Archive for: Auditing and assessment
CMS delays RAC permanent program
CMS yesterday announced it has delayed the Medicare Recovery Audit Contractor (RAC) permanent program and put a moratorium on all RAC-relayed informational sessions across the country. CMS has yet to release further details but told the American Hospital Association the action was necessary due to “a RAC protest and a stay of performance.”
However, the California Hospital Association (CHA), in a memorandum obtained by HCPro., Inc, says that PRG Schultz (PRG), a contractor that submitted a bid for work in the permanent program but wasn’t selected as one of the four permanent contractors, was considering a challenge to the contract award process.
Despite the delay in the process, Joseph Zebrowitz, MD, executive vice president of Executive Health Resources in Newtown Square, PA, warns facilities not to change anything in terms of preparing for a RAC visit. The permanent program will not change, he says.
“Basically, this is infighting amongst CMS potential contractors who are upset that they were not awarded the RAC contract,” Zebrowitz says. “I think it is important that this delay is not because of any question of whether the RACs are fair, or good, or legal. The RAC program is unchanged, and there is nothing out there to say that anything is going to be different. [CMS] just can not start when the contractors are in doubt. Once they resolve these complaints, they will start up.”
Zebrowitz guessed the delay would take 30 to 60 days.
PRG Schultz, which had the lowest percentage of appeals overturned in the demonstration project (2.1%), boasted last month of netting one of the highest technical scores in the demonstration project. It said CMS denied its contract because of its high contigency fee bid.
Monday, CMS ordered a blanket shutdown of all RAC activity, including its informative sessions (one in New Hampshire was stopped mid-conference yesterday, CHA says). The Healthcare Association of New York (HANYS) said a RAC videoconference briefing scheduled for Wednesday through the state was canceled.
CMS had announced the new RACs for its permanent nationwide program Monday, October 6. The four contractors and their selected regions are:
- Diversified Collection Services, Inc. of Livermore, CA: Region A, initially working in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and New York.
- CGI Technologies and Solutions, Inc. of Fairfax, VA: Region B, initially working in Michigan, Indiana and Minnesota.
- Connolly Consulting Associates, Inc. of Wilton, CT: Region C, initially working in South Carolina, Florida, Colorado and New Mexico.
- HealthDataInsights (HDI), Inc. of Las Vegas, NV: Region D, initially working in Montana, Wyoming, North Dakota, South Dakota, Utah and Arizona.
CMS said it chose the contractors and their regions based on three values:
- A “best value determination” that includes a strong technical approach and “exceptional” customer service
- Conflict of interest reviews
- Lowest contingency fee
CMS also announced last month how much money RACs will make from provider overpayments. The RACs get paid “contingency fees” based on the amount of the improper payments they correct for both overpayments and underpayments.
“Each RAC’s contingency fee is established during contract negotiations with CMS and, as such, the contingency fee varies for each RAC,” CMS said.
The contingency fees breakdown as follows:
Region A: 12.45%
Region B: 12.50%
Region C: 9%
Region D: 9.49%
Other CMS and OIG Issuances
OIG issues review of high-dollar payments for inpatient and outpatient claims processed by Riverbend Government Benefits Administrator for calendar years (CY) 2004 and 2005
On October 16, the OIG issued a report on high-dollar payments for inpatient and outpatient claims processed by Riverbend Government Benefits Administrator, a Medicare fiscal intermediary, for CYs 2004 and 2005. The OIG recommended that Riverbend recover overpayments totaling $4.9 million for 49 inpatient high-dollar claims and 51 outpatient high-dollar claims.
View the OIG report.
CMS issues final decision memo for percutaneous transluminal angioplasty (PTA) of the carotid artery concurrent with stenting
On October 14, CMS issued a final decision memo in which it made no changes to the national coverage determination for PTA of the carotid artery concurrent with stenting.
View the final decision memo.
CMS Transmittals and MLN Matters articles
CMS implements quarterly update to interest rate for Medicare overpayments and underpayments
On October 15, CMS issued a transmittal instructing Medicare contractors to implement an interest rate of 11.375% for Medicare overpayments and underpayments.
Effective date: October 22, 2008
Implementation date: October 22, 2008
View the transmittal.
CMS clarifies previous transmittal on the national coverage determination (NCD) for continuous positive airway pressure (CPAP) therapy for obstructive sleep apnea (OSA)
On October 15, CMS issued a transmittal clarifying a previous transmittal regarding the NCD for CPAP therapy for OSA.
