West Penn Allegheny Health System

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1 West Penn Allegheny Health System System Compliance Department Medical Necessity and Billing for Inpatient Rehabilitation Lessons Learned from an Inpatient Rehab Unit Billing Audit 2006 HCCA Compliance Institute Las Vegas, Nevada 1

2 Overview of Presentation Part 1: Background - Introduction to Inpatient Rehabilitation - Emphasis on medical necessity by OIG - How the audit was initiated - Overview of timeline & events Part 2: Appeals, Self-audits and Outcomes - Appeal processes - Concurrent pre-billing review - Self-auditing & improvement plan -Outcomes Part 3: Wrap-up - Audit tools - Issues targeted by auditors - Addressing & preventing issues - Other issues/regulations to consider 2

3 Course Objectives 1. Learn risk areas targeted for Medicare audits of acute inpatient rehabilitation. 2. Discuss documentation requirements specific to inpatient rehab units. 3. Discuss methods to appeal denials of rehabilitation claims. 4. Take away tools for auditing acute inpatient rehabilitation hospitalizations. 3

4 Overview of West Penn Allegheny Health System Key Statistics Located in Pittsburgh, Pennsylvania System formed in 2000 Tertiary Hospitals: Allegheny General Hospital (AGH) The Western Pennsylvania Hospital (WPH) Community Hospitals: AGH -Suburban Campus Alle-Kiski Medical Center Canonsburg General Hospital WPH -Forbes Campus Serves Pittsburgh and surrounding five-state area Houses more than 2,000 beds Employs more than 10,000 people Admits nearly 79,000 patients per year Logs more than 163,000 emergency visits 4

5 Introduction to Inpatient Rehabilitation Inpatient Rehabilitation is a post acute hospital service provided for: Pathology that results in significant loss of function to two or more extremities; Central Nervous System pathology that results in significant loss of function of a single extremity along with the loss of higher functions such as speech/language, balance and coordination; or Single extremity loss of function combined with medical complications that necessitate continuous RN or physician supervision and which is not part of the normal acute inpatient recovery process. 5

6 Inpatient Rehabilitation Basic Requirements According to Medicare (Pub , 110.1), Inpatient Rehabilitation Facility services: "must be reasonable and necessary (in terms of efficacy, duration, frequency and amount) for treatment of the patient s condition; and it must be reasonable and necessary to furnish the care on an inpatient hospital basis, rather than in a less intensive facility such as a Skilled Nursing Facility, or on an outpatient basis." 6

7 Inpatient Rehabilitation Basic Requirements Skilled intervention for at least 3 hours per day If less, the medical record shows that significant complications permit only a lower level of rehabilitation to occur. The skilled services required (Medical, Nursing, Physical Therapy, Occupational Therapy, Speech Therapy) are diverse and complex, requiring a coordinated multidisciplinary approach. A good probability exists for measurable functional improvement, within a reasonable period of time. 7

8 Focus Area on OIG Work Plans FY 03, 04 and 05 Medical Necessity and Payment of Inpatient Rehabilitation Stays are the focus of OIG Audits six audits listed in work plan since 2003 Reasons year 2000: over $4 billion dollars paid for inpatient rehab lack of Peer Review Organization routine medical review since 1995 First audit report published July 23, 2004 "Review of Medicare Inpatient Rehabilitation Facility Prospective Payments at Weldon Rehabilitation Hospital for Fiscal Year 2003," (A ) 8

9 Basis for Fiscal Intermediary Focus Suspect internal staff made initial allegations No fraud detected by Office of Inspector General (OIG) OIG referred issue to Fiscal Intermediary (FI) FI requested 60 medical records - Probe sample performed Phone call received from Benefit Integrity Unit directly to Compliance Officer 9

10 Inpatient Rehab Unit Audit Timeline Initial 60 Records Requested 06/02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Nov-05 Notification of Compliance Dept. 10/02 100% Prepayment Review Appeals of initial 59 claims Appeals of 100% Prepayment Denials Retrospective Self-Audit of 56 Claims 50% Prepayment 11/02 11/03 11/02 05/04 11/02 11/05 12/03 06/04 11/03 01/04 10

