Posts Tagged: medical documentation

Denials for Lack of Physician Orders

Connolly Review Results Letters Arrive Soon After Records Submitted

Word to the wise: Make SURE you have a process in place to check ALL (Medicare, at least) claims that go out your door to be paid, to insure that a clearly worded, appropriate Physician Order exists in the medical record.

If you do NOT insure that the order exists, you are risking the entire reimbursement. And if CMS decides that a pattern of this type of error is in your facility or practice… you are risking FAR more than that reimbursement.

Before I get to the subject of the headline, let me review what else was going on, recently.

Seven New Issues Posted

Last week was a pretty quiet week, which almost no activity by any of the RACs, except for a few additions by Connolly and HDI, on Friday, September 17. Connolly added 20 new DRG Validations, listed in five of six new (yes, really NEW) issues.

1 Duplicate Claims – DMEPOS
2 MSDRG 056: Degenerative Nervous System Disorders with MCC
3 MSDRG 057: Degenerative Nervous System Disorders without MCC
4 MSDRG 249: Percutaneous Cardiovascular Procedure with Non Drug-Eluting Stent without MCC
5 MSDRG 368, 369, 370, 371, 373, 377, 378, 379, 380, 381, 382, 383, 384, 385, 387, 388, 389, 390, 391, 392, 393, 395: Gastrointestinal Disorders
6 MSDRG 820: Lymphoma and Leukemia with Major O.R. Procedure with MCC

HDI added Part A Services delivered during a Hospice period.

1 Hospice Related Services – A

But these “new” issues are not all that happened…

Many Edits Made

Over the past couple of weeks, there have been many edits made to existing posts on all four of the RAC sites.

For example, many posted issues for Region A, DCS, actually removed some states from some of their approved issues. You might want to check the list, especially if you are in Vermont, New Hampshire or Maine. (Vermont was dropped from 14 issues, New Hampshire from 12, and Maine from less than that.)

Acute readmissions have been a recognized target for RACs for some time. There was an interesting edit made to the issue as posted on Region D, HDI’s site. Previously, the issue would deny for same day acute re-admissions for the same DRG with no B4 codes on the second claim. Now, it denies for no B4 or 42 Condition Codes on the second claim.

Another edit made in Region D: under the DRG Validation issue for Nervous System Disorders, MSDRGs 075 and 076 were specifically removed from the approved DRG list. Now, I caution everyone, be careful to not transpose those numbers – in the same issue are the approvals for Medical Necessity and DRG Validation for MSDRGs 057 and 056. I warn you because I myself have more than once looked at the list and been puzzled by it, when I kept thinking that the wrong ones were removed.

Denials for Lack of Physician Order

Despite the lack of activity on the lists themselves, the RACs have been very busy, sending out review results letters and denials. We have seen in Region C the first denials to come thru for a lack of or improper physician orders in a medical record. The types of claims being denied are both inpatient and outpatient. I can give you two examples that happen to be short stays.

An outpatient claim, where the patient wound up staying for 3 days. At some point, the patient’s status was changed to inpatient, which would have been appropriate (I’m told by the provider), except for one thing: in the documentation, there is a Nurse’s note, changing the patient status to inpatient, but there is nothing at all in the record that indicates that a physician ever approved or ordered this change. The claim was therefore denied, and the provider has no chance on appeal, because the physician’s order simply does not exist.

An inpatient claim, a 1-day stay: the patient was admitted to inpatient, even with just an 8-hour stay. I was told that the services were, in fact, inpatient services, and could have survived audit for inpatient status. Well, it could have survived, except for one thing: no physician order appears in the record to admit to patient to anything. Once again, the claim was denied; and again, there is no chance to appeal, since the order simply does not exist in the record.

Want to know the scary thing? Those claims were very easy to deny, they are not “worthy” of appeal, and the provider told me that the number of records requested was very few, compared to the limits that the RAC could ask for. In other words, the RAC knew exactly which records to ask for, and they were right on the money.  It seems like this is the proverbial “Easy Money” for the RAC.

Like I said, “Word…”

Why Did They Wait?

But if this is so easy, then why wasn’t the RAC doing this more, before now? My opinion is that the RACs have been waiting for at least some of the Medical Necessity issues to be released, so that they don’t have to ask for the records again, or so that they can have all their weapons loaded before they begin the battle in earnest. I think it is because the RACs are private companies, who actually care about efficiency. In the private sector, efficiency means more profits, and this makes private sector companies much better at this kind of work than many government agencies, who don’t have to worry about such “bourgeois” concerns as “profits.”

So What’s the “Word”?

Providers need to insure they have a reliable process in place to check documentation for physician orders before any claim is filed.

