ESMD UPDATE: MOVING TO FULL ELECTRONIC COMMUNICATION

TARA MONDOCK VP OF GOVERNMENT PROGRAMS & PAYER RELATIONS IVANS, INC.

DECEMBER 5, 2012

Agenda

• The Landscape Overview• Background on Improper Payments• Medical Documentation Process• CMS esMD Program• Medicare Review Contractor Perspective on esMD• Current and future use cases for esMD

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CMS continues focus on program integrity including improper payments and fraud and abuse

• Medicare has been consistently one of the top federal programs making improper payments

• CMS has deployed review contractors to conduct audits of Medicare payments to healthcare providers– Medicare receives 4.8 M claims per day– Claim review contractors issue over 2 million ADR requests each

year – Several types of review contractors Auditing Providers (Recovery

Auditor, MAC, ZPIC, CERT, PERM)• Improper payments include:

– Incorrect payment amounts– Incorrectly coded services– Non-covered services (services that are not reasonable and

necessary)– Duplicate services

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Audits Continue to be Big Business for the Government

• The CMS Office of Financial Management estimates that each year the Medicare FFS program issues more than $34.3 Billion in improper payments

• $1.03 Billion found in Medicare improper payments during Recovery Audit Demonstration Project in six states between 2006-2008– 96% in overpayments– 4% in underpayments

• As a result, the Recovery Audit Program is permanent and nationwide

• There is a greater shift to Prepayment Audit vs. Postpayment

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CMS Program Integrity Update (esMD)

Review Contractors include:

1. RAC – Recovery Auditor (Post-Payment and Pre-Payment NEW)2. MAC – Medicare Administrative Contractor (Pre-Payment)3. CERT – Comprehensive Error Rate Testing program

• Review Across All MAC Jurisdiction with focus on incorrect coding of claims, DRG upcoding or downcoding, and medical necessity

4. PERM – Payment Error Rate Measurement program• A claim is reviewed to determine if it was processed correctly, and

the services were actually provided, medically necessary, coded correctly, and properly paid or denied.

5. ZPIC – Zone Program Integrity Contractor• Fraud and Abuse

Providers Can Receive Audits From Many Types of Review Contractors

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MAC Awards are ongoing, driving more change across the Medicare Fee For Service Program – which impacts Prepayment Audits being performed by the MAC

• 2013 is going to be a very turbulent year for Medicare Contractors: – J1 (now JE) was awarded to Noridian (was Palmetto) UNDER PROTEST– J12 (now JL) was awarded to Novitas (no Change) UNDER PROTEST– JC DME MAC was awarded to CGS (no Change) UNDER PROTEST– J6 (which includes RHHI Region D) awarded to NGS UNDER PROTEST– J13 & J14 which will become JK upon award) is expected to be

announced by the end of the calendar year– Solicitation for J9 (which will become JN) and is expected to be

announced by end of year (December) or 1st quarter 2013– Recompete for J10 (which will become JJ) and is expected to be awarded

in 1st quarter 2013

7If you experience any technical difficulties during the webinar, please call 203.698.7230

CMS Program Integrity Initiatives Impact all Provider Types

– Part A/B Providers:• *Prepayment Audits vs. Post Payment (MAC’s & RAC’s)• Prior Authorization & OT/PT Therapy Caps• *High-tech legislation drives requirements for CMS to provide a means

to support PWK (Paperwork): Unsolicited Medical Documentation submitted with the Claim to avoid Prepayment Audit (A/B & DME MAC’s)

• *CERT (Error Rate) is higher than ever – Home Health Providers:

• *Third Party Liability Audits to validate when Medicaid vs. Medicare should have paid claims (Specialty MAC’s)

– DME Suppliers: • *Prior Authorization for Power Mobility Device Suppliers (DME MAC’s)

* These initiatives / transactions are currently or will be supported on esMD

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The Hunt for Improper Payments is Ongoing and Expanding across Medicare

• CMS officially announced the Recovery Auditor prepayment review demonstration would begin August 27, 2012.

• The Prepayment Review demo allows Medicare Recovery Auditors to review claims before they are paid (rather than the “pay and chase” method) and focus on:

– Incorrectly coded claims– Patients who came through the emergency department but should have

subsequently gone to observation rather than being admitted– Patients who received elective surgery during short-day stays when they should have

been outpatient procedures

• These reviews will focus on seven states with high populations of fraud- and error-prone providers – FL, CA, MI, TX, NY, LA, IL

• And four states with high claims volumes of short inpatient hospital stays – PA, OH, NC, MO

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Latest from the Medicare Administrative

Contractor (MAC)

First Coast Service Options rolled out edits to support Prepayment Audits across J9 (FL Providers only) over a 3 month period on MS DRG’s with 1/day LOS

• Added April 11, 2012:– MS-DRGs w/1-day LOS

• Added March 21, 2012:– 153 | 328 | 357 | 455 | 473 | 517

• Effective prior to March 1, 2012:– 226 | 227 | 242 | 243 | 244 | 245 | 247 | 251 | 253 | 264 | 287 | 313 |

392 | 458 | 460 | 470 | 490 | 552 | 641

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FCSO, J9 MAC (Florida Providers) Found A Way to Reward Improved Error Rates for Providers

• All MS-DRGs with a one-day length of stay (LOS) are subject to prepayment medical review effective April 11, 2012.

• FCSO has identified certain hospitals who have sustained low error rates for certain DRGs. Beginning July 17, 2012, these hospitals will be excluded from prepayment editing for the specific DRGs for which a low rate is maintained.

