Analyzing RAC and Government Audit
Data:
Gleaning Audit Intelligence to Reduce
Denial Risk
Donna J Brock, RHIT
System HIM Audit & Privacy Coordinator
Lee Memorial Health System
Dawn Crump
Vice President Audit Management Solutions
HealthPort
Overview
• Recognize growing audit demands and the impact across revenue
cycle and HIM teams.
• Compare and reset productivity benchmarks for timely submissions
to auditors, denial reductions, appeal management and
process/procedure adjustments to changing program parameters.
• Assess best practices in effective audit data clean-up, centralization
and workflow improvement.
• Uncover audit data integrity issues, which are exacerbated when
multiple audit-data sources are used, including home-grown
systems.
Request for Health Information Drivers
Increased scrutiny
of health
information
Audits are on the
rise
•
•
•
•
•
•
•
More covered lives
ACO Growth
Health Information Exchange
Health Care Reform
Value Based Payment
Legal
Billing/ Quality Compliance/
Audits
• Commercial Plan Audits
• HEDIS
• Medicare Risk Adjustment
• Commercial Risk Adjustment
• Government Audits
• MAC
• RAC
• CERT
• OIG
• QIO
State and Federal Auditors
U.S.
Department
of Justice
U.S. Department of
Health & Human Services
CMS
Centers for Medicare
& Medicaid Services
OIG
Office of
Inspector
General
Medicare
RAC
Recovery
Audit
Contractor
MAC
Medicare
Administrative
Contractor
CERT
Comprehensive
Error Rate
Testing
Medicaid
QIO
Quality
Improvement
Organization
MEDICAID
RAC
Medicaid
Recovery
Audit
Contractor
MIC
Medicaid
Integrity
Contractor
PERM
Payment
Error Rate
Measurement
ZPIC
Zone
Program
Integrity
Contractors
Recovery Audits vs Health Plan/Quality/Risk Audits
Health Plan Audits
•
•
•
•
No direct financial impact to the provider
Large volume of requests
No results letters or appeal process – only need to submit records
Records are requested to be reviewed by the health plans to:
–
–
–
Recovery, Government
and Commercial Audits
•
•
•
•
•
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Compile quality data
Improve health management
Maximize health plan’s reimbursement from CMS
Direct Financial impact to the facility
Records must be submitted timely or payment is recouped
Results are communicated to facility in various ways
Money is recouped
Denials can be appealed
Records are reviewed to identify improper payments:
–
–
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Services were medical necessary
Services were performed in the correct setting
Procedures were coded and billed correctly
One Hospital System Journey of ROI Growth
Hospital A Audit Growth
16000
14000
12000
10000
8000
6000
4000
2000
0
2010
2011
2012
Commercial
2013
Federal
2014
What are the cost associated with improper
payments?
• Medicare auditors are after all improper payments from all
providers
•
Medicare Modernization Act and Affordable Care Act have components to
reduce fraud, waste, and abuse to preserve the Medicare Trust Fund
•
Though some auditors may focus more on hospitals, the reviews can lead to
physician and other provider reviews
•
If the inpatient procedure was deemed medically unnecessary then so are
corresponding Part B claims.
• CERT programs cites insufficient documentation for high
percentage of errors
•
http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/index.html?redirect=/CERT
Changes you need to know for 2016
New RAC &
SOW
QIOs auditing
short stay/two
midnight
Managed Care
RACs
Comprehensive
Care for Joint
Replacement
(CJR)
9
Analysis of Denials
• According to AHA RAC Trac Q3 2015
– Only 40% percent of all records requested last quarter were denied
• What should you be reviewing in your data?
– Requests and denials
• Patient type
• Audit type
• Diagnosis
• What is your denial rate per volume requested?
• What is your appeal success rate?
• Compare your reasons for denials
– Drill down to root causes
Dig into your Denials
 Analyze audit results and trends
 Review Medicare’s surgery and DRG lists
 AHA RACTrac Survey results
• Fact based decision making• *remember garbage in- garbage out
• Educate CDI professionals with key audit outcomes
11
Reading between the lines- Understanding
the top reasons for audit denials
Medically Necessary
• Health care services or supplies needed to diagnose or
treat an illness, injury, condition, disease, or its symptoms
and that meet accepted standards of medicine.
• Does documentation support medical decision?