Which ones should they check? Only the ones they intend to send out the door. The RACs are willing to do this job for just nine percent of the claim (in Connolly’s case, anyway).

A provider, then, should be willing to do this for slightly more than that… say, 100 percent of the claim.

So I guess I’ll say that’s the “Word”: 100%.

That’s what is at stake, and that’s what providers should check.

How an MCC Became a CC

DCBAWhy AKI was demoted to CC status by CMS

By Robert S. Gold, MD, CEO, DCBA, Inc.

PDF download of this article HERE.

In March 2008, the National Kidney Foundation sent a letter to the National Centers for Health Statistics and asked that the term “acute kidney injury” (AKI) be an optional phrase for assigning ICD-9-CM code 584.9 (i.e., that it was the current terminology for what used to be called “acute renal failure.”) The request was granted.

CDI specialists and coders looked at the definitions published through the Acute Kidney Injury Network and noted the criteria of stages 1, 2 and 3 of AKI. They began to ask physicians to document AKI whenever a patient’s labs or urine output met those criteria. But in so doing we hurt ourselves-and we hurt “acute renal failure.” And it’s a shame. Now, with CMS’ resulting reduction of acute renal failure to CC, it now has no more severity attached to it than a simple urinary tract infection.

Let’s see where we went wrong and where we have to go to get it right.

WHAT AKI WAS

Long ago, in a galaxy far, far away, we had the terms “acute renal insufficiency” and “acute renal failure,” and we had advice as to when each was appropriate terminology to use in order to assign the codes that were designed for those conditions. These codes included 593.9 for renal insufficiency and 584.9 for acute renal failure (notice I didn’t use the term “acute” in the description of 593.9-it was a nonessential modifier then).

In the medical textbooks and within the medical community there was confusion in the terminology. For example, one medical textbook called the disease “renal insufficiency” and talked about “progressive renal failure,” and another textbook had a chapter entitled “renal failure” and spoke of “anemia of renal insufficiency.”

AHA’s Coding Clinic for ICD-9-CM, First Quarter 1993, p. 17, gave us the following definitions as guidance:

Renal insufficiency
It is generally accepted that renal insufficiency (code 593.9, Unspecified disorder of the kidney and ureter) refers to the early stages of renal impairment, determined by mildly abnormal elevated values of serum creatinine or BUN or diminished creatinine clearance. Clinical symptoms or other abnormal laboratory parameters may or may not be present but are usually minimal.
The treatment of renal insufficiency depends to a very large extent on the underlying cause, with much attention given to the possibility of preventing progression to renal failure.

And on p. 18, Coding Clinic states:

Renal failure
Renal failure (code 584, Acute renal failure, code 585, Chronic renal failure, code 586, Renal failure, unspecified) is a progression of renal insufficiency where renal function is further impaired and overt clinical consequences, such as anemia, have developed. In essence, renal insufficiency is more of an abnormal laboratory assessment, while renal failure incorporates both abnormal laboratory and clinical findings.

Back then, we looked for more than dehydration. We looked at more than a minor bump in creatinine. We looked for a sick patient. Sure, there may have been obstruction due to prostate cancer associated with a high creatinine level which returned to normal soon after suprapubic tube insertion.

Yes, there may have been a patient found down for three days at home who came in with depressed mental status and rhabdomyolysis and responded to a couple of liters of IV fluids in a couple of days. And these patients came back, at least measurably, to normal. But they were sick and they had acute renal failure. And if a patient had two days of diarrhea “altered mental status” and responded to a glass of water to return the creatinine level to normal, we were happy with dehydration or prerenal azotemia or acute renal insufficiency-because that’s what is was.

During this time, the renal world recognized the problems with lack of consistency and did some studies of acute decrease in renal function. It came up with mortality rates, rates of need for Renal Replacement Therapy (RRT – or dialysis) and identified three pretty distinct levels of change in creatinine, change in Glomerular Filtration Rate (GFR) and change in urine production. It also identified two levels of long-term outcome: Return of measurable function, or no return of measurable function. They published their results and findings and called the system RIFLE. And all rejoiced.

But there were two issues of massive importance that somehow didn’t get into the subsequent evolution of acute damage to the kidneys. First, all of the studies were done in critical care units on critically ill patients. Certainly there was mortality-but it was not clear whether the mortality came either from the renal damage or from the other conditions that the patients had at the time of death.

It was merely an observation of mortality, regardless of the cause, in patients with measurable changes in renal function. Secondly, and they were very specific about this-RIFLE only applied to intrarenal damage and did NOT apply to prerenal causes or postrenal causes. Basically, they said that the patients who actually had what they believed was acute tubular necrosis or hemorrhage of the kidney or infectious or immune destruction of renal parenchyma counted, and that the patients with elevations of creatinine due to dehydration without ATN or elevations of creatinine due to obstructing bladder cancer did not count.

