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This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients and may not be shared with vendors outside of Craneware.
Managing Payor Audits and Denials Jackie Poliseno, Director Consulting & Appeals
Craneware, Inc.
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• Industry Trends
• Medicare Audits
• Commercial Payor Audits
• Managing the Process, Gaining Control
• Success Stories
Agenda
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Industry Trends
• RAC “slow down” about to end
• CMS working to expand RAC program to include Medicare Advantage Plans
• BFCC-QIO Short Stay Inpatient Audits resume
• Commercial Audits on the rise − Concurrent
− Retrospective
• Increasing administrative burden for Providers
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Recovery Audit Contractors
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RAC’s – New Contracts Awarded October 31, 2016
• Region 1 – Performant Recovery, Inc.
• Region 2 – Cotiviti, LLC
• Region 3 – Cotiviti, LLC
• Region 4 – HMS Federal Solutions
• Region 5 – Performant Recovery, Inc.
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Improper Payments Included in the SOW
• Incorrect payment amounts
• Non-covered services
• Incorrectly coded services (including DRG miscoding)
• Duplicate services
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Provider Types:
• Inpatient hospitals
• Outpatient hospitals
• Physician/Non-physician practitioners
• Laboratory
• Ambulance
• Skilled Nursing Facility
• Inpatient Rehabilitation Facility
• Critical Access Hospitals
• Long Term Care Hospitals
• Ambulatory Surgical Centers
• Other (i.e. Comprehensive Outpatient Rehabilitation Facilities, Rural Health Clinics, and Independent Diagnostic Testing Facilities)
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ADR Limits
• Provider type specific
• Baseline ADR limit for Acute Inpatient Hospital: 0.5% of a hospital’s paid Medicare claims from the previous 12 month period
• ADR letters sent on a 45 day cycle Annual baseline ADR level divided by 8 to establish the Cycle limit
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ADR Limits Adjusted Based on Denial Rates After (3) 45 day cycles
Low denial rate lower ADR limits
High denial rate higher ADR limits
Denial Rate (Range)
Adjusted ADR Limit (% of Total Paid Claims)
91 - 100% 5.00%
71 - 90% 4.00%
51 - 70% 3.00%
36 - 50% 1.50%
21 - 35% 1.00%
10 - 20% 0.05%
4 - 9% 0.25%
0 - 3% No Reviews x 3 Cycles
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Recovery Audit Contractor – Targets DRG Validation
• Coding • Principal diagnosis incorrect
• 2nd Dx codes not supported
• Coding CC/MCC
• Targeted Diagnoses • Sepsis/Unspecified Septicemia
• Acute Respiratory Failure/Other Pulmonary Insufficiency
• Acute Kidney Failure
• Severe Protein Calorie Malnutrition
• Pancreatitis
Medical Necessity • Joint Replacement Surgery
• ESA
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Performant Recovery – Automated Reviews Issue Name Provider Type State(s) Impacted Date Posted
Inappropriate billing of Home Health E&M codes during Inpatient Professional Services (physician/non Physician practitioner) Region 1 2/1/2017
Automated Zoledronic Acid Billed units > 4. (Note: 1 unit = 1mg of medication) Outpatient Hospital; Critical Access Hospital Region 1 2/1/2017
Regadenoson (Lexiscan) billed with Units Greater Than 4 Outpatient Hospital; Critical Access Hospital Region 1 2/1/2017
Automated Cataract Surgery Once in a Lifetime Outpatient Hospital, CAH, ASC Region 1 2/1/2017
Automated Inpatient Psych Billed without Source of Admission Equal to “D” Inpatient Hospital, Inpatient Psychiatric Facility Region 1 2/9/2017
Trastuzumab (Herceptin), J9355 - Multi-Dose Vial Wastage Billed with JW modifier