11 FI Initial Findings and Financial Risk Dates of Service: 06/01/00 to 10/05/01 Universe of Claims: 377; Cases Audited: cases (19%) denied for medical necessity 2 cases (3%) denied for length of stay 3 cases (5%) denied for quality of care concerns with physical therapy aide supervision $246,000 refund due on 16 cases Estimated extrapolation to population of 752 claims for $2.8 million dollars for timeframe 06/01/00 to 10/05/01. FI began immediate payment hold on current claims, requiring 100% prepayment review FI required audit of timeframe 10/06/01 to 09/05/02 11

12 Strategies: Analyze, Research, Appeal Review 59 records Analyze medical record contents Research: state requirements for physical therapists and aide supervision federal regulations for inpatient rehab units medical necessity criteria Determination made to appeal all cases! Strategy: Include preadmission assessments Submit proof of physical therapy aide supervision by therapist Justify admission based on clinical status directly related to Medicare regulations for inpatient rehab coverage Justify medical necessity with Interqual Criteria Justify continued stay based on patient s progress and interdisciplinary plan of care 12

13 Results of First Appeal Fiscal Intermediary sent appeal to the Quality Improvement Organization*. Results: 3 quality issues reversed 3 admission denials reversed 2 length of stay issues reversed 8 admission denials upheld 50% Improvement as a result of appeal! * The Quality Improvement Organization changed from KePRO to Quality Insights during this time-frame. 13

14 Second Appeal to Local FI Office As 8 cases still denied, requested a 2 nd level review and FI agreed Appeal letter requested peer physician review Appeals based on: preassessment findings support of medical necessity based on severity of illness and intensity of service criteria internally coordinated physician peer review obtained by outside physiatrist and submitted with appeal 14

15 Results of Second Appeal Fiscal Intermediary performed appeal internally Results: 4 admission denials reversed 3 admission denials upheld 1 admission denial changed to length of stay denial Another 50%+ improvement as a result of 2 nd appeal! 15

16 Third Level of Appeal: Administrative Law Judge Appeal based on the fact that the hospital could not have known that, at the time of the admission, these cases would Held in person not be covered by Medicare. Hospital represented Appeal letters and information by External Peer submitted addressed: Review Physiatrist and all previous information Legal Counsel along with the physician peer review results 16

17 Administrative Law Judge Hearing Results Three admission denials overturned. One appeal (length of stay) upheld. Payback of $6,388 75% Improvement as a result of third appeal! Overall a 97% reduction in financial risk from first audit results. 17

18 Pre-Billing Review of all Inpatient Rehabilitation Cases Occurred concurrently during the appeal process of initial 59 cases Each Medicare case was on a bill hold at the FI Upon receipt of the bill, a request was made by the FI for the complete medical record 18

19 Self-Audit by Compliance Department Requested by Medicare Benefit Integrity Unit when corrective action plan to reduce prepayment review presented Timeframe for audit between initial 59 chart audit and the beginning of the pre-pay audit Options Full audit by Benefit Integrity Unit Self audit of statistical sample with extrapolation 19

20 Self-Audit Methodology Review statistically valid sample Review all cases for meeting admission criteria First level review by nurse Cases failing nurse review referred for independent physiatrist peer review Extrapolation of results to total population for the time-frame* * Proposed no extrapolation for an error rate below 5%; however, not acceptable to Benefit Integrity Unit. 20

21 Results of Self-Audit Admission Review Nurse review identified 5 of 56 cases for peer review. Physician peer review identified 2 of 5 cases were inappropriate for admission. Reimbursement for 2 cases was extrapolated across all cases in time-frame. Report submitted to Benefit Integrity Unit and accepted. Total payback = $66,

22 Audit Tools Tools included in packet: Key issues for rehab audit (1 page audit) Spreadsheet for intense rehab audit (Detailed audit that includes PAI) Medical necessity audit Definitions for abbreviations used in presentation Websites for Medicare Inpatient Rehabilitation information and regulations 22

