Transcript Slide 1

NEW CMS REIMBURSEMENT
REVIEW ENTITIES –
The Brave New World of MACs,
RACs, PSCs and MICs
2009 AHCA/NCAL Convention
ROLAND G. RAPP
MARK E. REAGAN
EVP, General Counsel, Chief Administrative Officer
[email protected]
Skilled Healthcare, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610
direct: 949-282-5822
fax: 949-282-5820
Partner
[email protected]
HOOPER, LUNDY & BOOKMAN, INC.
575 Market Street, Suite 2300
San Francisco, CA 94105
Tel: 415-875-8501
Fax: 415-985-8519
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Medicare Administrative Contractors
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The MMA (2003) mandated that a new MAC
authority replace current Part A FIs and Part B
carriers
This Medicare contracting reform must be
implemented by 2011
Prior -- 23 FIs and 17 carriers
To be replaced by 19 MAC contractors
 15 PartA/Part B MACs
 4 specialty MACs for DME
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MAC Benefits
(According to CMS)
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Serve as single point of contact for providers and suppliers
for all claims related business
Assist providers and suppliers with obtaining information on
behalf of patients about items or services received from
another provider or supplier that could affect claims payment
Improved provider education and training
Role for provider and suppliers in contractor evaluation via
surveys
Timeliness on claims processing and payment
A more even distribution of claims processing
Creation of a modernized administrate IT platform that
incorporates the latest technological advances and
standardization practices
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15 Part A/B MAC Jurisdictions:
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6
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13
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5
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12-
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10
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Part A/B MAC Jurisdiction States
Jurisdiction
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States Included in Jurisdiction
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American Samoa, California, Guam, Hawaii, Nevada, and Northern Mariana Islands
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Alaska, Idaho, Oregon, and Washington
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Arizona, Montana, North Dakota, South Dakota, Utah, and Wyoming
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Colorado, New Mexico, Oklahoma, and Texas
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Iowa, Kansas, Missouri, and Nebraska
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Illinois, Minnesota, and Wisconsin
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Arkansas, Louisiana, and Mississippi
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Indiana and Michigan
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Florida, Puerto Rico, and U.S. Virgin Islands
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Alabama, Georgia, and Tennessee
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North Carolina, South Carolina, Virginia and West Virginia
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Delaware, District of Columbia, Maryland, New Jersey, and Pennsylvania
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Connecticut and New York
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Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont
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Kentucky and Ohio
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MAC Part A/B Awards to Date
Award Date
Contractor
Jurisdiction
MAC A/B
Cutover Month(s)
July 31, 2006
Noridian
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done
Aug 2, 2007
Trailblazer
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3/2008 and 6/2008
Sept 5, 2007
Wisconsin Physicians Services Health
Insurance Corp (WPS)
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3/2008 through 6/2008
Oct 24, 2007
Highmark
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7/2008 through 12/2008
Oct 25, 2007
Palmetto
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8/2008 and 9/2008
Mar 17, 2008
National Government Services (NGS)
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7/2008 through 11/2008
May 6, 2008
National Heritage Insurance Corp (NHIC)
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not available
Jun 11, 2008
Pinnacle Business Solutions (PBSI)
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not available
Sept 12, 2008
First Coast
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not available
Nov 19, 2008
National Heritage
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not available
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MAC Part A/B Awards to Date
Award Date
Contractor
Jurisdiction
MAC A/B
Cutover Month(s)
Jan 7, 2009
Cahaba
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Not available
Jan 7, 2009
Noridian
Protests --Palmetto, NGS, WPSI
GAO Decision May 6, 2009
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Not available
Jan 7, 2009
Palmetto
Protest – Cigna
GAO Decision May 13, 2009
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Not available
Jan 7, 2009
Highmark
2 Protests – Cigna, NGS
GAO Decision May 6, 2009
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Not available
NGS
Protest – WPSI –
GAO Decision May 6, 2009
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Not available
Jan 7, 2009
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DME MAC Awards
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Jurisdiction A – National Heritage Insurance
Company
Jurisdiction B – AdminiStar Federal Inc.
Jurisdiction C – CIGNA
Jurisdiction D – Noridian
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Durable Medical Equipment
D
Noridian
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AdminisStar
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NHIC
C
CIGNA
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Geographic Assignment Rule
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Provider’s State -- Providers who are not in a special category will be
assigned to the MAC that covers the state where the provider is located.
