Wachler & Associates, P.C. | Attorneys Royal Oak Michigan

CMS Announces New Start Date for Prior Authorization of PMDs and Recovery Audit Prepayment Review Demonstration Programs

2012-02-06T18:35:16Z

The Centers for Medicare and Medicaid Services (CMS) has announced that the Prior Authorization of Power Mobility Devices (PMDs) and the Recovery Audit Prepayment Review Demonstration Programs are expected to move forward on or after June 1, 2012. On December 30, 2011, the two demonstrations were delayed from their initial January 1, 2012 start date. Although CMS initially announced the demonstration programs in November 2011, CMS decided to delay the programs' implementations after receiving considerable feedback from the provider communities affected by the programs.

In its most recent announcement, CMS stated that the demonstrations programs will begin once they receive Paperwork Reduction Act (PRA) Office of Management and Budget control numbers.

The Prior Authorization of PMDs demonstration program will be initiated in California, Illinois, Michigan, New York, North Carolina, Florida, and Texas. These are all states with high populations of fraud- and error- prone providers. The demonstration will implement a prior authorization process for scooters and power wheelchairs.

As a result of comments CMS received from providers and suppliers, significant modifications have been made to the Prior Authorization of PMDs demonstration program. Most importantly for suppliers, the 100% pre-payment review phase has been removed. Many interested parties had raised the concern that suppliers would be adversely financially impacted by the 100% pre-payment review phase, thus CMS eliminated it and the demonstration will begin immediately with the prior authorization phase. There was also concern regarding the inconsistency of suppliers in some states experiencing 100% pre-payment review, while suppliers in other states were required to receive prior authorizations. The pre-payment review phase was planned to last from between three to nine months for each state, so while one state might only be in that phase for three months, another state might be for nine. As a result, all demonstration states will start prior authorization at approximately the same time instead of the staggered start times as originally planned.

CMS also received many concerns about the ordering physician possibly not being in the best position to submit the prior authorization request. Under the modified demonstration, the physician/treating practitioner or supplier, on behalf of the physician/treating practitioner, may perform the administrative function of submitting the prior authorization request.

The Pre-Payment Review Demonstration Program did not receive any significant changes and will be implemented as proposed in November.

For more information on prior authorization, pre-payment review, or other CMS demonstrations, please contact a Wachler & Associates attorney at 248-544-0888.

CMS' Q4 Audit Program Activity: $353.7 Million in Improper Payments, Increased Focus on Medical Necessity Claims

2012-01-30T18:31:33Z

The Centers for Medicare and Medicaid Services (CMS) publishes quarterly reports identifying improper payment figures and the top audit issues by region. The most recent "Q4" report, covering July 1, 2011 to September 30, 2011, demonstrates a 22% increase in the total correction amount from the previous quarter.

During this period, CMS identified $277.1 million in overpayments and $76.6 million in underpayments, for a total correction amount of $353.7 million. This figure represents a dramatic increase from the two previous quarterly improper payment totals of $208.9 million (Q2) and $289.3 million (Q3). The boost, which is consistent across all regions, indicates that individual recovery auditors nationwide are increasing their efforts to identify incorrect payments, and further supports the industry-wide belief that audits are expanding.

The Q4 recovery audit program update also demonstrates that auditors are increasingly targeting "medical necessity" claims, with a focus on supporting documentation and the setting in which these services are provided. The Q4 update highlighted the following "top issues per region" of the recovery audit program:

Region A - Renal and Urinary Tract Disorders: (Medical Necessity) Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients with renal and urinary tract disorders needs to be complete and support all services provided.

Region B - Surgical Cardiovascular Procedures: (Medical Necessity) Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients with surgical cardiovascular procedures needs to be complete and support all services provided.

Region C - Acute Inpatient Admission Neurological Disorders: (Medical Necessity) Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients admitted with neurological disorders needs to be complete and support all services provided.

Region D - Minor Surgery and other treatment billed as Inpatient: (Medical Necessity) When beneficiaries with known diagnoses enter a hospital for a specific minor surgical procedure or other treatment that is expected to keep them in the hospital for less than 24 hours, they are considered outpatient for coverage purposes regardless of the hour they presented to the hospital, whether a bed was used, and whether they remained in the hospital after midnight.

