2. 34% Billing for services not rendered (this includes misrepresenting the provider of care)

Transcription

1 January 2012 Issue Audits, Fraud, Abuse, and Overpayments it s not about if it s about when By Inga Ellzey Inga Ellzey Under the broad definition of fraud are many violations, including the offering or acceptance of kickbacks, and the routine waiver of co-payments. According to a survey by the Health Insurance Association of America of private insurers' health care fraud investigations, overall health care fraud activity broke down as follows: 1. 43% Fraudulent diagnosis (like stating the lesion is a skin cancer and billing an excision of a malignant lesion when the pathology report shows a benign lesion) 2. 34% Billing for services not rendered (this includes misrepresenting the provider of care) 3. 21% Routine waiver of patient deductibles and co-payments 4. 2% Other For Medicare, the most common forms of fraud include: 1. Billing for services not furnished as billed (this includes medical record documentation that does not support the service(s) being billed and up-coding) 2. Misrepresenting the diagnosis to justify payment (using a diagnosis that is not covered with a diagnosis that is covered) 3. Soliciting, offering, or receiving a kickback (this applies most in pathology related charges) 4. Misrepresenting the provider of care (such as in incident to scenarios or billing under the name of one physician for services provided by another physician who is not yet credentialed)

2 5. Misrepresenting the place of service 6. Unbundling or "exploding" charges (misuse or abuse of the modifier 59) So how do you avoid allegations of Fraud? I think that the answers are quite simple: 1. Have all the providers in the practice certified in dermatology coding. A simple on-line dermatology-specific course that the provider can take, on their own schedule, arms the provider with so much information that it: a. Not only helps them to avoid improper versus correct coding, misrepresentation of services provided, understand the medical necessity criteria for certain code groups, as well as proper documentation to support services rendered, it also b. Increases practice revenue by understanding which codes to use for which services especially the differences in the levels of E/M services c. Shows intent to auditors that providers are interested in quality and compliant coding d. Becomes an inherent part of the practices compliance program. e. Assures that all providers are on the same page. Variances between providers affect practice good will if providers charge differently for same services and patients see multiple providers in the same group. For information about the Inga Ellzey Dermatology Institute s on-line coding course, contact or go on our website at This course is accredited for 30 CEUs by AHIMA, the American Health Information and Management Association (the oldest accreditation organization for training and credentialing medical record specialists). 2. Purchase a quality EMR system for your practice a. No single piece of technology will affect your medical record documentation in the future as a state-of-the-art derm-specific EMR. b. Not only will the right system for your practice save your providers time, freeing them up to see more patients, it can accomplish so much more:

3 *Captures information of services provided during the E/M encounter that often go unbilled. *Significantly improves the correct selection of the E/M service. *Supports, through quality and legible documentation, the level of care billed. *Guards against cloned records (that s something to watch for in choosing that perfect system for your practice). *Helps to reduce or eliminate over and under-coding for E/M visits and services. *Allows for more photography which can greatly assist in audits. *Eliminates transcription costs and the worry about non-legible chart notes. Inga Ellzey recommends EMA by Modernizing Medicine (Call ) to set up a no obligation demo or go on-line to the Modernizing Medicine website for an instant 30 minute free demo. This program was written by a dermatologist for dermatologists on a platform that documents like dermatologists practice. Yeah, finally someone got it right. (Disclaimer: Inga Ellzey has no financial interest in this company other than contracting for services for our billing service clients. All clients of the Inga Ellzey Billing Services get EMA free during the life of the contract as a billing service client. 3. Have the professionals do your billing Whether you do billing in-house or outsource your services to a company specializing in dermatology and excellence, you need to make sure that your billing entity is comprised of the best and the brightest. a. All the billers should be certified in dermatology coding. b. The billing supervisor should not be working on the billing processes but rather supervising staff and auditing them for quality and compliance. c. Internal audits should be performed for claims quality and also physician documentation. d. There must a process in place that carefully monitors carrier requests for information or audit requests to assure timely and quality responses. e. Have enough staff to do the work. Some providers tell me they cannot afford any more help but their A.R. over 90 days in the in hundreds of thousands of dollars.

