS Action Plan

Using Penalties to Improve Quality and Reduce Costs • Improve the individual experience of care • Improve the health of populations • Reduce the per capita cost of care for populations

Better Health

Lower Costs

Better Care

15


Meet Your Auditors

MAC CERT OIG ZPIC RA (RAC)

16


Medicare Administrative Contractor (MAC)

• FKA “FI” • Most likely to use data analysis • Targets top performers • NJ is in Jurisdiction L (Novitas Solutions) w/ DE,

PA, MD, and DC

17


Comprehensive Error Rate Testing (CERT)

• Medical review to check the accuracy of payment by the MAC

• Claim is independently reviewed and can be denied

• Denials cannot be deemed “fraud” by the CERT • Produces an error rate • Lawmakers have urged CMS to use information

from the CERT to provide guidance for different auditors (to reduce duplicative investigations) 18


Office of Inspector General (OIG)

• General oversight specific to trends

• Report to Congress

19


Zone Program Integrity Contractor (ZPIC)

• Fraud and abuse arm of Medicare program • Not a simple medical review to validate coverage and

payment • Looking for reasons to deny claims and pursue fraud

allegations • Recent increase in onsite audit visits • Least likely to use data analysis to target claims • ZPICs have prior knowledge of the Facility and billing

practices prior to arriving • Error rates can be extrapolated to the entire billing

universe 20


Recovery Auditors (RAs)

• ALJ backlog (500,000 claims as of September 2014)

• Current suspension aside from the Part B therapy caps (pre-payment review) and automated system denials pending new auditor contracts

• New RAs were supposed to be announced this October, but…

21


Data Analysis to Target Claims

Based on anecdotal data from our experiences with clients • RUA RUGs –are (“R”) you (“U”) a (“A”) target?) • RU “anything” over 60 days • Therapy revenue codes w/ an illogical number

of therapy units billed • 3-day (only) QHS followed by “RV” or “RU”

RUG group

22


Data Analysis to Target Claims

• Illogical start of care dates (occurrence code “11”) in relationship to the month billed

• Psych or depression codes on claims w/ Rehab RUGs

• ST utilization w/ no aphasia or dysphagia diagnosis codes

• Lower-18 RUG groups • Claims w/ 042 diagnosis

23


In the News

• OIG investigation of the 2011 claims from an Illinois PT resulted in a denial of 99 claims out of 100 examined – $634,837 in inappropriate payments – Documentation failures (plans of care, treatment

notes, progress notes, medical necessity, MD certifications)

– No compliance plan that included appropriate reimbursement auditing

24


In the News

• DOJ investigations found that 2 SNF management companies failed to prevent its contracted therapy company from providing unnecessary therapy in order to increase its reimbursement – Billing RU at high levels – $3.75 million and $1.3 million settlements – Targeted levels regardless of clinical need – Rounding treatment minutes (as opposed to exact

reporting) – SNF is responsible for oversight of its therapy

dept.

25


In the News

• Extendicare agrees to $38 million settlement • 33 SNFs in 8 states • Whistleblower • Unnecessary rehab services during ARD

periods • 5-year corporate integrity agreement

26


ZHSG Audits

• ZHSG conducts > 400 “formal” reimbursement compliance audits per year

– Targeted or Randomly selected (OIG RAT-STATS)

– General or focused reviews

– Audit components include UB-04, MDS, all supporting documentation

– Technical requirements, MDS capture, billing administration, medical necessity

27


8.3

8.1

8.29

8.41

7.9

7.95

8

8.05

8.1

8.15

8.2

8.25

8.3

8.35

8.4

8.45

2011 2012 2013 2014

Average RAS

RAS Score

28

Average Risk Assessment Scores


Frequent Findings

• MD certification issues • Non-compliant cut letter issuance • Missed COT OMRAs

– Facility thinks they are providing treatment at the correct RUG level the next 7 days

• UB-04 inaccuracies • Fragmented MA process

29


ZHSG Audit Findings (UB-04)

• Codes omitted based on MDS assessments and clinical documentation

• Duplicated codes

• Rehab “V57.XX” codes as secondary

• Outdated codes

• Incorrect LOA coding

30


Audit Findings (UB-04)

• Insufficient primary codes – Therapy claims w/ psych/depression diagnoses – Where is the disconnect coming from – clinical or

billing? – Clinical staff has the responsibility to validate clinical

documentation and the MDS – Billing staff has the responsibility to match the MDS to

the claim that is submitted to Medicare • ST claims with no diagnosis to support treatment

(absence of aphasia/dysphagia codes) • Claims w/ AIDS diagnosis

31


Leave of Absence

• Any time residents do not meet the midnight census, they are considered to be on LOA

• LOA alters the MDS reference windows for regularly scheduled assessments (but not COTOs or EOTOs)!

• Must “restart” the Medicare cycle if the resident is formally admitted to the hospital or out of the Facility for >24 hours 32


ICD-9 vs. ICD-10

ICD-10

1st digit alpha; digits 2 and 3 numeric; digits 4-

7 alpha or numeric

3-7 characters

Approx. 68,000 codes

ICD-9

1st digit alpha or numeric; digits 2-5

numeric

3-5 characters

Approx. 13,000 codes

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Final Thoughts

• Review systems of processing information – Who is in charge of what?

• Constantly monitor therapy logs to avoid significant overbilling and missed OMRAs – Minimal oversight can prevent systemic overbilling

• Ensure UB-04s are accurate and complete to minimize rejections – UB-04s are often ignored, yet are the primary

source for audit initiation – Who is looking at your UB-04s?

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Data Driven Quality Indicators for a Post Acute World • 30-Day Readmission Rates • Facility Acquired Rates (infection/Pressure • Ulcers/Falls) • Improvement measures • Medical Error Rates • Staff Turnover • Medical Director Status • Agency Usage (RN’s/Therapist) • ALOS by Diagnosis Group • Five Star Rating • Fallow up post discharge • Patient Satisfaction

35

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