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3/22/2012

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What to Do When A Recovery Auditor Knocks on Your

Hospital’s DoorDawn Crump, MA, SSBB

Network Compliance Director SSM Health Care St. Louis, St. Louis, Missouri

Thomas McCarter, MD, FACPChief Clinical Officer, Executive Health Resources

Ralph Wuebker, MD, MBAVice President of Audit, Compliance and Education

Executive Health ResourcesSteven Greenspan, JD, LLM

Vice President, Regulatory Affairs, Executive Health Resources

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Agenda

• The Medicare “State of the Union”

• Upcoming non-RAC audits

• Physician involvement

• Best practice and regulations

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So What is the Key Word Today?

It is no longer just about getting the answer correct;

it is all about your

“PROCESS”

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OIG doesn’t just determine whether the end result — the Medicare claim —was correct. It wants to know what kind of reviews hospitals perform to

ensure the “ultimate submission of claims” is correct.


CMS’ decision to increase the scope of cases that are being targeted for compliance audits pushes hospitals into the “Age of Audit Accountability.” “Getting it Right” for compliance and revenue integrity reasons has never been greater.

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“Gray” or Uncertain Medical Necessity: Why it Matters?

Cases that are clearly appropriate for Outpatient setting:

– Scheduled Transfusion

– Injection / Chemotherapy

– Skin Biopsy

– Tympanostomy Tube Placement

– Dilation & Curettage

Medicare / Medicaid 2010* Care at Hospitals

Inpatient Care• 18.3m cases

• $160.3B Reimbursed

Outpatient Care• 87.3m cases

• $43.2B Reimbursed

Cases that are clearly appropriate for Inpatient setting or clinical need:

– Acute MI

– Coronary Artery Bypass Graft

– Open Appendectomy

– Acute Intracranial Bleed

– Heart Valve Transplant

– Respiratory Failure

“Gray” Area – Cases that require individual assessment due to unclear Medical Necessity:

• 16.6M cases

• $79B in Reimbursement at Risk

Medical

– Chest Pain

– Syncope (fainting)

– Dehydration

– Back Pain

16.6M cases

Gray Area is expanding

Surgical

– Cardiac Procedures

– Mastectomy

– Prostatectomy

– Laparoscopic Appendectomy

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CMS and Auditor Focus on “Gray” or Uncertain Areas of Medical Necessity

• CMS believes that the annual error rate is $34B, equating to 2/3rds in the area of Medical Necessity

• US Office of Management and Budget projects that the actual annual error is $42B• Either way, the only way to remove error is to review all of the “gray” at-risk cases

“Gray” area growth nationally from 2007 to 2010: 36.7% increase– Interventional & Diagnostic Cardiac Procedures (catheters, stents, ICD, pacemakers – 1.6m

cases/year)

– Spinal Procedures – 107k cases/year

– Readmission target expanded from 7 to 30 days – 2.2m cases/year

– Changes in CMS “Inpatient Only” list – 510k cases/year

Why does the “gray” area grow?– Advances in medical technology and treatment methods make an outpatient setting appropriate for

some patients

– These advancements are reflected in changes in screening criteria and CMS’ “Inpatient Only” list

– CMS and auditors identify target areas based on where they think abuses occur or where hospitals are likely to make mistakes (costly, common, confusing)

– 24 hours or less (contractors are using time as a determinant)

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The Expanding Gray Zone

• The regulations haven’t changed

• The procedures haven’t changed

• How can providers be wrong 90% of the time?

• It is about how the contractors interpret the regulations

• If providers don’t fight back, the new interpretations become the new rules

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How Do Hospitals Manage “Gray” Medical Necessity without EHR?

Based on audits of >250 hospitals

Gray Cases: 16.6M, representing $79B

CommonErroneousProcesses:

Decisions based solely on Physician Order

Decision based solely on Screening Criteria

Screening Criteria with RN Case Manager Judgment

Screening Criteria with Attending or Onsite PA Opinion

CommonErroneousResults:

• Over-status IP: 25-42%• Over-status OBS/OP: 12-

27%

• Inconsistent and random based on individual opinion/style

• ALJ decisions do not rest solely on the physician order*


43%

• Misuse of IP screening criteria tool

• Huge bias towards OP


36%

• Violates Conditions of Participation (described as “revenue optimization” by DOJ)

• RNs not trained nor legally permitted to make this decision, so variation is wide


27%

• Similar result as solely relying on Order

• Inconsistent and random based on individual opinion/style

• Attendings also often passively agree with criteria screen result

*Based upon >2,000 ALJ hearings conducted by EHRILLUSTRATIVE – SAMPLE 6 HOSPITAL SYSTEM

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The Age of Accountability is NowThe Age of Audits

• MACs can have more impact than RACs– Prepayment reviews

– Focused audits

– Mobile audits

• OIG Audits also coming to the forefront

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Traditional Targets(PEPPER 1 day stay, DRG

validation)

MAC Probe Audits

(1+ day targets, esp. chest pain & high cost

procedures)

RAC TargetsInitial 18 announced, many

more to follow

OIG & DOJFraud, False Claims

Kyphoplasty, chest pain, ICD

ZPICZero Day stay, extrapolation,

‘specialized fraud fighters’

Medicare Audits 2012:A Target Rich Environment

CLAIMS REVIEWS

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Copyright ©2012 Executive Health Resources, Inc. All rights reserved. 10

Improper Payment Report

*$34.3 billion in improper payments

“The primary causes of improper payments, as identified in the FY 2010 Medicare FFS Improper Payments report, were insufficient documentationerrors, medically unnecessary services, and to a lesser extent, coding errors.”

