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HIGHLIGHTS: RAC Summit 7

INSIDE

RAC SUMMIT

INSIGHTS & HIGHLIGHTS

of the Seventh National RAC Summit as held December 4-6, 2012 in Washington, D.C

Reported by

Ernie de los Santos Faculty Chair & Founder

Appeal Academy

Appeal Academy Publishing 5042 Wilshire Boulevard

Suite 22785 Los Angeles, California 90036-4305


TABLE OF CONTENTS

Introduction .................................................................................................... 5

How To Use This Report ................................................................................ 8

DEC EMBER 4, 2012

The Preconference .......................................................................................... 10

When Did UR Move to the Back of the Bus? ................................... 11

The Importance of Concurrent Review, Part 1 ................................ 13

The Importance of Concurrent Review, Part 2 ................................ 14

Best Practices from the Field ............................................................ 15

Faculty Q&A ...................................................................................... 16

DEC EMBER 5, 2012

Day One: Opening Plenary Session ............................................................... 19

Use of Predictive Modeling to Detect Overpayments/Abuse ......... 20

MAC Roles and Relationships .......................................................... 21

Moving to Full Electronic Communication – an esMD Update ..... 23

Use of Milliman Care Guidelines: OBS and IP Levels of Care ........ 26

The Battle Continues… Anew? ......................................................... 28

What ALJs Look For ......................................................................... 30


Day One: Afternoon Plenary Session ............................................................. 32

Hot Issues I – MAC and RAC Prepayment Reviews ....................... 33

Hot Issues II – Medicare Advantage Denials and Appeal Issues ... 36

Hot Issues III – Rehab and Long Term Care .................................. 38

Hot Issues IV – What is an “Inpatient” and How to Get It Right .. 40

Hot Issues V – The National Part A to Part B Billing Demo .......... 43

Hot Issues VI – Medicaid Program Integrity – MICs and RACs ... 44

DEC EMBER 6, 2012

Day Two: Closing Plenary Session ................................................................. 46

The Road Ahead – AHA Policy Agenda ........................................... 47

Commercial Health Plans and Recovery Audits.............................. 49

The Top 10 Things To Know and Do Before Your ALJ Hearing..... 51

Legal Update ..................................................................................... 53

Current Congressional Interests and Initiatives ............................. 57

The Postconference......................................................................................... 59

Introduction to the “No Fear” Appeal Strategy ............................... 60

How to Make the Discussion Period Work for You ......................... 61

The ALJ Hearing: Anatomy of Appeals that Won and Lost ........... 63

Appeal Letters that WIN – Including Sample Templates ............... 66

Recent Winning Strategies and Tactics ........................................... 68

Final Audience Q&A with Faculty Panel .......................................... 71

Final Thoughts ................................................................................................ 74

Special Offer from Appeal Academy .............................................................. 76

Index ................................................................................................................ 77


INTRODUCTION: THE RECOVERY AUDIT ENVIRONMENT

Perhaps the most significant recent change in the reimbursement systems for the Medicare program has been the introduction of "recovery audit contracting" (RAC) as a way of finding improper payments made for Medicare services. While the program portends to be a method of insuring appropriate billing and payments, it is obvious to many observers that the virtual lack of any education or assistance programs offered to providers by CMS makes it clear that the true basis of the program is grounded in a desire by at least the US Congress to cut Medicare expenditures, rather than any realistic intention to secure the billing system. In the new RAC model, contractors are incentivized with contingency fees to find improper overpayments (and underpayments) to providers of Medicare services.

The latest CMS reports (released 1/22/13) of Medicare RAC financial activity and denials to-date show that the RAC has collected $3.9 Billion, from October, 2009, through December, 2012. The top issues accounting for the most denials have been what is termed “Medically Unnecessary” (roughly translated: it was billed as inpatient, but the claim either did not have sufficient supporting documentation for an inpatient admission, according to some guidelines we might be misquoting, or the claims falls in a “gray” area, so we’ll deny it, dare you to appeal, and no, we’re not letting you rebill it as outpatient, so you’ll only be paid

http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Recovery-Audit-Program/Downloads/Medicare-FFS-Recovery-Audit-Program-1st-qtr-2013.pdf


for outpatient if you get a Judge to say the magic words, and even if they do it won’t mean Jack for any other claim, period.) At the same time, however, about 75% of all denials that are appealed up to the 3rd level of appeal are overturned, and we’ve really only seen about 25% of all the filed appeals decided, so far.

Encouraged by the “success” of the national program, Congress decided last year to require new RAC contractors be put into place by all the States to perform the same kind of recovery in all the Medicaid programs. Given the reports mentioned above, it’s not hard to see why they’ve done this. But they have obviously ignored the additional administrative burden such programs will pile onto providers already operating on generally razor-thin margins (such as those found in facilities, nationally running about 2% Net). Contractor overlap with State OIG initiatives and other entities targeting outright fraud is also an obvious concern – and even the State agencies involved admit that such overlap is possible, since there is no system installed to automatically prevent such an occurrence.

Meanwhile, provider complaints about overzealous RAC contractors have now reached Congress, although it remains to be seen if Congress actually has the courage to treat these complaints with respect and concern, and then take any action favorable to the community. Providers have also filed complaints about inefficient MICs in the Medicaid program, and aggressive ZPICs targeting alleged fraud. CMS reports that it is in the process of making changes to the overall program integrity effort, but such efforts seem to be still in planning stages only.

Unfortunately, the most obvious and dramatic changes that CMS made to the RAC program in 2012 were two: first, the decision to allow the MACs to conduct prepayment review of questionable claims for medical necessity, site of service, and improper coding, preventing payment on the front end -- including a later decision to grant the same authority to the RACs; and second, the unilateral and sudden decision to raise the ADR Request Limits, early in the year. Beyond the Medicare FFS program, Medicare Advantage plans are now conducting audits and denying claims, and even some commercial health plans have contracted with the RACs to look for patterns of overpayment or even fraud.

At this year’s summit, there were two significant topics of focus, and these did not come from the conference planners, but rather from the attendees. It was quite obvious that two subjects were on everyone’s mind: winning appeals was possible, and the ALJ Level of Appeal was the place where it was possible. MUCH of the discussion centered on how it was possible and why this was happening. There was also some frustration with the whole appeal system, especially the time it was taking to get appeals through the system.

Nevertheless, for perhaps the first time, at least the first time I’ve seen it, there were government agency representatives in attendance who actually seemed to “get it” and were not only willing to listen to what providers had to say, but even seemed very interested in what was being said. I’m talking about the judges from the ALJ, including their boss, the Chief Administrative Law Judge, the honorable Nancy Griswold. This was hugely refreshing and a stark contrast to previous appearances by representatives of various agencies and contractors.

http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/75-of-appeal-rac-denials-overturned-in-1q-of-2012.html


And honestly, that was perhaps the biggest take-away from the whole event. Providers seem to have turned a corner now, because they see that they can actually write appeals for medical necessity denials. And they have a decent chance to win those appeals at the ALJ level, because the ALJs interpret the regulations in a way that makes sense.

Now in its seventh iteration, the National RAC (and MAC) Summit brought together seasoned hospital representatives, best of breed solutions companies, and savvy compliance professionals to provide very practical "how to" advice on both Medicare and Medicaid issues, and on MAC as well as RAC issues. More than ever before, these are truly "must see" presentations.

