Transcript Title

MANAGING
EXTERNAL AUDITS
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7/17/2015
OBJECTIVES:
Define the current external audits.
 Review the record requests and limits.
 Walk through the RAC discussion period and
appeal deadlines.
 Managing the audit process.
 Describe various tools to assist in the audit.
 Discuss appeal writing and discussions.

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.
7/17/2015
Background:
With greater and greater regulatory scrutiny over coding, we
are challenged with keeping up-to-date and well versed on:
AHA coding guidance
Clinical interpretations
Coding conventions/guidelines
Governmental rules
The number of coding/DRG denials from government and
non-government payers due to lack of clinical indications to
support the ICD-9-CM diagnosis code is increasing.
Current governmental audits
 Medicare RAC
 Medicaid RAC
 MIC
 MAC
 CERT
 ZPICS
 HEAT
 OIG
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7/17/2015
Non-governmental auditors
 Equiclaim
 Humana
 HDI
 Varis
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Medicare RAC
Recovery
Audit
Contractor
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7/17/2015
Who are the RACs?
 RECOVERY
 AUDIT
 CONTRACTORS
 Detect and correct past improper payments to
allow CMS, Carriers, FIs, and MACs to
implement actions that will prevent future
improper payments.
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7/17/2015
RAC Reviews
Automated
Complex
Electronic claim review:
Manual review:
 Duplicate claims
 Same patient
 Same date of service
 Suspected error
 Duplicate payment
 Medical record needed
 45 days to respond
 10 days for mailing time
 Incorrect disposition
 Site of service issue
 Audit for proper
documentation
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7/17/2015
Background: Recovery Audits Contractors
 “RAC” auditing to capture payment errors.
 Currently focusing on Part A/B but CMS is discussing
further expansion into Medicare C/D claims and
medical record reviews.
 All the more reason for us to focus on our
documentation AND coding accuracy.
Claims Excluded from a RAC Audit:
 Claims that have already been reviewed by
another Medicare contractor.
 Claims involved in a potential fraud investigation.
 Self-disclosed claims-provider discovers an error.
 Claims for hospice and home health.
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7/17/2015
Self-Disclosure Quote:
“If you are a compliance officer and your
organization never made a disclosure of
an overpayment, know that your compliance
program is not working as effectively as it should
be,” Sheehan said in an interview and in a July 14,
2010 webinar sponsored by the New York State
Office of Medicaid Inspector General (OMIG).
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7/17/2015
.
Current Coding Issues -Inpatient:
 Sequencing of Principal Diagnosis.
 Selection of a CC or a MCC.
 Excisional Debridement.
 Hepatic Encephalopathy.
 Sepsis.
 Transbronchial lung biopsies.
*Not a complete listing- of issues -visit your regional RAC website for a complete listing*
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Current Medical Necessity Focus-
one
and two day stays:
 Degenerative nervous system






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disorders .
Transient ischemia.
Chronic obstructive
pulmonary disease.
Perc. Cardiovasc. Proc. w/
DES/NON-DES.
Heart failure & shock.
Atherosclerosis.
 Cardiac arrhythmia &






