Recovery Audit Contractor (RAC)Denials

2010 Lean Symposium

4/20/2010

Presented by: Dennis McInerney representing The RAC Team

$

2008-Present IHDM RAC Team CharterAim: To produce a complete and accurate medical record for each patient

encounter that reflects the quality and value of healthcare delivered. By August 31, 2009 the team will have implemented new processes which will achieve these goals.

Current State: CMS has hired the RAC (Recovery Audit Contractors) who are scheduled to identify and recoup improper Medicare payments. RAC implementation for Iowa is tentatively scheduled for Aug 1, 2009. On this date they will start to audit retrospectively back to Oct 1, 2007. It is estimated based on RAC take-back history that IHS-DM is vulnerable to an average annual $2.8MM loss (200 records every 45 days, take back rate of 35%,

and average $5k per claim). Currently the processes and documentation that produce our medical record are prone to errors and rework. We want to review , standardize and improve these processes. We also do not have a process in place to address response to RAC letters.

FOCUS: To develop a process for responding to RAC's by Aug 31,2009. This will consist of a baseline assessment of risks and development of processes: 1) to track and respond to RAC's denials and medical records requests, 2) to continuously improve documentation in the medical record in support of the RAC team aim and 3) to successfully implement these processes.

Measures: All will improve by August 31, 20091. Prebill IHDM edits and their turnaround time (time the edit made the edit list to the time the edit is billed will improve by 25%).

a. *CCI &*LCD/NCD: average days on list Dec 08 = 11.97 days turnaround, Feb 09 = 5.1 days turnaroundb. CCI &LCD/NCD: accounts sent to work list (accounts in) Dec 08= 5.1 million Feb 09=4.6 million

2. Discharged patient accounts not final billed due to documentation deficiencies will improve by 25%a. Post discharge coding query average unable to bill weekly 2008 – 2.5 million

                                                       2009 to date– 1.86 millionb. Dictation deficiency –unable to code and bill -average weekly    2008 – 2.1 million

                                                       2009 to date – 3.2 million3. Patients level of care changes will improve by 50% +

a. Dec 2008: 523 observation errors corrected.  Average is 16.8 changes on a daily basis

*CCI: Correct Coding Initiative Edits*LCD/NCD: Local Coverage Determination/National Coverage Determinations

Team

Senior Leader: Mark Purtle, CMO

Team Leader: Patty Armstrong

Team Members: David Stubbs; Kara Dunham, Crystal Estabrook, Kim Hill, Nici Johnston, LeAnn Kai, Brenda Long, Barbara McLeod, Theresa Miller, George Morgan, Debra Myers, Susan Searcy, Glenda Seemiller, Janet Stipe, Joy Trude

Lean Advisors:

Dennis McInerney and Ray Seidelman

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RAC Project Metrics

Measure Description Goal Baseline

1. PreBill IHDM edits and Turn around time

a. Turn Around Time – Average days on *CCI & LCD/NCD on list. Time the edit made the edit list to the time the edit is billed.

*CCI: Correct Coding Initiative Edits & LCD/NCD: Local Coverage Determination/National Coverage Determinations

b. Accounts In. $ accounts/volume sent to work list

a. 25% reduction

b. 25% reduction

a. Dec ’08 – 11.97 days

b. Dec ’08 – 5.1 MM

2.Documentation Deficiency

Average unbillable discharged patient accounts due to:

• Post discharge coding query• Dictation deficiencies

a. 25% reduction

b. 25% reduction

a. ’08 2.5 MM

b. ’08 2.1 MM

3. Level of Care (LOC) Changes

• Number Level of Care changes from original determination

• 50% reduction • Dec ’08 - 523 changes

Five measures in place to help drive improvements and lasting process improvement outcomes

RAC Project Improvement Metrics as of Jan ‘10

1a. HIM Claim Denials: Average Days on List

Average 72% Improvement!