It was an honor and privilege to Co-Chair the Summit, and to sponsor and moderate the Postconference. I was fortunate to assemble four great speakers for that portion – Sharon Easterling, Steven Greenspan, Denise Wilson and Drew Wachler. They were each a perfect fit for the “No Fear” Appeal Strategy that I wanted to present and teach, and their material a perfect ending to the entire summit, especially considering the emerging focus of Medicare appeals at the ALJ Level. I’m happy to report that it was all well attended and well received.

In all, I consider this entire experience a fantastic time of listening, learning and networking, far more valuable than any of the larger conferences I have attended in the past seven years. I hope to continue to support and participate in all future RAC Summits.

I am happy to provide this set of highlights, and encourage all readers to view the full videos that are available, for a more complete experience and education.

Stay Safe and Good Hunting,

Ernie de los Santos Appeal Academy Founder Los Angeles, California January 2013


HOW TO USE THIS REPORT

The purpose of this report is to provide a shortened version of the best tips, tricks and advice that were heard at the Seventh National RAC Summit, in December, 2012. It is not intended to be a comprehensive review of the presentations. Besides, a complete set of the videos and PDFs for all presentations is readily available and is not that expensive (about the price of 2 webinars).

Actually, I wrote this for my own use and education, to keep in mind what’s been on everyone’s radar, and to also know who I want to go to for more input and more information. The presenters are all terrific, and I have to say that I think this is the best RAC Summit I have attended (I’ve attended 4 of them). At any rate, the idea of having a short version of the best stuff is the first and main purpose of this report.

I’ve tried to write these summaries to give you at least one great take-away from the session, plus a good idea of what you’ll find inside, in case you want to get the video of the whole session, including the slides.

However, an additional use of the report is to use the links provided to the video previews and full-version on-demand playback of each session, which can be individually purchased. So, you don’t have to invest in the entire conference to just get a few presentations that you want to hear in their entirety. Before you flip our your credit card, however, I’d advise going through this entire report and compiling a list of all the sessions you might want to see. Then, you can add up the cost of the bunch of them, and compare it to the price of the whole conference, which you can get either online or on a convenient flash drive, so you can install the whole set on your own network servers and share with your colleagues, there at your practice or facility.


Finally, you can use this report the way that I use it – a source for finding subject matter experts in some rather specific revenue cycle topic areas. The presenters, their firms or employers, and the exhibitors and sponsors are all at least good starting points.

That’s how I use the report, and I hope you find it helpful, just as I do.

One last comment before you dive in – I found some of the presentations so interesting that I found myself writing a good bit for them. Some, not so much. But hey – just keep in mind, this is just a “highlights” report.

Anyway, I hope you find it all useful.

Below is a link to the home of the RAC Summit Portal…

30 presentations

Free Previews

http://www.racsummitportal.com/conference_agenda.php?cid=22�


THE PRECONFERENCE

GETTING IT RIGHT THE FIRST TIME – BUILDING A STRONG UTILIZATION REVIEW AND PHYSICIAN ADVISOR PARTNERSHIP

The Seventh National RAC and MAC Summit opened on Tuesday, December 4, 2012 with the PreConference agenda, chaired by Day Egusquiza, President of AR Systems, Boise Idaho. The topic for the presentations was about creating strong Utilization Review in your daily operations to maintain excellent compliance and reimbursements.

The speakers included Day Egusquiza; Lori Horrall, Manager of Utilization Management at Union Hospital, Terre Haute, Indiana; Dr. Jeffrey Epstein, Medical Director for Stamford Medical Center, Stamford, Connecticut; and Dr. E.G. “Nick” Ulmer, Vice President Clinical Services and Medical Director of Case Management, for the Spartanburg Regional Healthcare System, Spartanburg, South Carolina.

[Ed. Note: Dr. Ulmer wins the prize for the longest single title in the conference, even outdoing the government employees in attendance.]

http://www.racsummit.com


WHEN DID UR MOVE TO THE BACK OF THE BUS?

Day Egusquiza President AR Systems, Inc. Twin Falls, ID

At some point in the recent past, for various reasons, Utilization Review got moved into the Discharge & Discharge Planning step of patient visits, which is arguably more the purview of the Case Management function.

UR needs to go back to being about the Front End... Why? Because it needs to be there to help get status right the first time, and right from the start of the whole process -- meaning Now.

UR BEST PRACTICE S

Day gives a long list of these in her presentation, but here are some highlights that I'll share here. The complete list will keep you busy and is one of those "this-is-worth-the-price-of-admission" things.

Here are my selected highlights:

• UR needs to get immersed, somehow, in two key areas: ER & OR -- again, that puts them back involved in the front end and not stuck late in the cycle.

• Nursing should get involved in STATUS. This will be new to them. So, your UR and CDI teams HAVE to train Nursing about Status. It's too important to ignore, especially now.

• CDI - you can't just be about DRGs & CCs or MCCs, now. You have to tackle 3 things: (1) don't miss those CC/MCCs, (2) get ready for ICD10, and (3) make sure STATUS is right.

• UR should be rounding with the physicians. They will be the ones who make sure the story gets told about why the patient is IP or OP, or why a change is needed, or just plain making sure it gets done right, right now.

WHAT ABOUT UR IN T HE OR?

MAC Prepayment audits are hitting surgical procedures now, very hard, especially out west (hips, knees, cataract, pretty much all your short stays).

UR must now be really involved and discuss H&P BEFORE the surgery.


And, they want to stop saying to the physicians that something is "medically unnecessary" -- that's too inflammatory. Instead, use "inappropriate status" - it is not being done in a medically appropriate setting.

After all, as we all know, this isn't about medicine, it's about money, and that winds up being about the setting, the status.

December 4, 2012 | preview: 2:00 | full-length: 28:56 | format: Video with PowerPoint

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http://www.racsummitportal.com/view_media.php?mid=381�


THE IMPORTANCE OF CONCURRENT REVIEW – PART 1

Lori Horrall, RN, BSN, MSM Manager, Utilization Management Union Hospital, Terre Haute, IN

Lori provided a detailed description of her facility's action plan for educating both physicians and Nurses about how to get status right up front, and documentation improvement. Their focus was about "telling the patient's story in the record," and secondly, about how

they should be using and documenting both Observation and Extended Recovery.

A significant change in culture was to provide definitions and instruction on the usage of assigning three different options for Patient Status - IP, OP and OBS. This also meant defining and teaching the differing roles that had to be played by physicians, nursing, Utilization Review and Case Managers.

One of the most significant changes was the role of UR in the Emergency Room. They recognized and now made it the responsibility of UR to track the criteria needed for correct assignment of patient status, and get it right, up front.

One of her slides was a great diagram of the Observation Decision Tree that they now use, which included physician orders and nursing documentation requirements. She also gave a list of Observation Tips that was made available and taught to everyone involved in the process.

After Lori's great talk, Day Egusquiza added some key suggestions, which she has helped Lori implement at her facility with great success.

Perhaps the most critical change was something that has to come from the Top Down, because it is so invasive, so to speak:

Bed placement only happens now AFTER UR's "blessing."

She then dealt with questions that arise from such a change –

- How do you deal with this in the ER? And after hours? - Who all needs to be educated by UR about status? - What does this say about Discharge planning functions?

In future reports, we plan to interview Day and others about what works the best to make THAT happen. Evidently, it is not an obvious fix.


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THE IMPORTANCE OF CONCURRENT REVIEW – PART 2

Jeffrey Epstein, MD Senior Medical Director Stamford Hospital and Healthcare System, Stamford, CT

The next speaker was Dr. Jeffrey Epstein, from Stamford Medical Center, in Stamford, Connecticut. Dr. Epstein worked for years at Morristown Medical Center in New Jersey, where he batted well over .900 in his appeals before the Administrative Law Judges, fighting

medical necessity denials from the Region A RAC. He is a speaker often at the RAC Summits, and is often a Chair for conferences about Physician Advisors and their education and usefulness for fighting denials, before and after the fact.