conduction disorders.
Syncope & collapse.
Chest pain.
Esophagitis, gastroent. &
misc digest disorders.
Medical back problems.
Renal failure.
Red blood cell disorders.
Not a complete listing- of issues -visit your regional RAC
website for a complete listing.
7/17/2015
Current Medical Necessity Focus- Patient
Status:
 Inpatient Admissions without a Physician's
Inpatient Admit Order Description.
 Admissions to the inpatient setting require a
physician's order in order to qualify and be paid
as an inpatient stay.
 Provider Type Affected: Inpatient Hospital
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7/17/2015
Patient Status:
 Admit to a location is
unclear from a medical
necessity standpoint .
 Is the location an OBS
unit or an area to support
an inpatient level of care?
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7/17/2015
Meeting Medical Necessity for
Admission
 Must accompany each
patient to the hospital.
 Fax with all preregistration material.
 Necessary to prevent
future RAC denials!
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Meeting Medical Necessity for
Admission
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7/17/2015
RAC Risks:
 Keep abreast of all new issues posted by your RAC.
 Perform pre-bill audits on designated areas:
 DRGs
 Discharge Disposition Codes
 Units of Service
 Outpatient coding
 Medical Necessity
 Patient Status.
 Educate applicable staff.
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Coding Monitoring Risk:
HIGH
MEDIUM
LOW
High probability of RAC risk
Moderate probability of RAC risk
Low - zero probability of RAC risk
Incorrect DRG/APC Assignment resulting in increased DRG/APC
payment
Correct DRG assignment
DRGs in the RED zone on
PEPPER Report
DRGs within acceptable range on
PEPPER Report
DRGS contained in OIG workplans
with incorrect DRG assignment
resulting in increased DRG
payment
Correct DRG assignment
MSDRGS with one CC or MCC
MS-DRGs with one CC or MCC valid
Assignment of diagnosis as POA not
reflected by documentation
Assignment of POA diagnosis reflected
within documentation
7/17/2015
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Medical Necessity Risk:
HIGH
MEDIUM
LOW
High probability of RAC risk
Moderate probability
of RAC risk
Low - zero probability
of RAC risk
Unclear orders
Unclear orders with medical
necessity of services - criteria met
Clear order –
medical necessity met
Does not meet medical necessity for
IP stay
Meets some criteria for IP stay (i.e.
SI not IS)
Meets all criteria for IP stay
Direct admit outpatient procedure
without medical necessity
Admission following surgery of
minor procedures
Urgent need for surgical
intervention reflective of medical
necessity
Admission order written prior to
procedure for other than inpatient
only procedure without medical
necessity
Extended recovery needed with
clinical support documented –
in IP status
Progression of patient from
different levels of care noted and
documented with medical necessity
7/17/2015
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RAC Deadlines
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Review RAC deadlines
 Record requests and limits.
 RAC discussion period.
 Demand letters/Remittance Advice.
 Appeal deadlines.
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Record Requests
 Process record request timely.
 Review each record for complete content.
 Format
 Paper
 CD
 Electronic
 Mail certified mail return receipt.
 May submit electronically via esMD for all 4
RACs - http://www.cms.gov/Research-Statistics-Data-and-Systems/ComputerData-and-Systems/ESMD/index.html
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Review Results Letter:
 First written correspondence received.
 Entitled “Review Results Letter-Findings.”
 If you disagree, contact RAC auditor ASAP.
 Contact Information for RAC Auditor is supplied
on the letter.
 Detailed information of the denial.
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Demand Letter:
 Second written correspondence from RAC.
 No title-the middle of the letter will have the name and
address for your FI.
 Date of demand letter should correspond with the denial
date on your remit.
 Monitor all N432/N469 (RAC denial codes).
 Detailed explanation of the denial.
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Demand Letter:
 Explains 15 day rebuttal Process.
 Outlines Repayment plan options.
 Discusses Recoupment process.
 Mandates that appeal must be filed within 30
days of the date of the latter to avoid a
recoupment.
 Next steps in the appeal process.
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Be prepared and watch deadlines:
 Master effective appeal
letter writing skills.
 Seek outside assistance.
 Engage other experts in
the organization.
 Expedite RAC
Discussions.
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7/17/2015
RAC Timelines
Review
Results
Letter –
Discussion
Period
within 15
days.
If RAC
denies your
rebuttal:
Appeal to FI
within 120
days.
If RAC denies
the claim:
Appeal RAC
Denial with 30
days to stop
recoupment of
funds.
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If Medicare
Appeals
Council
denies your
appeal:
Appeal to
Federal
District Court
within 60
days.
If QIC
denies your
appeal:
Appeal to
ALJ within
60 days.
If FI denies
your
appeal:
Appeal to
QIC within
180 days.
If ALJ
denies your
appeal:
Appeal to
Medicare
Appeals
Council
within 60
days.
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7/17/2015
Medicaid RAC
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7/17/2015
What is the Medicaid RAC?
 The Patient Protection & Affordable Care Act of
2010 (ACA) requires by December 31, 2010 each
state Medicaid program contract with one or
more RACs to identify underpayments &
overpayments.
 Each state will have flexibility in the design of the
Medicaid RAC program requirements.
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Medicaid RAC
 Must have an “adequate appeals process” for hospitals to
challenge adverse Medicaid RAC determinations.
 States may use their current Medicaid appeals process or develop a
separate appeals process-pending CMS approval.
 Employ trained medical professionals to review Medicaid
RAC claims.
 Unlike the Medicare RAC program, states are NOT required to
pay Medicaid RAC on a contingency fee basis for identifying
underpayments.
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Potential savings-Medicaid RAC:
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Fiscal Year
Estimated Savings (in
millions of dollars)
2011
2012
2013
2014
2015
$80
$170
$250
$310
$330
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Practice Appeal Writing
Coding
&
Medical Necessity
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Practice appeal writing:
 Coding
 Medical Necessity
 Automated
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7/17/2015
Defend your code assignments:
 Apply correct coding
guidance for each case
based on the discharge date
of the patient.
Acceptable advice:
 AHA Coding Clinic for
ICD-9-CM.
 AHA Coding clinic for
HCPCS.
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 Unacceptable
advice:
 Faye Brown’s Coding
Handbook.
7/17/2015
MIC/MIP
Medicaid
Integrity
Contractor/Program
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7/17/2015
Who are the MICs?
 MEDICAID
 INTEGRITY
 CONTRACTORS
 Perform audits under the
Medicaid Integrity Program (MIP).
 Deficit Reduction Act of 2005 to combat fraud and abuse
in the Medicaid federal entitlement program.
 Identify and recover overpayments.
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MIC Responsibilities:
 Identify overpayments.
 Audit provider claims.
 Review of provider actions to determine whether fraud
or abuse has occurred or may have occurred.
 Educate state or local employees involved in Medicaid
administration, and others, with respect to payment
integrity and quality of care.
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7/17/2015
MICs are Successful:
 Identified over $18.6
billion in improper
payments in 2008.
 Beat out Medicare at
$10.4 billion and
Medicare Advantage at
$6.8 billion.
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7/17/2015
Current MIC Issues Under Review:
 Duplicate claims.
 Outpatient claims with a date of service that
overlaps an inpatient date of service.
 Services provided after the death of a beneficiary.
 Unbundling of services.
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7/17/2015
Differences between MIC & RAC:
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MIC
RAC
 No record limits.
 Record limits set by NPI #.
 Look-backs based on
 Look-back period = 3 years.
individual state.
 Number of days to mail
records is based on state
rules (15 days usually).
 No reimbursement for
copying and mailing medical
records.
 45 days to mail records (+10
days mailing).
 RACs reimburse 12 cents/
page for hospital records.
7/17/2015
Differences between MIC & RAC:
MIC
RAC
 Not paid on a contingency
 Paid on a contingency
fees, paid through a fee-forservice model. Auditors will
be eligible for bonuses based
on their performance.
 May come on-site to do
reviews.
 No rules for MICs.
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fee.
 No on-site reviews.
 Set rules for RAC
program.
7/17/2015
MIC Provider Breakdown:
 Of the 500 audits currently under review, the
provider breakdown includes:

