This week, Health Data Insights, the Region D RAC, posted 29 DRGs that have been approved for medical necessity review.  The DRGs are 056, 057, 069, 190, 191, 192, 249, 253, 254, 291, 292, 293, 302, 308, 312, 313, 314, 315, 316, 391, 393, 551, 552, 640, 682, 683, 684, 689, and 811.

Our certified coders and contract physicians are able to assist you with coding and medical necessity reviews, appeals, and/or RAC readiness and preparedness.

Although the regulation requiring that only Medicare enrolled physicians or eligible professionals order and refer certain items and services, such as DME and home health, was effective July 1, 2010, CMS has stated that it will not automatically reject claims based on orders/referrals from providers who have not yet had their applications approved.  MLN Matters Article 6421 states the edits will go into effect on January 3, 2011.  All this being said; it is critical to note that the rule has not been suspended.  Providers should not submit claims for services related to providers they know are not enrolled.  Doing so could have serious compliance implications.

CMS has an Ordering Referring Report that can be accessed to determine if an ordering/referring provider is enrolled in PECOS.  To view this report, go to:  http://www.cms.gov/MedicareProviderSupEnroll/06_MedicareOrderingandReferring.asp#TopOfPage

CMS also has provided a new Initial Physician and Non-Physician Applications Pending Contractor Review File.  Providers can access this file to see if a provider’s application is in process and pending contractor review. While the applications have NOT been processed and approved, provider’s can at least verify that an application has been submitted and is awaiting processing.  To view this file, go to:  http://www.cms.gov/MedicareProviderSupEnroll/06_MedicareOrderingandReferring.asp#TopOfPage

Guidance has also been issued for providers that infrequently receive reimbursement from the Medicare program.  This can also be found at:  http://www.cms.gov/MedicareProviderSupEnroll/

A new MLN Matters Article was released last week that outlines existing CMS policy and timelines for the retention of medical records.  It provides helpful guidance and hierarchy from state law to HIPAA to CMS and also gives links to each of the regulations cited.  To view the article, go to:  http://www.cms.gov/MLNMattersArticles/downloads/SE1022.pdf

Last week, the Region B RAC, CGI, posted several Medical Necessity Review Issues.  All are complex reviews for inpatient hospitals for all states (IL, IN, KY, MI, MN, OH, WI).  They are as follows:

Also, in recent weeks, several new MS-DRG Validation Issues and Approved Audit Issues have been posted for all RAC Regions.  In particular, Connolly Healthcare, the Region C RAC has added numerous outpatient drug codes for dose versus unit billing errors.  Medical necessity is still excluded at this time for all audit issues.

The CMS RAC FAQs have also been updated with helpful questions and answers that are worth looking through.  To view the FAQs, go to: http://questions.cms.hhs.gov/

We encourage you to visit our website at www.hchealthcareconsultingllc.com and access our consolidated listing of both DRG validation issues identified by region and our approved audit issues table, also identified by region.  We also strongly urge providers to review the internal policies and auditing and monitoring procedures to ensure appropriate provider documentation and accurate coding oversight. We have contracted physicians and are able to assist you with medical necessity reviews, appeals and/or RAC readiness/preparedness audits.

CMS just released the FY 2011 IPPS Final Rule that establishes policies and payment rates for inpatient services. 

To read the entire CMS Press Release, go to: http://www.cms.gov/apps/media/press_releases.asp

CMS Issued three Fact Sheets with additional details at: http://www.cms.gov/apps/media/fact_sheets.asp

The final rule was placed on display at the Federal Register on July 30, 2010, and can be found under Special Filings at:  http://www.ofr.gov/OFRUpload/OFRData/2010-19092_PI.pdf or www.ofr.gov/inspection.aspx#special

The comment period for this interim final rule closes on Sept. 28, 2010.

Earlier this month, CMS released MLN Matters Article #SE1024 that outlines high-dollar payment vulnerabilities identified from the RAC demonstration project.  CMS hopes to educate providers on the types of problems found in the demonstration in order to prevent the same errors from occurring in the future.  CMS plans on releasing a series of related articles.  Providers are encouraged to use this information to “implement appropriate corrective actions” in their own practices.

This particular article focuses on the required medical record documentation that must be submitted upon receiving an Additional Documentation Request (ADR) and recommendations for preparing for RAC audits, including development of a RAC team to coordinate activities such as tracking audits, tracking appeals, identifying patterns of error and implementing corrective action.