Pre-Bill IHDM Edits - Average Days on List

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Average Days on List 11.97 5.24 4.95 3.75 2.31 4.1 5.03 4.79 3.04 2.23 1.83 2.62 2.81 2.87 2.24 2.04

% Improvement 56 59 69 81 66 58 60 75 81 85 78 77 76 81 83

Feb '09 Mar '09 Apr '09May '09

Jun '09 Jul '09 Aug '09 Sep '09 Oct '09 Nov '09 Dec '09 Jan '10 Feb '10 Mar '10

Average Discharge $'s

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IMMC ILH % PNQ Change

ILH 365,263 425,215 492,102 250,445 404,847 420,036 298,473 273,537 298,637 365,263 323,785 286,123 395,005 413,818 580,584 672,597

IMMC 2,218,50 1,302,96 1,297,48 1,254,05 1,353,22 1,244,06 995,265 456,618 1,303,31 2,218,50 1,412,31 962,820 1,230,65 1,139,66 1,232,44 1,590,15

% PNQ Change 0 33 31 42 32 36 50 72 38 0 33 52 37 40 30 12

Baseline(Sep 09)

Jan '09 Feb '09 Mar '09 Apr '09 May '09 Jun '09 Jul '09 Aug '09 Sep '09 Oct '09 Nov '09 Dec '09 Jan '10 Feb '10 Mar '10

RAC Project Improvement Metrics as of January ‘102a. Discharged patient accounts not final billed due to Post

Discharge Physician Queries

Oct09 – Mar10 Positive Improvement from baseline

RAC Project Improvement Metrics as of March ‘10

3. Level of Care Changes (adjusted for those in error)

Reduction in total LOC changes this March and a low of 6% Error Rate

Level of Care Changes

145 130 173110 107 124 109 133 146 142 108

155 232242

228 235 205 235 233 175 193169

2218

26

17 24 16 13 166

2146

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300

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May '09 Jun '09 Jul '09 Aug '09 Sep '09 Oct '09 Nov '09 Dec '09 Jan '10 Feb '10 Mar '10

Month

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Incorrect Input Clarifications Post Discharge

19% 15% 16% 6% 7% 7%

Incorrect InputsError Rate (Per Admissions)

7% 9% 9% 8% 6%

RAC Implementation Plan 3 “Work Streams”Denial Process Design, Error Reduction, Risk Management

April July

“Design in” RAC record submittal, appeal, and CBO/HIM/CM processes.

Improve the accuracy and completeness of current and future medical records

• Design and prototype record submittal, appeal, and recoup

• Simulate and redesign Sub processes

• Simulate “stress test” various high risk scenarios throughout all processes

Identify and fix any RAC impactful errors in past medical records and minimize financial loss

• Institutionalize new processes, roles, and responsibilities

• Identify areas in medical record with potential risk for inaccuracy and completeness

Design New and Improve Existing

Process Simulations & Overpayment

Identification & Disclosure

Communicate, Institutionalize

• Identify areas in medical record potential for RAC

• overpayment

• Fix any past records• Identify overpayments & Decide on

Disclosure

Dec

• Prioritize process improvements, ideate solutions, test, and refine

AnticipatedRAC

SubmittalsBegin

1

2

3

• Hardwire improvements and maintain the gains

Denial ProcessDesign

MR ErrorReduction

RiskManagement

Sep Ongoing

Denial Process Design“Lean from the Start”

• Team created Value stream maps always with the question “is this step necessary” and using Takt Time as a benchmark?• Integrated HIM processes with CBO system, CareMedic for efficient work flow• Designed in signals/triggers for any “handoffs”, utilize CareMedic software for work flow• Currently, testing work flow of process for additional streamlining

IHS-DM AUTOMATED RECOVERY AUDIT CONTRACTOR (RAC) PROCESS

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RAC Action

Committee

CBO

CaseMgmnt

CarrierFI

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RAC Committee/Ops Group/

UM Committee

HIM

CMS

RAC

Hospital Depts

Patient

NO YES

YES

NO

NO

YES

NO

YES

NO

YES

NO

CareMedic

NO

RAC

Patient

AUTOMATED

CMSApproves

?

Review Daily CareMedic WorkList

AR Demand Letter

CarrierFI

MAC

Collect appropriate documents for Appeal

DOCUMENTATION

RAC

CarrierFI

MAC

Update Decision field in CareMedic

AR Appeal

CarrierFI

MAC

CMS

Medical Records Needed

?