The title of his presentation tells it all – Physician Support of the Utilization Review Process and Denial Management Process. He covers a wide range of information on how he and those on his team support the hospital in those processes.

Dr. Epstein’s main point is that you should and CAN get compliance right to begin with, especially through the efficacious use of Physician Advisors. Getting it right will of course keep the government OUT of your hospital and the revenue will work itself out, then.

In his presentation, he provided a great diagram of their excellent concurrent review process, which he has helped implement at Stamford, and previously implemented with great success at Morristown.


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BEST PRACTICES FROM THE FIELD: Different Models for the Physician Advisor Function

E.G. “Nick” Ulmer, Jr., MD, CPC Vice President Clinical Svcs. and Medical Director of Case Mgmt. Spartanburg Regional Healthcare System, Spartanburg, SC

Rounding out the Preconference was Dr. Nick Ulmer, from Spartanburg Regional Medical Center, in Spartanburg, North Carolina. You might recognize Dr. Ulmer or Spartanburg from the excellent Physician's Advisor conference held there last year, and

scheduled to appear again this year.

Dr. Ulmer of course emphasizes the need to get "correct" inpatient determinations and get them documented sufficiently in order to be denial proof. Dr. Ulmer and Dr. Epstein are perhaps the biggest proponents of the use of Physician Advisors in the country, and with good reason -- they are both highly successful at it, and between them, they can advise on how to create, educate and utilize virtually any size team you might need.

Here, Dr. Ulmer reviewed the three choices a hospital has for creating a team of Physician Advisors:

• Internal - the use of a team entirely employed by you. • External - the use of a team from an outside firm; and • Hybrid - the use of both internal and external physicians.

Finally, Dr. Ulmer shared exactly how it worked at his own hospital, where he was given the daunting task of selecting, educating and managing a team of - no kidding - 18 physicians!

We again plan to report in the near future about exactly how Dr. Ulmer and Dr. Epstein educate and manage their teams.


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FACULTY QUESTION AND ANSWER SESSION


No questions were taken during the sessions, so they were all saved for the end, when the entire panel could participate.

Also, questions were taken from the online attendees.

QUE STIONS AN SWE RE D BY THE PAN EL

What if you have a patient admitted from the ER, if the attending physician doesn’t continue “the story” of what justified the patient being an inpatient, do you change their status back to OBS?

(Hint: the physician’s documentation, especially their assessment and plan of treatment needs to incorporate the complete history of present illness.)

How does the proposal to place a patient in OBS and then reevaluate after 24-48 hours consider Medicare patients who need a 3-day stay to qualify for SNF? (since OBS doesn’t count toward that 3-day stay – plus add in the fact that a 3-day stay really means staying across 3 “Midnights”)

(Dr. Laurence Clark, Medical Director at NGS, one of the Medicare MACs, even chimed in on this answer)

What if the attending doesn’t agree with the admitting or ER physician, which do you use to state the Principal Diagnosis?

(Ok, the short answer is easy and even I know it – you use the attending. But there is a longer answer that is worth hearing…)

Suppose you have Case Management available 24-hours -- what should we do when the attending is ordering an inpatient admit, but the CM doesn’t see criteria being met for inpatient, so they go back to the MDs… and the story really gets lost?

(Lori had a good example of exactly how her facility handles this; both Dr. Ulmer and Dr. Epstein had good input about how to work with your MDs to deal with this on a consistent basis; and finally Day explained exactly what Nursing should be doing and thinking and charting, and how all this contributes to the problem.)


A comment came in from online from someone who didn’t really ask a question but was obviously asking for help – they said that their hospital’s process was a “hot mess!”

(Day then tells a great story about how one hospital solved just such a problem, where the ER physicians, the hospitalists and the primary care physicians could not seem to make their documentation “mesh” properly. The good news is that this can be fixed, and it isn’t that hard!)

There was a question about having schedulers and Case Managers or UR work together to get status right for surgeries – what works to make sure the status gets done right, up front?

(Day gave a very specific plan of exactly what has to change, what you have to do to make this go away. One thing she emphasized is that this issue belongs to Surgery, while UR is just a partner player. Evidently she explains THIS so often, she just peeled off a whole list of things you need to think about, off the top of her head. Lori also explained how her own facility is working to correct this, and how it is a work in progress.)

What do you do with someone who is OBS initially, they only slowly improves with the care being administered, but they still can be safely discharged?

(As Day is fond of saying, “It’s Frickin’ Free!” BUT… you might want to hear what she had to say about why this kind of thing happens… and she describes what might be the case, and how such situations *could* be avoided.)

[Ed. Note: Day spends a long time discussing this, and Lori also had some good input from her experience, explaining how there are now MACs who are now starting to target 3-day qualifying stays for audit.]

What about when 2 Midnights meet criteria, but the 3rd Midnight does NOT meet inpatient criteria, does the patient qualify for a SNF stay paid for by Medicare?

(This is a really tough question, and you will want to hear what Lori had to say, since she has spoken to her QIO in Indiana, and Day also had some input. The risk here, however, is only for the SNF or other post acute care provider, not the hospital. )

Does the patient become liable for the SNF stay if the qualifying stay is subsequently denied?

(There is a qualified answer for this one, from Day. Sorry, couldn’t resist the pun!)


Are you having your Case Managers do concurrent review daily? And also, are you having your Physician Advisors review your outlier reports or your second level reviews?

(This was directed at and answered by Lori Horrall, with some input also from Dr. Ulmer and Dr. Epstein.)

What about using queries to support inpatient admissions, after the patient has been discharged? What if the intent to admit was in the H&P but not in the order itself?

(Orders can’t be changed, but there can be conflicts or unclear orders, which can be clarified by addenda. Dr. Epstein made some points here, but the situation goes back to what’s actually in the record. There were also several comments made by attendees, and finally Day had more suggestions about how to prevent these problems. The question then turned to discussions about the idea of appealing with an argument for “intent” – that the physician intended to admit to inpatient, even if they didn’t say it “correctly” in the order. Finally, Day tells yet another story about how a hospital was able to overturn a large number of denials using exactly this argument. Can you guess where, at what level of appeal these were won? You guessed it – the ALJ Level.)

December 4, 2012 | preview: 2:00 | full-length: 52:29 | format: Video Only

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DAY ONE: OPENING PLENARY SESSION

NATIONAL ISSUES & NATIONAL PLAYERS

The Seventh National RAC and MAC Summit continued with its Opening Plenary Session on Wednesday, December 5, 2012, chaired by Brian Annulis, a named-partner at Meade, Roach, and Annulis, a healthcare law firm based out of Chicago, Illinois. The topic for the presentations was about national issues and national players.

What made this particular morning really different was the number of speakers representing either government contractors or the government itself, specifically the Department of Health and Human Services, the parent of CMS. We even had attendees from one of the MACs, and he was not even a speaker – although he got pulled into several conversations during the sessions, particularly during the question and answer sessions.



USE OF PREDICTIVE MODELING TO DETECT OVERPAYMENTS/ABUSE

Amy (King) Caro Vice President, Health IT Programs Northrop Grumman Information Systems, McLean, VA

First up for the day was Amy Caro, Vice President for Health Information Technology Programs at Northrop Grumman. (According to Amy, Northrop Grumman has been in healthcare for over 20 years.)

