Recovery Auditors and Fee-for-Service Medicare DIVISION OF RECOVERY AUDIT OPERATIONS CENTERS FOR MEDICARE & MEDICAID SERVICES

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1 Recovery Auditors and Fee-for-Service Medicare 1 DIVISION OF RECOVERY AUDIT OPERATIONS CENTERS FOR MEDICARE & MEDICAID SERVICES

2 What is a Recovery Auditor? The Recovery Auditors are CMS contractors who are tasked with detecting and correcting past improper payments Recovery Auditors have been used by commercial health insurance companies for 30+ years Primarily for data analysis CMS is on the forefront by using recovery auditors to complete complex review Many commercial companies are starting to model CMS efforts 2

3 Recovery Auditor Jurisdictions 3 A D B C

4 What does the Recovery Auditor do? Post-payment review o Automated review (no review of medical record just data analysis) o Complex review (decision after review of medical record) o Semi-automated review (documentation reviewed only if provider disagrees with the improper payment) 4

5 What does the Recovery Auditor do? Recovery Auditor does not educate providers o CMS completes various forms of education based on Recovery Audit findings System edits Newsletters and educational articles Provider comparative billing reports 5

6 How do RACs Select Claims for Review? Claims Data Issues Providers/ Suppliers 6

7 Recovery Audit Program s Three Keys to Success Learned from demonstration o Minimize Provider Burden o Ensure Accuracy o Maximize Transparency 7

8 Minimize Provider Burden Limit the look back period to three years Maximum look back date was October 1, 2007 Recovery Auditors accept imaged medical records on CD/DVD Limit the number of additional documentation requests 8

9 Ensure Accuracy Each Recovery Auditor employs: Certified coders Nurses and/or Therapists A physician CMD CMS New Issue Review Board provides greater oversight Recovery Audit Validation Contractor provides annual accuracy scores If a claim determination is overturned at any level of appeal, the Recovery Auditor must return the contingency fee 9

10 Maximize Transparency New issues are posted to the web Major Findings are posted to the web Recovery Auditor claim status website Detailed review results letter following all complex reviews 10

11 CMS Recovery Audit Review Strategy Automated Review- Black & White Issues DRG Validation- complex review Complex Review for coding errors DME Medical Necessity Reviews complex review Medical Necessity Reviews-complex review Semi-Automated Reviews 11

12 What Did the Recovery Auditors review in FY 2010? Top Issues Reviewed: DME provided while in an inpatient status (corrected) DRG Validation Does the medical record support what was billed (education completed) DME provided after the beneficiary s date of death (corrected) 12

13 New Issue Postings Region A: Diversified Collection Services (DCS) o Region B: CGI Federal o Region C: Connolly Healthcare o Region D: HealthDataInsights (HDI) o 13

14 Sample New Issues Late Submission of IRF-PAI Data MN Reviews Inpatient Rehabilitation Facilities Incorrect Patient Status-IRF Wheelchair Bundling Urological Bundling Untimed Therapy Codes MS-DRG Validation & MN Reviews Inpatient Hospital (various) 14

15 Example of New Issue Posting Issue Name: Incorrect Patient Status-IRF Description: Inpatient Rehab hospitals have billed incorrect discharge statuses when a patient is transferred to another facility. The reimbursement for the inpatient rehab hospital was overpaid based on the type of facility the patient was subsequently transferred to Provider Type Affected: IRF Date of Service: 10/01/ Open 15

16 Calls are held weekly Major Findings Calls Calls provide information to the Claims Processing Contractors regarding Recovery Auditor Major Findings Major Findings are determined based on the improper payment amount identified by the Recovery Auditors Currently a Major Finding is considered any issue in which the collected amounts exceed $500,000 Information regarding calls is disseminated via a list serve to Claims Processing Contractors 16

17 Corrective Actions Several MLN Matters Articles, Newsletters, Coding Clinic Updates Documentation Alerts of issues identified Local and National System Edits Date of Death DME while in an inpatient status Consolidated Billing Technical Components 17

18 Future Program Plans Report to Congress Quarterly Updates of Net Collections Updated website Additional Corrective Actions Provider education in collaboration with the MACs Analysis of AB-Rebilling Demo Results Recovery Auditor Prepay Review Demo 18