CMS

Hospital Depts

Claim Determination . Send claim to Carrier /

FI/MAC

Automated Review

CMS

Charts, MR, UB

Within 15 days determine Root Cause and

Corrective Action and record on Template

AR Decision

Update CareMedic with Root Cause and Corrective

Action Template

AR Decision

ROOT CAUSE &

CORRECTIVE ACTION

Hospital Depts

CarrierFI

MAC

AppealRequest

?

Hospital Depts

Patient

Notify RAC Coord to Appeal or Not

AR Appeal

Issues Remittance Advice (RA)

Automated Review

CMS

Issues Demand LetterW $ and Appeal Rights

Automated Review

New Issue?

Hospital Depts

Begin Widespread review and update

Website

Automated ReviewSends New Issue

Review Request to CMS

Automated Review

Patient

RAC

Patient

RAC

HIM

Using CareMedic search and past records to Identify

any “Pattern /Criteria” for current patients admitted

Data Mining

Daily review in CareMedic possible delinquent

Request notifications

AR Request Mgmnt

RAC Action

Committee

Notify appropriate Dept and CC Exec Dir .

AR Request Mgmnt

Collect appropriate documents for Appeal

DOCUMENTATION

Escalation process

Update Dashboard with Root Cause & Corrective

Action Plan . Record response time

Dashboard Update

N432 posted on Remit

Automated Review

CaseMgmnt

Denial DashboardCase

Mgmnt

Need more information

?

RAC Action

Committee

CaseMgmnt

HIM

Applicable to Coding

Error?

CBO

CaseMgmnt

N432 posted on account “Adjustment based on

Recovery Audit”

Automated Review

RACCoordinator

HIM

RAC Action

Committee

RAC Committee/Ops Group/

UM Committee

CBOCBO

Assign and distribute Research Request in

Work Queue

AR Demand Letter

Present/Report to Exec Dir . New automated risk areas . Status of Root Cause and

Corrective Actions

Dashboard Update

Scan letter and attached to

corresponding accounts

AR Demand Letter

Send email ALERT to SELECT distribution on

Risk areas

Risk Alert

Make Copy of CD

DOCUMENTATION

RACCoordinator

RACCoordinator

CBO

HIM

Identify new posting and assign to appropriate

Work Queue

Dashboard Update

Present to committees status of appeals denied /justified by

Service area

Dashboard Update

PossibleDelinquent

Request?

Review CMS/HDI website for NEW risk areas

Auto/Complex Updates

Receive Demand Letter from Automated Review

AR Demand Letter

LegalLegal LegalLegal

YES REFER TO COMPLEX REVIEW

WPS

HDI website

------------------------------------------------------------------------

CareMedicDiscussion & Claim status

fieldsCareMedic

AUTOMATED

Are documents

In HPF?

YES

Deliver original documentation to RAC

Coordinator

DOCUMENTATION

CareMedic

NO

CareMedic CareMedicemail

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RISK ALERT

TEMPLATECareMedic

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HPF

CareMedicCareMedicMore

Information Request

Update Level of Appeal in CareMedic

AR Appeal

CareMedic CareMedic

YES CareMedic

Package and ship CD to HDI

AR APPEAL

CareMedic

Denial Dashboard

CareMedic

ROOT CAUSE &

CORRECTIVE ACTION

CareMedic

CareMedic

Email, Call, face-to-face retrieval of

documentation

AR APPEAL

Denial Dashboard

CMS

RAC

Patient

HIM

Hospital Depts

Legal

CBO

RAC Action

Committee

CaseMgmnt

RAC Committee/Ops Group/

UM Committee

CarrierFI

MAC

Deliver to HIM for HPF archiving

DOCUMENTATION

Scan originals and index into HPF

DOCUMENTATION

HPF

Assemble ALL scanned documentation (Cover letters, records, notes,

etc.)