Wachler & Associates has served healthcare providers and suppliers nationwide for over 25 years. We currently represent healthcare entities in all stages of the audit appeals process, and specialize in defending the medical necessity of inpatient admissions.

CMS Clarifies Procedure for MAC Claims Against DMEPOS Suppliers' Surety Bonds

2012-01-27T19:19:24Z

All Medicare suppliers of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) must obtain and maintain a surety bond of at least $50,000 to participate in the Medicare program. A Centers for Medicare and Medicaid Services (CMS) recent transmittal, effective February 21, clarifies this requirement and describes the procedures that DME Medicare Administrative Contractors (MACs) must follow when making claims against a provider's surety bond.

Under 42 CFR § 424.57(d)(5)(i), a surety is liable to CMS for 1) the amount of any unpaid claim, plus accrued interest, for which the supplier of DMEPOS is responsible, and 2) the amount of any unpaid claim, civil monetary penalty (CMP) or assessment imposed by CMS or the Office of Inspector General (OIG) on the DMEPOS supplier, plus interest.

First, the DME MACs will notify the surety that payment of a claim must be made to CMS within 30 days. The letter must 1) identify the specific amount to be paid, 2) be accompanied by "sufficient evidence" of the unpaid claim, 3) state that payment shall be made via check or money order and that the Payee shall be the DME MAC, and 4) identify the address to which payment shall be sent. The DME MAC will notify the supplier when payment has been made.

DMEPOS suppliers must then obtain an additional surety bond within 30 calendar days of that letter, and submit to the National Supplier Clearinghouse (NSC) additional coverage of an amount that equals or, in the case of a final adverse action, exceeds $50,000. Suppliers must be aware that failure to submit such additional surety bond coverage within 30 days may result in the NSC revoking the supplier's Medicare billing privileges.

If the DMEPOS supplier successfully appeals, CMS will notify the surety via letter and repay the surety within 30 days. Although a supplier may want to avoid the necessity of securing an additional surety bond, the DMEPOS appeals process may take longer than 30 days and prudent DMEPOS suppliers should obtain additional coverage to ensure continued Medicare billing privileges.

Wachler & Associates has served healthcare providers nationwide for over 25 years in a variety of issues, including DME Audits and all areas of Medicare Compliance.

CMS Publishes Important Reminder to Providers and Suppliers Regarding Referred or Ordered Services and Items

2012-01-25T18:06:26Z

The Centers for Medicare and Medicaid Services (CMS) recently published an important reminder for all providers and suppliers who provide services and items ordered or referred by other providers and suppliers. The reminder states that Medicare will only pay for items or services for Medicare beneficiaries that have been ordered by a physician or eligible profession enrolled in the Medicare program, and that the individual National Provider Identifier (NPI) of the referring provider or supplier must be included in any claim to Medicare.

CMS also emphasizes that providers and suppliers must ensure that any items or services submitted in Medicare claims were referred by Medicare-enrolled providers of a specialty type authorized to order or refer such services. Further, Medicare will only reimburse for specific items or services ordered or referred by providers or suppliers that are authorized by statute and regulation. Specifically, CMS highlighted that:

Chiropractors are not eligible to order or refer supplies or services of Medicare beneficiaries. Consequently, all services ordered or referred by a chiropractor will be denied.

Home Health Agency (HHA) services may only be ordered or referred by a Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.) or Doctor of Podiatric Medicine (DPM). Thus, claims for HHA services ordered by any other practitioner specialty will be denied.

Portable X-Ray services may only be ordered by a Doctor of Medicine or Doctor of Osteopathy. Portable X-Ray services ordered by any other practitioners will be denied.

Through this "important reminder," CMS emphasizes the necessary standards and documentation for healthcare providers and suppliers to successfully bill for providing referred services or items. The reminder demonstrates CMS' continued focus on ensuring proper referral arrangements and supporting documentation.

If you need assistance implementing a compliance program to safeguard against such issues or a potential audit, please contact a Wachler & Associates attorney at 248-521-0331.

RACs Target Skilled Nursing Facilities with High Therapy Resource Utilization Groups

2012-01-23T18:16:51Z

Recent Recovery Audit Contractor (RAC) activity demonstrates that the Centers for Medicare and Medicaid Services (CMS) may soon allow RACs to target skilled nursing facilities (SNFs) with certain levels of Ultra High Therapy Resource Utilization Groups (RUGs).