Her talk was about how her company helps CMS (and other federal and state agencies) detect overpayments and fraudulent "bad actors" as opposed to those who are honest. She provides a very (surprisingly!) interesting overview of how the Fraud Prevention System (FPS) works and helps weed out fraud and abuse. The main tool used is Predictive Modeling, which of course is quite complicated. Amy presents, however, what I would call a 30,000 foot view of the entire process.

An interesting piece of information from Amy was a series of slides that showed how the FPS gives them a way to "mature" the analytics that CMS has available. The modeling provided by Northrop Grumman provides a basis for evidence-based decision making that goes beyond just descriptive analytics (using existing data only), enabling more strategic thinking for forecasting and planning, and even going beyond all that to provide suggestive or prescriptive analytics, which will allow CMS to plan systems and/or programs that intervene and actually prevent fraud and abuse. One hopes that could even mean a way to prevent billing errors to begin with!

During questions, she confirmed that their relationship is directly with CMS, but that the ZPICs (Zone Program Integrity Contractors, the ones who specifically look for fraud) are one of the biggest users of their tools and results.

Amy also fielded questions about their involvement in deciding what is fraud versus error, detecting systemic errors versus provider errors, what they do for clinical analyses and how it is or is not conducted, the challenge of transparency for this type of work, what happens when ICD-10 finally arrives, and their involvement in CMS's new work in Medicaid.


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MAC ROLES AND RELATIONSHIPS

Deanna Cruser Provider Outreach and Education Senior Analyst - Part B CGS Administrators, LLC, J 15 MAC, Nashville, TN

Annie Scriven Senior Provider Relations Representative, Part A Provider Outreach and Education CGS Administrators, LLC, J 15 MAC, Nashville, TN

L.J. Smith Senior Provider Relations Representative - Part A CGS Administrators, LLC, J 15 MAC, Nashville, TN

This next presentation was from Deanna Cruser, Annie Scriven and L.J. Smith, from CGS, who is one of the Medicare Administrative

Contractors (the J15 MAC) for Part A, Part B and DME claims.

Deanna kept her presentation short to allow for as much Q&A as possible – which was very brave of her, I might add. Anyone who wants an easy to understand overview of the MAC's role in the RAC Process, you can find a nice overview about 8 minutes into the video. One thing she emphasized was that providers should realize that Demand Letters are automatically created by the system that CMS mandates every MAC to use for this purpose, and that they are only sent to the main mailing address normally used by the MAC.

Questions asked, some rather pointed, included some difficult topics: when might it be possible for a provider to download their own Demand Letters; when might the MACs be able to send those to another address; can you explain the difference between the MAC's interpretation of CMS regulations versus providers' interpretations; why is there a difference between the deadlines that various MACs are using versus what CMS has published in their online documents and charts; how to update the master address for a provider; what are the training and credentials of the auditors at the MAC, and can providers see the reports on that kind of training; what is the viability of medical necessity decisions being made by nurse-auditors instead of physicians; and why is that the MACs can decide about pre-payment audits with neither CMS oversight nor prior notification to providers.

As you might expect, the audience was not exactly a group of happy campers, but they were respectful, as were the three speakers, who did their best to answer the questions begin put to them. One of the questions prompted Deanna to indicate that she serves on a committee that oversees some publications being produced by CMS, and she promised to look into the differences between what was


published by CMS on the web and what the MACs were being told about some deadlines – as mentioned by one of the attendees.

[Ed. Note: It is a common complaint of the provider community that many medical necessity denials are filed by both MACs and RACs based upon clinical decisions (which are clearly reserved for physicians only) being questioned and second-guessed by non-physicians (using retrospective data not available to the physicians at the time of their decisions). While the disparity is obvious to all, it nevertheless seems that the MACs have the same requirements and system structure as the RACs, and the use of non-physicians to make clinical decisions is deemed "adequate" by the auditors, based upon the CMS mandates, which do not require the MACs nor the RACs to have a physician make such decisions. The Medical Director(s) are deemed as responsible for these decisions, despite the admitted fact that they cannot and do not review all such decisions.]


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MOVING TO FULL ELECTRONIC COMMUNICATION An esMD Update

Tara Mondock Vice President of Government Programs & Payer Relations Ivans, Inc., Stamford, CT

The next session was a report from Ivans, Inc. Vice President of Government Programs & Payer Relations, Tara Mondock. In a previous RAC Summit, Tara participated in panel discussions, but now provides a presentation about moving to complete use of

electronic submissions and communications, between CMS and all its contractors and healthcare providers. Today, we have the esMD program, which was introduced in the September, 2011. Ivans provides a system for a provider (or a vendor) to easily integrate into the esMD system.

Now, in case you haven't noticed, the billing instrument of our healthcare system today is not the form you use to submit a claim, be it the UB-04 or the Form 1500. Now more than ever, the billing instrument is actually the medical record. The whole thing. This will be even more true when we someday move to all prepayment review. Keep this in mind as you think about this presentation about the use of esMD.

Also, using some statistics that I pulled out of the presentation, I calculated that the average provider must deliver an average of 33,750 pages of medical records to Medicare Review Contractors, every 45 days. Just in labor, that effort requires almost 2 FTEs, annually.

And if we extrapolate, the worst hit providers, those getting the max of 600 ADRs per 45-day period from a RAC alone, are delivering probably 4 times as much, or 135,000 pages of medical records, 8 times per year, and using 7-8 FTEs.

Tara reports that all of the Medicare Review Contractors (RAC, MAC, CERT, PERM and ZPIC) are now boarded and ready to use the eSMD system. This doesn't mean it is all worked out, but at least one part of each of the contractors is "ready" to use eSMD, according to her presentation.

The most interesting slide to me was actually a list of the MAC Awards and all the protests (four exist as of the date of the Summit) that have been filed by the contractors who lost out on the contract awards.

Here's a short list of the ones under protest:

MAC Region Awarded to Previous Award

J1 (now JE) Noridian Palmetto J12 (now JL) Novitas Novitas JC CME CGS CGS J6 NGS --


(For more details, see slide 7 from her presentation.)

This should be interesting to all providers because it represents yet another set of delays and difficulties in dealing with the CMS review contractors, another item to have your staff watch and track.

Of course, the overall intention of the government is to have esMD support all the CMS Program Integrity Initiatives, including Part A/B providers, Home Health Providers and DME Providers. The prior authorization initiatives are the most difficult for esMD to incorporate, but we are told they will be supported, eventually.

Tara provided some very helpful slides showing a complete list of "edits" that a Florida MAC, FCSO, rolled out to support Prepay Audits on some specific MSDRGs, and in April 2012, adding all MSDRGs with 1-day LOS. She also talked about how some MACs have found ways to "reward" providers who were found to have very low error rates, by excluding them from future pre-pay audits. Those exclusions began in July, 2012.

[Ed. Note: Since hearing Tara mention this, I’ve heard that MACs are not really “excluding” providers from these audits, they simply “pause” the auditing. While that does give the provider a breather, so to speak, they are nevertheless still under the microscope, just not as regularly as before. Evidently, this is so that the MAC would have no trouble renewing their audit process, if and when they were to decide to do so, for whatever reason. To me, that means for any reason they choose. Once again, I see that all these programs are created to feed Congress’ unquenchable thirst for money, and have nothing to do with good medical care, and certainly have little or no concern for the survival of the providers. Forget fairness -- that doesn’t even get to sit on the sidelines, much less enter the game.]

