ZPIC, RAC and MAC Audits Proactive vs. Reactive Approach

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1 YOUR DATES HERE YOUR LOGO HERE ZPIC, RAC and MAC Audits Proactive vs. Reactive Approach Lisa Thomson, Vice President Pathway Health YOUR LOGO HERE OBJECTIVES Understand the different types of audits related to reimbursement: ZPIC, RAC, and MAC Determine proactive approaches for positive positioning to audits Describe the importance of a facility compliance plan to cultivate an environment of compliance Identify leadership monitoring protocols for ongoing compliance and quality outcomes 1

2 Current Healthcare Landscape 2

3 Proactive vs. Reactive Approach Leadership Tactics for this changing Environment Education and Knowledge Internal Review Data Agenda Preparedness and Protection Performance Improvement Proactive vs. Reactive Approach Knowledge and Education Current Healthcare Landscape 3

4 Healthcare Landscape Healthcare Landscape Why External Government Audits? Improper payments Payments for services that were not medically necessary Payments for services that were incorrectly coded Providers failed to submit documentation to support the services provides OR failed to submit enough documentation to support the claim Other errors (i.e. submitted twice/paid twice) Government Reaction Fraud Prevention System (FPS) In place for over 2 years Outcome $3 for every $1 spent Generated leads for additional 536 new ZPICs FPS collaboration with law enforcement OIG involvement and issuance of SNF based Reports Overpayment Reviewers found SNFs incorrect coding to higher RUGs in 20% of claims 4

5 Government Reaction Office of the Inspector General (OIG) Questionable billing by SNFs. Conduct a full review of SNF billing by end of FY 2011 and implement plan. Increased diligence on therapy utilization. Increased auditing of supporting documentation. HHS 2014 and Proposed 2015Budget! CMS and OIG (a new kind of Marriage)! Current Healthcare Landscape Medicare and Medicaid Fraud and Abuse Medicare Fraud In general, fraud is defined as making false statements or representations of material facts to obtain some benefit or payment for which no entitlement would otherwise exist. These acts may be committed either for the person s own benefit or for the benefit of some other party. In other words, fraud includes the obtaining of something of value through misrepresentation or concealment of material facts. Examples of Medicare fraud may include: Knowingly billing for services that were not furnished and/or supplies not provided, including billing Medicare for appointments that the patient failed to keep; and Knowingly altering claims forms and/or receipts to receive a higher payment amount. 5

6 Medicare and Medicaid Fraud and Abuse Medicare Abuse Abuse describes practices that, either directly or indirectly, result in unnecessary costs to the Medicare Program. Abuse includes any practice that is not consistent with the goals of providing patients with services that are medically necessary, meet professionally recognized standards, and are fairly priced. Examples of Medicare abuse may include: Misusing codes on a claim, Charging excessively for services or supplies, and Billing for services that were not medically necessary. Both fraud and abuse can expose providers to criminal and civil liability. Fraud and Abuse Laws False Claims Act (FCA) The FCA (31 United States Code [U.S.C.] Sections ) protects the Government from being overcharged or sold substandard goods or services. The FCA imposes civil liability on any person who knowingly submits, or causes to be submitted, a false or fraudulent claim to the Federal Government. The knowing standard includes acting in deliberate ignorance or reckless disregard of the truth related to the claim. Anti-Kickback Statute The Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)) makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. Fraud and Abuse Laws Civil Monetary Penalties (CMPs) Under 42 U.S.C. Section 1320a-7a, CMPs may be imposed for a variety of conduct, and different amounts of penalties and assessments may be authorized based on the type of violation at issue. Penalties range from up to $10,000 to $50,000 per violation. CMPs can also include an assessment of up to 3 times the amount claimed for each item or service, or up to 3 times the amount of remuneration offered, paid, solicited, or received. Examples of CMP violations include: Presenting a claim that the person knows or should know is for an item or service that was not provided as claimed or is false and fraudulent, Presenting a claim that the person knows or should know is for an item or service for which payment may not be made, and Violating the Anti-Kickback Statute. 6

7 CMS Fraud and Abuse Partners Centers for Medicare & Medicaid Services (CMS) Government agencies partner to fight fraud and abuse, uphold the Medicare Program s integrity, save and recoup taxpayer funds, and maintain health care costs and quality of care. CMS partners : Program Safeguard Contractors (PSCs)/Zone Program Integrity Contractors (ZPICs); Medicare Drug Integrity Contractors (MEDICs); State and Federal law enforcement agencies, such as the OIG, Federal Bureau of Investigation (FBI), Department of Justice (DOJ), and State Medicaid Fraud Control Units (MFCUs); CMS Fraud and Abuse Partners (continued): Medicare beneficiaries and caregivers; Senior Medicare Patrol (SMP) program; Physicians, suppliers, and other providers; Medicare Carriers, Fiscal Intermediaries (FIs), and Medicare Administrative Contractors (MACs) who pay claims and enroll providers and suppliers; Accreditation Organizations (AOs); Recovery Audit Program Recovery Auditors; and Comprehensive Error Rate Testing (CERT) Contractors. RAC Recovery Audit Contractors Medicare RACs Medicaid RACs ZPIC Zone Program Integrity Contractors PSC Program Safeguard Contractor MIC Medicaid Integrity Contractors MAC Medicare Administrative Contractor FI Fiscal Intermediary (now MAC) HEAT Health Care Fraud Prevention and Enforcement Action Team (HEAT) 7