Although Ultra High Therapy Resource Utilization Groups are not currently a CMS-approved audit topic, RACs are permitted to audit "test claims" and suggest new audit activity based on the results. In a recent demand letter, the RAC stated that the Office of Inspector General (OIG) of the U.S. Department of Health & Human Services has found an "overwhelming majority of error in assignments by providers under the RUGs categorization system to Ultra High Therapy RUGs, resulting in overpayments to SNFs."

These claims arose out of a 2010 OIG report which alleged that 1) SNFs are increasingly billing higher-paying RUGs, 2) for-profit SNFs are more likely than nonprofit SNFs to bill for higher-paying RUGs, and 3) in general, many SNFs maintain questionable billing for therapy services.

Specifically, the RAC claims that the OIG identified as "...errors in the sample could be traced to the providers' therapy minutes recorded on the Minimum Data Set not matching the minutes recorded in the medical record and the patient's care and resource needs." Further, it seems that SNFs with 10-15% of residents in the Ultra High Therapy RUGs category may be subject to RAC audits.

If the issue is approved by CMS, RACs will begin burdensome document requests and therapy audits nationwide. Providers of Ultra High Therapy RUGs should consider self-auditing internal records in order to ensure that the minutes of therapy and other medical records support the therapy provided.

If you need assistance with an internal audit, or implementing compliance program to identify and correct potential risk areas related to RAC audits, please contact a Wachler & Associates attorney at 248-544-0888.

CMS Clarification of 3-Day Payment Window when Inpatient Admission is Denied

2012-01-19T15:09:49Z

In a recent revision of its billing instructions, CMS clarified that when an inpatient stay is determined not to be covered by Part A (e.g. determined not medically necessary or otherwise denied by a Medicare audit or internal audit), there is no inpatient stay, and therefore the outpatient services provided on the date of admission or the preceding 3 calendar days are not required to be bundled. See Medicare Claims Processing Manual, Chapter 4, Section 10.12 and Chapter 1, Section 50.3.2 for the updated billing guidelines. MLN Matters article MM7672 clarifies that if the Part A stay is determined to be non-covered, the Part B services provided prior to the admission (i.e., prior to the admission order), which would otherwise be bundled into the inpatient claim, may be billed separately as if the admission did not take place.

Generally, the 3-day payment window policy requires that all diagnostic outpatient services and non-diagnostic outpatient services related to the inpatient admission provided to a Medicare beneficiary by a hospital (or an entity wholly owned or wholly operated by the hospital) on the date of the beneficiary's inpatient admission or during the 3 calendar immediately preceding the date of admission are to be included on the bill for the inpatient stay. However, outpatient diagnostic services that are unrelated to the inpatient admission, and are covered by Part B, may be billed separately to Part B.

The limit on this positive development is that the audit denial would need to occur within one year of the date of service in order to meet the timely filing limitations. For instance, if a RAC auditor determines that the inpatient stay is not covered by Part A and that finding occurs after the one year filing limitation, the hospital would likely be unable to bill the services to Part B for reimbursement.

In order to ensure proper compliance with the 3-day payment window policy, hospitals and their entities should work to coordinate their billing practices and claims processing procedures. In addition, hospitals should take additional compliance measures to review inpatient claim denials and determine if diagnostic and non-diagnostic outpatient procedures can be billed under Part B. If you have compliance questions regarding the clarification of the 3-day payment window policy, or any other compliance questions, please contact a Wachler & Associates attorney at 248-544-0888.

Recent RAC Activity

2012-01-17T14:27:50Z

DCS Healthcare, RAC for Region A, recently added 40 new issues to its CMS-approved issues list for providers in Pennsylvania, Delaware, Connecticut, New Jersey, New York, New Hampshire, Massachusetts, Maine, Vermont and D.C. A sampling of the newly approved issues is included below. Please visit DCS Healthcare's website to view the remaining issues.