There are two exceptions:
Exception 1 for QCP – Home Office State -- A qualified chain provider
(QCP) may request that its members providers be served by a single A/B
MAC – specifically, the A/B MAC that covers the state where the QCP’s
home office is located. QCP is defined as: (42 CFR 421.404(b)(2)
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Ten or more hospitals, SNFs, and/or critical access hospitals, under common
ownership or control, collectively totaling 500 or more certified beds;or
Five or more hospitals, SNFs, and/or critical access hospitals, under common
ownership or control in three or more contiguous states, collectively totaling 300
or more certified beds
CMS may assign non-QCP providers, as well as ESRD providers to an A/B MAC
outside of the prevailing geographic assignment rule only to support the
implementation of MACs or to serve some other compelling interest of the
Medicare program
Exception 2 for Provider-based Entities -- – Provider-based entities (e.g.,
hospital-based SNF) will be assigned to the MAC that covers the state where
the main “parent” provider is assigned.
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Local Coverage Determinations
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As is current practice, MACs will be required to develop LCDs
in accordance with chapter 13 of the Program Integrity Manual.
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As the MACs commence operations in their jurisdictions, each
MAC will consolidate all the LCDs for its jurisdiction by
selecting the least restrictive LCD from the existing LCDs
on the topic.
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National coverage decisions will continue to be issued by CMS.
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Recovery Audit Contractors (RACs)
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Demonstration
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Purpose of the pilot required by the MMA (2003)
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Division of Work
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Medicare Secondary Payer Overpayments
Non-MSP Claims review
The Demonstration in 3 States
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To determine whether use of RACs is cost--effective
Identify and collect Part A and Part B Medicare claims overpayments
and underpayments that were not previously identified by the MACs
California, Florida and New York (with responsibility for Arizona, SC
and MA)
Selected because they are the largest states in terms of Medicare
utilization
Demonstration ended in March 2008
Tax Relief and Health Care Act of 2006 – Expanded
program to all states no later than January 1, 2010
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Payment to RACs
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RAC paid on contingency basis – Starting March 1,
2006, RACs received an equivalent percentage for
all underpayment and overpayment identifications
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Problems
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Many problems in the California
Demonstration
AHCA and California affiliate went to CMS
and the Hill
Changes made for the permanent program
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CMS Improvements to the
RAC Permanent Program
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Coding experts
Physician reviewers
RAC physician medical director
Credentials of reviewers provided on request
Limits on # of medical records requested – CMS to establish limits
All new issues a RAC wishes to pursue for overpayments validated by CMS or an
independent RAC Validation Contractor
Contingency fees to be paid back by RACs when an improper payment determination
is overturned at any level of appeal
Changing from a 4-year look-back period to a 3-year look-back period
Maximum look-back date of October 1, 2007
Web-based application that will allow providers to look up the status of medical record
reviews
Reason for review listed on request for records letters and overpayment letters
Public disclosure of RAC contingency fees
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RAC Timetable
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The RACs have already started recovery audits
in Summer/Fall of 2009
Likely to be only “automated reviews” at first
and “complex reviews” likely not to start until
late Fall 2009/early 2010
“Medical necessity” complex reviews likely to
begin early 2010
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October 2008 Award to 4 RACs For
Permanent Program
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Region A -- Diversified Collection Services, Inc.
(DCS) of Livermore, California
Region B -- CGI Technologies and Solutions,
Inc. of Fairfax, Virginia
Region C -- Connolly Consulting Associates,
Inc. of Wilton, Connecticut
Region D -- HealthDataInsights, Inc. (HDI) of
Las Vegas, Nevada
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Contract Protests and Resolution on
February 6, 2009
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PRG-Schultz, Inc. will serve as subcontractor
to HDI, DCS, and CGI in Regions A, B and
D (will only be doing home health claims in
California)
Viant Payment System, Inc will serve as
subcontractor to Connolly Consulting in
Region C
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RAC Review Process
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RACs review claims on a post payment basis
RACs use the same Medicare policies as FIs, Carriers and MACs
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Two types of review:
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Automated (no medical record needed)
Complex (medical record required)
RACs will NOT be able to review claims paid prior to October
1, 2007
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NCDs, LCDs & CMS manuals
RACs will be able to look back three years from the date the claim was
paid
RACs are required to employ a staff consisting of nurses,
therapists, certified coders & a physician CMD
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Automated Review Process
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Review claims data – “data mining”
All potential issues approved by CMS
Claim determinations made at system level
without staff intervention
Library of CMS rules, regulations, guidelines,
and coding policies maintained and updated
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Complex Review Process
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All potential issues approved by CMS
Additional documentation requests
Medical record chart reviews
CMS record request limits – (10% of average monthly claims/up
to 200 claims per month)
Review Team:
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Coding review determinations (RN, Certified Coders, Therapists)
Medical necessity reviews will be performed by RNs who have access to
Physician Reviewers as necessary.
MD oversight of reviews
Complete documentation maintained in automated system
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Appeal Issues
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Strategic Appeal Issues - Redetermination
30 days to stop recoupment
 120 days to request redetermination
 11.375% interest accrues from date of determination
 Cash flow – can extend repayment for 90 days from
the date of determination (includes 60 days for
redetermination decisions to be issued)
 Impact of “rebuttal period” - up to 30 days
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Appeal Issues (cont.)
