The Changing
CMS Landscape
Managing Medicare and Other Payer Audits
Presenter: Carol Endahl Product Manager
HFMA ANI June, 2010
Medicare and Other Payer Audits
Objectives» Audit Landscape» Types of CMS Audits» Comparison RACs vs MICs» Medicaid Integrity Contractor (MIC) Process Overview» Audit Management Modules for Other Payer Audits» Consulting Services
Audit Landscape
The government continues to pass laws and implement policies to recoup past and prevent future improperly paid claims. » Health Care Reform passed in March paves the way for additional
CMS reviews designed to reduce fraud and abuse:
Expands RACs to Medicaid and Medicare Parts C (Medicare HMO, Medicare Advantage Plans) and D (Prescription Drug Program)
Repealed sec. 1874A(h) of the SSA which placed limitations on MAC prepayment medical reviews.
For Medicare and Medicaid, the HHS estimates improper payments for fiscal year 2008 to represent¹:» $10.4 billion in Medicare Fee-for-Service» $6.8 billion in Medicare Advantage» $18.6 billion for the Federal share of Medicaid expenditures » $14.1 billion for the State share of Medicaid expenditures
Audit Landscape
Multiple audit entities make a complex process even more complex» Providers can be audited by multiple entities simultaneously
Different programs (e.g., Medicaid versus Medicare)
Different audit issues (e.g., one-day stays versus post-mortem payments) or
Different audit periods
Other payers plan to institute similar reviews» National Health Care Anti-Fraud Association states that for every $2
invested in fighting fraud produces $17.3 in recoveries and court- ordered judgments, plus there are the claims that are not paid.
In today’s financial environment, government agencies want to stretch dollars and shore up program funding. What is better than recovering dollars that have already been spent?
Audit Landscape – RAC Update
As of June 3, 2010, over 351 new issues have been approved by CMS and posted to RAC web-sites» Most target DRG validation (complex - medical record requests)
CMS RAC 101 Calls (April-May)» Physician Audits – CMS project officer reports that physician
complex reviews have not started
Pending the establishment of medical record request (ADR) limits
» Medical Necessity Reviews – Providers might see medical necessity reviews “within the next month or so,” per Scott Wakefield of CMS. “We don’t have a specific timeframe for it but it will begin soon.”
Audit Landscape – Other Medicare
FI/MAC – Medicare Administrative ContractorsRAC/MAC duo creates “a bigger tool box for assuring correct Medicare claims payments”¹» 15 A/B MAC Jurisdictions (9 MACs implemented and processing
65% of national claims volume)» Perform probe reviews (often announced in newsletters),
targeted probes, ADR letters, prepayment reviews» Audit Process: Providers must respond to MRR within 30 days;
denial occurs day 45» Appeals Process: Same for all Medicare
Some of our Audit Management customers have seen an up- tick in the number of ADR requests from MAC/FIs
Audit Landscape – Other Medicare
CERT – Comprehensive Error Rate Testing contractor» Purpose: To improve the processing and medical decision
making involved with payment by intermediary» Audit Process: Providers receive medical record request letter
and up to 3 reminders (75 day deadline to respond)» Appeals Process: Same for all Medicare
ZPIC – Zone Program Integrity Contractor (formerly PSC)» Purpose: To look at billing trends and patterns and refer cases
to OIG» Aligned with MACs» Only Zones 4, 5, & 7 have been awarded contracts –
concentrated in Texas and Plains states, Southeast, Florida» Audit Process: Unknown» Appeals Process: Same for all Medicare
Audit Landscape – MICs
Medicaid Integrity Contractors (MICs)» MICs were created via the Deficit Reduction Act of 2005
GAO estimated that 2008 improper Medicaid payments to exceed $32.7 billion
• $18.6 billion in federal monies• $14.1 billion in state monies
» Program is managed by CMS but executed by the MICs» MICs are paid a fee for services rendered (not a contingency
fee)
Other Payer Audits - MICs
Provider Review MICs» Conduct claims data analysis of historical claims to identify
billing vulnerabilities & aberrant claims» Review MICs identify high risk areas and provide leads to Audit
MICs
Audit MICs» Conduct post-payment audits to identify overpayments
Field audits (medical records requested for on-site review)
Desk audits (medical records requested for off-site review)» Targets: Physicians, Home Health, SNF, Hospice, Hospital,
DME, Ambulance, Lab/X-Ray, Pharmacy, Renal Dialysis
Other Payer Audits - MICs
Audit MICs» Audit MICs are organized by Region
Regions I/II (New York, NJ, New England): IPRO
Regions III/IV (Mid-Atlantic/Southeast): Health Integrity
Regions V/VII (Midwest): Health Integrity
Regions VI/VIII (TX, Mountain States): HMS
Regions IX/X (West Coast, HI, AK): HMS» As of December 2009, audits were underway in 31 States;
Audits in remaining States were to begin no sooner than January 2010.
Exception: TN to begin June 2010
The majority of audits are hospitals
One-third of audits are long term care facilities
RACs MICsProvider outreach mandatory Provider outreach not mandatory
Formal process for establishing/ consolidating provider contacts
No formal process for establishing/ consolidating provider contacts
Look-back period set Look-back period varies by State
Time to produce medical records - set at 45 days (with possible extensions)
Time to produce medical records - generally shorter (with possible extensions) but based on State law
Limits established for the number of medical record requests
No limits established for medical record requests
Copy costs reimbursed No reimbursement for copy costsCannot audit the same claim under review by another entity
Can duplicate other claim audits
Discussion/Rebuttal Period (timelines defined)
Comment Period (timeline not defined)
Appeals process – 5 Levels of Appeal consistent across Medicare program
Appeals process – mirrors state Medicaid appeal process [varies]
Summary of RACs vs MICs
Audit ManagementOther Payer Audit ModuleConfiguring Master Files
Other Payer Audit Module
Master Files» Almost entirely configurable by the user» Intended to provide users with ability to add, edit and delete
various data elements that drive the audit process
Other Payer Audit Module
Master Files – Reason for Audit – Other Payer» This is entirely configurable by the user and should reflect the
primary reasons claims are being audited by the MICs or other payers.