Targeting lower error rates may indicate greater audit scrutiny in the short term

*From the February 2011 Improper Medicare Fee-For-Service Payments Report

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New RAC Activity

CMS announces Recovery Audit Contractor Demonstration Projects

Starting in 2012

• Recovery audit prepayment review – June 2012

• Prior authorization for certain devices – June 2012

• Part A to Part B rebilling - began January 1, 2012

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Recovery Audit Prepayment Review

• RACS will review claims before they are paid to ensure that the provider complies with all Medicare payment rules.

• They will conduct claim audits on 'certain types of historically high rates of improper payment. It will be applicable to 11 states, seven of which are HEAT (Healthcare fraud prevention and enforcement action team) states: California, Florida, Illinois, Louisiana, Michigan, New York, and Texas; and four states with high volumes of short inpatient stays: Missouri, North Carolina, Ohio, and Pennsylvania. All facilities who bill to the FI/MAC within those states are subject to the program

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Recovery Audit Prepayment Review

The initial list is as follows*:

• January 1: MS-DRG 312, syncope and collapse

• March 1: MS-DRG 069, transient ischemia and MS-DRG 377, gastrointestinal (GI) hemorrhage with MCC

• May 1: MS-DRG 378, GI hemorrhage with CC and MS-DRG 379, hemorrhage without a CC or MCC

• July 1: MS-DRG 637, diabetes with MCC, MS-DRG 638, diabetes with CC, and MS-DRG 639, diabetes without a CC or MCC

*Will be readjusted based on delay in initiation.

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Operational Details

• Limits on prepayment reviews won’t exceed current post-payment ADR (additional documentation request) limits.

• Providers may appeal the denial and have the same appeal rights as with other denials. Appeal time frames start on the date of the denial as indicated in the remittance advice.

• Medical records provided on appeal will be remanded to the recovery auditor for review. (This only applies to claims that were denied as a result of nonreceipt of medical records).

• Claims will be off-limits from future post-payment reviews from MACs and recovery auditors

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Part A to Part B Rebilling

• This initiative allows hospitals to rebill for 90% of the Part B payment when a Medicare contractor denies a Part A inpatient short stay claim as not reasonable and necessary due to the hospital billing for the wrong setting.

– Currently, when outpatient services are billed as an inpatient services, the bill is denied, only leaving ancillary services eligible within the timely filing/ bill type 121

– First 380 hospitals to volunteer

• Cannot bill observation hours

• Must hold the patient harmless

• The impact of the program is that Medicare is waiving the timely filing requirement

– In return, providers within this demo WILL AGREE TO WAIVE APPEAL RIGHTS for those claims resubmitted for Part B

– CMS will educate on how to resubmit within the new demo

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Areas to Consider

Continued participation is a multifactorial decision:

• Finance

• Compliance

• Appeals process

• UM process

• Clinical

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Source Authorities

• Section 6411 of Affordable Care Act (ACA)– March 23, 2010 signed by President Obama

• Proposed Rule was published November 10, 2010 – Federal Register, Vol. 75, No. 217 beginning pg. 69037– http://edocket.access.gpo.gov/2010/pdf/2010-28390.pdf

• Final Rule was published September 16, 2011– Federal Register, Vol. 76, No. 180 beginning pg. 57808– http://www.gpo.gov/fdsys/pkg/FR-2011-09-16/pdf/2011-

23695.pdf• Frequently Asked Questions Section 6411(a) of the

Affordable Care Act December 2011 – http://www.cms.gov/MedicaidIntegrityProgram/downloads/Scann

ed_document_29-12-2011_13-20-42.pdf

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Medicaid RAC Different from Medicare RA

• Many unknowns

• States have far more latitude such as:– chart limits

– appeals process

– payment to contractors

– Target areas

• Rules will vary state to state, so providers may be subject to multiple state rules

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Medicaid Recovery Audit Contractors: CMS Final Rule

• Will begin on January 1, 2012

• There is no global phase-in strategy

• Estimated to save over $2 billion over the next 5 years

• The look back period will be 3 years, unless the RAC receives approval from the state (§455.508(f))

• Process and procedural issues will be left up to the individual states

Source: Medicaid Program; Recovery Audit Contractors Final Rule, 42 CFR 455

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How May the New Demonstrations Impact You?

