Jackson Davis HealthCare
Medicare Audit Defense
& Medicare Appeals
(303) 586-5003
support@cmsaudits.com
The Healthcare Provider's #1 Medicare Audit Defense & Medicare Appeals Resource
Medicare Audit Defense & Compliance - ZPIC Appeals - RAC Appeals - CMS Program Integrity Resources
Medicare RAC Auditors Expand Coding, MS-DRG assurance and Medical Necessity Reviews. CMS Targets Providers Nationwide With Expanded Medicare Recovery Audits (RAC Audits)
In an effort to move-the-bar and collect on perceived overpayments to providers, The Centers for Medicare and Medicare Services (CMS) is taking aggressive strides to accelerate the acceptance of evidence-based health care and lighten the load of a strained national budget. After spending the past 30 years collecting and analyzing outcomes data from internal programs (CERTs, HPMPs, QIOs, etc.), both Congress and CMS have committed unprecedented resources to enforce evidence-based coverage policies and stop Medicare fraud.
In addition to the highly touted and widely publicized RAC Audits - Medicare ZPIC audits
, OIG audits, DOJ audits, Medicaid Integrity Contractor audits and the Medicare One PI system are all just samples of the latest initiatives focused on provider payments. However, CMS is adopting a new approach to Medicare audits - RAC audits - as the first real tangible effort to push hospitals, physicians and other healthcare providers down a path of revolutionizing the clinical practice of medicine. Using a classic "carrot and stick" approach, CMS has combined clinical pay-for-performance (P4P) incentives and value-based purchasing initiatives (the carrot) with the strong arm of RAC medical collection agencies (the stick) to insure providers are doing their part to facilitate a more nationalized, evidence-based healthcare structure.
"If it's not documented, it’s not done” - this has been the mantra of every hospital HIM department head, Case Management professional and compliance officer for the past 20 years. Now both Medicare & Medicaid are adopting clearly defined coverage criteria and evidence-based coverage policies, defining clinical payment criteria, replacing QIOs with RACs, forcing the issue of evidence-based outcomes, verifying supporting medical documentation and insuring claim payment levels. CMS has hired Recovery Audit Contractors (RACs) to lead the way and they are paying 9% - 12.5% contingency fees to guarantee the outcome.
A Little RAC History - The Demonstration Project
From 2005 - 2007, the Centers for Medicare and Medicaid Services (CMS) undertook the RAC demonstration project in Florida, New York, California (South Carolina, Massachusetts & Arizona were added late in 2007) while preparing for a nationwide roll out. In addition to an initial $36.2M in FY 2005, the RAC audits recovered $332.9M in FY 2006 and a staggering $610.9M in FY 2007 in overpayments to providers in the demonstration states. In addition to ramping up additional Medicare auditing efforts and law enforcement initiatives to stop Medicare fraud, CMS estimates billions of dollars in overpayments for patient services will be identified with the national Medicare RAC audit focus.
o Medicare RAC Audits - 2006 Status Report
o Medicare RAC Audits - 2007 Status Report
o Medicare RAC Audits - 2008 Summary Status Report
o Medicare RAC Audits - National Expansion Schedule
o Recovery Audit Program Overview - Legislation & Regulation
Based upon outcomes from the demonstration project and the Statement of Work for the nationwide audit program, RAC auditors are clearly leveraging the prior work of their peers. Quality Improvement Organizations (QIOs), Comprehensive Error Rate Tests (CERTs) and the Hospital Payment Monitoring Program (HPMPs) all have played a vital role in guiding the initial stages of the RAC audit process. As a result, over 95% of Medicare RAC audit identified overpayments have been directly related to CMS payment criteria, Medicare coverage criteria, ICD-9 coding assignments, evaluations of "medical necessity" and/or a need to meet Medicare Conditions of Participation documentation requirements (these are similar outcomes to other previous CMS audits).
It is critical that providers realize that Recovery Audit Contractors have the ability to analyze claims with payment dates reaching as far back as October 1, 2007. Providers should also be very aware of the potential Medicare fraud & abuse ramifications and consider that a wide range of whistleblower suits have been brought in RAC audit related focus areas.
RAC auditors are initially focusing on picking the low-hanging-fruit and reaching deep into the pockets of hospitals, inpatient rehabilitation facilities and physician practices. These are areas such as "inappropriate" chest pain admissions (MS-DRG 312 & MS-DRG 313) where CMS and Medicare coverage criteria have been codified and in place for several years. However, RAC auditors and CMS are also dedicated to implementing a systematic methodology to insure absolute and ongoing provider adherence to Medicare coverage criteria as defined by CMS manuals, National Coverage Determinations, Local Coverage Determinations, QIO guidelines, etc..
