Recovery Audit Contractors

1. Recovery Audit Contractors NvHIMA Annual Conference April 22, 2010

2. RAC Background

3. RAC Demonstration Project • Medicare Modernization Act (Rx bill) - 3 year demonstration project • Recover overpayments and identify underpayments (detect and correct) • 3 States selected based on highest per capita Medicare Utilization: - California, Florida and New York (MA,SC, AZ) • Mission is to reduce Medicare improper payments through the efficient detection and collection of overpayments, the identification of underpayments and the implementation of actions that will prevent future improper payments.

4. RAC Demo Results

5. RAC Overpayments

6. Examples of Improper Payments • Non-covered services/not medically necessary (e.g., a claim for a medical back treatment at an inpatient hospital when the services could have been performed as an outpatient) - Outpatient observation versus Inpatient status - Screenings, preventative, not FDA approved, etc • Incorrectly coded services (e.g., the provider bills for 15 minutes of therapy but the medical record indicates that 45 minutes of therapy were actually provided). - Place of Service indicators (11, 21, 22, etc) - For hospitals billing according to documented physician order - DRG/CPT Miscoding (documentation must support all assigned codes) - Units (Billing according to CPT/HCPCS definition) - New versus Established patients • Duplicate payments, and • No/Insufficient Documentation – failed to respond timely or submit complete records

7. RAC National Rollout • Tax Relief & Healthcare Act of 2006 • Makes Medicare RAC Demo Program PERMANENT • Expand to all 50 states by 2010 • CMS plans faster expansion using four regional RACs • Look back period: October 1st, 2007

8. RAC National RolloutPermanent - Expand to all states by 2010 CMS Responded to Some Concerns RAC Program Improvements • No Contingency Fee when Denial is Overturned at Any Level of Appeal • Required to Have a Medical Director, Certified Coders • No claims with a payment date prior to October 1, 2007 will be reviewed, regardless of the actual start date for the RAC in a state. • No payment recoupment for claims in Level 1 & 2 appeals, if filed within timeframe • 3-year Look-back Period for Review • Limits on the Number of Medical Records a RAC can Request per Month • Requirement for a Web-based Application by January 1, 2010

10. Types of RAC Audits • Complex Review: • Request of Medical Record • Must have an approved reason to review (i.e. Medical Necessity) • Able to rebut or appeal RAC denials prior to recoupment • Automated Review: • Typically Outpatient account types • No Medical Records requested • Decision to deny must be based on Clear Medicare policies (i.e. NCD/LCD’s, MUE’s) • Recoupment will occur regardless of providers decision to appeal Limits imposed on Inpatient and Outpatient reviews by CMS

11. Permanent RAC Program Updates

12. Medical Record Request Limitations (Part A) Revised policy on Medical Record request limits • Applies to all Complex Review requests • From NPI→TIN • ↑ to 200 records per “Hospital Campus” • “Hospital Campus”: providers with same TIN and share the first 3 zip code digits • 1% of campus claims for the prior calendar year Exceptions • larger providers (>100,000 claims/yr) subject to higher cap, 300 records per 45 days. • RAC’s can request CMS approval to exceed200 record max on per case basis.

13. Medical Record Request Limitations (Part B) • Latest information published (NPI):

14. RAC Implementation Updates • Medicare Part A MAC Transition: WPS to Palmetto, 04/19/10 • Blackout period for RAC requests(01/19/10-07/19/10) • Complex Review Audits: • Focus on DRG validation audits • 495 DRG’s requested, 365 approved • RAC Region B & C: 5 Coding Validation audits approved • Medical Necessity Review audits still on hold • Automated Review Audits: • All 4 RAC’s now conducting: • 416 audit requests, 300 approved • AHA RACTrac Nationwide Launch • Hospitals begin Reporting Data April 2010

15. AHA RACTrac Findings 2009 4th qtr. data: 32 Hospitals surveyed with total claim value of $11 million targeted by RACs

16. AHA RACTrac Findings • Automated reviews were not a precursor to Complex reviews • 63% of Hospitals surveyed reported employing additional staff or hiring external resources to manage RAC process

