CMS Proposes Extension of RAC Audit to Medicare Advantage Plans

Guest post by Rajeev Rajagopal, president, Outsource Strategies.

Rajeev Rajagopal
Rajeev Rajagopal

The proposal of the Centers for Medicare & Medicaid Services (CMS) to expand its Recovery Audit Program to Medicare Part C or Medicare Advantage (MA) plans is a new step in its efforts to fight fraud, waste and abuse in the Medicare program. The move is aimed at identifying overpayments and underpayments made on claims for services provided to Medicare beneficiaries. For physicians’ practices, the expanded recovery audit program would mean that they will have to take proactive steps to reduce their risks of falling prey to recovery audits by pay ensuring error-free submission of the claims of MA patients.  Outsourcing medical billing and coding is a great option to accomplish this task.

Medicare Advantage (MA) Plans and Allegations of Billing Fraud

MA plans or Medicare Part C are offered by private insurance companies approved by Medicare, which receive payment from Medicare for the coverage provided. There are different types of MA plans which provide all of a Medicare patient’s Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Part C plans are different from standard Medicare in that they are paid a set fee every month for each patient based on a complex formula called a risk score. CMS pays higher rates for sicker MA beneficiaries than for those in good health. CMS scrutinizes the diagnosis information reported by MA organizations and calculates risk scores for each enrollee using the Hierarchical Condition Category risk adjustment model. The risk score is calculated based on the enrollee’s demographic characteristics and health conditions. This practice aims to improve the accuracy of Medicare’s payments to MA organizations and reduces the incentives for plans to select only the healthiest beneficiaries.

Identifying Improper Medicare Payments with Recovery Audits

However, in recent years, there have been various reports of overbilling MA plans, costing taxpayers billions of dollars more than warranted. In Jan. 1, 2010, the government set up the Recovery Audit Program to fight fraud, waste and abuse in the Medicare program. It detects overpayments and underpayments for Medicare claims so that CMS can implement actions to prevent improper payments in all 50 states. Under the program, Recovery Audit Contractors (RACs) — private companies hired by CMS — have the authority to review medical records at short notice. RACs notify health care providers of the outcomes of the reviews via demand letters. An RAC demand letter would contain details of the problem with a claim, such as the coverage, coding or payment policy that was violated, a description of the overpayment made, recommended corrective actions, and explanations on the provider’s right to submit a rebuttal statement prior to recoupment of any overpayment and appeal and more.

Continue Reading

Will ICD-10sion Return this October?

Guest post by Amy Sullivan, vice president of revenue cycle sales, PatientKeeper. 

Amy Sullivan
Amy Sullivan

The multi-year run-up to the ICD-10 cut-over last October had a “Chicken Little” quality to it. There was prolonged hand-wringing and hoopla about the prospect of providers losing revenue and payers not processing and paying claims – the healthcare industry equivalent of “the sky is falling.”

Then CMS helped calm things down by announcing last July (as the AMA reported at the time), “For the first year ICD-10 is in place, Medicare claims will not be denied solely based on the specificity of the diagnosis codes as long as they are from the appropriate family of ICD-10 codes.”

Since ICD-10 is all about specificity – the number of diagnosis codes increased approximately four-fold over ICD-9 – this was a big relief to all involved. And, if you believe new research data, the sky indeed has not fallen: Sixty percent of survey respondents “did not see any impact on their monthly revenue following Oct. 1, 2015… Denial rates have remained the same for 45 percent of respondents. An additional 44 percent have seen an increase of less than 10 percent.”

Still one has to wonder what will happen after Oct. 1, 2016, when the current leniency expires and ICD-10 code specificity is required. Will physicians be in a position to enter their charges completely and accurately once “in the general neighborhood” coding no longer suffices?

They will if their organization has invested in technology that adheres to best practices in electronic charge capture system design. The three watch-words are: specialize, simplify and streamline.