One slide showed the most current prepayment reviews for Part B claims being conducted by Cahaba, the MAC for J10. There were many E&M codes listed, but the most alarming to me were the level 4 (99214) & level 5 (99214) codes for office visits by established patients, since 99214 is probably one of the top three codes submitted, and 99215 is probably within the top 20, nationwide. (In 2005, 99214 was #2 for family physicians, and 99215 was #18 - see this chart). Also, the codes for subsequent hospital care, 99231, 99232 and 99233 are also very common codes - again, probably within the top 20 nationwide.

NOTE: According to Tara, lists like this are available on the MAC websites, but you have to "go look for them." Yes, they can be found, but they also include notices to let you know that the lists posted are not all inclusive. Also, I have seen reports that in some cases, these prepayments have delayed payments for as long as 6 months or more. See this link for one example.

Finally, there was one slide that showed plainly that almost 40% of the dollars for CERT identified errors come from Emergency Medicine, Family Practice and Internal Medicine Part B claims. Add another 17% of dollars from Cardiology,


and you have a very small but well-stocked lake where auditors can go fishing. And just as an aside, the top offender specialty, Internal Medicine, represented 24% of the total dollars found in erroneous claims. That's 1 in 4 errors, from one specialty. (For a guy like me, that raises huge questions that will likely require another long report to investigate. Maybe later...)

The purpose of all this, of course, is to reduce costs and errors, particularly by reducing the use of paper for all these records. In particular, however, the biggest problem to solve is not so much the delivery itself, but actually the accountability and viability of receiving the records at the right place by the right person. Given the veritable mountains of paper involved in sending records to reviewers, there is no viable solution available today if paper continues to be the vehicle of choice for recording, storing and transmitting medical records, which are of course the key to billing, and therefore reimbursement. Also, and this is not exactly obvious, the use of CDs and DVDs does not actually change the main problem - receiving the records at the right place by the right person.

On slide 19, Tara provides a very nice outline of the road-map for the two phases of what will happen with esMD over the next couple of years. In case you are not aware of it, the RACs and MACs are now all set to use esMD for all Prepayment audits.

Tara handled questions about submitting documents for first and second level appeals and when that might be available; reimbursement models for submission of records via esMD; the lack of confidence & security concerning the look and structure of submitted documents, versus what the provider might have "wanted" to submit; the availability of esMD to Medicaid and other non-Fee-For-Service programs.

And all that in just 30 minutes… not bad, eh?


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USE OF THE MILLIMAN CARE GUIDELINES: Observation and Inpatient Levels of Care

Jeffrey Epstein, MD Senior Medical Director Stamford Hospital and Healthcare System, Stamford, CT

William Rifkin, MD, FACP, FHM Managing Editor Milliman Care Guidelines, New York, NY

If you are a reader of the RAC-Relief Google Group (and you should be if you're not... go here to join for free) you are no doubt familiar

with a friend of mine, Dr. Jeff Epstein, who is a passionate and vociferous advocate for fair and respectful treatment of providers by auditors and review contractors, and a no-holds-barred speaker and commentator. Jeff recently spoke out a lot about a presentation he attended by Milliman Care Guidelines, concerning admission status and the use of Observation versus Inpatient. As we all know, this is a huge topic in the industry, nationwide, and is the cause of many, many denials and subsequent appeals. Jeff was adamant that the advice he heard from Milliman was incorrect, and in particular, the Milliman Guidlines were especially being used incorrectly by Payors. As a result of a conversation with Dr. Bill Rifkin, Managing Editor for Milliman Care Guidelines, the RAC Summit brought Dr. Epstein together with Dr. Rifkin, and gave them both an opportunity to talk about the correct use of the guidelines.

A major sticking point, emphasized by Dr. Rifkin, is that the guidelines are meant to be, simply put, an aid to clinical decision-making. The problem many times is not that the guidelines disagree with a clinical decision, but that the clinical decision is virtually invisible -- it can't be seen in the record because not enough is being said, or what Dr. Rifkin calls "showing your math." Also, the guidelines are meant to be flexible. Of course, any set of guidelines can be misused. Such misuse is not necessarily the fault of the guidelines themselves.

Evidently, there are some payors who are using observation guidelines as a way to rule out inpatient admission. That is, if you don't FAIL observation guidelines, then you can't be inpatient. Dr. Rifkin spends quite a bit of time going over how the Milliman Observation guidelines are designed and what they are intended to do to aid a clinical decision. Even if you don't use Milliman, I strongly recommend a listen to his talk. It is clear and positive, and he does an excellent job in settling the question of "how should you be using observation criteria in the ED, and if so, when should they be considered?"

mailto:[email protected]?subject=Subscribe%20me%20to%20RAC%20Relief


One of his slides (another worth-the-price-of-admission thing) presents examples of the proper use of observation guidelines and even examples that are NOT proper use. Another slide goes over the correct application of OBS criteria for admission, discharge and moving from OBS to inpatient. Yet another slide shows some keys that show how their guidelines are designed to actually improve documentation.

Dr. Rifkin fielded questions about how Milliman uses both positive and negative studies in their research; how to deal with the "slowly improving" patient and judge an appropriate status; does Milliman have and use clinical partners to help analyze and evaluate their guidelines over time; how to defend against the recent RAC and MAC denials that focus retrospectively on the services being provided instead of the clinical decision-making evidence; how to handle patients that reach the 48-hour mark in OBS; other examples of auditors using retrospective evidence to deny admissions, and how to argue those cases.


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THE BATTLE CONTINUES… ANEW?

Before I review the next presentation, I wanted to insert an observation that I think is appropriate, at this point. This is something I noticed later in the summit, and I mentioned it in the Introduction.

I think it begins at least with this next presentation. There was a "theme" that seemed to take on a life of its own here at the RAC Summit -- appealing RAC and MAC denials to the Administrative Law Judge, or more accurately, an intense interest in the ALJ level of appeals for Medicare/Medicaid claims. The subject itself offers a decidedly interesting look at how our government works, particularly the separation of power that exists, not between the judicial branch and the executive branch, but within the executive branch itself! I for one was very pleasantly surprised to discover that even within the executive branch itself, judges in their employ are still able to be independent.

"No one is allowed to tell an ALJ how to decide a case before them."

Hon. Nancy Griswold, Chief Administrative Law Judge

The above quote is from a conversation with the Chief Administrative Law Judge, the Honorable Nancy J. Griswold, who told me this at a discussion table, during our lunch break.



She was answering my question about the concerns that I (and others) had after reading the recent OIG report on how the ALJ level of appeals seems to be going against CMS so often (about 75% of the time). The OIG suggested that (I'm paraphrasing it here) CMS needs to educate the ALJ on the manuals and regulations that govern these claims and denials.

The truth is that there is a distinctly different interpretation of the rules, between what CMS is instructing their MACs and RACs to use, versus how the ALJs often interpret the exact same rules. Apparently, the OIG sees this as a problem that requires “education” of the judges, by CMS.

Judge Griswold and her Deputy Chief ALJ, Judge Moore, actually seemed quite calm about the report from the OIG, and they described it as actually quite “tame” (my word, not theirs), at least compared to others they have seen in years past. At any rate, they appeared to have no real concerns about anyone stepping in and trying to tell them how to do their jobs or how to decide their cases, as it were.

Of course, the real difficulty is that the rules are vague, ambiguous and sometimes contradictory, which is what makes the differing interpretations possible, or even, more to the point, likely. With that in mind, let me tell you about Judge "Spike" Moore's presentation.