Several iterations of acute kidney injury studies followed to validate the results and recommendations above and the Acute Kidney Injury Network was formed. Again, all of the studies were done on critically ill patients on critical care units. But this group changed some of the rules. They eliminated GFR change as a valid measure and that was reasonable, especially if one didn’t know what the patient’s creatinine was before the insult and didn’t know if the end result was a decrease in function or not. And other less important issues could impact GFR than the renal destructive condition.

And then they said that their new staging of “AKI” was applicable to prerenal and postrenal causes because, in critically ill patient in critical care units, many had intrarenal damage because of prerenal and postrenal causes. The problem is that all of their patients again were critically ill and on critical care units. They did not look at creatinine change or urine output change in patients who didn’t make it to the ICU.

I think that this overlooked the 80+% of patients who have changes in creatinine or urine output that falls within their established criteria-particularly of Stage 1.

As an aside, let’s take a quick look at the term “injury” as it has pertained to other organs. There was a time that the pulmonology groups spoke of “acute lung injury” and there were a ton of publications talking about “acute lung injury.” What these investigators recognized is that the myriad of diseases that fall into the category of “acute lung injury” included the range of the most mild to the most severe and that the identification of the particular disease was more important than the vague term of “injury.” Thank goodness for that.

Acute lung injury due to viral pneumonia is a totally different animal than acute lung injury from ARDS due to amniotic fluid embolism. And they now continue to clarify “acute respiratory failure” and distinguish it by pathologic change rather than dwelling on a new term that has no specificity for risk. Should the renal world follow this lead? It’s not for me to say.

WHAT AKI IS

So we are left with a term, “acute kidney injury,” that has a myriad of levels of severity, and entering a reimbursement world where classification of failure of an organ-the kidney – is not an MCC at all. It’s the only failure of an organ that is not a major condition. Why? I believe it’s because the proper homework wasn’t done.

Because of the approved definition of 584.9 to include AKI, all levels of AKI were included in the statistics generated through coding and CDI initiatives. And patients with a creatinine bump of 0.3 mg% due to dehydration who were treated with a glass of water were reported with 584.9-and they went home in six hours when they cleared up mentally.

We have met the enemy and they is us (with fond memories to the critters of the Okeefenokee swamp).

Certainly, patients with stages 2 and 3 AKI are pretty darned sick-and I would guess that a significant portion of patients with stage 1 are sick, as well. But it may not be from the renal disease specifically. They do have other organs!

WHAT AKI SHOULD BE

I see a couple of options to fix the problem and I’ve worked with some of the authorities in renal disease medicine on this. The first is to create individual codes for the three stages of AKI (if we’re going to stay with AKI). And with these levels, we could perform some analysis on all patients with the identified stages, not only on patients on ICUs. We could run statistics from ICU patients only, non-ICU patients only, and all patients, just to see if there is an identifiable difference in mortality or in long term damage of renal function between the groups. By examining mortality, the rate of RRT, and cost, we would have a viable way to identify which patients are sick-who has a major disease-and who isn’t.

The second option is to follow the lead of the pulmonologists and dump AKI. From a coding, resource utilization, and CMS perspective, that’s a great option. From the perspective of statistical analysis of risk of mortality, we need the breakdown of “acute renal failure” or “acute kidney injury” to be studied, analyzed, and classified appropriately. This cannot be accomplished by repeating the flawed studies of the past. Let’s open it up to all comers. If the definition of the disease applies to all comers, the studies have to be done on all comers.

In the meantime, CDI specialists and coders who are dealing with the rules as they exist must look at how sick the patient was and how the patient was treated. If the cause of a bump in creatinine is dehydration and the patient’s treatment consists of a bolus of 500 cc of crystalloid in the ED and then regular diet, or consists of IV fluids at a normal rate of 75 – 100 cc/hour with no efforts at real resuscitation of vital signs and perfusion, and if the patient responds rapidly to these treatments, the patient should be considered to have the old acute renal insufficiency and not coded to 584.9 because it was not failure and it did not entail “kidney injury.” If we’re going to use “AKI,” we have to be able to validate injury, reversible or not. There has to be some consequence.

In fact, Mehta and his group of international nephrologists unanimously agreed that the “that application of the diagnostic criteria would be used only after an optimal state of hydration had been achieved.” (Acute Kidney Injury Network: report of an initiative to improve outcomes in acute kidney injury, Critical Care, volume 11, issue 2) [Ed. -- or get the full text PDF here.]