Under the program, RAC audits will focus on established CMS payment criteria / Medicare coverage criteria and consist of both automated claims history reviews from the CMS database as well as complex clinical reviews of patient medical records. Specific areas of concentration include those similar to other Medicare audits - such as Medicare ZPIC audits - "not medically necessary services" (or those not meeting CMS evidence-based coverage criteria), non-covered services, incorrectly coded claims, duplicate services and incorrect payment amounts.
2011 RAC Audits & RAC Appeals - Self-Audit Tools
Jackson Davis HealthCare (JDH) has invested thousands of hours in the documentation of CMS payment criteria, Medicare coverage criteria & development of Medicare audit templates for each RAC focus area. These RAC self-audit templates are backed by over 10,000 CMS and CMS contractor documents and provide the nation's most comprehensive resource for the evaluation of Medicare audit focus areas and the preparation of Medicare appeals.
Jackson Davis HealthCare self-audit templates and Medicare audit defense supporting documentation are now available for purchase by healthcare providers and healthcare attorneys nationwide. These are the perfect solution to proactively preparing for Medicare RAC audits, Medicare ZPIC audits, Medicaid Integrity Contractor audits and a wide range of other CMS audit initiatives!
The Medicare audit & Medicare appeals templates are perfect for use by internal auditors and compliance professionals in proactively reviewing potential RAC audit cases and when considering the filing RAC appeals. The following is a small sample of RAC audit focused templates that are available for purchase by healthcare providers:
Short Stays - Chest Pain and Chest Pain Related Diagnoses
Extensive O.R. Procedures Unrelated to Primary Diagnosis
IV Hydration & IV Infusion Therapy
Blood Transfusions
Bronchoscopy
Once in a Lifetime Procedures
Neulasta J2505
PCI / ICD Surgical Procedures in Wrong Setting
Inpatient Rehabilitation Facility Admissions
Respiratory Diagnosis Sequencing
Excisional Debridement Documentation
ER Visits & Use of Modifier 25
Skilled Nursing Facility Stays and Rehab RUGs
Hospice Admissions
SNF Admissions & 3-Day Acute Care Stays
Outpatient Physical Therapy Visits
Physician E&M Visits and Procedures
CMS Zone Program Integrity Contractors (Medicare ZPIC Auditors) Turn Up The Heat On Physicians, Hospices, Skilled Nursing Facilities, Home Health Agencies, Physical Therapists & HME Suppliers
While the Medicare Recovery Audit Contractor program (RAC Audits) continues to focus the majority of efforts toward hospital adoption of Medicare coverage policies, CMS has launched another major initiative to directly challenge all other providers. Although the program - Medicare Zone Program Integrity Contractors (ZPIC audits) - was not officially rolled out with an emphasis on physicians, hospices, skilled nursing facilities, HME suppliers and physical therapy billing, that is exactly where it has been focusing efforts.
Across the southeast, northeast and west coast regions of the U.S. - ZPIC auditors are in full force. SafeGuard Services, AdvanceMed, Health Integrity and Integriguard are all pursuing providers with surprise on-site visits, targeted data analysis, random audits, 100% pre-payment holds, extrapolations and follow-up to whistleblower actions.
So, who are ZPIC auditors anyway? Zone Program Integrity Contractors are organizations hired indirectly (or in connection with other CMS affiliated contractors) by CMS to perform a wide range of medical review, data analysis and Medicare audits. While ZPIC audits are similar in many ways to other Medicare audits currently being performed nationwide they do differ in one very important aspect – potential Medicare fraud implications. Of all the current CMS audit initiatives – RAC audits, MIC audits, etc. – it is vital that providers facing ZPIC audits immediately and effectively address targeted audit issues.
Prior to the 1996 enactment of the Health Insurance Portability and Accountability Act (HIPAA), Medicare program safeguard activities were funded from the contracted fiscal intermediary’s general program management budget. However, HIPAA revised the Social Security Act and established the Medicare Integrity Program - accelerating today’s focus on Medicare audits, Medicare fraud, abuse and enforcement of CMS evidence-based coverage policies.
The Medicare Integrity Program’s (MIP) primary purpose is to deter fraud and abuse in the Medicare program by giving CMS authority to enter into contracts with outside entities and insure the “integrity” of the Medicare program. In 1999, the Centers for Medicare & Medicaid Services (CMS) developed the PSC program to support the MIP, stop Medicare fraud and facilitate provider adherence to codified CMS Payment Criteria, Conditions of Participation and applicable judicial rulings.