WHAT ALJS LOOK FOR:

Hon. C.F. “Spike” Moore Deputy Chief Administrative Law Judge Office of Medicare Hearings and Appeals U.S. Department of Health and Human Services, Arlington, VA

In previous RAC Summits that I have attended, it always seemed to me that the officials from CMS were either too busy or simply did not care to mix with the attendees. I got this impression from the fact that

they did not hang around to chat, and it was evidently difficult or impossible to get them to speak to the conference. It was therefore very surprising and enjoyable to not only have an Administrative Law Judge speak, but in fact have several in attendance, along with several of their staff. Also, they stayed for quite some time, and openly discussed our concerns. They seemed especially interested in hearing what we had to say and answering our questions.

Deputy Chief Administrative Law Judge, the Honorable C. F. "Spike" Moore gave the ALJ's presentation just before the break for lunch, and it was at once enlightening and encouraging for everyone to hear - at least it was for all the providers.

Joining him for the talk were his boss, Chief Administrative Law Judge, Hon. Nancy J. Griswold; Jason Green, Senior Attorney and Advisor for the Chief Judge's Office; Andrea Bernardo, Chief of Policy; and several other members of the staff from the Office of Medicare Hearings and Appeals (OMHA), in Arlington, VA.

Judge Moore gave a short overview of the history of the OMHA and its roles and responsibilities, including its goal of providing legal decisions about providers' appeals within 90 days. That however, as he explains, is not what is happening, as we all know. Judge Moore further explained that the OMHA was setup to handle about 1200-1500 cases per month, but that this number has now swelled to over 5,000 per week. As he says, "it's a challenge" now, and there is a backlog, despite the fact that there are 65 ALJs, who also have legal assistants, paralegals and attorneys who work for them.

It was no surprise to us to hear that the majority of their Part A Appeals work is from the RAC program. In fact, for FY2012, they've seen a 320% increase in cases from the 1st quarter to the 4th quarter. Even though OMHA has requested additional funding to deal with this overload, actual funding is up to Congress.

[Ed. Note: Since Congress just gave itself a raise, even before it finally passed a bill to avoid the fiscal cliff, one would think that means that "there must be plenty of money" out there, right? So, of course, they will fund OMHA to lift the backlog, yes? We'll see.]


The most helpful information that Judge Moore presented was his coverage of the following items, which he does plainly and in detail:

- the importance of sending out notifications to all involved parties;

- your rights to escalate the case to the Medicare Appeals Council;

- detailed instructions on how to prepare for your ALJ hearing;

- details on bringing up new evidence, knowing the rules, LCDs, etc.;

- what to put, and how much to put into your briefs;

- asking for alternative remedies/resolutions;

- who and what to have for witness testimony and physician opinions;

- advice on how those witnesses and opinions will be weighed.

He also explains that an ALJ *can* decide to not adhere to an LCD, and how you might ask an ALJ to do exactly that.

And here is the key thing to keep in mind:

ALJs have decisional independence - but must nevertheless adhere to certain things.

He then outlines those certain things, which are few but specific.

Judge Moore and others from OMHA then fielded questions for 20 minutes on various issues: responding to the recent OIG report that criticized providers; exactly how far behind is the OMHA (the one asking the question has a case that's been out for 18 months); what the OIG report might mean, particularly its suggestion about having oversight over the ALJ, since the ALJ seems to be reversing so many denials; why are the first and second levels of appeal so "worthless" from the providers' viewpoint; in the event of a Part A denial that is upheld, what is the "correct" way to include a request for the ALJ to allow rebilling for full Part B payment.

During the questions, Judge Griswold also gave suggestions about what to do if your case goes far beyond the 90 days.


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DAY ONE: AFTERNOON PLENARY SESSION

SIX HOT ISSUES

Dr. Larry Hegland, System Medical Director for the Ministry Health Systems of Wisconsin, chaired the afternoon sessions for the Summit. Larry is the creator and administrator of the popular Google Group, RAC Relief, which is a free email list server, now used by over 500 members from all over the country.

The topics for the afternoon were for various topics, all considered "Hot Topics" for us all.



HOT ISSUES I – MAC & RAC PREPAYMENT ISSUES

Stewart Presser (DCS and NGS) Greater NY Hospital Association, New York, NY

Kathy Reep (FCSO and Connolly) Florida Hospital Association, Orlando, FL

Larry T. Hegland, MD (CGI and NGS) Chief Medical Officer, Ministry Saint Clare's Hospital, The Diagnostic and Treatment Center, Weston, WI

Mike Frith (HDI and Palmetto/Noridian/WPS) Regional Manager, Patient Accounts, Trinity Health-Saint Alphonsus, Boise, ID

Brian Annulis (Moderator) Partner, Meade, Roach, and Annulis, Chicago, IL

The first Hot Issues session included speakers talking about the MAC and RAC Prepayment Reviews, including one speaker from each of the four RAC Regions.

Kathy Reep is from the Florida Hospital Association and spoke for Region C. One key thing that Kathy reported was that their MAC, FCSO, is in fact now performing "reach through" -- that is, if a hospital's claim is denied and recouped, the MAC is also recouping the physician's claim. Hospitals report that they now receive a lot more documentation, now that they see that the dollars are being recouped from them, also. (Go figure...)

Kathy also reported that FCSO does not really "remove" a hospital from the Prepayment Review list, but that rather they simply stop requesting records from that hospital for an unspecified period of time. At a later date, they may request a few records, just to insure that the hospital is still doing a good job.

Stew Presser spoke for Region A. Stew is from the Greater New York Hospital Association, and talked about how almost all NY and CT hospitals are now experiencing MAC prepayment reviews for perhaps all DRGs for short stays, period. The focus of their MAC, NGS, seems to be on specific types of admissions, and some hospitals receive 15 to 20 requests for review per day. He also mentioned how NGS recently attempted to provide some guidance about the use


of Observation before admission, but that this guidance was then removed and is being rewritten.

[In fact, this guidance was a great topic of discussion all thru the summit, and remains a hot topic. You can get a copy of the slides here. The issue is about slide 26.]

Stew also reported on a recent project conducted by NGS in partnership with CMS, to send out a "Mobile Medical Review Team" which was a team of Nurses sent out into the field to do postpayment review of 10 hospitals in 2011, 10 in 2012, and a like number in 2013. Let's just say that the results were not good, and are being appealed and reviewed.

Stew reported that NGS is not known to be doing any reach through recoupment, as yet.

Larry Hegland reported that in Region B, there has yet to be much prepayment activity, to date.

Here is an interesting fact brought up by Kathy Reep -- in the state of Florida, state law prohibits a hospital to request a copy of the physician's medical documentation after the fact, even for the purpose of appealing a denial. That is, the hospital must get that documentation before hand, or they are essentially out of luck and will not be able to satisfy medical necessity for such a claim. She also mentioned a recent MLN Matters SE1236, entitled Documentation of Medical Necessity for Major Joint Replacements, which very specifically talks about what is needed in the record to satisfy medical necessity - and it's quite a list! Effectively, this seems to be a copy of what was in a past LCD in Florida. One wonders if we will see more of this, in the future.

The Region D speaker was not able to be present, but there were some reports that Noridian activity was light, with fewer denials than from the RAC, HDI. There was also a report from Day Egusquiza that in California, Palmetto is now doing prepayment reviews on cataracts. As seen with the joint replacements, the reviewers are looking for documentation that the patient is at the end stage of the cataract disease process, and therefore need the procedure.

More details discussed:

- commercial prepayments being seen

- other LCDs that give cataract documentation requirements

- work to change the Florida state law that prohibits the use of physician records by a hospital

- commentary about not making your processes Medicare only

- audience comments about prepayment audits for Medicare Advantage Plans (now appearing)

http://apps.ngsmedicare.com/ADC/displaymedia.aspx?whatToDo=attch&id=2848


- discussion about getting pre-authorization with a guarantee of payment (ok, stop laughing...)

