IS YOUR PRACTICE A GOVERNMENT TARGET? A BRIEF REVIEW OF THE AUDIT PROCESS WHAT IS AN AUDIT?
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1 IS YOUR PRACTICE A GOVERNMENT TARGET? A BRIEF REVIEW OF THE AUDIT PROCESS 3/16/ WHAT IS AN AUDIT? An audit is a review of medical claims submitted to a government or private payer. Audits can be conducted due to: A random event A Qui Tam event Benchmarking event At times, it may be impossible to determine what triggered an audit, but you must always be prepared 1
2 RECOVERY AUDITS Health care fraud is a persistent and costly problem both for commercial and government payors sic. The Centers for Medicare & Medicaid Services CMS estimates that a significant amount of fee for service payments are misspent on improper payments every year. To address health care fraud, Congress and CMS have developed a variety of approaches over the past several years to audit Medicare and Medicaid claims. CMS.gov The Recovery Audit Program s mission is to identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states. Bulletin of the American College of Surgeons GOVERNMENT AUDITING ENTITIES RAC Recovery Audit Contractor including Medicaid ZPIC Zone Program Integrity Contractor MIC Medicaid Integrity Contractor MAC Medicare Administrative Carrier CERT Comprehensive Error Rate Testing HEAT Health Care Fraud Prevention and Enforcement Action Team PERM Payment Error Rate Measurement PSC Program Safeguard Contractor MIP OIG Office of the Inspector General DOJ Department of Justice 2
3 PRIVATE PAYER AUDITS Avoid improper payments over and under payments or Recoup what they say are improper payments at a much later date. Based on contractual issues Rules are a bit nebulous depends on economy There is no limit on number of records Most often based on CMS and Government rules THE COMPLIANCE PLAN A document that, when properly designed, lays out the policies and procedures that help to optimize reimbursement while reducing the risk of conflicts and recoupments Every practice should have one, and that s according to OIG, not me! The benefits CMS Self Audit Toolkit Reducing and preventing improper payments; Ensuring that claims submitted are true and accurate; Enhancing patient care; Speeding up and optimizing proper claim payment; Minimizing billing mistakes; Reducing the chances of an external audit; emphasis added 3
4 NEW FRAUD DETECTION TECHNOLOGIES CMS REPORT TO CONGRESS; FRAUD PREVENTION SYSTEM SECOND IMPLEMENTATION YEAR, JUNE 2014 THE FRAUD PREVENTION SYSTEM (FPS) After three years of operations, the Centers for Medicare & Medicaid Services CMS today reported that the agency s advanced analytics system, called the Fraud Prevention System, identified or prevented $820 million in inappropriate payments in the program s first three years. The Fraud Prevention System uses predictive analytics to identify troublesome billing patterns and outlier claims for action, similar to systems used by credit card companies. CMS Press Release, July 14, 2015 These are moneys you didn t get, not moneys that were recouped after the fact! 4
5 WHAT IS PREDICTIVE ANALYTICS? PREDICTIVE ANALYTICS A branch of advanced statistics that uses historical data to make predictions about future events For our purposes, it is used by CMS to identify fraud using detection methods such as coding rules, anomaly detection, link analytics, etc. Uses specific algorithms to associate scores to likely matches Regression K th nearest neighbor Neural networks 5
6 THE BIG FIVE 1. Evaluation and Management codes 2. Procedure code utilization by frequency 3. Procedure code utilization by RVU 4. Modifier Utilization 5. Time THE AUDITOR S APPROACH Automated reviews Sorting through claims data based on scores issued by the FPS 100% of all Medicare fee for service claims including yours Semi automated reviews For high scoring claims, they associate the NPI or TIN codes to identify a specific entity Pull a time sensitive set of claims associated with that NPI or TIN Expected value Estimate recovery and ROI i.e. CERT or historical experience Focused Complex reviews Requests are made for charts that correspond to claims in question 3/16/