• If you are participating, what impact does it have on your program?– Your front end stays the same

– You should be submitting for first-level appeals

– You should be tracking denial rates; contractors will become aware of who is participating

– You can opt out at any time

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Other Activity

• OIG

• ZPICs

• Medicaid RACs

• Fraud

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Challenges & Increased Aggressiveness by MACs

• MACs are only limited by their staffing patterns– Mobile audits

– Prepayment reviews• Focus on 3 DRGs

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RACs Are But the Tip of the Audit Iceberg…

Who What

MCR RAs Medicare Recovery Auditors

MACs Medicare Administrative Contractors

CERT Comprehensive Error Rate Testing

MIP Medicaid Integrity Plan

MIG CMS Medicaid Integrity Group

MICs Medicaid Integrity Contractors

MIG Medicaid Inspector General

MCD RAC Medicaid Recovery Audit Contractors

PERM Payment Error Rate Measurement

PSCs Program Safeguard Contractors

ZPICs Zone Program Integrity Contractors

OIG Office of the Inspector General

DOJ Department of Justice

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RACs and MACs Working Together

• As of Jan 3, 2012 RACs will be transferring the responsibility of issuing demands letters to the MACs.

• As a result, when a recovery auditor finds that improper payments have made been, it will submit claim adjustments to the MAC, and the MAC will then establish receivables and issue automated demand letters for any recovery auditor identified overpayment.

Source: MedLearn Matters 7436, July 2011.

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MAC Challenge

• Not all MACs have part A experience• Most are new to non-coding medical necessity

admission status issues• Numerous examples of guidance provided that

appears to not be consistent with statutes, regulations and manual guidance

• Examples:– Time as sole basis for admission status– Corrective Action Plan requested prior to Appeals

• You need to be prepared to defend yourself and stand up for your rights.

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Examples

• DRG 313 – “Our opinion is that if a patient with chest pain has negative enzymes and a normal EKG, they are an outpatient”– In this group 68/69 were successfully appealed

• Trailblazer audited elective PCI and denied 98% of 250 claims– Lost contract– In this group 143/145 successfully appealed

• Your UR committee needs to know you are doing it right and stand up.

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OIG Audits in Progress

• Coding

• Complications

• One-day procedures

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2012 OIG Work Plan for Professional Services

• Claims for incident-to services that exceed 24 hours in a given day– do not appear in claims data and can be identified only by reviewing the

medical record– expose Medicare beneficiaries to care that does not meet professional

standards of quality

• High cumulative Medicare Part B payments to practitioners– unusually high Medicare payments may indicate incorrect billing, fraud,

or abuse

• Look at specific areas of the country to see if they are experiencing a higher number of physicians opting out of the Medicare program and assess the potential impact on beneficiaries– wants to know if opt-out physicians have been submitting claims to

Medicare

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• E/M services to ensure that the submitted codes accurately reflect the services provided– E/M services provided during the post-op period of a global surgery will

be of particular interest

– Trends in coding of claims from 2000-2009

• Place-of-Service Errors– Services performed in ambulatory surgical centers and hospital

outpatient departments to determine whether they properly coded the places of service

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2012 OIG Work Plan for Professional Services


OIG Now into Concordance

Review of Place-of-Service Coding for Physician Services Processed by Medicare Part B Contractors during Calendar Year 2009 (A-01-10-00516) http://go.usa.gov/0z6

We recommend that the Centers for Medicare & Medicaid Services (CMS) instruct its Medicare contractors to (1) recover approximately $3,000 in overpayments for the sampled services; (2) immediately reopen the claims associated with the nonsampled services, review our information on these claims (which have estimated overpayments of $9.5 million), and work with the physicians who provided the services to recover any overpayments; (3) continue to strengthen their education process and reemphasize to physicians and their billing agents the importance of correctly coding the place of service and the need for internal controls to prevent Medicare billings with incorrect place-of-service codes; and (4) continue to work with program safeguard contractors and, if necessary to coordinate Part A and Part B data matches, with other Medicare contractors to develop a data match that will identify physician services at high risk for place-of-service miscoding and recover any identified overpayments. CMS concurred with our recommendations and described the corrective actions that it was taking or planned to take.

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MAC Review of Physician Claims

• Effective January 1, 2012, First Coast Service Options Inc. (FCSO) also will perform post-payment review of the admitting physician's and /or surgeon's Part B services related to inpatient admissions that are denied either because they do not meet the level of care criteria as services performed could have been performed in a less intensive setting (i.e., outpatient), or documentation did not support the medical necessity of the procedure.