Some consultants are now advising their clients to tell the docs to document “acute tubular necrosis” rather than AKI across the board. That’s a very questionable practice and can do nothing but get you into trouble. If the case is one in which the patient probably has measurable injury of the kidneys, after fluid resuscitation, with acute tubular necrosis due to salicylate poisoning or sepsis or shock, sure-call it acute tubular necrosis, because that’s what it likely is. Even severe dehydration with significant hypovolemia can cause ATN-but it should be significant.

Got it?

About the author:

ROBERT S. GOLD, MD, CEO

Dr. Robert S. Gold is co-founder of DCBA, Inc., and has more than 44 years of experience as a physician, medical director and consultant. A graduate of Hahnemann Medical College in Philadelphia, he trained in General Surgery in the U.S. Navy where he spent his professional career as a practicing surgeon. Since leaving the service, he has worked as a consultant in the fields of Managed Care Medicine, Locum Tenens, Home Health, Hospital accreditation and licensure and, most notably over the past ten years, in audit and education regarding documentation, coding and billing accuracy (DCBA) for healthcare services.

Nationally known for his education regarding the clinical orientation of coding in AHIMA teleconferences and at the National Conference for the Society for Clinical Coding, Dr. Gold is a frequent speaker at industry conferences and is widely published.

Region B RAC Adds Review of Inpatient Admit Orders, 95 DRG Validations

RAC-LOGO-CGIIn the continuing posting of issues, the RAC contracted for the upper midwestern states, CGI Federal, has now joined Connolly Healthcare in its posting of an issue that can possibly recoup all Medicare Part A charges for an inpatient claim, and still not even touch the dreaded issue of Medical Necessity.

The List

Below are the 15 new issues, posted last week. Follow the links to each one, in the eduTrax RAC New Issue Database®, which can be seen with simple free registration at myedutrax.com.

1 Date of Death-DME
2 Inpatient Admissions without a Physician’s Inpatient Admit Order
3 MSDRG 052, 053, 054, 055, 056, 057, 058, 059, 060, 061, 062, 063, 067, 068, 069, 070, 071, 072, 073, 074, 077, 078, 079, 080, 081, 082, 083, 084, 085, 086, 088, 089, 090, 091, 092, 093, 097, 098, 099, 101, 102: DRG Validation for Nervous System Disorders
4 MSDRG 165: DRG Validation for Major Chest Procedures
5 MSDRG 168: DRG Validation for Other Respiratory System O.R. Procedures
6 MSDRG 175, 176, 180, 181, 182, 183, 184, 185, 186, 187, 188, 192, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206: DRG Validation for Respiratory
7 MSDRG 242, 243, 244: DRG Validation for Permanent Cardiac Pacemaker Implant
8 MSDRG 247, 249, 251: DRG Validation for Percutaneous Cardiovascular Procedures
9 MSDRG 326, 327, 328: DRG Validation for Stomach, Esophageal and Duodenal Procedures
10 MSDRG 371, 372, 373: DRG Validation for Major Gastrointestinal Disorders and Peritoneal Infections
11 MSDRG 405, 406, 407: DRG Validation for Pancreas, Liver and Shunt Procedures
12 MSDRG 474, 475, 476: DRG Validation for Amputation for Musculoskeletal System and Connective Tissue Disorders
13 MSDRG 490, 491: DRG Validation for Spinal Fusion
14 MSDRG 533, 534, 537, 538, 562, 563: DRG Validation for Musculoskeletal Fractures
15 Prosthetic Additions When Billed With Initial Or Preparatory Knee Prosthesis

More to Come

We’ll have more to say about the review of Physician orders, soon…

RAC Reviews for Multiple Issues

Can a RAC review a claim for multiple issues at the same time?

We’ve seen this question from several providers, recently. The short answer is “Yes,” but under certain circumstances, it’s “No”; and so maybe the answer should be “Maybe”?

Timing is everything, in…

Timing, Timing, Timing

In the retail industry (and others), the three most important factors are said to be, “Location, Location, Location.” If that’s true for those industries, then perhaps something similar can be said for our industry, under the new healthcare reform environment.

I submit that at least in dealing with the RACs, the factors might be, “Timing, Timing, Timing.”

Timing is everything, in many things, don’t you agree?

So let me explain what I mean…

How RACs Perform Reviews

RACs have to get issues they want to review approved by CMS before they can do “widespread review” — the term “widespread” evidently refers to multiple records, multiple providers, and/or multiple states. (They can review ANY record on a very limited basis while assembling evidence needed to garner CMS approval for any issue, but that’s another subject…)

Approved Issues Lists

The RACs also have to post a list of approved issues on a public web page, before they can begin conducting records requests, conduct reviews and publish their results — most often in the form of Demand Letters, recouping the payments from the providers.