7 FY 2014 CORRECTIONS BY REVIEW TYPE WHAT IS CERT COMPREHENSIVE ERROR RATE TESTING 7
8 THE CERT REVIEW PROCESS 1. CERT randomly selects a sample of 100,000 claims submitted to Carriers, FIs, and MACs during each reporting period. 2. Request medical records from the health care providers that submitted the claims in the sample. 3. Review the claims in the sample and the associated medical records to see if the claims complied with Medicare coverage, coding, and billing rules, and, if not, assigning errors to the claims. 4. Where medical records were not submitted by the provider, classifying the case as a no documentation claim and counting it as an error. 5. Sending providers overpayment letters/notices or making adjustments for claims that were overpaid or underpaid. 8
9 IMPORTANCE OF CERT TO AUDITORS 2015 IMPROPER PAYMENT RATES AND PROJECTED IMPROPER PAYMENTS BY CLAIM TYPE (DOLLARS IN BILLIONS) Table B1: 2015 Improper Payment Rates and Projected Improper Payments by Claim Type (Dollars in Billions) 9
10 TYPES OF ERRORS REPORTED No documentation the provider fails to respond to repeated attempts to obtain the medial records in support of the claim. Insufficient documentation the medical documentation submitted does not include pertinent patient facts e.g. the patient s overall condition, diagnosis, and extent of services performed. Medically unnecessary service claim review staff identify enough documentation in the medical records submitted to make an informed decision that the services billed were not medically necessary based on Medicare coverage policies. Incorrect coding providers submit medical documentation that support a lower or higher code than the code submitted. Other Represents claims that do not fit into any of the other categories e.g. service not rendered, duplicate payment error, not covered or unallowable service. TOP SERVICE TYPES BY VALUE 10
11 SERVICE-SPECIFIC OVERPAYMENT RATES ERROR RATES BY PROVIDER TYPE 11
12 TOP SERVICE TYPES BY RATE HOW SOPHISTICATED ARE THE AUDITORS? 12
13 THEY LOOK AT MORE THAN JUST E&M Modifier 25 Time THE AUDIT PLAN Ultimately, the goal of any compliance plan is the creation of the audit plan The audit plan is a concise document or worksheet that details, at the physician level, those procedures codes and modifiers subject to an internal review CMS and private payers expect that you are going to self monitor your coding and billing and report when you have found an error Without the audit plan, the compliance plan is nothing more than a policy and procedural binder stuck on a shelf somewhere 13
14 TRADITIONAL APPROACHES Probe Audits unstable, unpredictable, very poor ROI Compare rank positions inadequate without variance Establish variance inadequate without frequency Factoring frequency by variance huge scalar differences CMS has made it clear that practices need to do more to identify aberrant coding behavior THE PRE-AUDIT ANALYSIS QUANTITATIVE METHODS 14
15 TOP 25 FREQUENCY COMPARISON EXPECTED V. OBSERVED ANALYSIS 15
16 TOP 25 RVU COMPARISON MODIFIER UTILIZATION - SUMMARY 16
17 ASSESSED TIME ANALYSIS HARVARD/RUC TIME ASSESSMENTS ARE ASSIGNED TO EACH CODE IN ORDER TO ASSESS BELIEVABILITY OF REPORTED PROVIDER WORK LOAD IS HOURS VISIBLE RISK IS BASED ON OIG STANDARD OF 2.5 TIMES FMV 5,000 HOURS LATENT RISK IS A FACTOR OF FTE RATIO AND OBSERVED TIME ESTABLISHES WHAT TIME WOULD LOOK LIKE IF EXAMPLE TIME COMPARISON 17
18 E/M INTRA-CATEGORY CALCULATIONS 1. Record frequency and current RVU ($) value 2. Multiply to calculated total RVUs ($) 3. Create frequency distribution calculation 4. Compare to national distribution 5. Calculate difference (variance) 6. Redistribute the frequency 7. Calculate differences 8. Positive tends towards under-utilization comparison while negative trends towards over-utilization comparison CONTROL ANALYSIS AND RVU EXPOSURE 18
19 SIMULTANEOUS ANALYSIS OF UTILIZATION QUESTIONS? FRANK COHEN
WHAT IS AN AUDIT? IS YOUR PRACTICE A GOVERNMENT TARGET? An audit is a review of medical claims submitted to a government or private payer.
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