Medicare Claims Review “Audits” What you need to know …

1. Medicare Claims Review “Audits”What you need to know …

2. President’s Goals for 2012 • Reduce overall payment errors by $50 billion • Cut fee-for-service error rate in half • Recover $2 billion in improper payments

3. Rapidly Changing Environment • New Medicare audit programs, including prepayment audits, seek reduction of overall payment error rates

4. Webinar goals • How did we get here? • How to document medical necessity to avoid audits ! • AAOS/AAHKS advocacy activities …

5. Audit Webinar Panel • David Halsey, MD • AAOS Board of Specialty Societies • AAOS Coverage Determinations Project Team • AAHKS Health Policy Chair • Brian Parsley, MD • AAHKS 2nd VP • David Templeman, MD • AAOS Coverage Determination Project Team, Chair • AAOS Board of Specialty Societies • AAOS Board of Directors

6. Audit Webinar Staff • Matt Twetten • AAOS Sr. Manager, Regulatory, Quality & Medical Affairs • Ashlen Strong • AAOS Manager, State Government Relations

7. Medicare Auditing Environment

8. “Alphabet soup” • MAC • CERT • LCD

9. Medicare Administrative Contractor (MAC) MACs are private companies that serve as contractors performing claims administration MACs do not work on contingency basis

10. Medicare Auditing Environment: Operations • Receive and process Medicare A and B claims • Computer systems • EDI • Front-end claim review • Pricing • Enrollment • Customer Service Call Center • Appeals and Redeterminations

11. Medicare Auditing Environment: Integrity Program • Data analysis • Medical review • Local coverage policy • Provider education

12. CMS definition:Medical Necessity • Safe and effective • Meets, but does not exceed the patient’s medical need • Performed in accordance with accepted standards of practice

13. Comprehensive Error Rate Testing (CERT) • Designed to monitor performance of MACs and to ensure claims administered properly • Audits result in annual reports of rate of improper payments made to hospitals • High payment error rates  Part A claim review (hospital)  Part B claim review (physician)

14. What is a CERT error? • No documentation • Insufficient documentation • Medically unnecessary service • In the hospital chart !!

15. How did we get here? 90 % error DRG 470

16. MAC-Generated Prepayment Audits • MACs authorized by law to reduce payment error rates • 3 MACs initiated audits targeting procedures with high error rates • High error rates shown for TKA/THA (DRG 470)

17. MAC-Generated Prepayment Audits • Begins with prepayment audit of hospital claim (Part A) • If problematic, then hospital payment is denied • Contractor looks to physician claim (Part B) related to problematic hospital claim • If problematic, then money already paid to physician is recouped

19. Documenting Medical Necessity for Major Joint Replacement (Hip and Knee) • MLN Matters SE1236: Published by CMS in September, 2012 • Described by CMS as “an educational guide to improve compliance with documentation requirements for major joint replacement surgery.” • To avoid denials, records should contain enough detailed information to support the medical necessity of the procedure. • “Painful DJD unresponsive to conservative treatment” is not enough.

20. History • Description of pain • ADL limitations • Safety • Contraindications to non-surgical treatments • Failed conservative treatments, e.g., • Meds (e.g., NSAIDs) • Weight loss • Physical Therapy • Intra-articular injections • Braces, orthotics or assistive devices.

21. Physical Examination • Deformity • Range of Motion • Crepitus • Effusions • Tenderness • Gait description

22. Investigations • Results of applicable • investigations • Plain films • MRI

23. Clinical Judgment • Reasons for deviating from a stepped-care approach • Intolerant of NSAIDs • Refused injections • Joint damage too severe to respond (e.g., AVN femoral head) Must be clearly documented

24. Simple game … Documentation is the key … in your office note, op note and discharge summary How do you reach the decision for surgery? Remember your chief resident or fellowship presentations to your attending staff !!

25. Reliable Resources www.paymentaccuracy.gov www.aaos.org/medicare101 www.ahhks.org/