Once an issue is approved by CMS and posted on the RAC’s website, the RAC uses proprietary software and their own experience to do data mining and analysis of Medicare Part A and Part B claims, which CMS makes available to them. When the RAC identifies claims that they believe show a potential for an improper payment, they can perform one of two types of review: an Automated review, where an error is a certainty just from data analysis; or a Complex review, where an error is considered likely, but cannot be determined without a human review of the medical record for the claim in question.

For an Automated review, the error is certain, by definition, so a Demand Letter is produced and sent to the provider. For a Complex review, an Additional Documentation Request letter (ADR) is send to the provider, and requires the provider to send specific claims records to the RAC for review. The ADR must name the issue being reviewed by the RAC. It must list one issue, and this issue must already be approved by CMS and posted on that RAC’s approved issues web page.

Now, back to the question at hand:  once a RAC recieves a record in house, can they review it for other approved issues at the same time?

The CMS Answer

Here’s how the CMS RAC FAQs answer that exact question: READ CAREFULLY…

Question: Can the Recovery Audit Contractor (RAC ) do a medical necessity review on a claim that they originally reviewed for DRG validation?

Answer: At this time, if the RAC has already requested documentation and issued a review results letter to the provider for a DRG Validation, the RAC will not be allowed to re-review the claim again for medical necessity. However, if both issues are approved (DRG Validation and medical necessity) prior to the request of the additional documentation, the RAC may conduct both reviews simultaneously.

(see Answer ID 10007, posted 4/23/2010)

Let’s analyze this a bit…

So that’s…At Least Two Answers?

First, notice the phrase, “At this time,…” So, CMS might change their policy at a later date. Form your own opinion about the likelihood of that.

Second, while the first sentence mentions the review results letter, which appears to place a stop on multiple issue reviews on a claim (that was the NO answer), the second sentence allows multiple issue reviews on the same claim, as long as both issues were approved for review before the ADR was sent out for that claim (that’s the YES answer).

So, as long as both issues were approved for review before an ADR was sent out, it appears that a single claim can be reviewed for multiple approved issues.

However, if a new issue is approved after a Review Results letter was sent out for a previously approved issue, the RAC is not allowed to re-review that same record for the new issue.

And Maybe a Third Answer?

What the statement does NOT address is this: can the RAC send out a new ADR for the same claims, under the newly approved issue? (That’s what I call the MAYBE answer.)

Well, we would expect that the RAC could submit an ADR for any approved issue, even if the record has already been reviewed for something else… but we’re going to send this question in to CMS and see what their answer is, which we will then post here…

So, stay tuned.

RACs Post New Issues in June

Three of the four RACs posted new issues recently. The Region A RAC, DCS, posted 39 new DRG Validations issues, plus an approved issue to review Evaluation & Management (E&M) codes for New Patient visits, mirroring the same issues already approved for other RACs.
Despite recent reports that issues including review of Medical Necessity have already been approved by CMS in at least one region, none of the RACs have yet to post any such approved issues.
The new issues are listed below, including links to their descriptions on eduTrax®. To see those pages, you will need to login to the eduTrax main site. Registration on the site is still free.

Region A

The RAC for Region A (DCS) posted several new issues, mostly for Automated Review:

1 Blood Transfusions
2 Bronchoscopy Services
3 Duplicate Claims – Part B
4 Global Billing of Radiology or Diagnostic Tests in the Facility Setting
5 Global Surgery – Pre and Post-Operative Visits
6 Global vs. TC/PC Split Reimbursements
7 IV Hydration
8 MSDRGs 177, 189, 193, 291, 438, 441, 444, 592, 602, 682, 689, 691, 693: MS-DRG Validation for Severe Sepsis
9 MSDRGs 216, 217, 218, 219, 220, 221: MS-DRG Validation for Cardiac Valve Procedures
10 MSDRGs 234, 236: MS-DRG Validation for Coronary Bypass
11 MSDRGs 335, 336, 337, 350, 351, 352, 353, 354, 355: MS-DRG Validation for Lysis of Adhesions
12 MSDRGs 463, 464, 465, 573, 574, 575, 901, 902, 903: MS-DRG Validation for Excisional Debridement
13 National Correct Coding Initiative – Part B
14 Neulasta
15 New Patient Visits
16 Newborn/Pediatric Codes
17 Once In A Lifetime
18 Parenteral Nutrition Additives with Premix Solutions
19 Technical Component of Radiology
20 Untimed Codes
21 Initial/Preparatory Knee Disarticulation Prosthesis
22 Manual Wheelchair Accessories Billed With Power Wheelchair Bases