4 You cannot afford not to have adequate staff; just do some math. Let s say you have $198,000 in services out over 90 days but they are all 2011 dates of service. That means that they have a chance of getting paid if worked soon! If an employee can work without interruption, they can work on an average of 60 claims per day. Let s assume that you have 1477 claims that are presented in the over 90-day A.R. Based on the 60 claims per day scenario, it would take one full time person doing nothing but working the old accounts days to work the entire report. The average month has 21 working days. So in actuality, it would take one month and 4 days to work the entire A.R. report over 90 days. This of course does not include working the A.R. that is from days old. In today s ago of Electronic filing, Electronic Remittance and Electronic Funds Transfer, you should have most claims paid in under 30 days. So claims that are in the day buckets, need to be followed for status. Let s say that represents another 1400 claims. That adds another 23 days to the timeline. So it would take one full time person dedicated solely to working the A.R. 2 months and one week to get through the entire A.R. If there is no one working those claims on a dedicated clock, then about 25% of those claims will end up in the over 90-day bucket and your A.R. will continue to get higher and higher eventually out of control. Let s assume your average claim is worth $ You hire one more person who devotes 100% of their time to A.R. You pay them $18.00 per hour plus benefits, so bottom line is $21.00 p/h. If they can collect 80% of the money out over 91 days, that s $158,400. The staffer costs you $45,000. That s a pretty good return on your investment. You can t afford not to hire that extra person. And, we are not even talking about all the money in the day buckets that will go unpaid if no one is there to work the unpaid claims. f. Hire the best and the brightest. Have relationships with the finest vocational schools in the area and have them send their best students to do their required 6 week externships. They work for free. This gives your practice great insight as to their personality, work ethics, and what department they would be most successful in. By the end of the six weeks, you can hire the cream of the crop, and they start already trained, tested, and acclimated to your company s philosophy and mission statement. What could be a better win-win scenario? 4. Have a compliance program to monitor the billing processes, coding, and documentation. As carriers increase and intensify their audits and vigilance over their The RACs and commercial carrier auditing entities

5 Who are the RACs? If you think that only Medicare is auditing like crazy, think again. The vast majority of the audits that I am involved in right now are from commercial carriers. The biggest payback request was from a commercial carrier, not Medicare. Medicare has contracted with four companies (to cover four regions of the USA) to do their provider audits. They are: 1. Diversified Collection Services, Inc. (DCS) of Livermore, California (Region A). Region A: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Washington, DC Issues: 2. CGI Federal (CGI) of Fairfax, Virginia (Region B). Region B: Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, and Wisconsin. racb@cgi.com Connolly, Inc. (Connolly) of Wilton, Connecticut (Region C). Region C: Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, U.S. Virgin Islands, Virginia, and West Virginia. RACinfo@connollyhealthcare.com Issues: 4. HealthDataInsights, Inc. (HDI) of Las Vegas, Nevada (Region D). Region D: Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota, Northern Mariana Islands, Oregon, South Dakota, Utah, Washington, and Wyoming. racinfo@ hdi.com Part B: Issues:

6 Each Recovery Auditor is responsible for identifying overpayments and underpayments in a geographically defined area that is roughly one-quarter of the country. In addition, the Recovery Auditors are responsible for highlighting to CMS common billing errors, trends, and other Medicare payment issues. The Recovery Auditors are paid on a contingency fee basis for both overpayments and underpayments that are identified and corrected. The regional distribution of the Recovery Audit program is as follows: How do you know you re being audited? 1. You receive any informational letter. a. This is a letter from your region s RAC. b. You need to be familiar who they are so you can tell whether or not this is a legitimate request. c. The Informational Letter is used to notify providers that they are investigating a potential overpayment and providing the physician the opportunity to submit additional information to support the billing of the service. d. These are called the additional development requests and usually result from an automated review system. e. Providers have 45 days to submit additional information. f. If no response is made, the claim will be denied and overpayment sought. g. If you note a clerical error in the claim, providers should not submit an appeal request until the RAC has made the final decision and issued an overpayment demand letter to you. h. Providers should not attempt to refund the potential overpayment or appeal the decision until the RAC has issued an overpayment demand to the provider. i. RACs only audit Medicare Part B Fee-for-Service claims not Medicare Advantage Organizations. 2. How often is a provider subject to a RAC audit? Will it happen only once a year or is there a certain period of time? a. There are limits as to how often a provider may be audited or the frequency. For physicians the limits are as follows: Solo provider: 10 records each 45 days 2-5 providers: 20 records each 45 days 6-16 providers: 30 records each 45 days 16 or more providers: 50 records each 45 days b. RAC audits are conducted post-payment and limited to the services that have been approved by CMS. Source: 3. The Overpayment Demand Letter

7 This is different from the Informational Letter as this is the decision letter sent after the RAC has reviewed the provider s records against the claim requested in the informational letter. What does the Demand Letter contain? The RAC letters will contain detailed information, including: 1. The coverage, coding or payment policy that was violated 2. A reason for conducting the review 3. A description of the overpayment situation 4. Recommended corrective actions 5. An explanation of the provider s right to submit a rebuttal statement prior to recoupment of any overpayment 6. An explanation of the procedures for recovery of overpayments 7. The provider s right to request an extended repayment schedule 8. Information on the provider s right to appeal 9. Other demand letter requirements for written notifications What are the steps to take after you get a RAC Demand Letter? 1. Providers should follow the instructions outlined in the demand letter for appealing the decision if they wish to request a correction. 2. Filing an appeal will stop the recoupment process. 3. On the redetermination form, providers should clearly indicate that they received a RAC demand letter and wish to reopen a claim to correct a billing error(s). 4. Make sure to include the necessary correction(s) and attach a copy of the RAC demand letter. 5. The provider must send the redetermination form and applicable documentation to the address listed in the RAC demand letter for redeterminations. When is too much too much? When you receive a demand letter for payment, you will need to determine the following: 1. Should I pay the demand or should I fight it?

