Articles Posted in Recovery Audit Contractors (RACs)

CGI Federal, RAC for region B, has recently added a new issue to its CMS-approved issue list for providers in all region B states.

• Pharmacy Supply Dispensing Fee. Medicare pays pharmacy supply/dispensing fees for immunosuppressive, oral anti-cancer, chemotherapeutic, and oral anti-emetic drugs as well as drugs used as part of an anti-cancer chemotherapeutic regimen when they are submitted on the same claim as the drug being billed. A claim submitted with a pharmacy supply/dispensing fee in the absence of any of the previously mentioned drugs represents an overpayment and will be denied as not medically reasonable and necessary.

Connolly Healthcare, RAC for region C, added two new issues to its CMS-approved issue list for suppliers that bill CIGNA Government Services.

On October 7, 2011, the United States District Court of New Jersey, made a ruling denying an ambulance services’ request for a preliminary injunction against a Medicare program safeguard contractor (PSC). National Ambulance Services, Inc. (“Nationwide”) sought a preliminary injunction to restrain SafeGuard Services, LLC (“Safeguard”) from continuing its pre-payment audit of the ambulance service Part B claims for non-emergency ambulance transportation to patients. On January 13, 2011, the Centers for Medicare and Medicaid Services (CMS) had notified Nationwide that the PSC for its district would conduct a pre-payment process to ensure that all payments to Nationwide were consistent with Medicare policies. Subsequently, Safeguard conducted a pre-payment audit and recommended that 92.1% of Nationwide’s claims should be denied Medicare reimbursement. At the time of the request for preliminary injunction, Nationwide had only appealed a portion of the total claims to an Administrative Law Judge and none of the claims had reached the Medicare Appeals Counsel level of appeal.

The district court began its analysis by holding that it does not have the authority to make a ruling that involves the interpretation of the Medicare statute in regards to the evidentiary standard for coverage. Judicial review over matters arising under the Medicare statute was not available to the plaintiff until all available administrative remedies were exhausted. The court stated that without a final judgment of the Medicare Appeals Council, the plaintiff had not exhausted its administrative remedies, and consequently, the court lacked the authority to review any claims arising under the Medicare statute.

The court next moved to the issue of awarding Nationwide a preliminary injunction. In order to issue this type of emergency relief, the court stated it must consider the following four factors: (1) the likelihood that Nationwide would succeed on the merits; (2) the extent to which Nationwide will suffer irreparable harm without injunctive relief; (3) the extent to which SafeGuard will suffer irreparable harm if the injunction is issued; and (4) the public interest in the matter.

DCS Healthcare, the RAC for Region A, posted four new issues to its CMS-approved issues list for providers in Maryland.

• Medical Necessity Review (MNR)- MDC 5 conditions of the circulatory system (medical) MS-DRGs: 286-293, 299-305, and 308- 316. 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. MS-DRGs: 286-293, 299-305, and 308- 316.
• Medical necessity: acute inpatient admission neurological disorders MS-DRG’s: 068-074, 103, 312 (Collaborative). RACs will review documentation to validate the medical necessity of short stay, uncomplicated admissions. Medicare only pays for inpatient hospital services that are medically necessary for the setting billed and that are coded correctly. Medical documentation will be reviewed to determine that the services were medically necessary and were billed correctly for MS-DRG’s, 068-074, 103, and 312.

CGI Federal, the RAC for Region B, added two new issues to its CMS-approved issues list. In addition, two more issues were added to the CMS-approved issues list for DME suppliers who bill CIGNA Government Services.

CGI Federal New Issues

• Leuprolide 3.75mg incorrect code reported (Region B). The purpose of the complex review is to identify the incorrect use of HCPCS code and corresponding number of units billed for services of Leuprolide (depot suspension) 3.75mg. An overpayment exists when a provider bills for greater than 3 units of service for HCPCS code J1950, as defined by applicable Local Coverage Determination documents.

The Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) recently released a MLN Matters article providing an overview of Medicare policy regarding chiropractic services. CMS has determined, through numerous audits, that a significant portion of chiropractic service claims have been paid inappropriately. Medicare auditors have discovered that the most common errors include missing signatures, insufficient or absent documentation, and billing Medicare for medically unnecessary services. The MLN Matters article was published to help providers better understand Medicare coverage and payment requirements for chiropractic services. Proper compliance with Medicare coverage, coding and documentation requirements will result in a greater percentage of correct claim payments. Therefore CMS has provided a number of practical tips in an effort to reduce the number of improper payments being paid to chiropractors.

If you have any questions regarding Medicare coverage policies and requirements for chiropractic services, or any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) focused on chiropractors who practice in the office setting. The CBRs will be released on September 26, 2011 to 5,000 different providers. These CBRs will be similar to the ones released to chiropractors last fall; however, the new CBRs will focus on data from 2010.