Physician; Outpatient hospital; Professional services (physician/non-physician practitioner); Ambulatory surgical center; Critical Access Hospitals Region 1 2/21/2017
Visits to Patients in Swing Beds Physician; Professional Services Region 1 2/23/2017
Excessive Units of Hospital Services Professional Services (physician/non- physician practitioner) Region 1 2/23/2017
Automated Nebulizers Not in Accordance with Billing Requirements DME by Supplier, DME by Physician Region 5 2/2/2017
Automated CPM Billed without Total Knee Replacement DME by Supplier, DME by Physician Region 5 2/2/2017
Automated DME Billed While Inpatient DME by Supplier DME by Physician Region 5 2/21/2017
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Performant Recovery – Complex Reviews
Issue Name Provider Type State(s) Impacted Date Posted
Trastuzumab (Herceptin), J9355 - Multi-Dose Vial Wastage, Dose vs. Units Billed Physician; Outpatient hospital; Professional services (physician/non-physician practitioner) Region 1 2/21/2017
Complex Medical Necessity Sacral Neurostimulation Inpatient hospital-acute care; physician; Outpatient Hospital; professional services (physician/non-physician practitioner); ASC Region 1 2/17/2017
Complex Medical Necessity Cardiac PET Scans Outpatient Hospital; Physician Region 1 2/1/2017
Complex Inpatient Hospital MS-DRG Coding Validation Inpatient Hospital Region 1 2/1/2017
Complex Medical Necessity Bariatric Surgery Outpatient Hospital Region 1 2/1/2017
Complex Comprehensive Cataract Removal Ambulatory Surgery Center (ASC); Outpatient Hospital Region 1, Excludes MI + IN 2/7/2017
Complex Review Osteogenesis Stimulators DME by Supplier, DME by physician Region 5 2/14/2017
Complex Group 2 Support Surfaces Without Correct Diagnosis of Condition DME by supplier; DME by physician Region 5 2/15/2017
Complex Medical Necessity Tracheotomy Suction Catheters, Suction Pumps, Catheters and Other Related Supplies/Equipment. DME by Supplier; DME by physician Region 5 2/8/2017
Complex Medical Necessity Chest Wall Oscillation Devices DME by Supplier; DME by physician Region 5 2/8/2017
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QIO – Short Stay Inpatient Audits
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QIO Short Stay Inpatient Audits
• QIO audits resume (September 12, 2016)
• Sample Size: − 10 Claims average-sized hospital
− 25 Claims large-sized hospital
• Provider Types: − Acute Care Hospitals
− Long-Term Acute Care Hospitals
− Inpatient Psychiatric Hospitals
− Excluded: CAH and inpatient Rehabilitation Hospitals
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QIO Audit Timelines
• One audit every six months
• Lookback period previous six months
• Providers have 45 days to submit records following a request – a reminder will be generated at day 15
• BFCC-QIOs have 45 days to review and render a decision
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• Excluded Claims: − Inpatient-Only procedures
− Discharge Disposition Codes: 07 (AMA); 20 (Expired); 02 (Discharged/ Transfer)
− IME, Medicare Advantage, or Medicare Secondary Payor (MSP) claims
− Other “Do Not Pursue” claims, not further identified
• Records Submission – esMD, encrypted CD, fax transmission, hard copy
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Review Criteria/Considerations:
• Valid IP Order − Must specify admission for inpatient status
− For admissions in which the MD expects the patient’s “medically reasonable hospital services” to span at least two midnights
• Two-Midnight Benchmark − Reviewers will consider a patient’s total cumulative time in the hospital.
− Admissions spanning less than two midnights will generally be regarded as not medically necessary but;
− Admissions less than two midnights may be appropriate on a case-by-case basis.