8 a.. Review the claims in question and compare your findings to those of the auditor. b. You can argue the demand on a claim-by-claim basis. c. Hire an attorney if the amount is high. Here is what you can do immediately if you are charged with fraud or have a large payback request. The allegations of fraud are hard to prove as the carrier must prove intent and that is difficult so it usually comes down to how much money will the carrier end up getting? 1. Hire an attorney qualified and experienced in health care fraud and audits. a. The attorney can educate you as to the stakes involved and how to proceed. They take the emotional aspect out of the process. b. The attorney will most likely engage the services of a qualified consultant well versed in dermatologic coding, billing, and documentation issues and can help you determined how to fight their overpayment decisions.. They are usually engaged by the attorney so that attorney-client privilege prevails. Note: Any and all consultants should be retained by the lawyer under attorney-client privilege. c. This individual or team will give their unbiased input as to whether or not the findings of the auditor are flawed, partially flawed, or correct. Most of the time it s a combination of provider billing errors as well as sloppy auditing by the carrier s auditor. 2. Keep the individuals involved or knowledgeable about the audit in your practice to a minimum. a. Only the key individuals who can contribute to the audit process should be involved or have knowledge of the audit. b. No one else in or outside the practice should know with, of course, the attorney and consultant(s). 3. Extensions may be provided, if asked 4. Let the experts do their job. The physician(s) involved usually get very emotional and want to challenge the carrier s findings; often upset because their medical judgment and decision making is challenged.

9 Having spent over ten years as an expert witness and consultant in fraud and abuse cases, I rarely ever saw anyone getting jail time that didn t deserve it. 99% of those audited just end up paying back some amount of money. At the end of the day, this auditing process is all about money. It s business; not personal. It s easy to say, but stay calm and let the process work. At some point it will be over and life will go one as before. 5. Learn from the audit experience. Frequently, there are mistakes made by the providers. The audit experience should be educational and result in the practice fine-tuning the areas of deficiency. If you learn from your mistakes, chances are you won t have as much to worry about should there be a next time. What is on the OIG Hit List Medical Documentation Issues 1. Requested medical records were not submitted a. No response from office b. Incomplete records sent c. Illegible notes 2. Documentation did not support a face-to-face encounter by the performing physician a. Incident to rules were not met b. Misrepresentation of the provider of care not credentialed c. Date of service is incorrect 3. Documentation did not support the service was rendered on the DOS reported. a. Incorrect ICD-9 code b. Incorrect CPT code c. Medical necessity d. No documentation at all - frequently seen in my chart audits 4. Submitted documentation contained insufficient information to determine if the service reported was actually rendered. a. No lesion size b. No date of service c. No patient identification included (Name, DOB) d. Procedure not identified 5. Signature requirements were not met. Physician signatures were either missing or illegible. If the signature is illegible, the provider s name should be stamped or printed below the signature.

10 6. Submitted documentation did not capture all of the E/M key components. New Patient: Must support all three key components: History, Exam and Medical D Decision Making Est. Patient: One of the three key components can be eliminated but the other two must be met in their entirety Frequent mistakes: * Patient History form not included * Patient History form not signed and dated by reviewing provider * No ROS or ROS is misrepresented * ROS is vague and not relevant to the Chief complaint * Exam is too limited * Medical decision making is low but level requires moderate 7. Level of E/M code reported exceeded documented needs for the patient s condition and the physician s work required to treat the patient. (e.g., medically unnecessary) a. Asking same questions again in close visit proximity b. Doing same level of detailed exam in short time frame c. Using diagnoses that are not addressed or do not need to be addressed * Personal History of Skin Cancer * Dry skin * Sun damage and SPF * Lentigos and scattered SKs 8. Billing new patient visits when seen by another member of the same specialty group. a. When a patient is seen by one member of the group, the patient is established to all other members of the same group for the next three years. Exception: Consultations b. Cannot bill a new patient visit if another member of the group has seen the patient within the three year period. 9. Incorrect use of modifier 25. a. No procedure was reported. b. E/M performed in a global period. c. There was no significant and separately identifiable service rendered over and above that for just the procedure itself Note: In the future: Carriers will NOT accept an E/M visit on the same DOS for an established patient visit if there are not two separately diagnoses. 10. Failing to report and document the level of E/M service s key components appropriate to treat the patient s presenting problem(s).