- issues with ADR letters that look the same (do you send the records to the RAC or MAC?)

- volume of RAC prepayment

- NGS Medical Director's comments (answering a question) about the "value" and content of NCDs versus LCDs

- advice about requesting Part B payment in the case of a Part A denial, and when (Level 1? 2? 3?)

- some new information from NGS and all the speakers about CMS's thinking, post the AB Rebill Demonstration and the recent AHA lawsuit

- a long discussion about appealing in order to get the Part B payment when you know the Part A claim was improperly filed as inpatient

- what to do about beneficiary liability in the case of a Part A claim converted to Part B as a result of an ALJ order.

This was over an hour full of great information… kudos to the panel!

December 5, 2012 | preview: 2:00 | full-length: 1:11:51 | format: Video with PowerPoint

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HOT ISSUES II – MEDICARE ADVANTAGE DENIALS & APPEALS ISSUES

Shannon Pavel, RN, CPHM Clinical Appeals and Denials Coordinator Infirmary Health, Mobile, AL

The second Hot Issues session on Medicare Advantage Clinical Audits was presented by Shannon Pavel, Clinical Appeals and Denials Coordinator for Infirmary Health of Mobile, Alabama. Shannon has been working on this front since 2009 and is seeing a huge increase in

activity by these auditors. On one slide, she listed the various companies that have been doing these audits since then - the growth in both the number of companies and the number of audits is alarming.

A huge difficulty Shannon discussed was how these non-RAC audits and denials wind up entering your revenue cycle in multiple places, because the auditors do not have preset or even consistent processes. Therefore, it is difficult to track and calculate the effect of these audits. All the types of clinical audits you expect are there, but the limits, or more accurately the lack of limits, on the contractors, makes this look more like the RAC Demonstration than the national program. Look-back limits, time frames, ADR limits -- none of those exist, here.

Based on her three years of experience at this, Shannon is then able to present some survival strategies, including detailed suggestions for:

• tracking and trending; • what you need to know about contracts, manuals, your own UR process; • your payor representatives and who else to talk to within the payors, even

your own internal staff; • appeal strategies to use; • how to be aggressive and organized about it; and • suggestions for non-contracted facilities.

Finally, Shannon presented a long list of problems that she has experienced, and that you can probably expect to meet and have to address. It seemed that many could be solved, but did require time and effort by Shannon and her team, sometimes including arbitration.


Shannon also fielded questions about:

- loopholes that might exist for non-notification of denials; - is there any way to deal with these plans as we now do with RACs, via the

CMS Project Directors; - the potential for HIPAA violations by the payors, via their mishandling of

the records; - the existence of so-called "hidden denials" via contract changes; - additional appeal strategies concerning other commercial and/or Medicaid

payors.


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HOT ISSUES III – REHAB AND LONG TERM CARE

Jane Snecinski, FACHE President Post Acute Advisors, LLC, Atlanta, GA

The third Hot Issues session was presented by Jane Snecinski, President of Post Acute Advisors, Atlanta, Georgia, on Rehab and Long Term Care. Jane's company has a niche market, only concerned with these type of issues. Within the RAC program, there are about

1,900 approved issues, but only about 4% are for post acute care. Plus, most of those are automated denials. She points out, however, that both HDI in Region D and Connolly in Region C have been approved for Complex Reviews for medical necessity for Inpatient Rehab claims, plus semi-automated reviews for late submission PAIs, and incorrect discharge status. Those late PAIs could cost you about 25%. Also, the Hospice providers are being hit because of the marketing relationships you might have with LTC providers, particularly if you own them.

Perhaps the biggest impact that Jane thinks will occur this coming year concerns Skilled Nursing Facilities and Nursing Homes, because of a long list of new issues now coming up. One of her slides, slide 6, shows a long list, and the top one is about mandatory compliance and ethics programs, aimed at not only promoting quality care but also preventing and detecting fraud and abuse. While we all could have guessed that one would happen, there are others in her list that are not so obvious. She also noted in that list that many of those issues would involve automated edits/denials.

Jane wonders out loud if CMS has purposely avoided complex reviews, given the dismal performance they saw in California during the demonstration project. Perhaps the gray areas there are too gray, at this time, even for CMS?

RACs seem to be doing a limited number of ADRs for these types of claims, and most of the denials are being reversed at the ALJ level. MACs seem to only be doing probe audits, while ZPICs, when active, request large numbers of records. Medicaid RACs are not very active (yet), and MICs present very little activity.

A danger that Jane points out, however, is that an Inpatient Rehab unit could nevertheless become a huge problem, partly because it is such a small part of a hospital's "pie." She told a story of a small 15-bed unit with an Average Daily Census of 5 wound up costing the parent hospital over $500K because its billing had been so mishandled, for years, as revealed by an outside audit and extrapolation.


The two examples she then presents are extremely interesting, due to the extrapolation that ZPICs and RACs are authorized to use. The first example showed how a review of 100 Inpatient Rehab records would up costing the hospital $6 Million, after extrapolation.

Her second example illustrated another example of a 15-bed unit like the one mentioned above, but the best part of it was hearing how the CEO had a great "Aha!" moment, when he realized (out loud, even) that when he cut $3000 out of that unit's education budget, that meant that his people didn't learn about some changes, and so they didn't know how to properly code those claims... and he finally saw how HE had caused this massive error, as a result of his decision. Jane was so excited! He had a different reaction...

Jane answered questions about:

- ZPIC experience, especially concerning their extrapolation methods;

- - what she thinks is now the biggest exposure areas for post acute care.


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HOT ISSUES IV – WHAT IS AN INPATIENT… AND HOW TO GET IT RIGHT


The unsinkable, indefatigable Day Egusquiza presented the Hot Issue IV session next, entitled "What is an Inpatient... and How to Get It Right," covering many of the challenges of coverage and compliance, asking the question, "Why is it so hard?"

It's a reasonable question. But it's hard to answer. There are lots of reasons, Day mentions many, but another question that comes up is, "when did we take our eye off figuring out whether someone really is an inpatient?" That's another one that is hard to answer, but again, Day suggests that regardless of when, we did. The good news is that it CAN be fixed.

Day suggests that the problem occurs because the hand-off between the physicians and the caregivers is broken. The story of the patient is not being told in the medical record. Earlier in the day, Judge Moore, the ALJ speaker from OMHA, gave a very encouraging and informative presentation, and one thing that listeners should have taken away was that, as he explained, the ALJ MUST depend upon the medical record. When a medical necessity denial comes before them, the question they ask is "should this patient have been an inpatient or not." While your representative may be able to explain the story of why the patient needed to be inpatient, the Judge must find that story and evidence to support it in the medical record.

Day promised to give out her complete Inpatient vs. Observation class and there is a link to it here. (uh.. be prepared, this is a 101 slide presentation!)

Meanwhile, here's the simplest explanation I've heard of what Observation is:

Ask two questions of the Attending Physician...

1. Are they safe to go home? 2. Do you know what's wrong and is there a defined course of

treatment yet?

If the answers to those are both NO, then PLACE them in OBS.

So. Good question: Why are we making this so hard?

http://www.ehcca.com/presentations/racsummit7/egusquiza_1_h1.pdf


Day also referred to a great article that recently appeared in AARP, the Jan-Feb 2010 issue, the article is "Hospital Stays are Under Observation." The article does not appear to be available online anymore, but here are several other links I can provide on this subject.

