DCS Healthcare, recovery audit contractor (RAC) for Region A, posted 11 newly approved audit issues on its website mid-August. Unlike its counterpart, CGI Federal, none of the new issues include medical necessity review. Nine of the new issues are for medical severity-diagnosis related groups (MS-DRGs), another also affects inpatient claims and another affects durable medical equipment (DME) suppliers.

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The Centers for Medicare & Medicaid Services’ (CMS) New Issue Review Board recently approved the first medical necessity review audits for Medicare’s permanent recovery audit contractor (RAC) program, reports AHA News. The newly approved audits include 18 types of inpatient hospital claims and one type of durable medical equipment (DME) claim. The particular issues and the first of the four regional RACs that will conduct medical necessity reviews for them was just recently announced.

Region B RAC, CGI Federal posted on its website, Aug. 6, its list of approved issues for medical necessity review. Nine of the 18 issues are revisions of existing diagnosis-related group (DRG) validation issues, according to HCPro.

Before issuing additional documentation requests (ADRs) to hospitals for these reviews, each RAC must post on its website the particular audits it will conduct, including citations for the related Medicare policy. CMS expects the remaining RACs to post the new audits and begin issuing ADRs within the next two weeks.

Source: AHANews.com

Deborah Grider, CPC, CPC-H, CPC-I, CPC-P, CPMA, CEMC, COBGC, CPCD, CCS-P, AAPC president and CEO, discusses the move to ICD-10-CM codes and the need for physicians to start preparing for it now.

Full Article

The Centers for Medicare & Medicaid Services (CMS) released July 12 a special edition MLN Matters article (SE1024), “Recovery Audit Contractor (RAC) Demonstration High-Risk Vulnerabilities – No Documentation or Insufficient Documentation Submitted.” The article is the first of a series providing information on RAC high-dollar improper payment vulnerabilities.

According to the article, “While the demonstration proved recovery auditing was successful identifying and correcting improper payments in Medicare, it also provided best practices for developing a national program and allowed CMS to identify high risk vulnerabilities.”

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Internal audits promote healthy medical coding practices and deter Recovery Audit Contractors (RACs) from knocking on your door in search of improper Medicare payments. What should you look out for? A good place to start is to monitor what the four RACs are monitoring. RACs are required to post new issues under review on their websites. Three RACs just posted new issues in May.

DCS Healthcare Services

DCS, RAC for jurisdiction A (District of Columbia, Conn., Mass., Maine, Del., N.J., N.Y., N.H., Pa., R.I., Vt.), posted the following new Medicare severity diagnosis-related groups (MS-DRG) validation issues pertaining to inpatient hospitals (Medicare Part A) on May 11:

Note: At this time, medical necessity is excluded from review.

MS-DRG Validation for Liver Transplant

MS-DRG validation requires that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary’s medical record. Reviewers will validate for MS-DRG 006; principal diagnosis, secondary diagnoses, and procedures affecting or potentially affecting the MS-DRG.

For guidance, see: ICD-9-CM Coding Manual (for dates of service on claim); ICD-9-CM Addendums and Coding Clinics; Medicare Program Integrity Manual chapter 6.5.3, section A-C DRG Validation Review; Uniform Hospital Discharge Data Set (UHDDS) – Reporting of Inpatient Data Elements, July 31, 1985; Federal Register (Vol. 50, No. 147), pages 31038- 31040.

MS-DRG Validation for Heart Transplant

MS-DRG validation requires that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary’s medical record. Reviewers will validate for MS-DRG 002; principal diagnosis, secondary diagnoses, and procedures affecting or potentially affecting the MS-DRG.

For guidance, see: ICD-9-CM Coding Manual (for dates of service on claim); ICD-9-CM Addendums and Coding Clinics;  Medicare Program Integrity Manual chapter 6.5.3, section A-C DRG Validation Review; Uniform Hospital Discharge Data Set (UHDDS) – Reporting of Inpatient Data Elements, July 31, 1985; Federal Register (Vol. 50, No. 147), Pages 31038- 31040.