Insufficient Documentation
• Specific documentation or documents required to support
services billed per LCD or health plan requirements
Incorrect Coding
• Codes assigned per coding guidelines based on
documentation provided in health information
What are auditors looking for?
• Complete documentation
• Diagnostic test results supporting medical decisions
(admission, procedures, therapy)
• Previous treatment options
• Orders/ Appropriate Signatures
• Certification Statement
• Review records for completeness prior to submitting
CERT Error Rate Information
•
WPS CERT “insufficient
documentation continues to have
a large impact on error rates for
WPS Medicare and on a national
level. Medical record
documentation must support the
services billed according to
Medicare guidelines, the medical
necessity of the services, and be
legible in order?”
http://www.wpsmedicare.com/j5macpartb
/departments/cert/document-tips.shtml
14
Insufficient Documentation
Claims are placed into this
category when:
Medical
documentation
submitted is
inadequate to support
payment for the
services billed
Specific
documentation
element that is
Evidence that allowed
required as a condition
services were actually
of payment is missing,
provided, were
such as a physician
provided at the level
signature on an order,
billed, and/or were
or a form that is
medically necessary
required to be
completed in its
entirety
How to know what to include?
• All requests are not the same!
• Create checklist for high volume/high dollar services
• Know your auditors and what they are auditing
• Use the following to develop your lists:
• LCD/NCD Requirements
•
Know the LCD’s (local coverage determination) and NCD’s
(national coverage determination)**review annually for changes on high volume procedures
• CERT tips guidelines
• Medicare Billing Manuals
• Recovery Auditor websites
CERT examples
CERT –Errors
Medically
Unnecessary
Service or
Treatment 48% of total
errors
Invasive
Insufficient
Service
Procedure Not
Medically
Documentation
Incorrectly
- 25% of total
Coded - 7% of
Necessary 10% of total
errors
total errors
errors
Ex: Missing 12-Lead Electrocardiogram (EKG) tracings to support the 12Lead EKGs billed during the emergency room encounter and observation
admission on billed dates of service. Submitted documentation includes
the physician's testing orders and the physician's EKG interpretations.
http://www.wpsmedicare.com/j5macparta/departments/cert/j5mac-2nd-qtr-2014-error-summary.shtml
17
Inpatient Rehab Example
• Inpatient Rehab Facility Patient Assessment instrument
(IRF-PAI)
– Must be submitted in a specific timeframe
– Must be included in the health information
When reviewing the record in the EMR for appeal, IRF-PAI was
present and time stamped…
Example from CGI website
Documentation needed for Chemotherapy drugs:
1. Administration Record including start and stop times
2. Signed and dated physician order for chemo
3. Infusion start and stop times
4. Drug order including dose and route
Supplemental Medical Review Contractor (SMRC) project - Herceptin
http://www.strategichs.com/wpcms/project-y2p25-herceptin-multiuse-vials/
Best Practice Tip
• View and approve prior to submission of health
information
• Randomly audit compiled health information
Tips to Control costs
Centralize audit process
Continuous quality improvement - physician, CDI and coding education
Audit/Appeal automation software
Electronic delivery of documentation
Prevent denials and/or appeal denials
22
What does your process look like?
Respond to denials timely
• Be prepared for denials
• Review record submitted against denial reason
– EMRs can be tricky to review
– Ensure health information included supports minimum LCD/NCD
requirements
• Utilize discussion period when possible
• Establish an internal appeals team or a rapid denial review
process with your external appeal partner
• Direct denials to appropriate personnel
• Monitor appeals process
24
CMS Overpayment Collection Timeline
Adapted from http://www.cms.gov/Outreach-and-Education/MedicareLearning-Network-MLN/MLNProducts/downloads/overpaymentbrochure50809.pdf
Following up on key audit trends
Review
demonstration
project results
Evaluate
PEPPER
reports
CMS updates
Scrutinize
published
RAC data
CERT
information
26
Top Inpatient Surgery
1. Arteriography and angiocardiography using contrast material: 2.4 million
2. Cardiac catheterizations: 1.0 million
3. Endoscopy of small intestine with or without biopsy: 1.1 million
4. Endoscopy of large intestine with or without biopsy: 499,000
5. Diagnostic ultrasound: 1.1 million
6. Balloon angioplasty of coronary artery or coronary atherectomy: 500,000
7. Hysterectomy: 498,000
8. Cesarean section:1.3 million
9. Reduction of fracture: 671,000
10. Insertion of coronary artery stent: 454,000
11. Coronary artery bypass graft: 395,000
12. Total knee replacement: 719,000
13. Total hip replacement: 332,000
• http://www.cdc.gov/nchs/fastats/inpatient-surgery.htm
27
Service Types with Highest Improper
Payments: Part A Inpatient Hospital PPS
2014 CERT Results
Improper Payment Rates- CERT 2014 Error
Report
Part A Inpatient Hospital PPS
Services (MS-DRGs)
Major Joint Replacement Or
Reattachment Of Lower Extremity
(469 , 470)
Projected
Improper
Payments
Insufficient
Improper Documentati
payment rate
on
Medical
Necessity
$345,709,650
5.90%
68.40%
21.20%
Spinal Fusion Except Cervical (459 ,
460)
$200,530,719
10.30%
46.60%
37.60%
WPS CERT Denial : Procedure, total hip replacement, and thus inpatient
admission, not reasonable and necessary: little information about prior
conservative treatment; no specific information about X-rays.