 To view this article, go to: http://www.cms.gov/MLNMattersArticles/downloads/SE1024.pdf

On July 15, 2010, the OIG released the results from their “Analysis of Errors Identified in the Fiscal Year 2009 Comprehensive Error Rate Testing Program”.  The objective of the OIG in performing this review was to identify which providers caused most of the improper payments and the types of payment errors that were made.  Out of 99,480 sampled claims for FY 2009 (representing $71 million), nearly 20,000 claims resulted in improper payments totaling $4.7 million.  The national paid claims error rate based on these results is 7.8% or $24.1 billion.  Six provider types topped the list accounting for 94% ($4.4 million) of the $4.7 million in improper payments and are as follows:

• Inpatient hospitals
• DME suppliers
• Hospital outpatient departments
• Physicians
• Skilled Nursing Facilities
• Home Health Agencies

The majority (98%) of payment error types fell in the following three categories:

• Insufficient documentation (missing clinical notes, missing test results, and incomplete/missing/illegible physician orders)
• Miscoded claims (diagnosis or procedure)
• Medically unnecessary services

Part of the review focused on medical necessity of inpatient stays versus observation which is consistent with one of the areas in which the OIG and RACs are focusing.  Providers should REALLY focus on their case management and admission protocols to decrease error rates and avoid costly investigations and potential recoupments.

The report outlines errors and gives examples specific for each provider type.  Additionally, we encourage providers to take a detailed look at the report to identify areas that may need further evaluation in their own practice.

The OIG recommended to CMS that they use the results of CERT reports to identify areas of potential program weakness based on the types of errors that were identified in the analysis, make corrections, and take any steps needed to strengthen the CERT program.  CMS agreed and will share these results with each of the contractors.

To view the entire report, go to: http://www.oig.hhs.gov/oas/reports/region1/11001000.pdf

On June 25, 2010, President Obama signed into law the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010”.  This law establishes a 2.2 percent update to the Medicare Physician Fee Schedule (MPFS) payment rates retroactive from June 1 through November 30, 2010.  Contractors have been instructed to stop processing claims with the negative update rate and expect to start processing claims with dates of service June 1, 2010 and forward with the new rate as soon as July 1, 2010.  Claims that were processed with the negative rate will be reprocessed “as soon as possible”.  Since Medicare pays the lesser of the submitted charges or MPFS amount, those claims submitted for June with charges less than the 2.2% update will need to contact their contractor and request an adjustment.  To visit the Medicare Fee Schedule page, go to:  http://www.cms.gov/PhysicianFeeSched/01_overview.asp

On July 13, 2010, Medicare posted the CY2011 Medicare Physician Fee Schedule Proposed Rule in the Federal Register.  This publication addresses proposed changes to payment policies and addresses/discusses provisions in the Affordable Care Act and MIPPA.  It also discusses payments under various other fee schedules (Ambulance, Lab, ESRD, Part B drugs).  Other highlights include:

• Coverage of Annual Wellness Visits for Medicare Beneficiaries
• Incentive payments for primary care services beginning January 1, 2011
• Other Incentive payment programs
• Improvements to the Physician Quality Reporting System (PQRI) – authorizes incentive payments through 2014 and requires penalties beginning in 2015 for professionals that do not submit quality data
• Changes in payment calculation for dual energy x-ray absorptiometry (DXA) services
• Exceptions to the levels of physician supervision required for diagnostic tests to include Certified Nurse Midwives who furnish diagnostic tests that fall within their state scope of practice
• Review of misvalued codes

To view the entire proposed rule, go to: http://edocket.access.gpo.gov/2010/pdf/2010-15900.pdf

Medicare has released the CY2011 OPPS Proposed Rule.  In large part the proposed changes are geared toward implementing the statutory requirements outlined in the Affordable Care Act.   One of the most significant proposed changes is to the Physician Supervision requirement for Outpatient Therapeutic Services in Hospitals and CAHs.  In summary, CMS is proposing to identify a limited set of services with significant monitoring components, that are non-surgical and typically have a low risk of complication after the initial assessment deemed “nonsurgical extended duration therapeutic services”.  These services would require direct supervision for the initiation of the service followed by general supervision for the remainder of the service.   The list of proposed services appear in Table 37 of this proposed rule and include services such as, IV infusion, hospital observation, IV hydration therapy, subcutaneous infusion, and some injections.  To view the entire rule, go to:  http://www.ofr.gov/OFRUpload/OFRData/2010-16448_PI.pdf