The CBRs are produced by Safeguard Services under contract with CMS and will provide comparative data to help show how these individual providers compare to other providers within the same field. These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. Providers should view CBRs as a tool, rather than a warning, as a way to aid them in properly complying with Medicare billing rules. It is also important to understand that CBRs do not contain patient or case-specific data, but rather only summary billing information as a method of ensuring privacy.

If you are a recipient of a CBR centered on chiropractic services in the office setting, or are among the other provider types that have been identified to receive CBRs (i.e. ordering DME, physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact a Wachler & Associates attorney at 248-544-0888 to discuss evaluating the CBR analysis and development of an appropriate compliance plan that will reduce audit risks.

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released its Medicaid RACs final rule after previously delaying its expected April 1^st implementation date. The Medicaid RAC program was created as a tool to fight Medicaid fraud and abuse, and the program shares many characteristics with the Medicare RAC program which has already recovered $670 million to date in 2011. The regulations are effective January 1, 2012.

According to the rule, “This final rule implements section 6411 of the Patient Protection and Affordable Care Act (the Affordable Care Act), and provides guidance to States related to Federal/State funding of State start-up, operation and maintenance costs of Medicaid Recovery Audit Contractors (Medicaid RACs) and the payment methodology for State payments to Medicaid RACs. This rule also directs States to assure that adequate appeal processes are in place for providers to dispute adverse determinations made by Medicaid RACs. Lastly, the rule directs States to coordinate with other contractors and entities auditing Medicaid providers and with State and Federal law enforcement agencies.”

Health and Human Services projects that the Medicaid RAC program will save taxpayers $2.1 billion over the next five years, of which $900 million will be returned to the states. Vice President Biden stated in a press release that, “if we’re going to spur jobs and economic growth and restore long-term fiscal solvency, we need to make sure hard-earned tax dollars don’t go to waste.”

On September 12, 2011, The Centers for Medicare & Medicaid Services released a new Recovery Audit Contractor (RAC) Statement of Work. A number of updates and clarifications were made to the previous RAC Statement of Work. One addition institutes a new type of review known as a semi-automatic review. This is a new two-part review that can include both automated and complex reviews. The new Statement of Work also clarifies the difference between DRG Validation and Clinical Validation by adding definitions of each. The Statement of Work defines DRG Validation as the process of reviewing physician documentation and determining whether the correct codes, and sequencing were applied to the billing of the claim. Clinical validation is defined as a separate process, which involves a clinical review of the case to see whether or not the patient truly possesses the conditions that were documented. Another addition was clarification to the process known as “Allowance for a Discussion Period.” For example, if the recovery auditor is notified by the contractor during the discussion period that the provider initiated the appeals process, the recovery auditor shall immediately discontinue the discussion period and send the provider a letter stating that the recovery auditor cannot continue the discussion period once an appeal has been filed. Click here to view the entire RAC Statement of Work.

If you need assistance in preparing for, or defending against RAC audits, or implementing a compliance program geared toward identifying and correcting potential risk areas related to RAC audits, please contact a Wachler & Associates attorney at 248-544-0888.

The Centers for Medicare and Medicaid Services (CMS) estimates that the Medicare Fee-For-Service Program issues billions of dollars in improper Medicare and Medicaid payments every year. The majority of improper payments are identified through the contractor’s manual review of the provider’s medical records compared with the provider’s claims. Review Contractors request medical records by mailing a paper letter to the provider. To fulfill a request for medical records, the provider typically has only two methods for submitting the records to the Review Contractor- paper mail or fax.

This month, CMS plans to implement Phase 1 of its voluntary Electronic Submission of Medical Documentation (esMD) pilot which will offer providers a more efficient method to deliver medical records to the Review Contractor that made the document request. During Phase 1 of esMD, providers will have the option to electronically submit medical records to the requesting contractor. To keep the medical records and other documentation secure during the electronic exchange between the provider and the contractor, esMD will employ the technology of the Nationwide Health Information Network called CONNECT-compatible gateways.

CMS plans to introduce Phase 2 of esMD in 2012. During this phase, Review Contractors will electronically send documentation requests to providers when the contractor selects their claims for review.

CGI Federal, RAC for Region B, added three new issues to its CMS-approved issues list for providers in all Region B states.

• SNF consolidated billing. Services that are billed separately that should be included in the Skilled Nursing Facility Consolidated billing. Consolidated Billing is when services provided during the resident’s stay in a skilled nursing facility (SNF) are bundled into one package and billed by the Skilled Nursing Facility. Under the Consolidated Billing requirement, a Skilled Nursing Facility itself must submit all Medicare claims for the services that its residents receive (except for specifically excluded services).
• DME while inpatient. The Medicare DMEPOS benefit is intended only for items that a beneficiary uses in his or her home. When a beneficiary is in a Part A inpatient stay, the institutional provider (e.g., hospital) is not defined as a beneficiary’s home for DMEPOS therefore; Medicare will not make separate payment for DMEPOS when a beneficiary is in the institution. The institution is expected to provide all medically necessary DMEPOS during a beneficiary’s covered Part A stay.