DOCUMENTATION

HPF

Scan originals and index into HPF

DOCUMENTATION

HPF

Burn all files onto CD

DOCUMENTATION

Deliver CD to RAC Coord

DOCUMENTATION

Are ALL filesVisible

?YES

NO

HPF

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Receive CD documentation & send

receipt

AR APPEAL

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Receive delivery receipt and update time in

CareMedic

AR APPEAL

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Truck

LEGEND

Shapes

Paper

Flow

Computer Digital

Information

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LetterMail

Activity / Task / Step

# Outcome

AUTOMATED

#

Step

Database Information

Wait

Phone WalkActivity

TemplateStandard

Work

Outcome

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Flow

/

Material

FlowPrint

Fax

Task

System

Information

(

Queue/

Data

COMPLEX

Report /Dashboard

?Decision

CD Rom

Receive email and review current select patients

matching criteria

Risk Alert

?

email

RISK ALERT

TEMPLATE

emailEscalation Process

Review daily work queue forAR letters

AR Demand Letter

Backup CD on Network and File CD

AR APPEAL

Share Drive

Record Delivery date ,And

Attach files to accounts in Caremedic

AR APPEAL

CareMedic

DATAMINING/RISK ALERTS AND AUTOMATED NOTIFICATION DECIDE ON APPEAL AND COLLECT AND ASSEMBLE DOCUMENTATION DELIVER DOCUMENTATION AND ESCALATION PROCESS FOR DELINQUENT

Automated Denial (“N432” posted”)

Complex Denial (“Requires Medical Record Review”)

1

Working Shifts per Day 1 ShiftsHours per Shift 8 Hours

Break Time per Shift 30 MinutesLunch Time per Shift 45 Minutes

Planned Downtime per Shift 60 MinutesCustomer Demand per Day 8 Units

Available Time per Shift 480 MinutesNet Working Time per Shift 345 MinutesNet Working Time per Shift 20,700 SecondsNet Available Time per Day 20,700 Seconds

Takt Time = 2,760 Seconds per PieceTakt Time = 46.0 Minutes per Piece

Takt Time Calculator

46 mins / recordAssuming 20 day

Intervals

Error ReductionFacts about Current Medical Record

In general current medical record contains:

1. 184 + documents types in HPF

2. Anywhere from 50 pages to over 2,000 + pages

3. Anywhere from 4 to 50 people can provide “input” through the course of the medical record “assembly” process

Observation Inpatient

Note: No Care Cast info added

From the floor …

40% (73) Handwritten 25% (46) Keyboard 24% (44) “Drop down / Pick list” 11% (21) Automated

4. The original source of input for the 184 documents are:

YIKES, Where do we start?

2

Error Reduction“Top 10” Medical Documents based on Risk Priority*

• *Risk Priority score is a function of four criteria1. The average # fields in the document2. The originating input method (see table to right)3. Annual Average number of people who can potentially enter

information4. Information in documents used by RAC (L,M,H)

Based on the prioritized

documents, sub teams were formed to verify potential risk, provide root cause analysis if

needed, implement solutions, and

ultimately improve accuracy and completeness.

Please bring on the EMR…

1Automated

3“Pick List”

6Keyboard

9Handwritten

Error Opportunity

WeightInput Method

1Automated

3“Pick List”

6Keyboard

9Handwritten

Error Opportunity

WeightInput Method

2

0 2000 4000 6000 8000 10000 12000 14000 16000 18000

Nursing AssessmentNursing Documentation

ReassessmentsRelease of Information DDS

Shift Assessment Transfusion Record

Clinical PathwaysObstetric Records

Phy Ord Adm Card Post CathPhy Ord Glycemic MgtDischarge InstructionsTransfusion Reaction

Interdisciplinary AssessmentPhy Ord Adm ACS Chest Pain

Phy Ord Adm Hrt FailurePhy Ord Adm Pneumonia

Phy Ord Adm General AdultPhy Ord Adm Postop Colon

Phy Ord Isc Stroke Tia Adm MedEmergency Department Records

Emergency Department ReportChemical Dependency

Outpatient DocumentationSleep Questionnaire

Phy Ord Susp Stroke Tia EdBirth Worksheet

Discharge PlanningDeath Report

Amendment of PHI by PatientTransfer Record

Release of InformationSelf Assessment

Clinical AssessmentCode Resuscitation

Intraoperative RecordRestrict Disclosure of PHI

Risk ManagementDisclosure or Not?

• Using an external audit team to identify overpayments & decide to make Disclosures versus appealing before RAC audit

Reduce potential denial pipeline by self disclosing known, unrecoverable, overpayments

3

Are we Ready?

Questions?