Region C

Connolly added two DRG Validations and one issue for Automated review:

1 Lymphoma and Nonacute Leukemia with MCC: MS-DRG 840
2 Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without MCC: MS-DRG 247
3 Zoledronic acid, (Zometa) – Dose vs. Units Billed

Region D

HDI added a single issue for Automated review, concerning Discharge Status:

1 Incorrect Patient Status – Acute

Every wonder about what difference a Discharge Status code makes for your reimbursement? Take a look at the Transfer DRG Assistant® at the eduTrax site. The complete tool includes all DRGs, all the Discharge Codes with explanations, and can show you an estimated difference in reimbursement based upon length of stay, the DRG assigned, and the appropriate status code, which is determined by where a patient may (or may not) wind up going after discharge from your facility.

Making Your Own RAC Issues Lists?

Good luck, we know how hard it is to do. To find a complete, sortable listing of all the RACs’ posted issues, visit this page on eduTrax. (Registration required.)

We recommend viewing the list, sorted by Approved Date.

To see the complete original listings (on the RAC websites), visit this page.

When Will Medical Necessity Reviews Begin?

No one knows but the RACs, and so far, they ain’t sayin’.

BUT — If you would like to be notified immediately whenever they do get posted, simply to the click here to subscribe for free to the eduTrax RAC New Issues Alert Service®.

We post new issues, as in this article, and will send out an email notice immediately when medical necessity issues begin posting on the RAC websites.

RAC 101 – The Movie

New Video Posted by CMS

CMS posted a recording of a RAC 101 seminar conducted by Connie Leonard and Commander Marie Casey, earlier in April. If you missed the RAC 101 conference call on April 28, this is probably the same script.

The video includes a short Q&A period, with what we would characterize as typical FAQs.

However, there were two questions asked during this video that produced two previously unheard answers:

  • While RACs can use extrapolation, there are currently no issues approved that can use extrapolation; and
  • When one RAC is approved for a new issue, the other three RACs do not automatically receive approval for that same issue — the other RACs must submit their own case to be approved for their region.

Find the video HERE.

Part A Denial is NOT Automatic Denial for Part B Services, Says Medicare Appeals Council

The Centers for Medicare and Medicaid Services (CMS) recently asked the Medicare Appeals Council (Council) to review and overturn an Administrative Law Judge (ALJ) “partly favorable” decision for O’Connor Hospital, of San Jose, California. The case originated in 2007 during the Recovery Audit Contractor (RAC) Demonstration Project. In its request to have Council review the appeal, CMS attempted to argue that the Part B services were not separately billable under Part A, and therefore the ALJ had erred as a matter of law when it ordered CMS to pay the provider the difference between the covered and non-covered services.

On February 1, 2010, the Council posted their decision: they did not agree and stated that the position of CMS was essentially inconsistent with policies found in its own manuals.

On December 7, 2007, the RAC charged with auditing California providers denied Medicare coverage for a claim of inpatient hospitalization services, as furnished to a beneficiary on November 1, and 2, 2004, at O’Connor Hospital. The RAC found the services provided were not “reasonable and necessary” per the Social Security Act, and therefore the hospital had received an overpayment. Like virtually every other claim filed by a RAC during the demonstration, said overpayment finding was upheld at both of the first two levels of the appeals process.

The first level of appeal in the RAC program, when requested by the provider, is a Redetermination. This is an additional examination of the claim by the RAC, supposedly by personnel who are different from the personnel who made the initial determination. One might consider this as simply a chance to ask the RAC to be sure to check their paperwork. We are not aware of any denials being overturned at this level of appeal during the Demonstration project.

The second level of appeal, again when requested, is a Reconsideration. These are always conducted by a Qualified Independent Contractor (QIC), thereby allowing an independent review of medical necessity issues by a panel of physicians or other health care professionals. (This is a change from previous programs, but did not originate with the RAC. These reviews were instituted in Section 521 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), and replaced the Hearing Officer Hearing process for Medicare Part B claims, while creating a “new” second level of appeal for Medicare Part A claims.)

The provider took the claims to the next level of appeal, the Administrative Law Judge, or ALJ. There were four claims in question for four different beneficiaries at O’Connor. On September 16, 2009, the ALJ overturned the RAC denial for three of the four claims, thereby reversing the denial and granting Medicare coverage for the inpatient services, as filed. The fourth claim, however, was a more sticky situation.

While the ALJ agreed with the RAC and denied the coverage for the inpatient services provided as billed on the fourth claim, the ALJ nevertheless found that “the observation and underlying care are warranted.” In other words, yes, the inpatient admission was not warranted, but the observation and other outpatient services were warranted and should therefore be paid by CMS, even though the services were never billed as such. Or, put another way: “down-code” the claim to Part B services and pay those.