8 Healthcare Landscape Focus on Overpayment as well as Fraud and Abuse From: Hooper, Lundy & Bookman, PC Let s Take a Closer Look! MAC RAC ZPIC YOUR LOGO HERE 8

9 Medicare Administrative Contractor MAC Primary Role Primary contact for provider enrollment Part A and Part B FFS billing claims in a geographic region Replaced FIs Focus Medicare payment accuracy Recoveries and process 1 st level of appeals Additional Development Request (ADR) Reviews facility and professional claims related to a beneficiary Medicare Administrative Contractor MAC Scope Process claims Review claims, data, history, comparisons Audit claims Re Determination Requests Educate Provide Leads to next level of Audit Partners! Penalties Claim denials Referral to other audit partner Medicare Administrative Contractor MAC Appeals Process 1 st - Re determination by MAC 2 nd - Reconsideration by Qualified Independent Contractor (QIC) 3 rd Hearing by Administrative Law Judge 4 th Review by Medicare Appeals Court 5 th Judicial Review in Federal Court 9

10 Recovery Audit Contractor RAC Primary Role Independent collection agency Started in demonstration project, now permanent 1 primary contractor for each of 4 regions Improper Payment Identification and collection % for both overpayments and underpayments they correct Focus Medicare and Medicaid overpayments and underpayments Detect and correct past improper payments so MAC can recover overpayments and implement further actions Recovery Audit Contractor RAC Scope Apply statutes, regulations, CMS coverage/billing to make determinations 2 types Automated claims history review (no medical record review) Complex review (medical record review) Pre and /or Post Payment Look back up to 3 years after the date the claim was filed Recovery Audit Contractor RAC Penalties Medicare No penalties if provider agrees with RAC determination and pays back monies If miss deadline in appeals process, CMS can automatically recoup alleged overpayment 31 st day after receipt of initial demand letter Medicaid No penalties if provider agrees with RAC determination and pays back monies States have flexibility to decide penalty process 10

11 Recovery Audit Contractor RAC Appeals Medicare Mirrors the five level MAC appeals process Medicaid States have the flexibility to decide the structure of the appeals process Zone Program Integrity Contractor (ZPIC) Primary Role Fraud detection, prevention and correction Contracted payment, non contingent (no performance %) ZPICs combine Program Safeguard Contractors (PSCs) and Medicare drug integrity contractors (MEDICs) ZPICs oversee all Medicare claims in their zone 7 ZPIC Zones Zone Program Integrity Contractor (ZPIC) 11

12 Zone Program Integrity Contractor (ZPIC) Focus Medicare fraud, waste and abuse Identify fraud within service area review past and pending claims by investigation and audit Compare billings with similar providers NEVER random audit - if you are chosen there is a reason potential fraud ZPIC initial request is indication of scope of investigation! Zone Program Integrity Contractor (ZPIC) Scope Investigate Audit claims Authorized to initiate administrative sanctions Payment suspensions Determine overpayments returned Refer for exclusion form government health care programs Support and refer to LAW ENFORCEMENT Zone Program Integrity Contractor (ZPIC) Audit initiated by: Complaints OIG hotline, whistleblower, fraud alerts, direct to ZPIC Referral from MAC, RAC, beneficiary Data analysis LOS out of norm ZIPCs may Use a statistician Review small number of records to determine fraud Conduct interviews staff, beneficiaries, etc. 12

13 Zone Program Integrity Contractor (ZPIC) Scope No specific look back periods Refer finding of fraud to law enforcement for civil, criminal, CMP, other administrative sanction Involve OIG and US Attorney offices Penalties Recoupment Civil and criminal action/sanctions Appeals Mirror 5 level Medicare appeal process YOUR LOGO HERE Proactive vs. Reactive Internal Review 13

14 Minimize Risk YOUR LOGO HERE Internal Review Minimize Risk! 1. Review internal processes Admission screening and assessment Nursing and Rehabilitation integration Medicare Meeting observation Medical Record Documentation Therapy logs Assess Staff knowledge and competency MDS Coordinator MDS succession planning IDT knowledge of RAI Internal Review Minimize Risk! 1. Review internal processes (continued) Claims error process MDS Coordinator process Business office Rehabilitation Adherence to RAI Manual Assessment Reference Date process OBRA scheduling ADL Tracking accuracy 14