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Review Criteria/Considerations continued:
• No need for attestation of expected LOS, will be inferred from the medical record
• Reasonableness of the inpatient admission will be based upon the information known to the ordering physician at the time of decision to admit
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Audit Results
• Minor Concern – less than or equal to 10% denial rate
• Moderate Concern – greater than 10%, less than 20% denial rate
• Major Concern – greater than 20% denial rate
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Audit Results - Actions
• Provider outreach and education to be completed within 90 days of audit completion
• CMS may participate in education sessions
• Noncompliant claims and missing medical record denials will be forwarded to the MAC for adjudication;
• Noncompliant providers will be referred to the Recovery Auditors (RA) − QIOs continued to work with CMS to define:
• “patterns of noncompliance and denial”
• thresholds for referral to RA for provider-specific audits
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Commercial Health Plan Audit Practices
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Commercial Audit Differences
• Timelines − Audits can occur much closer to patient encounter
− Audits typically come announced
• Auditor may be onsite
• Pre-approval process
• Denial confusion
• Unclear Appeal process
• Withhold payment vs retrospective takebacks
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Commercial Audit Challenges
• Rules not widely publicized, not consistent
• Harder to track, understand, and monitor
• Harder to quantify
• Harder to assess risk and exposure
• Difficult to gain insight into what’s being denied, and appeal success rates
• Recurring errors lead to ongoing denials and result in delayed or lost revenue
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Concurrent Audits
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Concurrent Audits
• Authorization − Notification of patient admission and supporting documentation within 24 hours
− Clinical documentation for subsequent days
− Entire stay could be denied
• Patient Status − Denials driven by UM guidelines
− Outpatient vs Inpatient
− Least costly setting (Hospital, Rehab, SNF, Home)
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Concurrent Audits continued…
• Throughput − Efficiency of care
− Ensuring care is specific to reason for admission • Could result in denial
• Lost revenue
• Discharge Planning − Preparing early
− Parallel plans of care
− Could result in denial or reimbursement reductions
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Retrospective Audits
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Retrospective Audits
• Patient Status − Outpatient vs Inpatient
• Inpatient Orders − Written, Signed, Dated
• Readmissions
• Bioengineered Skin Substitutes
• Medical Necessity − Joint Replacement
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Failed non-surgical treatments (tried for at least 3 months)
NSAID/COXIB Medication Trial ☐Yes ☐No ☐Contraindicated for the patient
Weight Loss
Current BMI Click here to enter text.
☐Yes ☐No ☐Contraindicated for the patient
Physical Therapy ( ≥ 12 visits)
DOS Click here to enter text.
☐Yes ☐No DOS ☐Contraindicated for the patient
Intra-articular injection
DOS Click here to enter text.
☐Yes ☐No DOS ☐Contraindicated for the patient
Braces, orthotics or assistive devices ☐Yes ☐No ☐Contraindicated for the patient
Other (specify) Click here to enter text.
Notes Click here to enter text.
Radiology Indications for Replacement
(need 2 or more):
☐ Subchondral cysts
☐ Subchondral sclerosis
☐ Periarticular osteophytes
☐ Joint Subluxation
☐ Joint Space Narrowing
☐ Bone on Bone articulation
Notes Click here to enter text.
Highest Level of Walking Support (for the affected joint that the
patient currently uses to carry out activities, e.g., work, leisure)
☐ None / Orthotics
☐ Brace / Cane
☐ Crutches / Walker
☐ Wheelchair
Notes Click here to enter text.
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Select all that Apply None Mild Moderate Severe
Pain at rest (e.g., while sitting, lying down or causing sleep disturbance ☐ ☐ ☐ ☐
Pain when weight bearing (e.g., walking, bending) ☐ ☐ ☐ ☐
Pain with passive ROM ☐ ☐ ☐ ☐
Pain related ADL limitation (e.g., putting on shoes, managing stairs, bathing, or cooking) ☐ ☐ ☐ ☐
Abnormal findings on physical exam related to most severely affected join (e.g., deformity, instability, antalgic
gait) ☐ ☐ ☐ ☐
Aggravating Factors (list): ☐ ☐ ☐ ☐
Notes Click here to enter text.