ZPIC auditors (formerly known as Program Safeguard Contractors) have a contracted Statement of Work (SOW) that encompasses all of the fundamental activities required for CMS program safeguard activities. Basically, a ZPIC auditor is generally responsible for one or more of the following Medicare audit focus areas - (1) pre or post pay medical review of claims, (2) data analysis, (3) benefit integrity and/or fraud detection, (4) cost report audits and (5) provider education.
At the highest level, CMS considers an individual ZPIC as being responsible for detecting, deterring and even preventing Medicare fraud and abuse. In this capacity, the ZPIC auditor is directly responsible for operating areas such as investigation, case development, administrative solutions and referral to law enforcement.
With the establishment of ZPIC audits, fiscal intermediaries and Medicare administrative contractors typically have some or all of their program safeguard duties removed from the scope of their responsibility. Step-by-step, CMS appears to be developing a more concentrated functional contracting focus for specific areas such are benefit integrity and claims processing activities.
ZPIC Audits - CMS Medical Review Process
The CMS Medical Review (MR) program is designed to promote a structured approach in the interpretation and implementation of Medicare policy. The ultimate goal of the MR program is to identify and reduce Medicare program vulnerabilities (areas of potential Medicare fraud or abuse) relating to coverage and by taking the necessary action to prevent or address these areas.
The CMS’ national objectives and goals as they relate to medical review are as follows: 1) Increase the effectiveness of medical review payment safeguard activities; 2) Exercise accurate and defensible decision making on medical review of claims; and 3) Collaborate with other internal components and external entities to ensure correct claims payment, and to address situations of Medicare fraud, waste, and abuse.
In order to identify and challenge perceived Medicare fraud & abuse issues, ZPIC audits are based upon a combination of claims data from multiple sources (fiscal intermediary, regional home health intermediary, carrier, and durable medical equipment regional carrier data). By combining data that originates from a full range of CMS contractors, the Medicare ZPIC contractor creates a complete profile of the beneficiary’s claim history regardless of where the claim was processed.
Although Quality Improvement Organizations (QIOs) continue to perform reviews related to quality of care and expedited determinations, they no longer perform the majority of utilization reviews for acute PPS hospitals or LTCH claims. The review of acute PPS hospitals and LTCH claims is now the responsibility of other CMS program contractors including: Carriers, Fiscal Intermediaries (FIs), Program Safeguard Contractors (PSCs), Zone Program Integrity Contractors (ZPICs) and Medicare Administrative Contractors (MACs).
While not all contractors perform all Medical Review functions, MR functions may include: analyze data, write local coverage determinations (LCD), review claims and educate providers. Specific efforts may include:
· Proactively identify potential MR related billing errors concerning coverage & coding made by providers through analysis of data and evaluation of other information;
· Take action to prevent and/or address the identified error;
· Place emphasis on reducing the paid claims error rate by notifying the individual billing entities of MR findings and making appropriate referrals to provider outreach / education and PSC Benefit Integrity (BI) units;
· Publish LCDs to provide guidance to the public and medical community about when items and services will be eligible for payment.
ZPIC Audit Outcomes, CMS Extrapolation & ZPIC Appeals
ZPIC auditors refer all identified overpayments to the Medicare affiliated contractor (typically a MAC), who subsequently sends the provider a demand letter for recoupment of the perceived overpayment. In any case involving an overpayment, even where there is a strong likelihood of Medicare fraud, the MAC will typically request recovery of the overpayment.
Under most circumstances, ZPIC audit contractors may use statistical sampling to calculate and project (i.e., extrapolate) the amount of overpayment(s) made on claims. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), mandates that before using extrapolation to determine overpayments, there must be a determination of sustained or high level of payment error, or documentation that educational intervention has failed to correct the payment error.
A sustained or high level of payment error may be determined to exist through a variety of means is not subject to administrative or judicial review. Examples include: error rate determinations by ZPIC audits / MAC audits, probe samples, data analysis, provider/supplier history, information from law enforcement investigations, allegations of wrongdoing by current or former employees of a provider and audits or evaluations conducted by the OIG.
If the provider elects to appeal a claim reviewed by a ZPIC, then the ZPIC forwards its records on the case to the CMS affiliated contractor (typically a MAC) so that it can handle the Medicare appeal. ZPICs are required to have a medical specialist involved in denials that are not based on the application of clearly articulated policy with clearly articulated rationale.