Service Types with Highest Improper Payments: Part A
Excluding Inpatient Hospital PPS
2014 CERT Results
Home Health Documentation
 Required Documentation:
 Physician certification/recertification of “confined to
home” status and the need for home health services



Why confined to home in narrative?
Why intermittent skilled nursing services are needed?
PT, OT, SLP services must be reasonable and necessary to
the restoration or maintenance of function
 Face-to-face encounter documentation
 Therapy notes
 Comprehensive assessment of the home care recipient
Home Health – Insufficient Documentation Denial
• The devil is in the details: ask the why’s?
• A home health agency submitted a claim for home PT, OT and home health
aide services.
• Documentation was submitted
• Physician’s signed plan of care
• Face-to-face encounter documents
• Comprehensive assessment of the beneficiary
• Copies of all therapy and home health aide notes
• The submitted face-to-face encounter documentation stated only “unsteady
gait” and “taxing effort.”
• Acceptable Narrative:
• Ambulates limited distance of 125’ with assistance of a walker due to acute stroke;
• Frequent seizure activity, requires supervision/assistance of another person
How do you compare? Appeals
•
AHA RAC reports providers are appealing 47% of all denials
 Settlement?
 Utilize Discussion option for RAC process
 50% of denials reversed by RAC through discussion per AHA RAC Trac Survey
results
•
53% of claims are not appealed after a RAC denial (AHA RAC TRAC)
•
What are the reasons you didn’t appeal?
• No IP order
• Documentation doesn’t support the necessity
• Not enough staff to manage appeals
• Interqual validation?
•Compliance impact document:
•Reasons for not appealing
•Action plans for un-appealed RAC denials
•Education plans with key stakeholders
•Re-audit as needed
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Other Questions to consider on Appeals
• Do you separate out automated vs complex denials?
• Cost of appeal vs dollars at risk?
• Do you utilize Internal vs External appeal partner?
– Do you capture administrative cost of appeals?
• Productivity
• Quality vs Quantity
• What is your overturn /success rate on your appeals?
• How many dollars are held in your appeals?
Appeal /Dollars at risk example
–
Once a record is requested for an external audit the expectation is that the entire payment for
that claim is at risk until otherwise communicated.
Volume of records requested
Avg value of medical records
requested or $$ at risk
$$ in Medicare Payments
Technical denial error rate
(example only)
Volume of Techinal Denials
Cost of Technical Denials
% Denied
Total Claims Denied
Appeal Percentage
Total Appealed
Overturn rate
Appeal Success Rate # of claims
Avg $ retained
150
150
$5,458.00
$818,700.00
$5,458.00
$818,700.00
0.5%
0.5%
0.75
0.75
$4,093.50
$4,093.50
45%
67.5
47%
31.725
62%
45%
67.5
57%
38
62%
19.6695
$107,356
23.8545
$130,198
35
Appeal vs Rebill
• Data analysis can help determine what is the best
course for rebill or appeal
– 58% of original Part A recouped when Part B rebilled *(AHA
TRAC
3rd
QTR 2015)
• Points to consider
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Overturn rate on appeal
Overturn rate by DRG or Procedure
$ associated with improper payment
Expected part B reimbursement
Refunds due to secondary payors
RAC
Lee Memorial Health System, Fort Myers, FL
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1461 Acute Care beds
– 4 campuses (3 provider numbers)
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60 bed Rehab Hospital
300 Primary and Specialty Care Physicians
112 Skilled Nursing Facility
Home Health Services
2 RACs (Soon to be 3 with Home Health)
3 MACs
18,563 AudaPro RAC accounts
Challenges
• Difficulty tracking and managing influx of audits across
all areas
• $ 48 Million at risk in audits
• $ 12 Million at risk in appeals
• At audit peak was receiving ~ 700 ADR’s every 45 days
What we currently track?