Ability to walk without significant pain
☐ Over 5 blocks ☐ 1-5 blocks ☐ Less than 1 block ☐ Household ambulatory
Safety Issues (e.g., falls): Click here to enter text.
Notes Click here to enter text.
The patient’s current medication regimen is controlling their joint pain:
☐ No ☐ Yes
Types of medications
☐ Narcotics ☐ NSAID/COXIB
☐ Over-the-counter
Other (specify)
Notes Click here to enter text.
Pain History
Physical Exam (describe if present)
☐ Deformity Click here to enter text.
☐ Crepitus Click here to enter text.
☐ Effusion Click here to enter text.
☐ Tenderness Click here to enter text.
Range of Motion: Click here to enter text.
Gait description: (specify
with / without mobility aides)
Click here to enter text.
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Retrospective Audits continued…
• DRG Validation − Coding
• Coding CC/MCC
• Principal diagnosis incorrect
• 2nd Dx codes not supported
• Procedure codes, Modifier issues
• Targeted Diagnoses • Sepsis/Unspecified Septicemia
• Acute Respiratory Failure/Other Pulmonary Insufficiency
• Acute Kidney Failure
• Severe Protein Calorie Malnutrition
• Pancreatitis
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Retrospective Audits continued…
• Outpatient units > 1 or >2
• CCI Edits
• Modifier issues
• MUE’s
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Managing the Process, Gaining Control
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Discover • Collect and aggregate data
• Implement Audit tracking software
• Track all audits in one place
• Visibility − Dollars at risk
− Deadlines
− What’s in process
− Appeal/No Appeal rates
− Denial overturn rates
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Counts
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DRG Report
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Audit Activity
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Convert • Interdepartmental Team
− Compliance
− Medical Director
− Case Management
− Billing Office
− Coding
• Clearly define accountability for analysis and goals
• Hold payors accountable
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Convert continued…
• Communicate with payors
• Automate to support efficiency
• Work denied claims, No missed deadlines
− Identify owner
− Distribute claims to owners
− Embed knowledge in your process to assist staff
− Denial letter, Due date, where/how to send
− Track and report on un-worked
− Track worked-not-closed
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Worklist
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Optimize • Set Benchmarks
− Deadlines
− Appeal percentages
− Win rates
• Best Practice Benchmarks − Missed Appeal Deadlines 0%
− Appeal Rate >90%
− Appeal Success Rate 85%
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Optimize continued… • Provide education
• Achieve accurate coding and charging − Focus on DRG’s with high denial rates
• Prevent future audits − Trend significant issues by denial reason
− Perform root cause analysis
− Develop corrective action plans
• Monitor
• Leverage audit data − Negotiate response times
− Future contractual language
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Success Stories…
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Client Hospital Story #1
RAC Denials: Erythropoiesis Stimulating Agents (ESA)
Maritime Healthcare Appeal Response
Denials No
Appeal Appeal Favorable Unfavorable Open
Hospital A 142 17 125 101 20 4
Hospital B 12 3 9 9 0 0
Total 154 20 134 110 20 4
0
10
20
30
40
50
60
Jan -16 Feb -16 Mar -16 Apr -16 May -16 Jun -16 Jul -16 Aug -16 Sep -16 Oct -16 Nov -16
ESA Audit
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Client Hospital Story #2
RAC Denials: Secondary Diagnosis Code Eliminated (82) Severe Protein Calorie Malnutrition (40)
• Data mining…
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In Summary
• Be sure staff are well prepared to make level of care determinations that are justifiable.
• Ensure physicians understand admission order and documentation requirements.
• Drive care to be provided in the most efficient possible way.
• Check your contracts to be sure processes are aligned with payor expectations.
• Communicate well with your payors
• Have a way to track and trend concurrent denials, audits, and appeals.
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Questions?
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Jackie Poliseno
615-869-4088