Medical Necessity Review (MNR) for MS-DRG 922 Other Injury, Poisoning and Toxic Effect Diagnosis with MCC. Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 922 Other Injury, Poisoning and Toxic Effect Diagnosis with MCC.
Medical Necessity Review (MNR) for MS-DRG 464 Wound Debridement and Skin Graft Except Hand, for Musculo-Connective Tissue Disorders with CC. Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 464 Wound Debridement and Skin Graft Except Hand, for Musculo-Connective Tissue Disorders with CC.
Medical Necessity Review (MNR) for MS-DRG 617 Amputation of Lower Limb for Endocrine, Nutritional, and Metabolic Disorders with CC Disorders with CC. Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 617 Amputation of Lower Limb for Endocrine, Nutritional, and Metabolic Disorders with CC.
Medical Necessity Review (MNR) for MS-DRG 215 Other Heart Assist System Implant. Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 215 Other Heart Assist System Implant.
Medical Necessity Review (MNR) for MS-DRG 734 Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy with CC-MCC. Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 734 Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy with CC-MCC.
Medical Necessity Review (MNR) for MS-DRG 836 Acute Leukemia without Major O.R. Procedure with CC. Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 836 Acute Leukemia without Major O.R. Procedure with CC.
Medical Necessity Review (MNR) for MS-DRG 340 Appendectomy with Complicated Principal Diagnosis without CC-MCC. Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 340 Appendectomy with Complicated Principal Diagnosis without CC-MCC.

Connolly Healthcare, the RAC for Region C, recently added two new issues to its CMS-approved issues list.

Incorrect payments for Maintenance and Servicing of capped rental DME. Payment for maintenance and servicing of capped rental DME equipment is included in the rental payments, and should not be reimbursed separately.
Incorrect modifiers billed with bilateral indicator 2 - OP. Certain modifiers cannot be billed with Bilateral Surgery Indicator 2 because the Relative Value Units (RVUs) are already based on the procedure being performed as a bilateral procedure.

If you need assistance defending against RAC audits or implementing a compliance program that will help identify and correct potential risk areas related to RAC audits, please contact a Wachler & Associates attorney at 248-544-0888.

CNN Quotes Managing Partner Andrew Wachler on ABIM Allegations

2012-01-13T20:26:32Z

Last year, the American Board of Internal Medicine (ABIM) suspended 139 doctors following an investigation into the practices of the Arora Board Review test-prep company. ABIM claimed that the doctors violated ethical and conduct standards by providing test questions to the company.

Wachler & Associates represented over 40 doctors that were suspended without regard to their individual behavior and circumstances. The story, however, has gained national traction and appeared today on the front page of CNN's website.

CNN traveled to our offices in Royal Oak, MI to interview Andrew Wachler, managing partner of Wachler and Associates. The following is an excerpt from the article:

Most of the cases against the suspended doctors have been resolved. Drew Wachler, an attorney who handled many of those cases, told CNN, "The cases were really resolved through settlement agreements with ABIM."

"We articulated the impact on these physicians," Wachler said. "We tried to present their body of work throughout their entire careers, looking at the extraordinary references they received, their conduct throughout medical school, residencies. It was resolved in that fashion."

Mr. Wachler's comments demonstrate the due process and individual consideration we fought to ensure each doctor received during the appeal process. For all healthcare providers, ethical and integrity matters are exacerbated by related issues such as licensing, participation in managed care organizations, and staff privileges. This issue highlights the collateral consequences that may be impacted by board certification, thus requiring doctors to always defend claims to ensure their continued ability to practice medicine.

A short version of this story will air on January 13th at 8:00 p.m. ET on CNN's "AC360," and the full version will air on "CNN Presents," January 14th and 15th at 8:00 p.m. and 11:00 p.m. ET.

If you have any questions or concerns regarding the ABIM suspensions or appeal process, or if you are facing board certification, licensure, managed care participation, or staff privilege issues, please contact a Wachler & Associates attorney at 248-544-0888.

CMS Announces Interim Final Rule Creating New Standards for EFTs

2012-01-05T21:07:25Z

Today, the Centers for Medicare and Medicaid Services (CMS) announced an interim final rule with comment period which creates new standards for electronic funds transfers (EFT) and remittance advice transaction (RA) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). According to the U.S. Department of Health and Human Services (HHS), the new standards will save physician practices and hospitals between $3 and $4.5 billion over the next ten years, as well as result in an estimated savings of 800,000 pounds of paper due to the elimination of paper checks.