• Government audits for:
– Medical Necessity
– DRG
• Facilities:
– Hospital
– Physician clinics
– Home health
– SNF
– IP Rehab
– OP Rehab
• Beginning to monitor commercial reviews
How should you be spending your RAC “slow
down”?
• Evaluate your audit management process and team for RAC
readiness and efficiencies
• Monitor other payor audits
–
commercial plan audits have been on a steady rise
• Inspect the integrity of your audit data and analyze for clinical
improvement opportunities
• Review claims still in appeal and claims that were not appealed
– Develop an educational plan around both
– Remember if you did not appeal it and there are trends you may have a
compliance issue around improperly billed claims
Appeal Everything?
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•
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Missing documentation on diagnosis or medical necessity
Lack of order
Discussion -DRG changes
•
Rebill
– Weak case with little documentation
– Evaluate reimbursement for return on investment
Appeals
• Our Process and Challenges
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Cost of appeal vs dollars at risk
Review of DRG/Coding accuracy
Overturn/success rate
Appeal vs Rebill
Appeals – Use of Teams
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Appeal Decisions are Collaborative:
– Care Management Department
– Analyzes Medical Necessity Denials before Appeals
– Central Business Office (CBO)
– Involved in Pre-Payment Denials and Part B Re-Bills
– Audit Department
– Centralized Audit Location
– DRG Denials
– Clinical Documentation (CDI)
– Involved in Level 3 (ALJ) Appeal Decisions
•
•
Claims Denied Discussion
Communicate Statuses and Results of Appeal Claims
Audit Department Flow Chart for Appeals
Lesson learned Challenge the decision
•
Technical Denials
– Discussion or Appeal with Proof of Receipt
•
ALJ Appeals
– Current Minimum of 28 Months Out
– Are you going to participate in the new appeal demonstration
•
Inpatient Only
– Appealing to Prove on CMS IP Only Lists
How we stay informed and educated
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Weekly Webinar
– Rac Monitor and vendor/partner education
•
Government Agency Websites
•
PowerPoint Presentations
•
Monthly Audit Meetings
•
LEAN with Department Huddles
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Seminars and Continuing Education
•
American Hospital Association
– Quarterly Rac Trac
Duplication of efforts
• Monitor for compliance and deny when outside limits
• Duplicate requests
– Same name
– Same Dates of Service
– Same DRG
Financial Impact
•
Monthly/Quarterly Reports
– $$ at Risk at All Levels of Appeals
– Shared with All Required Stakeholders
– Examples:
– 622 Claims at ALJ Older than 12 Months
– Dollars at Risk = $4M
– 55 Claims at ALJ Older than 28 Months
– Dollars at Risk = Over $380,000
Have a good process
•
Create standard P&P’s
•
Information is only as good as the data that is entered
•
Lower financial risks
•
Quicker turnaround time in appeals with more favorable results
– Quicker record submission= quicker reimbursement of prepayment audit claims
•
More accurate reporting
Learning from Denials and appeals
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Appeal Training Sessions
– Coders
– Top DRG denials
– Root cause analysis
•
Communication loop with:
– Physicians
– CDI
– Other System Facilities
Summary
• Denials / Appeals can be costly – learn from denials and appeals
• Track all denials and appeals
• Develop a process or initiatives around denials
• Communicate / Educate key stakeholders on denials and appeal
outcomes
Best practice tips
Identify your top denial reasons
Create checklist/ templates to educate clinicians in understanding specific required
documentation
Identify additional documentation needed for different service lines and specialties
Educate clinicians to answer the why’s
Make sure all signatures are present and legible and meet requirements
Ensure EMR print templates are inclusive of all key information and review annually
Review records for completeness/specific documentation needs prior to submitting
Questions
•
•
Dawn Crump - Dawn.Crump@HealthPort.com
Donna Brock - donna.brock@leememorial.org