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MACS Increasing Focus on Pre-Payment Audits

Review Description CodingAir Ambulance; Hospital to Hospital Transport A0431Ambulance Service; ALS, Emergency A0427Ambulance Service; BLS, Non‐Emergency A0428Ambulance Service; BLS, Emergency A0429Complete Blood Count (CBC) with Differential 85025Chiropractic Services 98940, 98941 – ATCritical Care; E&M 99291‐99292Initial Hospital Care; E&M 99223Injection; Infliximab J1745Office Visits; Established Patient 99214‐99215Physical  Medicine and Rehabilitation Services All CodesPulmonary Rehabilitation G0237‐G0238Subsequent Hospital Care 99233Subsequent Nursing Facility Care 99308‐99310

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The most current prepayment reviews being conducted by the Part B Medical Review Department at Cahaba, MAC for Jurisdiction 10.

CERT Identified Errors by Provider Specialty

Legacy Top Ten Provider Specialties by Dollars in Error

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esMD: Current and Future Use Cases

Traditional Audit Request and Response Process

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Review Contractor

Provider

Doc’ n Request

Letter

Paper Medical Record Printing and shipping costs

Administrative burdens

No record of receipt

Time and money that

could be better spent delivering

higher quality healthcare

Responding to Audits By Mail/Fax is a Time Consuming Process

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Average Hours of Staff Time Spent (per hospital) on RAC Audits (Q1 2012)

esMD – How Does it Work?

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esMD - Current and Future Use Cases

INBOUND •Responses to Documentation Request Letters in PDF •Appeal Requests in PDF •Unsolicited Documentation in PDF (called paperwork or “PWK”)•Structured Orders, Progress Notes, ADMC Requests •Structured esMD Phase 2 Registration

OUTBOUND •Structured Outbound Documentation Requests •Review Results Letters •Demand Letters

LOOKUP •Request\Receive Documentation Status •Request\Receive Claim Status •Request\Receive Appeals Status •Request\Receive Eligibility Info

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We are here

Phas

e 1

Phas

e 2

esMD will support additional types of transactions and program integrity initiatives

• Additional Transactions: – Prepayment Audits (Recovery Audits are supported now)– Prior Authorization for Power Mobility Device (PMD) demonstration

(November release)– Level 1 Appeals (coming by 1st Quarter)– PWK – unsolicited Medicare Documentation (coming 1st Quarter)

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Providers are Generally Subject to an Audit by Review Contractors Every 30-45 Days

• All providers that bill Medicare and Medicaid are eligible to be audited by various Review Contractors

Audits often require medical documentation to support claims

Historically, the documentation could only be mailed (either paper copies or on CD/DVD)

The amount of paperwork submitted in 2010 by the average hospital was significant

150 medical record requests every audit cycle (45 days)

225 pages of medical documentation per request

33,750 total pages submitted on average

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AuditDocs+: Electronic Submission in 4 Easy Steps

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1. Enter the audit information from the letter you received from the review contractor

2. Enter in claim information attached to the audit

3. Attach supporting medical documents to appropriate claims

4. Click submit you have successfully completed your electronic submission of medical documentation

Submitting of Medical Documentation

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Use the checkbox to select the claim(s) you wish to send

If you have added files after sending, this will send only the unsent files

Click here to send all files to CMS

• Establish the claim to be managed within the ADR.

© IVANS, Inc. Confidential. All rights reserved.

Audit Trail Provides a Return Receipt Confirming Documents Were Sent by Provider & Received by Contractor

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Four distinct CMS Defined Time Stamps:•Sent to CMS•Received by CMS •Sent to Contractor•Received by Contractor

• ‘Claims by CMS Status’ Graph tracks each step of the electronic transmission.• ‘CMS Status history’ tab displays all necessary time stamps for confirmation of receipt.

© IVANS, Inc. Confidential. All rights reserved.

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Workflow Tool: Delegating Timely Response

Add Task For This Claim

• Once you have created a new audit and uploaded at least one claim for that audit, you will be able to utilize the built-in workflow tool to assign tasks to members of the Group Account.

• The workflow feature allows the audit owner to delegate the responsibility, to another User ID, of retrieving and uploading the applicable patient files for a single patient claim.

© IVANS, Inc. Confidential. All rights reserved.

Reports Provide Detailed Tracking Information

• From the Report page, User may select to drill into more detail in a particular audit.• Reports may also be exported to editable file formats (Word, Excel, PDF, etc.)

Critical Time stamps

26 © IVANS, Inc. Confidential. All rights reserved.

Dashboard and Graphs Provide a Comprehensive Snapshot for Managing Department Activity

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• IVANS AuditDocs+ Solution monitors the progress on your audits, tasks, and total pages sent – by deadlines.

• Visuals provide intuitive management overview to all audit response activity.

Easily view all audits sorted by status.

Track the volume and timing of total pages submitted.

View status of tasks; Past Due, Assigned, or In Progress.

© IVANS, Inc. Confidential. All rights reserved.

Key Benefits Key Benefits

esMD

• Reduces workloads for the provider & cuts down on printing and shipping costs

• Reduce risk of missing filing deadlines

• Quicker response cycle due to faster electronic delivery

AuditDocs+

• Efficient management of group users through workflow tool

• Streamlined dashboard designs with graphic summaries of response volume and timelines

• Effective tracking and reporting for revenue cycle impact

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Providers are at Risk to Lose Millions of Dollars

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• $4.3 billion in Medicare payments were targeted for medical record requests through the 1st quarter of 2012

• The esMD Solution allows providers to manage timely and cost effective response.

Learn about IVANS:http://www.ivans.com

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Or contact us at:(800) 548-2690, Option 1auditdocsplus@ivans.com

IVANS AuditDocs+™http://www.ivans.com/auditdocsplus

CMS esMD Website:http://www.cms.gov/esMD

For more information

Contact your designated IVANS Account Representative

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