Other Payer Audit Module
Master Files – Other Payer Maintenance » This is entirely configurable by the user. This tool is used to add,
edit, and delete Other Payer entities. It populates the “Audit Initiated By” menu on the Manage Audit Case Screen.
MIC Audit & Appeals Process Overview
SubmitMed Recs
FileExtension
Minimum of 15
days
IntakeQuestionnaire
How it Works: MIC Review Process
Demand letterFrom
Medicaid
SubmitMed Recs
FileExtension
Minimum of 15
days
Exit Conference
(Audit Findings)
Entrance C
onference
Draft Report Issued
Comments on
Report
2nd DraftReport Issued
State Reviews 2nd Draft
CMS Issues Final
State Notifies Provider
State Recoups
From ProviderState
Appeal Process
NotificationLetter Request for
Med Recs
Deadline varies by State
Deadline varies by State
No Limits
No Stated Timelines
Desk or
Field Audit
Other Payer Audits - MICs
Audit MIC – Audit Process Overview» Once identified by the Review MIC, the provider is referred to the
Audit MIC» Audit MIC sends the provider a Notification Letter identifying the
records being requested for audit
Provider must respond to requests within stated timeframes in the letter
Notification Letter also includes Intake Questionnaire.» Audit MIC sets up Entrance Conference with provider, usually by
telephone
Providers have 2 weeks prior to the start of an audit to prepare documents
Other Payer Audits - MICs
Audit MIC – Audit Process Overview» Intake Questionnaire
Provider must complete Questionnaire and return to the MIC Representative at the Entrance conference or by mail following the Entrance Conference
Questionnaire is lengthy and asks for details related to:• Provider’s legal name• Medicaid provider agreement – Where is it located?• Pharmacy and radiology services • Medicaid recipient volume, revenue & reimbursement, • Billing procedures, if ever audited or had to pay back an
overpayment
Other Payer Audits - MICs
Audit MIC – Audit Findings Process Overview» Audit occurs» Audit MIC shares initial draft report with State Medicaid for
review and comment» Audit MIC prepares draft audit report of findings and conclusions
and shares with provider for review and comment
Provider is given 30 days to comment and submit additional information
» CMS prepares second draft incorporating any changes resulting from comments
Draft report issued to State
Other Payer Audits - MICs
Audit MIC – Audit Findings Process Overview» State reviews revised draft report and makes additional
comments.» CMS issues final audit report (with overpayment specified) and
submits to the State» State notifies the provider of overpayments
Appeal period begins» Audit MICs do not recoup overpayments
Federal government collects its portion directly from State Medicaid
State Medicaid recoups its portion from the provider
Other Payer Audits - MICs
Audit MIC – Appeal Process Overview» Provider appeals of MIC audit determinations are handled based
on State law» Claims appeals processes differ from Medicare appeals process
Some are governed by State’s administrative procedures or other specific regulations
Some provide opportunity for a Fair Hearing before an ALJ
Some provide for review of written record
Some must be challenged in State court» Audit MICs support the State during the appeals process
Audit ManagementOther Payer Audit ModuleManaging an Audit Case
Other Payer Audit Module
Manage Audit Case» Selection of “Other Payer
Audits” will open the Search Selection screen
» The “Work Claims” option provides worklists based on the audit process and appeal steps.
Other Payer Audit Module
Manage Audit Case – Audit Case Screen
Complete the audit case to see how the Menus and Deadline Dates are populated with user- configured data elements
The Audit Initiated By menu provides the list of Other Payers set up from your Master File.
Other Payer Audit Module
Manage Audit Case – Audit Case Screen
Select the Audit Initiated Date and enter the date of the Notification Letter.
Enter the Letter Receipt Date so you can see how many days it takes for you to receive the Letter.
Deadline Dates are automatically populated based on Master File configuration
Other Payer Audit Module
Manage Audit Case – Appeal
Deadline days from the Payer Maintenan ce Tool drive the deadline date on the Appeal tab.
Audit Management - Summary
Helps you manage institutional audit cases and appeals initiated by the MICs, Other Medicaid, Medicare Advantage, Commercial plans
Audit & Appeals Management tools include:» Worklists» Audit Case Information and Tracking
Audit cases linked to claims & payments for net payment impact calculation:
• Manual or Automated backload of 837s/835s » Appeal Tracking & Information» Payment Information» Attachments
A Comprehensive Audit Solution
In addition to the Audit Management solution, Ingenix Consulting provides Audit Support Programs to save you valuable time and resources in the audit and appeal processes.
They include:» Audit Process Mapping and Gap Analysis helps ensure that
software and workflow are maximized» Risk Assessment of coding and compliance issues help you take
proactive steps to prevent losses» Other Audit Services
Defense Audit Reviews
Mock Audits, Shadow Audits
Appeals Support
Audit Management
Audit Management SolutionContact Information:
Carol EndahlProduct Manager, IngenixEmail: [email protected]: 571-521-7650
Audit Support ProgramsContact Information:
Don P. PerriniConsulting Sales, IngenixEmail: [email protected]: 770-642-0287
Visit http://www.caremedic.com/Events_List.aspx for a list of upcoming Audit Management Webinars