MS-DRG Validation for HIV

MS-DRG validation requires that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary’s medical record. Reviewers will validate claims where diagnosis code 042 Human Immunodeficiency Virus (HIV) disease was billed as secondary. Principal diagnosis, secondary diagnoses, and procedures affecting or potentially affecting the claim will be reviewed for accuracy.

For guidance, see: ICD-9-CM Coding Manual (for dates of service on claim); ICD-9-CM Addendums and Coding Clinics;  Medicare Program Integrity Manual chapter 6.5.3, section A-C DRG Validation Review, Uniform Hospital Discharge Data Set (UHDDS) – Reporting of Inpatient Data Elements, July 31, 1985; Federal Register (Vol. 50, No. 147), pages 31038- 31040.

CGI Federal

CGI, RAC for jurisdiction B (Ill., Ind., Ky., Mich., Minn., Ohio, Wis.), posted the following new issue pertaining to durable medical equipment (DME) on May 3:

Knee Orthoses

As defined in National Government Services’ Knee Orthoses Policy Article A47174, effective date July 1, 2008, revised Jan. 1, certain additions are considered not separately payable when billed with the related base code and will be denied as not separately payable.

Suggested resources:

• Medicare Benefit Policy Manual, Publication 100-2, Chapter 15, Section 120 – Prosthetic Devices
• National Government Services, Inc., Policy Article A47174 – Knee Orthoses

Connolly Healthcare

Connolly Healthcare, RAC for jurisdiction C (Ala., Ariz., Colo., Fla., Ga., La., Miss., N.C., N.M., Okla., S.C., Tenn., Texas, Va., W.Va., Puerto Rico), most recently posted the following new issue pertaining to DME suppliers who bill CIGNA Government Services:

DME vs. Inpatient

DME claims should not be billed during an inpatient stay with the exception of: All L codes and codes that are within two days of discharge.

For additional information, see: Medicare Claims Processing Manual, chapter 20 - Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS); Medicare Claims Processing Manual, chapter 6 – SNF Inpatient Part A Billing and SNF Consolidated Billing; Medicare Claims Processing Manual, chapter 3 – Inpatient Hospital Billing; and Hospital Outpatient PPS Addendums A and B Updates.

Health Data Insights (HDI)

HDI, RAC for jurisdiction D, did not posted any new issues for May.

RAC audits are expected to be more commonplace, and it is best, experts say, to prepare yourself ahead of time. How do you do that?  Physicians Practice magazine has excellent feedback about how to prepare your practice before it happens.

Because Recovery Audit Contractor (RAC) audits are increasing, it’s important to understand how to respond in the event that your practice is audited. If it is determined that overpayments were made, providers have several appeal options at their disposal. In considering these options, bear in mind that responding early and accurately in the early stages of the audit process will increase the chance of early resolution.

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A U.S. Government Accountability Office’s (GAO) March 2010 report to Congress concludes that, although the Center for Medicare & Medicaid Services (CMS) has taken steps to improve recovery audit contractor (RAC) oversight and related services to providers, the agency has not established processes to ensure prompt resolution of RAC-identified improper payment vulnerabilities. Read more »

The Centers for Medicare & Medicaid Services’ (CMS’) policy Change Request (CR) 6698 clarifies and updates signature guidelines for medical review purposes of the Program Integrity Manual (PIM). Read more »

The Office of Inspector General (OIG) says recovery audit contractors (RACs) referred two cases of potential fraud to the Centers for Medicare & Medicaid Services (CMS) during the 3-year RAC demonstration project conducted between March 2005 and March 2008. Because of inadequacies in the program, however, no action was taken.

This allegation was made in a February 2010 OIG report, which also found that, other than a presentation about fraud, RACs received no formal training from CMS regarding the identification and referral of potential fraud.

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