• Focus will be cardiac (DRGs 226-251) and ortho procedures (DRGs 458, 460,470,490) , chest pain (DRG 313), medical back (DRG 552), nutritional/metabolic (DRG 392) and esophagitis/gastroenteritis (DRG 641)

Source: FCSO's Program Integrity and Provider Outreach and Education Departments

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Areas of Compliance Risk Broadened

Medical Center To Pay $2.8M To Settle Unnecessary Stent Claims

The Baltimore Sun (7/11, Bishop) reported, (Hospital name withheld) has "agreed to pay $2.8 million to settle federal claims it failed to prevent cardiologist (name withheld) from placing medically unnecessary stents in dozens of patients between 2003 and 2006," according to the Maryland US Attorney's Office. (Name withheld) was "convicted last month in US District Court of healthcare fraud and related charges for falsifying patient records to make it appear they needed coronary stents, then billing private and public insurers hundreds of thousands of dollars for the unwarranted procedures." He faces a "maximum of 35 years in prison at his sentencing, set for Nov. 10." The hospital, which "admits no liability...has already repaid nearly $1 million"; and it has also agreed to "repay any federal funds it received for (name withheld) improper stents," federal prosecutors said.

Physician was sentenced to 8 years in prison.

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2012 OIG Work Plan Targets New Risk Areas for Hospitals

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16 risk areas that OIG focuses on during OIG Medicare compliance reviews, although not necessarily all at once:

• Outpatient claims paid greater than charges

• Inpatient payments greater than $150,000• Outpatient payments greater than $25,000• Payments for hemophilia services

• One-day stays at acute care• Major complication/comorbidity and complication/comorbidity• Payments for septicemia services

• Payments for inpatient same-day discharges and readmissions• Payments for outpatient surgeries billed with units greater than one. (usually a clerical error)• Outpatient claims billed during DRG payment window• Inpatient manufacturer credits for replacement of medical devices• Outpatient manufacturer credits for replacement of medical devices• Post-acute transfers to SNF/HHA/another acute care/non-acute inpatient facility• SNF/HHA consolidated billing — outpatient services• Outpatient claims billed with modifier 59 (bilaterals)• Inpatient claims paid greater than charges


OIG to Ramp Up Compliance Reviews for 2012

Sixty more Medicare compliance reviews are already planned or underway, underscoring the HHS Office of Inspector General’s commitment to this new multi-faceted strategy for auditing hospitals, OIG officials say.

“This is an evolving initiative,” Brian Ritchie, the HHS Assistant Inspector General for CMS Audits, said …..”It’s a big investment in the hospital area.”

From a pool of 3,600 short-term acute care hospitals, Ritchie says the OIG picks the lucky winners partly based on:

• Their past performance on single-issue audits;

• Where they stand compared to other hospitals’ billing volumes according to CMS’s Program for Evaluating Payment Patterns Electronic Report (PEPPER); and

• Whether there is continued “poor performance” (e.g., Medicare administrative contractors and quality improvement organizations have been to hospitals and “tried to educate them,” for example, with little success).

Report on Medicare Compliance, Nov 14, 2011

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DOJ Activity

• Defibrillator

• Chest pain

• Kyphoplasty

• Taking referrals from MACs and ZPICs

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What’s Going to Happen to Physicians?

• OIG

• MAC

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MLN Matters®

SE1037

• CMS contractors are not required to automatically deny a claim that does not meet the admission guidelines of a screening tool.

• CMS considers the use of screening criteria as only one tool that should be utilized by contractors to assist them in making an inpatient hospital claim determination.

• For each case, the review staff will utilize the following when making a medical necessity determination – Admission criteria; – Invasive procedure criteria; – CMS coverage guidelines; – Published CMS criteria; and – Other screens, criteria, and guidelines (e.g., practice guidelines that

are well accepted by the medical community).

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Conclusion

• Medical Necessity is a complicated issue –but it is possible to achieve success.

• Case management process must be based on clinical and regulatory evidence and best practices

• Consistent process must be paired with diligent oversight and data review

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Utilizing PEPPER and Data Analysis to Enhance Your

Compliance Efforts

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• The Program for Evaluating Payment Patterns Electronic Report (PEPPER) is intended to support the hospital’s own auditing and monitoring activities

• Created in 2003, the current edition of PEPPER includes an expanded list of areas at risk for improper Medicare payment (18 “targets” added)

• These targets reflect the latest denial data from RAC, CERT, and MAC/FI audits

• Changes in both quantity and format of PEPPER data need to be fully understood in order to maximize their value

About PEPPER

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• Utilization Review Committee

• Case management

• Medical coding and billing

• Compliance officers/committees

• Finance and Leadership

Who Should Use PEPPER?

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Currently available:

• Short-term acute care (STPEPP, quarterly)

• Long-term acute care (LTPEPP, annual)

Started this year (annual reports):

• Critical Access Hospitals (April 2011)

• Inpatient Psychiatric Hospitals/Units (June 2011)

• Inpatient Rehabilitation Hospitals/Units (Sept 2011)

What Types of HospitalsReceive PEPPERs?