The net effect was to reduce the recoupment to simply the difference between the Part A and Part B services provided for the fourth claim only, compared to complete recoupment of all four inpatient claims, as the RAC originally decided.

Even without knowing the exact figures involved, this all suggests that CMS may have lost money on the entire process — they had to return all monies recouped, less the difference noted, but the RAC got to keep their entire commission/fee/bounty, per their contract with CMS.

Of course, while the provider got back almost all their reimbursements for the four claims, they still had to pay legal fees out of their own pocket. Considering the time involved, these were likely not insignificant.

Without reviewing all the documents here, we do wish to note a few things we think providers should consider about these decisions, regarding potential strategies for RAC appeals:

First: Bring these decisions to the attention of your legal counsel. Providers should bring both these  decisions to the attention of their legal counsel, and their RAC Team.

Second:  In Part A Medical Necessity Denials, fight for reimbursements for Part B services, if provided. Medical necessity reviews have not yet been approved for RACs, but they are likely to begin at any time. Although the O’Connor case was a result of a RAC Demonstration project denial, the Medicare Appeals Council decision is at least the second time that the Council has reminded CMS that they in fact have current policies in place that not only say that such claims should be paid as described in these cases (unbilled Part B services are sometimes payable when Part A is denied), but that CMS even instructs contractors to do exactly that. These cases offer good reason to believe the Council will render decisions in the future that are consistent with these two.

Third: In such cases, refile for Part B services as provided. The date for “refiling” a claim under such circumstances could be difficult to determine, but may depend upon what the Medicare Appeals Council considers as “new evidence” — which, at least in the case of the UMDNJ appeal, could be inferred from the fact that the contractor reached a denial decision and informed the provider of same, thereby supplying the provider with “new evidence.” Even without such a date for “reopening” the file, in the case of the O’Connor appeal, the Council found that the time limit is simply the end of the entire process, its “finality.”

Fourth: Familiarize yourself with these decisions. The Council cites several documents that are important to the decisions.

The documents cited can all be found HERE on www.myedutrax.com in our Documents Section.

CMS Expands RAC Records Requests Limits

Limits Now Apply to All Institutional Claim Types, Not Just DRG Validations

The Centers for Medicare & Medicaid Services (CMS) modified its FY2010 Additional Documentation Request (ADR) Limits, expanding the scope of the rule to include all institutional providers, on January 28, 2010. Previously, the rule applied to ADRs for DRG Validation issues only, as posted by CMS on December 1, 2009, and would have only applied to Medicare Part A providers. CMS also indicated that more changes are yet to come, with rules applying to physicians and other types of providers, including DME suppliers.

The December posting indicated that there would be two “caps” made on RAC ADRs, during FY2010. Through March 2010, the cap would remain at 200 ADRs per 45 days for all providers/suppliers. However, from April through September 2010, providers/suppliers who bill in excess of 100,000 claims to Medicare, across all claims processing contractors, would have a cap of 300 ADRs per per 45 days.

These limits would apply per “campus” instead of per NPI (National Provider Identifier). The definition of a campus is CMS’s new method of calculating limits, and is based on providers’ Tax ID Numbers plus the first three numbers of the ZIP code where those provider entities are physically located.

This most recent posting does not change any of the previous limits or definitions, but does expand the rule to apply to all claim types, not just DRG Validations.

Read the new document  HERE , along with a copy of the text from the December document.

Connolly Posts Over 40 New Issues

Connolly Healthcare, Region C RAC, posted over 40 new issues, all for Complex Reviews, most for Inpatient Hospitals, during the final week of December, 2009. Happy New Year! The total number of issues now approved for Connolly’s review is over 75. Most of those issues will review MS-DRG coding and DRG Validation, but those all include the following phrase in their title:

At this time, Medical Necessity excluded from review.

Of course, this could change at any time now, since CMS plans to allow Medical Necessity to be reviewed, beginning in calendar 2010. (See CMS RAC Review Phase-in Strategy)

Non-User Friendly Lists

However, as we discovered in this past quarter, since the RACs began posting new issues, as they are required to do by CMS, we noticed that the WAY in which they post the new issues is not consistent, from RAC to RAC. What’s worse, there seems to be no effort on the part of the RAC to make that information easy to sort, copy, or deal with in any useful form. That is, you can’t sort the list, you can’t make a decent copy of it, you can’t even see all the data you might like to know on each issue.