When Is a Hospital Inpatient Stay Not an Inpatient Hospital Stay – Hospital “Observation Services”

-- an excellent article with many ALJ decisions mentioned. Written in 2010, is still hugely, curiously relevant!

Medicare: Inpatient or Outpatient?

-- another one from AARP, from October, 2012.

Extended Observation Stays in Acute Care Hospitals: Criticism, Legislation and Discussion

-- another thoughtful article at the Center for Medicare Advocacy, Inc.

AARP Letter to CMS Suggesting Acceptance of OBS to Satisfy Medicare Coverage of SNF Services

-- a September, 2012 letter to CMS by AARP

[Ed. Note: If you've never heard Day speak before, you don't know that a 20-minute talk from her is like 60-90 from many other speakers, not because they don't know the subject, but because Day is... well, have you ever tried to get a drink of water from a fire hydrant? That’s not a complaint, merely an observation and a bit of advice! If you want to get everything you can from Day, get a recording. You'll need it.]

She also covered:

- the latest news on "the story of Syncope" and why it shouldn't be IP by itself;

- the 2013 OPPS Proposed Rule, and why a 24-hr bright line is a bad idea; - Medicare's Inpatient definition & the use of "guidelines" which are really

kinda useless; - Vocabulary to use to teach the physicians about: - What does "Severity" look like? - What does "Intensity of Service" look like? - What to say when the MD says... "Nursing knew what I meant...";

http://cmahealthpolicy.com/2010/05/24/when-is-a-hospital-inpatient-stay-not-an-inpatient-hospital-stay-hospital-observation-services/

http://cmahealthpolicy.com/2010/05/24/when-is-a-hospital-inpatient-stay-not-an-inpatient-hospital-stay-hospital-observation-services/

http://www.aarp.org/health/medicare-insurance/info-08-2012/medicare-inpatient-vs-outpatient-under-observation.html

http://www.medicareadvocacy.org/2010/08/26/extended-observation-stays-in-acute-care-hospitals-criticism-legislation-and-discussion/

http://www.medicareadvocacy.org/2010/08/26/extended-observation-stays-in-acute-care-hospitals-criticism-legislation-and-discussion/

http://www.aarp.org/content/dam/aarp/politics/advocacy/2012-09/aarp-comm-medicare-hopps-nprm-observation-status-final.pdf

http://www.aarp.org/content/dam/aarp/politics/advocacy/2012-09/aarp-comm-medicare-hopps-nprm-observation-status-final.pdf


- Who is the only physician that matters when determining status; - Several examples of what needs to be in the admit note or admit order and

how to explain it; and finally, - what UR & CDI should be doing now, besides DRGs.

See what I mean?

Here's one piece of advice that I simply have to pass along... two actually:

1. Go look at the OIG's 2011-12 Work Plan -- it lists Risk Areas, applicable for every hospital; and

2. You had better learn to pay attention to and use PEPPER reports -- because the OIG is studying them.

The OIG is using PEPPER to find their audit issues. You can do the same.

This is one of the presentations I submit is a MUST SEE from the conference. Twenty-seven minutes, well worth the price of admission.


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HOT ISSUES V – THE NATIONAL PART A TO PART B BILLING DEMONSTRATION

Mike Frith (HDI and Palmetto/Noridian/WPS) Regional Manager, Patient Accounts, Trinity Health-Saint Alphonsus, Boise, ID

The Hot Issue #5 was a presentation by Mike Frith, from Trinity Health System in Idaho, on their experience in the National Part A to Part B Billing demonstration. Mike had to present remotely, as a

family emergency prevented him being present at the Summit. I've seen Mike do this presentation before and the results are very interesting, and perhaps the most interesting thing is the results for the three hospitals in his system, and how they each evaluated their participation.

Just as an aside, I personally find it completely unacceptable that CMS requires a hospital to forego appeal rights to be in this program. For me, there is not effective oversight over the RACs, so I would expect to lose money, period. But that’s me. You might want to consider Mike’s methods, which are certainly based upon more scientific methods than I might use in this case.

He reports on four hospitals. For one of the hospitals, their receipts for the denials they suffered were about 55% of their original Part A billings, since they got to rebill them as Part B. Had they only been able to get the ancillaries paid, and not considering any appeals they might have won, they would only have received about 5% of the Part A payments. For another hospital, they received about 42%, versus 11% they would have received only for ancillaries, within timely filing limits. The third hospital received only about 35%, versus 6%, if they hadn't been in the demonstration. A fourth one got 38% versus 9% -- but there was very high appeal opportunity seen here, and that was a major consideration. Also for the fourth hospital, there were significant MAC Pre-payment denials, recovering only 22% of the DRG payments, which, overall, was thought to be an overall loss for them, due to what they saw as some potential appeals, which they thought they could have easily won. That is, they lost money in this hospital, because they couldn't appeal anything.

Mike goes on to explain exactly how they it was determined whether those hospitals should stay in the demonstration or opt out, even offering examples of the "break-even" analyses he performed for each one.


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HOT ISSUES VI – MEDICAID PROGRAM INTEGRITY ISSUES – MICS AND RACS

Markus Cicka Director, Missouri Medicaid Audit and Compliance State of Missouri, Jefferson City, MO

Brian Fisher Program Integrity Account Manager, Iowa Medicaid Enterprise Iowa Medicaid RAC and Program Integrity Contractor, De Soto, IA

Kathy Lippmann Vice President, State Government Services Mid-Atlantic, HMS (State of Virginia Medicaid RAC), Richmond, VA

Carolyn L. Yocom Director, Health Care U.S. Government Accountability Office, Washington, DC

Steven A. Greenspan, JD, LLM (Moderator) Vice President of Regulatory Affairs Executive Health Resources, Newtown Square, PA

The final presentation of the day, Hot Issue #6, was a panel discussion moderated by Steve Greenspan of EHR, and concerned the

Medicaid Program's program integrity efforts at the state level, in the MICs, and in the Medicaid RACs. The panel included two State government representatives, a representative of a Medicaid RAC Contractor, and a member of the staff of the GAO.

The panel basically made a series of comments about the various issues that were being seen and addressed in the various states. Here is a set of bulleted versions of what they talked about:

• Both CMA and the State need to own the whole issue of integrity for the Medicaid programs. But the States have been inconsistent, so it is hoped that the Fed may be able to help that. [I’m holding my tongue…]

• There is of course a concern by providers that with so many different unconnected agencies doing audits, there will be overlap and an even greater burden placed on the providers. Coordination between the State, the Fed and all the contractors is indeed a challenge, but is worked on


constantly.

• Data is fed to the various auditors on a monthly basis, but the formats are different, state to state, and with time, programs change as well, so this is another challenge that is constantly being addressed. This adds time to all the audits, however.

• Managed care is another challenge, because so much data is required, including all the encounter data. More time…

• Medicaid RAC appeals can be either RAC state/contractor specific or a state may choose to use their existing process already in place. Nevertheless, this means there are going to be up to 50 different processes in place.

• RACs can be paid up to 17% for DME overpayments, as allowed by CMS guidelines.

Frankly, this was not a very encouraging subject, but at least the people involved are talking and do appear to be people just trying to do the best job possible, given the circumstances. All of them seemed approachable, ethical, competent people, which in itself is encouraging.

Finally, there were questions answered about:

• what kind of oversight is being put on you by CMS & the States?

• is there coordination with the ZPICs as well?

• are there any changes as a result of the Affordable Care Act or even due to successful appeals?

• what standards are being used for definitions of inpatient, state-to- state, etc.?


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