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• Provides a rolling 3 year analysis of paid Medicare inpatient claims

• Monitor your hospitals ranking based on STATE, MAC/FI JURISDICTION, and NATIONAL claim patterns

• Quarterly data allows analysis of trends

• Data is available within 4-6 months of claim filing

Note: As of Q4 2010, PEPPER data reflects17 MAC/FI Jurisdictions. Further consolidation is expected as the MAC program is finalized

PEPPER Basics

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• Does not monitor outpatient services, such as observation care or outpatient procedures

– Except for 1 target that includes both inpatient and outpatient cardiac stents

• Does not include Medicare Advantage (HMO) claims or other payors

• Does not compare hospitals by size, demographics, or type of services

What the PEPPER is Not:

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PEPPER Data and Info

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Obtain PEPPER data files from qualitynet.org:

Training and other info: pepperresources.org


ONGOING

• Stroke / Intracranial Hemorrhage

• Respiratory Infection

• Simple Pneumonia

• Septicemia

• Medical DRGs with CC or MCC

2011 Coding/DRG Validation

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NEW

• Surgical DRGs with CC or MCC

• Excisional Debridement

• Ventilator Support

• Unrelated OR Procedure

2011 Coding/DRG Validation

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• Extensive changes; increased scope and type of targets

• Reflects increased audits and denials, as well as hospital requested changes

• Subsets (* = new)

– 1-day stays (3 targets, minor changes)

– 2-day stays* (7 targets – 6 medical, 1 procedure)

– Specific DRGs* (7 targets – 6 medical, 1 procedure)

– 3-day qualifying stay

– Readmissions (any hospital and same* hospital)

2011 Medical Necessity

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35%39%

46%52%

56%

64%70%

76%79%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

10th 20th 30th 40th 50th 60th 70th 80th 90th

Understanding Outliers

High OutlierLow Outlier

Percentile

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Example: Simple Pneumonia

count of discharges for MSDRGs 193, 194(simple pneumonia with CC or MCC)

count of discharges for MSDRGs 190, 191, 192 (COPD with or without CC/MCC) +

plus count of discharges for MSDRGs 193, 194, 195(simple pneumonia with or without CC/MCC)

Higher Severity DRGs

All Related DRGs

MS-DRG coding is tested in the PEPPER by looking at ratios of higher severity MSDRGs to the universe of related

MSDRGs.

DRG Validation Ratios

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DRG Validation and CodingOverview

High outlier for 2+ quarters or most recent quarter

Low outlier for 2+ quarters or most recent quarter

Stroke ICHSimple Pneumonia

SepticemiaSurgical CC/MCC

0-1 quarters as an outlier Sparse or no data in PEPPER

Medical CC/MCCRespiratory Infect.

Unrelated OR Procs.Excis. DebridementVentilator Support


DRG Validation and CodingBy Quarter

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Example: 2-Day Stay: Heart Failure

Count Of 2-day Stays (LOS 0-2)For DRGs 291, 292, 293

excluding transfers, deaths, left AMA (does not exclude observation > 24 hrs)

Count Of All Discharges forDRG 291, 292, 293

Higher Concern Cases

All Related Cases

Medical necessity is tested in the PEPPER by looking at ratios of cases with a higher probability of medical necessity

concerns to the universe of related cases.

Medical Necessity Ratios2-Day Stays

Copyright ©2012 Executive Health Resources, Inc. All rights reserved.Copyright ©2011 Executive Health Resources, Inc. All rights reserved.

Example: 2-Day Stay: Heart Failure

10%

15%

20%

25%

30%

35%

40%

45%

50%

Q1 FY2008

Q2 FY2008

Q3 FY2008

Q4 FY2008

Q1 FY2009

Q2 FY2009

Q3 FY2009

Q4 FY2009

Q1 FY2010

Q2 FY2010

Q3 FY2010

Q4 FY2010

Targ

et A

rea

Per

cen

t

Two-day Stays for Heart Failure and Shock

Hospital Jurisdiction : 80th Percentile State : 80th Percentile National: 80th Percentile

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Internal Audits

Need to audit? When reviewing this information, you may want to consider auditing a sample of records if you identify:

• Percents (4th column in the table below) that are consistently red (high outlier)

• A trend of increasing Percents over time resulting in outlier status

• Your Percent is above the national 80th percentile (see graph on the following worksheet)

PEPPER Instructions (top of each worksheet)

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• Short Stay Targets

– 1-day stays (3 targets, minor changes)

– 2-day stays (7 targets – 6 medical, 1 procedure)

• How many outliers are present in these areas?

– 1 or more in the past 4 quarters?

– 2 or more in the past 3 years?

– Trend noticeably up or down?