HHS will require health plans to comply with two standards when transmitting EFT payments to providers: (1) a standard format for when a health plan orders, authorizes, or initiates an EFT with its financial institution, and (2) specification of the data content to be contained within the EFT. Currently, when a provider submits a claim for payment electronically, the RA is often sent separately from the EFT payment, making it difficult for the provider to match the bill with the corresponding payment. The new rule seeks to eliminate these errors by requiring the use of a trace number that automatically connects the RA to the EFT.

Today's regulation is the second in the series of regulations that CMS is required to design by Section 1104 of the Patient Protection and Affordable Care Act of 2010. The first regulation was announced last July. It implemented operating rules for two electronic health care transactions that give providers a simpler method to determine whether a patient is eligible for coverage and the status of a health claim submitted.

The effective date of the announced regulation was January 1, 2012, and entities covered under HIPAA must be in compliance with the newly created standards by January 1, 2014.

If you have any questions regarding electronic funds transfers, or any other compliance issues, please contact a Wachler & Associates attorney at 248-544-0888.

CMS has Delayed the Recovery Auditor Pre-Payment Review Demonstration Program

2012-01-03T15:59:20Z

Last week, CMS announced its decision to delay the Recovery Auditor Pre-Payment Review Demonstration Program until further notice. On its website CMS indicated that the delay was due to comments/suggestions received regarding the program and CMS' commitment to consider the comments carefully. Although it is unclear at this time whether CMS will eventually implement the demonstration program as it was initially announced or make significant changes to the program, CMS confirmed that it will provide at least 30 days notice before the demonstration program begins.

For more information on pre-payment review and strategies to utilize if on pre-payment review, please contact Wachler & Associates attorney at 248-544-0888 or visit www.racattorneys.com.

CMS Announces Delay of Power Mobility Device Demonstration Program

2011-12-30T14:30:48Z

On December 29, the Centers for Medicare and Medicaid Services (CMS) announced that it would delay the start of the Prepayment Review and Prior Authorization of Power Mobility Devices (PMDs) Demonstration Program. CMS originally announced the demonstration program on November 15 and followed the announcement with special Open Door Forums explaining the program's implications for providers and suppliers. During the Open Door Forums suppliers expressed their concerns that the program would have dire consequences for suppliers of power mobility devices. Some suppliers also questioned CMS' failure to consult with industry leaders prior to announcing the demonstration program.

The industry's pressure was effective. CMS' decision to delay the start of the program was a result of "intensive collaboration" between CMS and AAHomecare. Industry leaders also obtained support from a number of members of Congress who wrote a letter to Marilyn Tavenner, the Acting Administrator of CMS, to delay the implementation of the program and work with industry leaders. In a press release, AAHomecare's Vice President of Government Affairs, Walt Gorski stated, "we are pleased that CMS has taken a deep breath to understand the power mobility sector and the impact that any widespread prepayment review would have on Medicare beneficiaries and homecare providers."

It is unclear at this time how long the start of the program will be delayed. CMS stated that it will review the comments and suggestions provided by industry stakeholders and will provide at least 30 days' notice prior to the demonstration program implementation date.

For more information on the demonstration programs announced on November 15 or assistance with a Medicare audit, please visit www.racattorneys.com or contact a Wachler & Associates attorney at 248-544-0888.

CMS Implements 3-day Payment Window Policy for Wholly Owned or Wholly Operated Physician Practices

2011-12-29T18:04:32Z

Recently, the Centers for Medicare and Medicaid Services (CMS) released Change Request 7502 relating to the 3-day payment window policy. For services on or after January 1, 2012, the 3-day payment window will apply when a patient is seen in a physician practice that is wholly owned or wholly operated by a hospital and is admitted as an inpatient within 3-days (or, in the case of non-IPPS hospitals, one day). The window will apply to diagnostic and nondiagnostic services that are clinically related to the reason for the patient's inpatient admission, regardless of whether the inpatient diagnosis is the same as the outpatient diagnosis.

For claims with dates of service on or after January 1, 2012, a new modifier PD is available and must be appended to the entity's preadmission diagnostic services, as well as nondiagnostic services related to the admission. When a related inpatient admission has occurred, the wholly owned or wholly operated entity will need to manage their billing processes to ensure that they bill for their physician services appropriately. The hospital is responsible for notifying the wholly owned or wholly operated entity that a patient has been admitted as an inpatient when the entity provided services to the patient within the 3-day window.