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Strategic Appeal Issues - Reconsideration
60 days to stop recoupment
 180 days to request reconsideration
 11.375% interest accrues from date of
determination
 Cash flow – 90+60+60 = 210 days (Includes 60
days for reconsideration decisions to be issued)
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Appeal Issues (cont.)
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One strategy – appeal all claims within 30 days at first
level and within 60 days at second level
Advantages
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Cash flow (for a maximum of 210 days from date of
determination or 330 days, if reconsideration)
Opportunity to reverse decision without impact
Disadvantages
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Accrue interest at 11.375%
Frantic timetable to assemble appeals
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Appeal Issues (cont.)
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A Second Strategy – appeal some claims within
recoupment limits
Based on amount in question?
 Based on review of the merits?
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A Third Strategy – appeal claims within appeal
but not recoupment limits
ALJ, Medicare Appeals Council and Court
Appeals
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Additional Defenses and Issues
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Without Fault (Section 1870)
Even if overpayment identified provider may still be
paid if “without fault”
 Three-year rule for use of presumption but viable
defense regardless of timeframe (unique counting
rule, still applies to the three-year RAC window)
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Additional Defenses and Issues
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Waiver of Liability (Section 1879)
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Even if service determined to be not reasonable and
necessary, payment could be made if provider or
supplier did not know, and could not reasonably
have been expected to know that payment would not
be made
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Additional Defenses and Issues
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Timing of Reopening “Good Cause” 42 C.F.R.
405.980
Medicare Appeals Council Decisions involving
hospitals and skilled nursing facilities
 Decisions by Appeals Council and the ALJ lack
jurisdiction to decide contested reopenings under
the Medicare appeals process
 Impact of raising “good cause”
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Additional Defenses and Issues
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Timing of Reopening/”Good Cause”
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MAC Decision Palomar Medical Center v. Johnson, S.D. Cal. No. 3:09cv-00605-BEN-NLS (S.D. Cal. Complaint filed 3/24/09)
Challenges RAC reopening of two year old hospital claim
ALJ determined RAC had not shown “good cause” for reopening
MAC reversed ALJ finding ALJ lacked jurisdiction to determine
whether reopening was lawful
Court challenge to jurisdictional argument and due process
CMS Transmittal 1671 (February 16, 2009) – RAC data analysis is
“good cause” and ALJ has no jurisdiction
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Additional Defenses and Issues
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Credentials of reviewer
Can request a copy of credentials
 Medical Director
 Coding Experts
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Additional Defenses and Issues
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Review criteria used
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Must be Medicare policy, National Coverage Determinations,
Local Coverage Determinations
What was in effect at time
Is Medicare policy applied correctly
Can any of the coverage determinations be used as a defense?
Incorrect application of statutes
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Medical records standards
Physician testimony/declaration
Standard of care evidence
Peer-reviewed science
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Additional Defenses and Issues
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Sampling
Extrapolation PIM (CMS Pub100-08) Chapter 3
 3.10.1-3.10.11.2
 Challenge statistical analysis
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Provider Preparation
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Know where previous improper payments have been found (OIG, CERT,
Demo RAC Reports)
New issues are posted to the web – CMS appeal process
RAC claim status web interface (2010)
Detailed review results letter and denial letter following all complex reviews –
“discussion period” opportunity/does not impact appeal deadlines
Prepare to respond to RAC medical record requests – 45 day window
Keep/submit proper documentation – point of contact/team
building/organizational issues resolved
Appeal when necessary - know timelines for appeal AND timelines to stop
recoupment (e.g., 120 days v. 30 days for first level appeal and 180 days v. 60
days for second level appeal)
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Program Safeguard Contractors
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Like RACs, PSCs are part of the Medicare Integrity
Program
Not contingency fee contractors
Function like RACs in the area of “complex review”
Requirements for Medical Records – 45-day window
Ability to cause recoupments (like RACs)
Organize like RAC activities
Activities have focused on Part A and Part B (MDS
and therapy)
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Medicare Integrity Program (“MIP”)
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Created by Deficit Reduction Act (“DRA”) in 2005
Establishes the federal government’s role in combating
Medicaid fraud, waste and abuse
Effective support and assistance to States
Formation of Medicaid Integrity Group (“MIG”)
Creation of Medicaid Integrity Contractors (“MICs”)
Goal of the MICs:
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Identifying and recovering overpayments
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The World of Medicaid Integrity
Contractors (“MICs”)
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Review MICs - data analysis
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Audit MICs – post-payment audits
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Educate MICs – educate providers
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MIC Audit Process
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ID of potential audits through data analysis by review MICs
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Vetting potential audits with State and law enforcement
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Audit MIC receive assignment
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Contact with provider and scheduling of the entrance conference
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Currently in 20 states – Florida, South Carolina, Pennsylvania,
Delaware, Georgia, Alabama, North Carolina, District of Columbia,
Virginia, Kentucky, Maryland, Texas, Arkansas, Louisiana, New
Mexico, Colorado, Oklahoma, California, Nevada, Idaho
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Timing of Audits
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Should be at least two weeks notice before audit
to begin
Records request/preparation time (all over the
place - 10 to 45 days)
Desk or field audit
Entrance conference (phone or in-person)
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Look-Back Period
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Not set by MIG
Relates to maximum period under state law
Not always clear under state law
Need to know/analyze state law
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Audit Process (cont.)