– Evidence of short stay surgery/procedure risk?

o 1-day stay ALL DRG outlier with 1 day stay MEDICAL DRG below the 80th percentile

o Review procedures included on Top 1 Day Stay Surgical DRG list that are not Inpatient Only

Digging Deeper: Short Stay Targets

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• New in 2011

– TIA vs. all stroke/intracerebral hemorrhage

– COPD vs. all medical DRGs in MDC 04 (respiratory system)

– Syncope vs. all medical DRGs in MDC 5 (circulatory system)

– Circulatory System (Other) vs. all medical DRGs in MDC 05 (circulatory system)

– Digestive System (Other) vs. all medical DRGs in MDC 06 (digestive system)

– Medical Back vs. all medical DRGs in MDC 08 (musculoskeletal system/connective tissue)

Digging Deeper in Medical Necessity: DRG Specific Targets

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• These targets reflect admissions that may lack clear documentation of inpatient medical necessity, regardless of LOS

• Use of similar DRGs in the denominator helps to control for population differences, such as the prevalence of respiratory disease

• As for all targets, high outliers must be evaluated by the hospital to ensure correct status and adequate documentation (both clinical and utilization review)

• These targets also involve DRG code assignment variation from hospital to hospital; review of outliers should be done in conjunction with coding staff

How to Interpret DRG Specific Targets

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Example: Syncope

5%

7%

9%

11%

13%

15%

17%

Q1 FY 2008Q2 FY 2008Q3 FY 2008Q4 FY 2008Q1 FY 2009Q2 FY 2009Q3 FY 2009Q4 FY 2009Q1 FY 2010Q2 FY 2010Q3 FY 2010Q4 FY 2010

Targ

et

Are

a P

erc

en

t

Syncope

Change in case review?Change in coding?

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• New in 2011

– PTCA with stent (ratio of inpatient to all cases)

– 2-day Stay Vascular Procedureso Renal, Peripheral, Othero Excludes cerebral and cardiac procedures

– Top 1-day stay surgical DRGs

Procedure Targets

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• New in 2011

– Very high 80th percentile threshold

o Outlier = 100% national, high 90s for jurisdiction

o Reflects large number of inpatient stents in all states/regions

o Does not differentiate elective vs. emergent

o Does not differentiate 1-day vs. long stay

o May be of limited use for these reasons

PTCA with Stent

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Example: Cardiac Stent

40%

50%

60%

70%

80%

90%

100%

Q1 FY2008

Q2 FY2008

Q3 FY2008

Q4 FY2008

Q1 FY2009

Q2 FY2009

Q3 FY2009

Q4 FY2009

Q1 FY2010

Q2 FY2010

Q3 FY2010

Q4 FY2010

Tar

get

Are

a P

erce

nt

PTCA with Stent

Shift to outpatient is greaterthan benchmark groups

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• 3-day qualifying stay prior to SNF

– Transfers to SNF or swing bed with LOS = 3

– Possible ‘social admission’ to gain SNF benefit

• Readmission to any hospital

– Readmission within 30 days to any hospital

– Excludes acute care hospital transfers

– Excludes rehabilitation (diagnosis code V57.)

– (Maryland only, excludes psychiatric transfers)

• Readmission to same hospital (new)

– If same hospital readmission rates are lower than total readmissions, patients are seeking care elsewhere.

Additional Targets

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Using Data to Enhance Your Compliance Program

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St. Elsewhere’s Peer Group*

*Peer groups and statistics created from EHR’s hospital customers.

Peer Group# of Hospitals in Peer Group

# of Benchmark Hospitals

Avg # of Beds at Benchmark Hospitals

Benchmark Avg # of MCR Discharges

Benchmark Avg % of Discharges that are MCR CMI

ST Acute <50 47 40 36 535 49.1% 1.271

ST Acute 100 – 149 146 40 126 2,359 49.9% 1.385

ST Acute 150 – 199 146 38 173 3,091 49.6% 1.456

ST Acute 200 – 249 127 38 221 3,251 47.3% 1.477

ST Acute 250 – 349 157 45 301 5,170 47.9% 1.572

ST Acute 350 – 499 150 42 409 6,548 42.7% 1.662

ST Acute 50 – 99 165 44 75 1,121 53.1% 1.289

ST Acute 500+ 55 10 624 9,067 34.9% 1.750

ST Acute / Teaching 109 33 568 7,835 35.7% 1.808


Second Level Review Benchmarks

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Expected Actual* DifferCardiac Medical 115 145 30

GI Medical 42 72 30GU/Renal Medical 33 52 19

Neuro Medical 28 41 13

Other Medical 112 123 11Cardiac Procedures 10 4 -6

Other Procedures 26 38 12

TOTAL 356 475 119

*Average over the most recent 12 months.

RECOMMMENDATION: Facility should review compliance process and Interqual® results for top three clinical categories shown above.

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First Level Screening Compliance Metrics

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Reviewed September 2010 through February 2011

Final StatusCM

Reviewed No Review % Reviewed

Inpatient 7189 253 96.6%

Observation 654 291 69.2%

Total 7843 544 93.5%


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Cardiac Medical CasesDistribution of Interqual® Failure Rates

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Interqual ® Failure Rates by Person (minimum of 10 cases per person)

Expected Range

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Compliance Analytics Provides Answers to Common Questions

• How do I know if I’m compliant?