When the modifier is present on claims for services, CMS shall pay:

Only the Professional Component (PC) for CPT/HCPCS codes with a Technical Component (TC)/PC split that are provided in the 3-calendar day (or, 1-calendar day for non-IPPS) payment window, and
The facility rate for codes without a TC/PC split.

In order to ensure proper compliance with the 3-day payment window policy, entities and their hospitals should begin to coordinate their billing practices and claims processing procedures. If you have any compliance questions relating to the 3-day payment window policy, or any other compliance questions, please contact a Wachler & Associates attorney at 248-544-0888.

Ten Highlights from the Proposed Physician Payment Sunshine Act Rule

2011-12-23T16:20:39Z

In the December 19, 2011 Federal Register, CMS published a Proposed Rule to implement the "Physician Payment Sunshine Act" portion of Patient Protection and Affordable Care Act (PPACA), or health care reform, which requires drug, medical device, biological and medical supply manufacturers to track and report payments made to physicians and teaching hospitals. The Proposed Rule clarifies several components of the Physician Payment Sunshine Act, including the following:

1. Applicable manufacturers must report the required information to CMS in an electronic format by March 31, 2013 and on the 90^th day of each calendar year thereafter.

2. The Physician Payment Sunshine Act will apply to any manufacturer whose products are sold or distributed in the United States regardless of where they are manufactured.

3. Payment includes any "transfer of value" including, without limitation: consulting fees, compensation for services other than consultation, honoraria, gifts, entertainment, food, travel, education, research, charitable contributions, royalties or licenses, current or prospective ownership or investment interests, speaker fees, faculty fees, and grants.

4. When reporting "transfers of value" to physicians, the payments must be broken down into specific categories.

5. Over the counter (OTC) drugs/biologicals are excluded from the Physician Payment Sunshine Act's reporting requirements, as are devices that do not require premarket approval by or notification to the FDA.

6. Payments through a physician group practice must be reported individually under the individual physicians' names.

7. For purposes of the Physician Payment Sunshine Act, physician owned distributorships (PODs) are considered a Group Purchasing Organization and must comply with the reporting requirements with regard to physician investment/ownership interests and other "transfers of value."

8. Ownership/investment interests will be defined in a manner similar to the manner in which they are defined in the Stark laws and will include investments/ownership interests of immediate family members (using the same definition as the Stark regulations, i.e., spouse, child, parent, sibling, or grandparent - including "step" and adoptive relationships).

9. A recipient physician will be given 45 days to review reported information prior to it being made available to the public.

10. Civil Monetary Penalties (CMPs) will be imposed for failure to report.

If you have questions about the Physician Payment Sunshine Act, health care reform (PPACA), Stark law, or any other fraud and abuse issues, please contact a Wachler and Associates, P.C. attorney by email or by phone at 248-544-0888.

CMS' Special Open Door Forum on Recovery Auditor Pre-Payment Review Demonstration Program

2011-12-22T20:54:50Z

On December 21, the Centers for Medicare & Medicaid Services ("CMS") held a special Open Door Forum ("ODF") for the Recovery Auditor Pre-Payment Review Demonstration Program announced on November 15 along with two other demonstration programs, all of which will become effective on January 1, 2012.

The ODF, in which 1600 callers participated, addressed the purposes and the operational aspects of the program. CMS explained that they developed the program in an effort to reduce the error rate for improper payments, prevent improper payments before they are made and to focus on claims with high improper payment rates.

The demonstration program will begin with the pre-payment review of short-stay inpatient hospital claims (two days or less) for hospitals located in the eleven states affected by the demonstration program. Specifically, one MS-DRG, 312 Syncope & Collapse, will be reviewed beginning January 1. In March and then again in May CMS will add two more MS-DRGs and in July CMS will add three more. Thus, by July there will be eight DRGs subject to pre-payment review under the demonstration program:

MS-DRGs for Review:

January 1: MS-DRG 312 Syncope & Collapse

March 1: MS-DRG 069 Transient Ischemia and MS-DRG 377 G.I. Hemorrhage W MCC

May 1: MS-DRG 378 G.I. Hemorrhage W CC and MS-DRG 379 G.I. Hemorrhage W/O CC/MCC

July 1: MS-DRG 637 Diabetes W MCC, MS-DRG 638 Diabetes W CC and MS-DRG 639 Diabetes W/O CC/MCC