Effective date: March 13, 2008
Implementation date: August 4, 2008
View the transmittal.
News: McKesson charged with Medicare fraud scheme
The Department of Justice joined a whistleblower suit accusing McKesson, North America’s largest durable medical equipment (DME) supplier of creating a sham DME company that submitted false claims and paid kickbacks to a nursing facility company.
Federal prosecutors allege McKesson created and managed a phony DME company named CERES Strategies Medical Services Inc. (CSMS) which was an affiliate of Beverly Enterprises, Inc., a nursing facility company.
According to prosecutors, CSMS billed Medicare for DME supplies and made it appear as though Beverly supplied its own DME. McKesson allegedly supplied those services and the two parties shared the higher reimbursement received from Medicare. In exchange for the arrangement Beverly referred all its Medicare supply needs to McKesson.
To read the DOJ press release click here
Quality Control: 8 tips for quality control auditing
The quality assurance team at Community Regional Medical Center in Fresno, CA used hard numbers to show the need for automated quality assurance software for its facility. Whether you use a similar approach or not, here are some helpful tips and reminders from healthcare consultant Steven Orvis as you think about your quality assurance program:
1. Eliminate subjectivity on front end. Software providers can create lists of customized services that physicians regularly provide. When a service is ordered, staff members enter a diagnosis code, and the software determines whether it meets medical necessity. It can also generate an Advanced Beneficiary Notice (ABN), as necessary. The advantage of having this as part of the front-end tools is that it is hard to train or expect staff to make medical necessity determinations, and this eliminates subjectivity.
2. Get it right before the visit. Software is available that will match members to their health plans and benefits, so that this can be done before the visit, and reduces or eliminates insurance verification errors.
3. Customize your own rules. Registration scrubber software automates much of the review process and lets users build edits and rules. The rules allow users to automatically check for required fields. The systems can also take this information and build worklists for the auditors.
4. Comply with HIPAA early. HIPAA provides an electronic standard for eligibility verification. The best practice is that eligibility verification occurs during the scheduling process, or pre-registration.
5. Beat the billing scrubber. Failure to review the accuracy of registration data before the billing scrubber review will delay the billing of the claim.
6. Do not disregard training. The best software system in the world cannot replace good, strong, face-to-face training. You need an adequately-trained team, including tools and processes for formal and consistent QA and training.
7. Create registration fields if choosing manual approach. A manual QA process involves an auditor, spreadsheets, copies of face sheets, insurance cards, and Explanation of Benefits (EOBs). The auditor should create a list of registration fields that affect a clean claim and review each field against the documents provided. You can review approximately 100-150 registrations per day. The auditor would then document the errors and identify the problem areas and training needs. This is labor-intensive and time-consuming.
8. Monitor performance. You need to track and monitor the overall adherence to and effectiveness of the QA process for at least six months. This will ensure that there is a working process, consistent reporting, and a reasonable accuracy target.
NJ Hospital pays $3.85M to settle Medicare fraud charges
Cooper University Hospital in Camden, N.J., agreed to pay the federal government $2.85 million plus interest to resolve allegations it illegally increased charges to Medicare beneficiaries to obtain higher reimbursement from the program, according to a Department of Justice (DOJ) press release.
Between 2001 and 2003, Cooper allegedly inflated the cost of certain inpatient and outpatient stays in order to qualify for more lucrative outlier payments.
Whistleblower Anthony Kite will receive $654,500 for bringing the case to the government’s attention, according to the release.
To read the full DOJ press release click here.
Tip: Quality of Care
Quality of care continues to be a priority with both the state and federal government. Consider the following questions and concerns when examining your compliance program:
- Evaluate the procedure in place to monitor quality of care.
- Is an oversight board in place?
- Is the quality of care part of the provider’s plan?
- How are quality-of-care problems handled?
- Educate professional and nonprofessional staff on quality of care and the ethical responsibility each has in this area.
- Is quality of care in the mission statement?
- Are the goals and charitable duties of the facility in concert with quality of care?
- Immediately address problems or concerns regarding quality of care and errors.
- Is there a clear line of communication among staff, the compliance officer, and the board to address quality of care problems?
- Are inquiries and questions handled discretely and in confidence?
- Are inquiry results made available to the complainant and others in a timely manner?