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Intake questionnaire (work in process)
Entrance conference
Audit
Review of preliminary audit findings and
tentative conclusions
Opportunity for provider to comment and
provide additional information
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Audit Process (cont.)
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Draft audit report to CMS and State for review
and comments along with provider
If revised, further review with State
Draft audit report finalized
CMS issues final report to State
State has 60 days to repay federal government
for its share
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Audit Process (cont.)
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State issues final report to provider and begins
overpayment recovery process
Provider rights of appeal are those available
under State law
Settlement made complicated by feds
recoupment from states
If provider wins, what happens to state loss?
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Relevant Issues
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Standards applied – known?
Audit according to General Accepted Government
Auditing Standards (“GAGAS”)
Adequate time to produce all records
Ability to stay recoupment
Payment plan available?
Timely Appeal Process/Overburdened State Appeal
Process/Due Process
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MIC PROGRAM
No Record Request Limitations
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No Limits on the Number of Medical Records a
MIC can Request per Month
Unlike RAC program
Basic problem with MIP/MICs – no formal
structure to program
Compare and contrast to RAC
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MIC Application of Standards
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Uncertain
Push MIC to identify substantive standards
utilized
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Identified Audit Process Issues
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Requests for information outside of the scope
of the audit (intake questionnaire)
Short timeframe
Looking back up to 5 years
Duplicative of other audits
Federal/State conflicts
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Areas of Focus in LTC
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Accuracy of patient responsibility/share of cost
Deceased patients
Duplicative payment issues/impact of retro
Medicaid rate changes can make it look like
duplicate claims
Bed-hold rate limitations
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Prepare for RACs/MICs
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Establish internal team
Interdisciplinary Team: Legal, Finance, Clinical,
Compliance, IT
Identify point of contact for internal and external
communications
Develop central tracking mechanisms/database for all Incoming and Outgoing
Coordinate the tracking mechanism with communications
structure – record reviews, and appeal of recoupment
deadlines
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Prepare for RACs/MICs (cont.)
Conduct self audits to identify potential problems
 Participate in trainings and outreach
Monitor news sources, CMS, associations, and your
own reports to stay abreast of trends
 If desired, development of unique forms for appeal
levels once issues identified
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Responding to Record Requests:
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Stamp date and Time Received
Push for 45 calendar days from date of letter for
MICs (already established for RACs)
 Can request an extension
 Notify if significant discrepancy between date of
letter and date of receipt
 Identify any internal issues in expeditiously getting
the mail for processing
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Responding to Record Requests:
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Was the request sent to the right place?
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Notify Contractor of the contact person with
contact information
Did the Contractor exceed a reasonable number
of record requests under the circumstances?
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Responding to Record Requests:
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Copying of Record and Others
Ensure entire record is copied
 Include copies of substantive coverage materials
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Review of all records before they are released
Permits early identification of issues
 Establishes priority for appeals
 Intensive work
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Responding to Record Requests:
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Has the claim already been subject to audit by
another contractor
Who is this request from?
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Confusion with so many different contractors
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Responding to Record Requests:
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Document Management?
Stamp number (Bates Stamp) on bottom of each
page produced
 Scan everything produced
 Include cover letter itemizing contents of box of
documents or CD
 Send certified mail or, if regular mail, complete
affidavit of service by mail
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Responding to Record Requests:
Data Management
• Audit ID Number
• Information about the production
•Type of Audit
• Patient information
• Reason for Audit (Issue Specific) • Status of case
• Date of Record Request
• Reimbursement information
• Date Received
• Contractor/State response
• Next Deadline
• Status at each level of appeal
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Determinations
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Stamp the date received
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Determine Appeal period
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Additional Defenses and Issues
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Review criteria used
 What was it and is it subject to attack?
 What was in effect at time?
 Is Medicaid policy applied correctly?
Incorrect application
 Medical records standards
 Physician testimony/declaration
 Standard of care evidence
 Peer-reviewed science
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