Changes Made Without Notice

The worst part, however, is the way that the RACs do their postings: willy-nilly. In other words, they just throw the posts up there. There is no notice sent or made about a new post being added and/or changed. When new issues are added, there is also no effort made to group similar issues together. For example, on the Connolly list, some of the DRG Validation issues involve all three of an MS-DRG triplet (a triplet is an MS-DRG “group,” if you will, a set of three MS-DRGs that represent all three severity levels assigned by CMS to that diagnosis — e.g., Pneumonia is assigned a triplet, 193/194/195, representing Pnuemonia with an MCC, with just a CC, or without MCC or CC). This is not huge, but it certainly makes it difficult to work with the list.

Needless Complexity

For example, we know of one hospital in Region C that received a single letter requesting 24 medical records, one for each of 24 different MS-DRGs. The MS-DRGs were simply listed by number, with no descriptions. For a coding department, this is not a huge problem. However, for a RAC Team, it is an issue. Why? Because the letter probably has to travel thru several hands to get to the Coding department, who then have to look up the codes, add the descriptions, and then send the letter back up the path to all concerned parties, so that they know what they’re doing.

How much time did that just add to the time it takes to identify, find, copy and send off those records to the RAC? Providers are already under the gun to get the records back to the RAC, and this makes the process all that much more difficult. And needlessly!

A New Way to See the New Issues

For our own internal use, eduTrax developed it’s own database of the new issues, and we are pleased to now make that database available to providers, for their use.

The RAC News Issues Page provides direct links to the four RAC websites. You need not register or login to see these links. Simply go HERE, and choose one of the RAC links.

The RAC New Issues Menu requires you to register, which is free and takes only a minute to do. (You will have to confirm your email address, as a security measure.) Once you login to the site, select the RAC New Issues Page, and a new menu will appear on your left. (preview here)

eduTrax® RAC New Issues Alert Services

This new service now gives you the following choices:

  • See New Issues by each RAC — but in a list that is sortable and searchable,
  • See New Issues by State — click your state, get a list of the issues approved for that state.

We keep the database updated daily. Currently, we are changing the Issue Title, in our database, so that it is more friendly. For example, we put the MS-DRG number at the front of the title. This makes it easier to search and sort.

To search for an MS-DRG, simply enter the number alone in the Title Search field, then hit Go.

To sort any list by title, simply click on “Issue Title” at the top of the list.

Go HERE to see some instructions on using the sort and search filters.

Soon, we will announce an eMail Alert Service — you get an email from us whenever a RAC posts or changes an issue, and the email will include what got added and/or changed. That way, you stay alerted, and you don’t have to figure out what changed — we do it for you!

More Coming Soon…

So, we recommend you go look at the lists yourself. And watch for the announcement about our new Alerts services.

Also, our next post will include some analysis of the new issues, and what you need to be looking for.

CMS Modifies The FFS Medical Review Process for FY2010

The vast majority of Medicaid errors are due to inadequate documentation…” – CMS

The above statement comes directly from a Fact Sheet just posted on the CMS website. (Find the sheet here.) Candidly, we know this is not really NEW. It is a rather aged refrain. Nevertheless, we think it stands reporting/repeating, because it does seem to keep coming up, and this is just the latest, most public declaration of what is really at issue, and further substantiates what was even reported during the RAC Demonstration Project.

What is “news” is this statement in the Fact Sheet:

Based on recommendations from the HHS Office of the Inspector General (OIG), Members of Congress and CMS clinical experts, the Agency modified the FFS medical review process used to identify improper payments this year.

There is no explanation of what or how they changed the review process, but the results are quite impressive:

As a result of this heightened scrutiny and more complete accounting of Medicare FFS claims, CMS is reporting a 2009 FFS error rate of 7.8 percent, or $24.1 billion, compared to 3.6 percent in 2008.

The calculated error rate more than doubled, between 2008 and 2009. One can readily deduce that the changes, whatever they are, are significant.

The changes are neither listed nor detailed, but CMS does state that it is “taking further steps” to insure the following:

  • that providers are submitting all required clinical and medical documents to support a claim,
  • that providers’ signatures on medical documents are legible,
  • that a provider’s claims history can no longer be used to fill in missing treatment documentation, and
  • will require that medical information from a provider be included to support DME claims, in addition to the already required records from suppliers.

All of those steps are significant. While CMS again neither mentions nor details what these “further steps” are, it behooves a provider to pay attention to what they have outlined as their intended targets — namely, the four bullets, above.

It is also interesting to note that while much of the industry is focused on what the RACs are doing, the RACs were not even mentioned in this report, but HEAT was directly named. If you are not aware of HEAT, you should see our previous post about them.

See our news article about CMS’ Press Release and the Fact Sheet, here.

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