17. AHA RACTrac Findings

18. Healthcare Reform Patient Protection and Affordable Care Act • March 23, 2010: Executive Order on expansion of “payment-recapture audits” • No later than 12/31/10, federal government agencies must expand current recovery audits to: • Medicaid • Medicare Part C & D • This change is in addition to the Medicaid Integrity Contractors (MIC) audits underway Bottom Line: heavy administrative burden to providers

19. CMS Announcements CMS Nationwide RAC 101 Conference Calls • April 28, 2010 1:00 pm - 2:30 pm EST: Nationwide RAC 101 Call, 1-877-251-0301 • May 4, 2010 1:00 pm - 2:30 pm EST: Nationwide RAC 101 Call for Home Health and Hospice Providers, 1-877-251-0301 • May 5, 2010 1:00 pm - 2:30 pm EST: Nationwide RAC 101 Call for DMEPOS, 1-877-251-0301 • May 12, 2010 1:00 pm - 2:30 pm EST: Nationwide RAC 101 Call for Physicians, 1-877-251-0301

20. RAC Permanent Program: Provider Feedback • RAC Region C: receiving 80% of Medical Records in 45-47 days • HDI: Sending Part A demand letters to RAC designee; sending Part B demand letters to CFO • CAH’s receiving ADR requests related to DRG validations • RAC’s reviewing claims already under review by another contractor • Medical Record tracking issues • Limitations on Re-review of records (495 audit requests/ 365 approved) • Multiple ADR requests received within 45 day period

21. Renown Health RAC Preparedness

22. Renown Health • Renown Regional Medical Center: 808 beds • Renown South Meadows Medical Center: 76 beds • Renown Rehabilitation Hospital: 62 beds • Renown Skilled Nursing Facility: 160 beds • Renown Medical Group: >40 Medical groups, Urgent Cares, Specialties, Imaging Centers

23. Initial Preparation • RAC Group Selection • Monthly meetings • Review RAC Demonstration Data • Risk Assessments • Statement of Work/Literature • Provider Networking • AHA/CMS website updates • Education Outreach

24. Decisions • Risk Assessment Scope • RAC Tracking Tool • RAC Response Teams • Assigning roles • Process Improvements • Internal/External Resources

25. Risk Assessments • DRG Coding • Cardiac DRG Coding • Observation > 48 hrs. • O/P Cardiology Services • 1 day stays • 3 day qualifying • Discharge Disposition

27. RAC Response Teams

28. Response Team:Business Office Team:Director PFS, CBO Manager, Gov’t Supervisor, Systems Administrator, Lead Medicare Biller • Worklists created→ERA Remarks code N432, N102 mapped RAC Worklists • RAC Recoupment adjustment code • Items currently under review: • Patient Account Hold • Canned patient letters

29. Response Team:HIM Team:HIM Director, HIM Managers, Supervisors, Lead • Imaging agreement in place for Medical Records scanning • Identification of documentation to be included in Medical Record • Documentation Checklist • DRG/Coding Appeals • Templates/Resources: AHIMA

30. Response Team:Clinical Review Team: RN Auditors, Physician Advisor, Clinical Documentation Improvement • Review of all medical necessity denials • Appeals initiated in order of greatest potential revenue loss • Participation in Defense Audit Team

31. Defense Audit Team Team:RAC Coordinator, Billing Compliance, RN Auditors, Clinical Documentation Improvement, HIM Managers, Other leaders as needed • Proactive audits (driven from feedback) • Identification of process improvement opportunities • Implementation of Process Improvements • Audit results forwarded to Internal Audit & Compliance for continued monitoring • Education

32. Defense Audit Team Coding & Documentation Compliance Committee • Integrated Defense Audits into this team • Objective:Review & audit any In/Outpatient issues driven by committee feedback, RAC “New Issues” listing, OIG workplan • Current Focus: • Observation status/charging • Bedside procedures • Drug administration/ Infusions • Other projects underway: Patient Status Group