-
Conduct internal audits and evaluations to ensure quality of care in all areas of the facility.
-
Make them part of compliance.
-
Use quality of care to your advantage.
-
Recognize and promote the organization’s effectiveness and efficiency to the government and, more importantly, to the public.
-
Quality of care, correction of errors, and promotion of good healthcare systems will drive down the cost of malpractice insurance and give beneficiaries the services and care they need.
This tip was adapted from The Compliance Officer’s Handbook. For more information about the book or to order your copy, click here
OIG: Medicare overstated fraud recoveries
Medicare allegedly instructed outside auditors ignore government policies designed to accurately report fraud and as a result, the agency’s claim of preventing millions of dollars in fraud in 2006 are misleading, according to an OIG audit.
The OIG said one-third of spending for wheelchairs, oxygen supplies, and other medical equipment for fiscal year 2006 was improper. The report estimates the fraud totaled approximately $2.8 billion. In its report to Congress, CMS said it reduced the amount of durable medical equipment (DME) fraud in FY 2006 to $700 million.
CMS hired AdvanceMed, a subsidiary of Computer Sciences Corporation, to audit Medicare DME spending. According to the OIG report, CMS officials told AdvanceMed to ignore Comprehensive Error Rate Testing program, an auditing protocol required by law. Instead of randomly selecting and comparing invoices to physicians’ records, auditors were allegedly instructed to only examine the invoices from DME suppliers.
Medicare introduced a competitive bidding program to help control costs and decrease fraud. Congress suspended the program, that was originally effective July 1.
To read the OIG audit click here
Tip: Get cooperation from employees and staff during an internal investigation
An internal investigation obviously requires you to interview the subject of the complaint. However, in many cases other employees may have helpful information, too. However, staff members on the receiving end of an investigational interview may have the following concerns:
- Fear they have unknowingly done something wrong and will lose their job
- Concern they may implicate a coworker and be responsible if he/she loses his/her job.
- Fear of being viewed as being disloyal or a “rat” by other employees
- Concern about working with an accused employee who is later found not to have done anything wrong
- Concern about being sued by an accused employee for defamation
Each of these concerns stands in the way of obtaining information you need. However, it is the employee’s duty to the organization to disclose and information he or she may have about potential noncompliance. Remind employees about this duty; explain that by assisting with the investigation, they are doing the right thing, for the right reasons.
Don’t be afraid to directly attack the notion of someone being a “rat.” Describe how the organization investigates matters, not due to someone’s personal vendetta, but to protect the integrity of the company, its employees, and its patients.
Explain the organization’s duty to its patients by ensuring that employees act with integrity. By helping with the investigation, the employee helps to protect the organization and its patients.
This tip was adapted from the Internal Investigations Handbook. For more information about the book or to order your copy, click here.
Tips for supporting an audit finding
A significant amount of your audit work will consist of obtaining, examining, and evaluating evidential matter. The OIG defines evidence as the data and information auditors obtain during an audit or review that documents findings and supports opinions and conclusions. This evidence tends to affirm or disprove any matter in question or to influence opinion. Evidence gives the auditor and the compliance officer a prudent basis for forming judgments.
Audit evidence differs from legal evidence in that legal evidence is defined by rigid legal rules. The accuracy of audit evidence, on the other hand, is largely defined by the auditor’s judgment.
Sufficient, competent, and relevant evidence should be obtained to afford a reasonable basis for the findings and conclusions. A record of the work should be retained in the form of working papers. Working papers should contain sufficient information to enable an experienced auditor—with no previous connection to the audit—to ascertain the evidence supporting the auditors’ significant conclusions and judgments. Auditors may meet this requirement by listing file numbers or case numbers or by using other means of identifying the specific documents they examined. They are not required to list detailed information from those documents.
This tip was adapted from Healthcare Auditor’s Handbook For more information about the book or to order your copy, click here.
- Evaluate the procedure in place to monitor quality of care.
- Is an oversight board in place?
- Is the quality of care part of the provider’s plan?
- How are quality-of-care problems handled?
- Educate professional and nonprofessional staff on quality of care and the ethical responsibility each has in this area.
- Is quality of care in the mission statement?
- Are the goals and charitable duties of the facility in concert with quality of care?
- Immediately address problems or concerns regarding quality of care and errors.
- Is there a clear line of communication among staff, the compliance officer, and the board to address quality of care problems?