Many of the questions asked by the callers revolved around the operational aspects of the program. CMS stated that even though the claims identified for pre-payment review are subject to pre-payment review, there will not be a 100% review of all of those claims. CMS would not, however, state what the percentage of claims reviewed would be. In addition, CMS explained that claims subject to pre-payment review will be suspended and then the provider will receive an Additional Documentation Request (ADR). Providers will receive the ADRs electronically and the ADR will state whether the provider should send the documentation to their MAC or to their RAC. Providers will have 30 days to submit documentation and will receive an automatic denial if they do not send the documentation within 45 days.

Another interesting development from the ODF arose from the relationship between the AB Rebilling Demonstration Program and the Recovery Auditor Pre-Payment Review Demonstration Program. In response to one caller's question, CMS confirmed that if a participant of the AB Rebilling Demonstration Program is also located in a state subject to the Pre-Payment Review Demonstration Program, then that provider will be unable to appeal short-stay inpatient claims denied on pre-payment review, but they will be able to rebill for Part B reimbursement.

The most severe consequence of the pre-payment review demonstration program is the effect it will have on providers' cash flow. As more claims and services are added to the list for pre-payment review, providers will be forced to absorb more costs from services that are denied. If a provider decides to appeal the denials, it could take over a year for them to reach the Administrative Law Judge hearing stage. Clearly, waiting a year for payment will have very serious implications on hospitals' ability to provide services.

For assistance with a Medicare appeal or for more information on the demonstration programs announced by CMS, please contact a Wachler & Associates attorney at 248-544-0888.

CMS to Reopen Home Health Claims Denied Based on Face-to-Face Requirements

2011-12-20T20:57:37Z

CMS has announced that it is requiring Medicare to reopen claims that contractors denied because Home Health Agencies ("HHA") allegedly did not comply with "Face-to-Face" encounter requirements put in place by the Patient Protection and Affordable Care Act ("ACA"), or Health Reform legislation.

The Face-to-Face encounter rules require that the physician certifying the patient's need for home health care must have seen the patient "face-to-face" in order for Medicare to pay for a home healthcare episode. This encounter must take place either 90 days before the home health episode, or within 30 days of the beginning of home health care.

Providers brought to CMS' attention that contractors were inappropriately denying claims based on the face-to-face requirement in two situations following an acute or post-acute stay:

•- When the HHA used a single form for the plan of care and the certification using a single signature by a "community physician" who assumed the oversight of care for an HHA patient, and

•- When the physician who cared for the patient in the acute or post-acute setting is the certifying physician and has signed the face-to-face encounter attestation.

Typically the forms HHAs submit to Medicare have only one signature line for, potentially, two physicians-often the certifying physician will be different than the community physician overseeing a patient's care in an HHA. The physician who cared for a patient in an acute or post-acute setting may certify the patient's eligibility for home health services, provide face-to-face encounter documentation, and initiate a plan of care, while a community physician will assume responsibility of the patient's ongoing home health care and make changes and updates to the plan of care as needed.

Often, the HHA will have one physician sign the plan of care for a patient as well as the no-longer-required CMS-485 form, while another physician provides face-to-face encounter documentation in the form of an addendum to the CMS-485 form. In this case, CMS has determined that the physician who signed the plan of care is the physician responsible for oversight of the patient's home health care.

CMS has also identified situations in which the physician who signs the face-to-face documentation does not name the community physician taking oversight of the home care. CMS does not require that the face-to-face-signing physician provide specific documentation to the contractor regarding the transition to a different physician for home health oversight.

As a result, CMS is requiring all contractors reopen any claims denied for not having met face-to-face requirement, upon request of providers. Contractors are then required to assess whether the claims meet the face-to-face requirements. Even if a contractor determines that a certain claim meets these requirements, the contractor must subsequently perform a complete and full review of all Medicare requirements in order to determine that the claim is payable. If you are a home health agency or provider and believe that you have been subject to inappropriately denied claims that should be payable because the claims met the face-to-face encounter requirements, please contact a Wachler and Associates, P.C. attorney by email or by phone at 248-544-0888.