A charge capture system is specialized when it exposes only relevant codes to physicians in a particular specialty or department, and when it provides fine-tuned code edits.  With different types and processes of workflows (and let’s face it, personal preferences), physicians need an intuitive and personalized application that easily fits into their individual work styles. A tailored user experience allows providers to build and display their patient lists in whatever way is most convenient and meaningful to them – down to lists organized by diagnosis and “favorites.”

Continue Reading

Modifications to Meaningful Use for 2015 through 2017: Realigning the EHR Incentive Programs

The following is an announcement from CMS about potential modifications to the meaningful use program, announced Apr. 10, 2015:

On April 10, 2015, the Centers for Medicare & Medicaid Services issued a new proposed rule for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs to align Stage 1 and Stage 2 objectives and measures with the long-term proposals for Stage 3, to build progress toward program milestones, to reduce complexity, and to simplify providers’ reporting. These modifications would allow providers to focus more closely on the advanced use of certified EHR technology to support health information exchange and quality improvement.

The proposed rule is just one part of a larger effort across HHS to deliver better care, spend health dollars more wisely, and have healthier people and communities by working in three core areas: improving the way providers are paid, improving the way care is delivered, and improving the way information is shared to support transparency for consumers, health care providers, and researchers and to strengthen decision-making.

The proposed rule is a critical step forward in helping to support the long-term goals of delivery system reform; especially those goals of a nationwide interoperable learning health system and patient-centered care. CMS is also simplifying the structure and reducing the reporting requirements for providers participating in the program by removing measures which have become duplicative, redundant, and reached wide-spread adoption (i.e., are “topped out”).  This will allow providers to refocus on the advanced use objectives and measures.  These advanced measures are at the core of health IT supported health care which drives toward improving the way electronic health information is shared among providers and with their patients, enhancing the ability to measure quality and set improvement goals, and ultimately improving the way health care is delivered and experienced.

Continue Reading

HHS’ Vision Casting and the Private Sector’s Positive Response

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez
Ken Perez

We’ve often seen the U.S. federal government announce its intent to drive major changes in the way the healthcare system is run, only to have the private sector respond in a tepid or negative manner.

That was not the case at a January 26 Department of Health and Human Services meeting, at which HHS Secretary Sylvia M. Burwell announced concrete goals and an aggressive timeline for moving Medicare payments from fee for service to fee for value. Nearly two dozen leaders representing consumers, insurers, providers and business leaders were in attendance and clearly supportive of the vision cast by Burwell. Notably, high-ranking representatives from the American Academy of Family Physicians, the American Medical Association, the American Hospital Association, and America’s Health Insurance Plans (AHIP) were among the participants.

The announcement was a landmark one. For the first time in the history of the Medicare program, HHS has communicated quantified goals for pushing a significantly greater share of Medicare payments through alternative payment models, such as accountable care organizations (ACOs) and bundled payments. Such payments will rise from 20 percent ($72.4 billion) of Medicare payments in 2014 to 30 percent ($113 billion) in 2016 and 50 percent ($213 billion) in 2018—a compound annual growth rate of 31 percent over the five-year period.

Continue Reading

MGMA: Medicare Physician Quality Reporting Programs Not Improving Patient Quality, Needlessly Complex

More than 82 percent of physician group practices responding to the MGMA Physician Practice Assessment: Medicare Quality Reporting Programs* research reported they actively engage in internal processes to improve clinical quality for the patients they serve. Despite this focus, practices were heavily critical of Medicare’s physician quality reporting programs and their impact on patients and practices. More than 83 percent of physician practices stated they did not believe current Medicare physician quality reporting programs enhanced their physicians’ ability to provide high-quality patient care.

In addition to the lack of effectiveness, physician practices reported significant challenges in complying with Medicare quality reporting requirements. More than 70 percent rated Medicare’s quality reporting requirements as “very” or “extremely” complex. In addition, a significant majority of respondents indicated these programs negatively affected practice efficiency, support staff time, and clinician morale.

Next year, 2015, will be a critical year for medical group practices participating under three main Medicare Part B physician quality reporting programs.* It will be the first year all three programs penalize physicians for reporting unsuccessfully, and penalties will continue to grow in future years. When added up, unsuccessful reporting in 2015 will subject physicians and other eligible providers to Medicare payment penalties as high as 11 percent, levied in future years.