- Are inquiries and questions handled discretely and in confidence?
- Are inquiry results made available to the complainant and others in a timely manner?
-
Conduct internal audits and evaluations to ensure quality of care in all areas of the facility.
-
Make them part of compliance.
-
-
Use quality of care to your advantage.
-
Recognize and promote the organization’s effectiveness and efficiency to the government and, more importantly, to the public.
-
Quality of care, correction of errors, and promotion of good healthcare systems will drive down the cost of malpractice insurance and give beneficiaries the services and care they need.
-
OIG: Medicare overstated fraud recoveries
Medicare allegedly instructed outside auditors ignore government policies designed to accurately report fraud and as a result, the agency’s claim of preventing millions of dollars in fraud in 2006 are misleading, according to an OIG audit.
The OIG said one-third of spending for wheelchairs, oxygen supplies, and other medical equipment for fiscal year 2006 was improper. The report estimates the fraud totaled approximately $2.8 billion. In its report to Congress, CMS said it reduced the amount of durable medical equipment (DME) fraud in FY 2006 to $700 million.
CMS hired AdvanceMed, a subsidiary of Computer Sciences Corporation, to audit Medicare DME spending. According to the OIG report, CMS officials told AdvanceMed to ignore Comprehensive Error Rate Testing program, an auditing protocol required by law. Instead of randomly selecting and comparing invoices to physicians’ records, auditors were allegedly instructed to only examine the invoices from DME suppliers.
Medicare introduced a competitive bidding program to help control costs and decrease fraud. Congress suspended the program, that was originally effective July 1.
To read the OIG audit click here
Tip: Get cooperation from employees and staff during an internal investigation
An internal investigation obviously requires you to interview the subject of the complaint. However, in many cases other employees may have helpful information, too. However, staff members on the receiving end of an investigational interview may have the following concerns:
- Fear they have unknowingly done something wrong and will lose their job
- Concern they may implicate a coworker and be responsible if he/she loses his/her job.
- Fear of being viewed as being disloyal or a “rat” by other employees
- Concern about working with an accused employee who is later found not to have done anything wrong
- Concern about being sued by an accused employee for defamation
Each of these concerns stands in the way of obtaining information you need. However, it is the employee’s duty to the organization to disclose and information he or she may have about potential noncompliance. Remind employees about this duty; explain that by assisting with the investigation, they are doing the right thing, for the right reasons.
Don’t be afraid to directly attack the notion of someone being a “rat.” Describe how the organization investigates matters, not due to someone’s personal vendetta, but to protect the integrity of the company, its employees, and its patients.
Explain the organization’s duty to its patients by ensuring that employees act with integrity. By helping with the investigation, the employee helps to protect the organization and its patients.
This tip was adapted from the Internal Investigations Handbook. For more information about the book or to order your copy, click here.
Tips for supporting an audit finding
A significant amount of your audit work will consist of obtaining, examining, and evaluating evidential matter. The OIG defines evidence as the data and information auditors obtain during an audit or review that documents findings and supports opinions and conclusions. This evidence tends to affirm or disprove any matter in question or to influence opinion. Evidence gives the auditor and the compliance officer a prudent basis for forming judgments.
Audit evidence differs from legal evidence in that legal evidence is defined by rigid legal rules. The accuracy of audit evidence, on the other hand, is largely defined by the auditor’s judgment.
Sufficient, competent, and relevant evidence should be obtained to afford a reasonable basis for the findings and conclusions. A record of the work should be retained in the form of working papers. Working papers should contain sufficient information to enable an experienced auditor—with no previous connection to the audit—to ascertain the evidence supporting the auditors’ significant conclusions and judgments. Auditors may meet this requirement by listing file numbers or case numbers or by using other means of identifying the specific documents they examined. They are not required to list detailed information from those documents.
This tip was adapted from Healthcare Auditor’s Handbook For more information about the book or to order your copy, click here.
Medicare introduced a competitive bidding program to help control costs and decrease fraud. Congress suspended the program, that was originally effective July 1.
To read the OIG audit click here
- Fear they have unknowingly done something wrong and will lose their job
- Concern they may implicate a coworker and be responsible if he/she loses his/her job.
- Fear of being viewed as being disloyal or a “rat” by other employees
- Concern about working with an accused employee who is later found not to have done anything wrong
- Concern about being sued by an accused employee for defamation