• Why is my observation rate increasing?

• How big is my Medical Necessity audit risk?

• How do I compare to my peers in Medical Necessity Compliance risk?

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Observation Rate

Q: “Our number of admissions are down, but census has remained high? What is the cause?”

A: Medicare Medical Observation rate 18% • 614/2818 (OBS/OBS + IP)• MED DRGs only• National average is 6-9%

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Observation Rate by Payor

Observation RatesPayor Category IP Medical OP Observation Obs Rate

COMMERCIAL 12,005 6,410 34.81%

MEDICAID 3,331 2,087 38.52%

MEDICARE 13,062 1,783 12.01%

OTHER 3,156 1,652 34.36%

Q: We review ALL Medicare cases and our observation is increasing?


Medical Observation Rates

Medical Observation Rates

Payor Category IP MedicalOP Medical

ObsMed Obs

Rate

COMMERCIAL 12,005 5,535 31.56%

MEDICAID 3,331 2,041 37.99%

MEDICARE 12,562 1,254 9.07%

OTHER 3,156 1,461 31.64%

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Expected Cases for Review

• 84 High Risk Cases (OBS and Inpt) per Month o = (485 + 614) / 13

o 888 high risk MED DRGs* (From CGI approved Medical Necessity list)

o 485 1,2,3 day stay (Highest audit risk)

o 614 med obs (revenue loss)

o 13 months of data

*High Risk DRGs: 56 57 69 182 190 191 192 249 253 254 291 292 293 302 308 312 313 314 315 316 393 551 552 640 682 683 684 689 811

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High Risk by Month

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OBS Rates by Admit Source

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July 2010 - September 2010

Values

Sum of IP Med

Sum of Obs

Observation Rate

Born in Facility or SNF Transfer 21 1 4.5%

Emergency Room 1391 109 7.8%

Physician Referral 62 17 27.4%Transfer from another health care agency 27 0.0%

Grand Total 1477 126 8.5%


Weekend Review

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Admit MonthWeekday Cases

Weekend Cases

Total Cases

Weekday Referrals

Weekend Referrals

Total Referrals

Referral Rate All

Referral Rate

Weekends

Oct‐09 536 143 679 53 18 71 10.5% 12.6%

Nov‐09 535 142 677 27 7 34 5.00% 4.90%

Dec‐09 562 154 716 17 6 23 3.20% 3.90%

Jan‐10 537 175 712 13 6 19 2.70% 3.40%

Feb‐10 526 144 670 18 4 22 3.30% 2.80%

Mar‐10 645 142 787 23 6 29 3.70% 4.20%

Apr‐10 586 161 747 20 9 29 3.90% 5.60%

May‐10 547 175 722 30 7 37 5.10% 2.00%

Jun‐10 527 137 664 46 4 50 7.50% 2.90%

Jul‐10 541 172 713 27 8 35 4.90% 2.70%

Aug‐10 528 153 681 34 3 37 5.40% 2.00%

Sep‐10 433 121 554 17 2 19 3.40% 1.70%

Total 6503 1819 8322 325 80 405 4.9% 4.4%

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Cardiac Procedures

St Elsewhere Cardiac Procedures ‐MedicareCardiac

Procedures Inpt Outpt Totals

Pacer/AICD 98% 2% 613

PTCA/Stent/Cath 92% 8% 1,318

St Nowhere Cardiac Procedures – MedicareCardiac

Procedures Inpt Outpt Totals

Pacer/AICD 59% 41% 454

PTCA/Stent/Cath 68% 32% 1,169

Limited to:

-Traditional Medicare -Elective or Scheduled-Overnight Stays


“Compliance Dashboard”

• Overall observation rate

• Commercial medical observation rate– Key payors

• Medicare – Medical observation rate– Inpatient high-risk case count per month– Surgery: inpatient vs. observation vs. outpatient

• Interqual® failure rate

• IRR (inter-rater reliability)

78

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“Cardiac Dashboard”

Cardiac inpatient vs. outpatient metrics:

• Payor

• Traditional Medicare– ER vs. elective

– Same-day discharge vs. overnight stay

– Device vs. catheter procedure

– By physician (blinded)

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St. Elsewhere Dashboard

Jan-11 Feb-11 Mar-11

Medical

Observation Rate 28% 25% 27%Medicare Medical Observation Rate 9% 8% 8%

High Risk DRG Short Stays 34 28 38

CardiacScheduled Cardiac Devices inpt/outpt 67/33 61/39 64/36Scheduled Cardiac Cath Procedures

inpt/outpt 55/45 53/47 52/48

Audit Activity RAC Requested

Charts 30 0 20

RAC denied charts 5 3 8

80

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Dawn Crump MA, SSBBNetwork Director of Compliance SSM Health Care