Continue Reading

The History of the Sustainable Growth Rate, and How Its Repeal and ACOs are Linked

Ken Perez
Ken Perez

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Section 4503 of the Balanced Budget Act of 1997, enacted on Aug. 5, 1997, replaced the Medicare Volume Performance Standard (MVPS) with the sustainable growth rate (SGR) provision, a formulaic approach intended to restrain the growth of Medicare spending on physician services. The SGR formula incorporates medical inflation, the projected growth of per capita gross domestic product (GDP), projected growth in the number of Medicare beneficiaries, and changes in law or regulation.

The SGR requires Medicare each year to set a total budget for spending on physician services for the following year. If actual spending exceeds that budget, the Medicare conversion factor that is applied to more than 7,400 unique covered physician and therapy services in subsequent years is to be reduced so that over time, cumulative actual spending will not exceed cumulative budgeted (targeted) spending, with April 1, 1996, as the starting point for both.

In part because of the effective lobbying efforts of physicians, Congress has temporarily suspended application of the SGR by passing legislative overrides or “doc fixes” 17 times from 2003 to 2014. (It utilized five different pieces of legislation in 2010 alone to avoid cuts exceeding 20 percent.) As a result, actual spending has exceeded budget every year during these years. Because the annual fee update must be adjusted not only for the prior year’s variance between budgeted and actual spending but also for the cumulative variance since 1996, the next proposed update, effective April 1, 2015, is a reduction in Medicare physician fees of 20.9 percent.

Those hoping for a permanent repeal of the SGR—which is pretty much everybody, given the almost universal disdain for it—entered 2014 with a sense of optimism that this would be the year. These hopes were fueled by bipartisan and bicameral support of SGR reform proposals that emerged at the end of 2013 and significantly lower estimates by the Congressional Budget Office (CBO) of the cost of a long-term doc fix.

Ultimately, the inability to figure out how to pay for the SGR repeal blocked the passage of the permanent reform bills, and Congress settled for yet another short-term patch. On March 27, 2014, the House of Representatives, under a suspension of normal rules, approved via a voice vote H.R. 4302, the Protecting Access to Medicare Act of 2014. The bill provides a patch to the SGR that would avoid a 24.4 percent reduction to Medicare’s Physician Fee Schedule (PFS), effective April 1, 2014, replacing the scheduled reduction with a 0.5 percent increase to the PFS through Dec. 31, 2014, and a 0 percent increase for Jan. 1, 2015, through March 31, 2015. Four days later, the Senate approved H.R. 4302 on a bipartisan 64-35 vote, and President Barack Obama signed the bill into law.

Continue Reading

CMS Proposes Changes to the Medicare Shared Savings Program Quality Measures

Ken Perez
Ken Perez

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

In the wake of mixed initial results for the Pioneer ACO Model and Medicare Shared Savings Program (MSSP), this is the year for the Centers for Medicare & Medicaid Services (CMS) to take the feedback it has received and revamp its ACO programs.

The proposed rule for the 2015 Physician Fee Schedule (PFS), a 609-page document released on June 19, 2014, interestingly included the first installment of modifications to the ACO programs. The proposed rule devoted 52 pages to changes to the quality measures for the MSSP. Throughout the document, CMS emphasized its intent to align the numerous physician quality reporting programs, such as the Medicare EHR Incentive Program for Eligible Professionals and the MSSP, as much as possible, to reduce the administrative burden on the eligible professionals and group practices participating in these programs.

The final rule for the MSSP, issued in November 2011, presented 33 quality measures against which ACOs would be measured. These quality measures also apply to Pioneer ACOs. The measures pertain to four domains: patient/care giver experience, care coordination/patient safety, preventive health, and at-risk populations.