15 Internal Review Minimize Risk! 1. Review internal processes (continued) Medical necessity CRITICAL!!! Ensure records accurately reflect care and services Consistent with clinical conditions Needs of a skilled professional Correlation between IDT MDS documentation per RAI and clinical documentation Accurate ADL s!!!! Internal Review Minimize Risk! 2. Self Audit High Risk Areas Accuracy of claims Variances high RUGs vs. facility demographics Sudden changes in billing Spikes in billing Compromised identities (provider/beneficiary) High error rates RUG changes or discrepancies Overpayments/underpayments Internal Review Minimize Risk! 2. Self Audit High Risk Areas (random audits) (continued) Medical necessity CRITICAL!!! Ensure records accurately reflect care and services Consistent with clinical conditions Needs of a skilled professional Correlation between IDT MDS documentation per RAI and clinical documentation Accurate ADL s!!!! 15

16 Internal Review Minimize Risk! 2. Self Audit High Risk Areas (continued) Physician orders support MDS sections Therapy Ancillaries Specialty services Certs Advanced Beneficiary Notices Rehabilitation Documentation Nursing and Rehabilitation 3. Triple Check Process 4. Update Policies and Procedures 5. Train staff Internal Review 6. Develop quality strategy for improvement Goals based off of internal review Prioritize Impact Systems and tools needed to change processes Resources applied or needed Time frames Approval/Agreement Proactive vs. Reactive Data Agenda 16

17 Data Agenda We are transforming Medicare from a passive payer, to an active purchaser of value Assistant CMS Administrator Quality Care + Data = Reimbursement Data Agenda One thing you can control to some degree is performance! 17

18 Data Agenda Organizational Data: The New Path to Value and Reimbursement! 1. Determine Quality Profile: Assess Organization Data 2. Review Internal Processes: Data Collection, Review and Response 3. Establish an Information Agenda for Planning Your data is key to positive outcomes! Data Agenda Organization Data used by Auditors MDS RUGs distribution Therapy Utilization Quality Measures Claims submissions Patterns of errors Spike in reimbursement Readmission/Discharge data Survey Results! 21 st Century Leadership Data Driven Decisions Understand what the real business question is. (Who, What, Why, When, How) Create an analysis plan with hypotheses. Collect or review the right data Gather insights Make recommendations Take action 18

19 Proactive vs. Reactive Preparedness and Protection Preparedness and Protection 1. Establish an Audit Response Team Compliance Officer/Lead Documentation Manager Administrator Director of Nursing Rehabilitation Director Business Office MDS Coordinator(s) Admission/Discharge Clinical, financial, legal expertise Determine Roles and Responsibilities Preparedness and Protection 2. Monitor MAC and Government trends Guidance/Guidance/Manuals/Internet-Only-Manuals- IOMs-items/CMS html 19

20 Preparedness and Protection 3. Audit Response Process Establish Timeframes and Response Reaction Track ALL Deadlines Prepare for large volume of requests Keep Complete record What requested Who sent When sent How sent Copies of all records and correspondence Communication point person Legal Counsel Preparedness and Protection 3. Corporate Compliance culture Established corporate compliance plan Updated and reviewed per requirements Staff trained» Orientation» Annually» As needed based upon monitoring activities Code of Conduct Adherence to Medicare and Medicaid requirements RAI manual/mds assessments/ard, etc. Documentation medical necessity Preparedness and Protection 3. Corporate Compliance culture External audits good faith for compliance! Contract outside organization to conduct external review of MDS/RAI process» Admission to discharge» Record accurately reflects care, services, coding and billing» Staff knowledge and adherence to requirements» Identification of opportunities for improvement On going training and professional growth 20

21 Proactive vs. Reactive Performance Improvement YOUR LOGO HERE 21

22 Performance Improvement Minimize Risk of Recoupments Proactive steps to ensure highest level of claim accuracy Leadership Monitoring Medical Necessity Admission/Discharge processes MDS Coding and Documentation Pre-bill screening process Denials and Appeals management Performance Improvement Minimize Risk of Recoupments Leadership Monitoring Track denied claims Review data leadership review big picture Look for patterns, trends Monitor Corporate Compliance processes and outcomes Focus on current/significant payment recoveries emerging from revenue audits Performance Improvement OIG and fraud, OIG updates, CMS, CMS Fraud Prevention Toolkit, which contains information for providers and information providers can give to beneficiaries, HEAT, CMS Electronic Mailing Lists, Education/Medicare-Learning-Network- MLN/MLNProducts/Downloads/MailingLists_FactSheet.pdf Provider compliance educational materials, Education/Medicare-Learning-Network- MLN/MLNProducts/ProviderCompliance.html OIG Advisory Opinions, 22

23 Proactive vs. Reactive Approach Leadership Tactics for this changing Environment Education and Knowledge Internal Review Data Agenda Preparedness and Protection Performance Improvement Proactive vs. Reactive 23

24 Thank You! YOUR DATES HERE Lisa Thomson, Vice President Pathway Health YOUR LOGO HERE 24