23 Issues Targeted by External Auditors Medical necessity not documented as outlined by severity of illness and intensity of service criteria Trial of therapy not adequate admission reason for all patients Physicians not ordering 3 hours of therapy per day/ 5 days per week Physicians not documenting order when therapy should be held due to patient s condition or testing Reason for speech therapy consultation not documented by physician Solutions Education; physician to document medical necessity for admission & continued stay Education/documentation of reason for trial Education; revise standard orders Education; physician to document order to hold therapy with related reason Education; physician to document reason with order; therapist to link reason to assessment 23

24 Issues Targeted by External Auditors Documentation of professional status of therapists Documentation of student supervision Therapists not documenting time for therapy sessions, thus 3 hours difficult to account Therapy evaluation not charged as a one time fee Solutions Update electronic therapy documentation record for professional designation; time calculation for therapy sessions and note by supervising therapist when students in attendance Physical therapy management must keep track of patient receiving 3 hours of therapy/5 times per week Charge entry staff education Therapy billing units match services rendered Staff education 24

25 Issues Targeted by External Auditors Preassessment evaluation not filed as part of the medical record Documentation of interdisciplinary plan of care, goals & progress Issues with copy quality Solutions Include pre-assessment evaluation as part of permanent medical record Staff education Evaluation of work performed by copier service; review each chart prior to releasing to FI 25

26 Issues Targeted by External Auditors Patient Assessment Instrument (PAI): timeliness, accurate onset dates, scoring of PAI and coding Etiologic diagnosis (2nd diagnosis on claim) Impairment agreement assignment Documentation in medical record to support PAI, FIM, and Impairment Group assignment Initial assessment based on 3 full days of evaluation Solutions Update initial assessment tool used to calculate PAI scores from a one day to a three day timeframe for documentation by nurses & therapists PAI coding education 26

27 Clinical, Documentation & Billing Issues Targeted by External Auditors The 75% (currently 60%) Rule As of July 1, 2004, the Rehab Unit population for all payers must serve patients with 13 identified diagnoses: 1) Stroke 2) Spinal Cord Injury 3) Congenital Deformity 4) Amputation 5) Major Multiple Trauma 6) Fracture of Femur (Hip Fracture) 7) Brain Injury 8) Neurological Disorders 9) Burns 27

28 Clinical, Documentation & Billing Issues Targeted by External Auditors 10) Active Polyarticular Rheumatoid Arthritis, Psoriatic Arthritis and Seronegative Arthropathies 11) Systemic vasculidities with joint inflammation, resulting in significant functional impairment of ambulation and other activities of daily living that have not improved after an appropriate, aggressive and sustained course of outpatient services or another less intense setting immediately preceding the inpatient rehab admission 12) Severe or advanced osteoarthritis involving 2 or more weight-bearing joints (not counting a joint with a prosthesis) with joint deformity & substantial loss of range of motion, muscle atrophy, with significant functional impairment.(as above) 28

29 Clinical, Documentation & Billing Issues Targeted by External Auditors 13) Knee or hip joint replacement, or both, during an acute hospitalization immediately preceding the inpatient rehabilitation stay and also meet one or more of the following specific criteria: bilateral knee or bilateral hip joint replacement surgery during the acute hospital admission immediately preceding the IRF admission; extreme obesity with a Body Mass Index of at least 50; and age 85 or older. Phase in of Rule For cost-reporting periods beginning on or after July 1, 2005 and before July 1, 2006: 60% of population; may be in the principal diagnosis or co-morbid condition 29

30 Other Issues to Consider Trial of Rehab cannot be explanation for admission to rehab for all patients PPS excluded rehabilitation unit is regulated by both the hospital COP at 42 CFR 482 (also found in Appendix A of the SOM) and the PPS excluded rehabilitation unit requirements at 42 CFR 412. State Operations Manual, Chapter 3, Management of Rehabilitation Units by Contractor OIG ruling Advisory Opinion No. 03-8, posted 04/10/03 30

31 Questions, Answers, and Open Discussion Sandra L. Sessoms Director, System Compliance Robert R. Michalski Vice President, System Compliance West Penn Allegheny Health System Two Allegheny Center, Suite 100 Pittsburgh, PA

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