The proposed rule recommends the addition of the following 12 new measures:

Continue Reading

Some Early Results and Optimism for Medicaid ACOs

Ken Perez
Ken Perez

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Accountable care organizations (ACOs) are primarily associated with Medicare or commercial payer-led arrangements. However, the Affordable Care Act (ACA) also authorized limited demonstrations that allow states to test Pediatric ACOs from 2012-2016. In addition, the Centers for Medicare and Medicaid Services (CMS) has provided guidance letters to several state Medicaid directors on how to implement integrated care models, which may include ACOs, in their Medicaid programs.

With this encouragement from CMS and the need to rein in Medicaid spending—which is generally increasing due to the ACA and is shared by the federal government and states—it is estimated that about half of the states are at some stage of planning Medicaid ACOs.

This emerging trend runs counter to a couple of the conventional caveats about ACOs—they won’t scale to handle large populations, and they won’t work with patients who are economically disadvantaged.

However, these caveats are being challenged by the experiences of Colorado, Utah and Oregon, respectively, as well as the plans for North Carolina’s Medicaid ACO program.

Colorado’s Accountable Care Collaborative (ACC) has been in existence since 2011 and today has more than 350,000 members, almost half of the state’s Medicaid population. The ACC has focused on connecting members with their primary care physicians, using care coordinators, and leveraging analytics extensively.

According to the report on the ACC’s most recent fiscal year, which ended in June 2013, the program generated gross savings of $44 million, returning $6 million to the state after expenses. It accomplished this in part by reducing hospital re-admissions by between 15 percent and 20 percent and decreasing the use of high-cost imaging services by 25 percent versus a comparison population prior to implementation of the program. In addition, relative to clients not enrolled in the ACC program, it slowed the growth of emergency department utilization, lowered rates of exacerbated chronic health conditions (e.g., hypertension by 5 percent and diabetes by 9 percent), and reduced hospital admissions for chronic obstructive pulmonary disease patients by 22 percent. Most importantly, Colorado has seen improved health for the ACC member population.

Continue Reading

Medicare Fraud Strike Force Charges 90 People for $260 million in False Billing

Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in six cities has resulted in charges against 90 individuals, including 27 doctors, nurses and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $260 million in false billings.

Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, FBI Assistant Director Joseph Campbell, U.S. Department of Health and Human Services (HHS) Inspector General Daniel R. Levinson and Deputy Administrator and Director of the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Shantanu Agrawal.

This coordinated takedown is the seventh national Medicare fraud takedown in Strike Force history.  The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Strike Force operations in nine locations have charged almost 1,900 defendants who collectively have falsely billed the Medicare program for almost $6 billion.  In addition, CMS, working in conjunction with HHS-OIG, has suspended enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.  Almost 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units and other federal, state and local law enforcement agencies participated in the takedown.

Continue Reading

CMS Proposed Rule for the Inpatient Prospective Payment System: Taking a Closer Look at the Numbers

Ken Perez
Ken Perez

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

On April 30, 2014, the Centers for Medicare & Medicaid Services issued its proposed rule for the Inpatient Prospective Payment System (IPPS), which pays about 3,400 acute care hospitals, and the Long-term Care Hospital Prospective Payment System (LTCH PPS), which pays about 435 LTCHs.

The issuance of this proposed rule is a significant event, as it discloses CMS’s intent regarding the average change (increase or decrease) to the IPPS reimbursement rate, what one might call an “annual inflation adjustment.”

While CMS projects that the payment rate update to general acute care hospitals will be 1.3 percent in FY 2015—which on the face of it doesn’t look too bad—it’s important to understand how CMS arrived at that figure, what is the projected overall impact on hospital payments because of other regulatory changes, and how the proposed update compares with the recommendation of the nonpartisan Medicare Payment Advisory Commission (MedPAC).

How did CMS arrive at the 1.3 percent update (adjustment)?

CMS started with a proposed annual market basket update (inflation projection) from research firm IHS of 2.7 percent. That starting point was then reduced, per the Affordable Care Act, by a multi-factor productivity adjustment of 0.4 percent and a specified reduction to the market basket update of 0.2 percent, yielding 2.1 percent. Then CMS reduced it by a documentation and coding recoupment adjustment (basically to correct for past, unintended documentation and coding over payments) of 0.8 percent, resulting in a net update of 1.3 percent.

Continue Reading