St. Louis

SSM Health Care-St. Louis includes:◦ Seven hospitals 6 Adult Acute Care 1 Pediatric Acute Care

◦ SSM Managed Care Organization

◦ Physicians' Organization

◦ Regional organization restructure in 2008

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Began audit risk inventory end of 2008 Conferred with other providers who were in

the demonstration RAC project Reviewed PEPPER reports Identified main access points Mapped ADR request process and TAT Educated key stakeholders Began search for tracking system

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855 Form contacts

Number of departments receiving ADR requests

Delay in response time Lack of learning from audit outcomes Identification of potential compliance risks

from audit outcomes

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Began pilot project for RAC with QIO requests 2009

Created an Access tracking dbase Designated a single point of contact for all

STL hospitals Developed an electronic communication plan

with HIM for ADR requests and approvals Established a process for results review and

appeals

Records were submitted timely (no technical denials)

Able to quantify the number of requests and reasons for requests

Hospital staff able to focus on day to day activities

Appeals submitted and tracked in a standard format.

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First RAC request received February 2010

Hard to quantify dedicated FTE (multiple hats)

Initial staff dedicated ~ 1.5 FTE for 7 hospitals

Single point of contact for all STL hospitals Regional RAC – Audit Team and Corporate

RAC Team Integrated with HIM, Case Management,

Compliance, Finance Tracking RACs, MACs, CERTs, PROBE,

Medicaid and beginning Medicare Advantage plans

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System wide tracking system for multiple government audits◦ Dispute tracking◦ Increased data on audit risk

Dedicated auditors for review and appeals (Case manager, RN, Coder,Physician Advisor )

Use of discussion period with RAC

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TAT for ADR request letter (48h or less)

# of requests by DRG & Hospital

# of denials, $ of denials

% Denials by type and Hospital

# and $ of denials by discharge year

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Multiple audit time line expectations

Medicare 855 file – Correspondence

Pre-Payment reviews

Remit Advice N432- billers and follow up

Refunds, recoupments or immediate offsets

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Immediate offset◦ Challenges identifying account details on RA◦ Multiple offsets grouped on RA

Recoupment- do the math◦ Cost of 30 days interest?◦ 1 mos interest on $15,000 claim =$134◦ 75 denials at $134 = $10,078…..

Refund◦ Checks cut within 5-7 days of receiving remittance

advice◦ Better able to reconcile

If you bill it they will come!

Align with Denials Team use outcomes for all payors◦ Process improvement teams in top risk areas Surgery LOS (short stay) Outpatient services

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Technology ◦ Use EMR to your benefit◦ User friendly and intuitive◦ Address any type of audit and be prepared to

appeal appropriately aggressive◦ Templates◦ Email alerts◦ Create your own reports◦ Store and track the data that’s important to you Billing data Coding data

Balancing internal audits and external audits◦ Action plans ◦ Probe Audit with 30 day turn around before re-audit

Assimilate with Coding Compliance, Clinical Documentation Specialist, and Charge Master professionals

Education – OIG risk, PEPPER, Operational changes that impact Compliance

Alignment with vendors who assist in billing, appeals or coding & documentation improvement

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Financial reconciliation process

ROI – electronic submission

Appeals- learn from win’s and losses

Utilizing EMR’s to aid in thorough documentation

Reporting to show trends for improvement

Finding the right balance on the “gray” areas of medical necessity

Congratulations! You have just been converted to an inpatient.

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Contact Information

Thomas McCarter, MD, FACP

Chief Clinical Officer

Ralph Wuebker, MD, MBA

Vice President, Audit, Compliance & Education

Steven Greenspan, JD, LLM

Vice President, Regulatory Affairs

[email protected]

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107


About Executive Health Resources

EHR was recognized as one of the “Best Places to Work” in the Philadelphia region by Philadelphia Business Journal for the past four consecutive years. The award recognizes EHR’s achievements in creating a positive work environment that attracts and retains employees through a combination of benefits, working conditions, and company culture.

EHR has been awarded the exclusive endorsement of the American Hospital Association for its leading suite of Clinical Denials Management and Medical Necessity Compliance Solutions Services.

AHA Solutions, Inc., a subsidiary of the American Hospital Association, is compensated for the use of the AHA marks and for its assistance in marketing endorsed products and services. By agreement, pricing of endorsed products and services may not be increased by the providers to reflect fees paid to the AHA.

EHR received the elite Peer Reviewed designation from the Healthcare Financial Management Association (HFMA) for its suite of medical necessity compliance solutions, including: Medicare and Medicaid Medical Necessity Compliance Management; Medicare and Medicaid DRG Coding and Medical Necessity Denials and Appeals Management; Managed Care/Commercial Payor Admission Review and Denials Management; and Expert Advisory Services.

* HFMA staff and volunteers determined that this product has met specific criteria developed under the HFMA Peer Review Process. HFMA does not endorse or guarantee the use of this product.

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