33. RAC Tracking Tool ComplyTrack • System setup customized to all facilities/users • User logon/training provided • Reference manuals distributed • Claims Import file • Standard/Custom Reporting • Imaged documents stored

34. RAC Tracking Tool Elements to Consider • Central Audit Database (RAC, MIC’s, CERT, etc.) • Invoicing (Hospital, PPS providers only) • Workflow, tasks, e-mail updates • System Resources/ Limitations: • Claims/ERA Import files • Scanned documents RACTrac: • AHA quarterly RAC reporting • Free RAC tracking software available

35. RAC Correspondence • Contact information registered with HealthDataInsights • RAC correspondence/requests sent to central location: • E-mail address accessed by multiple staff • PO Box specific to RAC (send yourself a Demand Letter) • RAC Coordinator Handbook documents all processes, policies, tasks, and contact information • Review HealthDataInsights (and other RAC Regions) website daily

36. Additional Preparation • Defense Audit Team • Ongoing Process Improvements • Mock RAC Audits • Allocate adequate Reserves • Continued refinement of processes

37. Key Take Away Preparation Tips • Audit Risk areas from Demonstration program/current RAC focus (specific DRG’s, 1-day stay’s) • Identify root cause of findings and begin implementing Process Improvements • Form RAC Team and Sub-groups • Outline RAC Workflow (Identify additional resources needed) • Implement method for RAC Tracking • Network with providers; report RAC non-compliance to CMS Project Officer and professional associations

38. RAC Resources • CMS RAC webpage http://www.cms.hhs.gov/RAC/ • CMS CERT webpage http://www.cms.hhs.gov/cert/ • CMS MAC webpage http://www.cms.hhs.gov/MedicareContractingReform/ • American Hospital Association http://www.aha.org/aha/issues/Medicare/RAC/index.html • American Medical Association http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/recovery-audit-contractors.shtml • Palmetto GBA www.palmettogba.com (Jurisdiction1) • WPS Medicare www.wpsmmedicare.com • RAC Monitor http://www.racmonitor.com/ • HealthDataInsights, Inc. https://racinfo.healthdatainsights.com/ • Diversified Collection Services www.dcsrac.com • CGI http://racb.cgi.com • Connolly Healthcare www.connollyhealthcare.com/RAC

39. Other Government Auditors to watch for

40. Medicaid Integrity Program • Who’s affected: • All fee-for-service providers • 3 Contracts Awarded: • Review Contractor (MIC) to Data Mine (AdvanceMed) • Audit Contractor (MIC) to Audit Provider claims (HMS) • Education Contractor (MIC) to Provider Education/Outreach Sessions (Strategic Health Solutions LLC) • Unlike RAC: • No Medical Record limits imposed • No MR copy fee paid to providers • HMO’s subject to Audits • Look-back period based on state regulations (NV-6 years)

42. Zone Program Integrity Contractors • Focus: Fraud and Abuse • Review Scope: • All Medicare claims (A, B, C, D), including Medi/Medi • Provider Cost Reports • Provider agreements (Contracts) • ZPIC Zones: • Geographic areas defined by 7 zones • Zone 1: American Samoa, California, Guam, Hawaii, Mariana Islands, Nevada (unawarded) • “Hot spots”: CA, FL, IL, NY, TX

43. Zone Program Integrity Contractors • Examples of fraud and abuse: • Non-covered→covered • Upcoding • Billing for services not rendered • Improper billing practices (unbundling for ↑ reimbursement) • Soliciting/offering kickbacks • Excessive charges • ZPIC Audit Triggers: • High utilization • Insufficient documentation submitted with claim • 3rd party complaints (RAC’s)

44. Zone Program Integrity Contractors • Unlike RAC: • Look-back period: 6 years • No record limits • On-site reviews allowed with little advance notice • Managed Care Contracts affected • Allowed to conduct audits on claims under concurrent review (RAC’s) • Go-Live: • Contractor awards to be released soon • No start date published • OK Hospital has already been contacted by their ZPIC

45. Be Prepared!

46. Questions? Melissa Williams Renown Health RAC Coordinator 775-982-6776 mwilliams@renown.org