44 % on hospitals

29 % on long term care facilities

21 % on pharmacies

6 % on other provider types.
 CMS Open Door Forum
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MIC Targets:
 Patient discharged dead or alive.
 Inpatient at time of ambulatory service.
 Hysterectomy on males.
 Debridement requiring actual cutting.
 Heart failure and shock-InterQual criteria reviewed.
 Ambulatory surgery with no complications to justify
inpatient stay.
 DRG assignment.
 Observation beds.
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MAC
Medicare
Administrative
Contractor
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Who are the MACs?
 MEDICARE
 ADMINISTRATIVE
 CONTRACTORS
 Section 911 of the Medicare Prescription Drug,
Improvement and Modernization Act of 2003 (MMA).
 Replaces current claims payment contractors - fiscal
intermediaries and carriers - with new contract entities
called Medicare Administrative Contractors (MACs).
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MAC Responsibilities:
 A/B MACs perform Medicare functions
currently administered by fiscal intermediaries
(FIs) and carriers.
 Allows greater integration of
Medicare Part A and Part B claims.
 Improves efficiency and accountability in
program administration.
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7/17/2015
MAC Awards:
 Nineteen (19) A/B
MACs encompassing
the majority of Part
A/B claims.
 Four (4) specialty
MACs-DME supplier
reviews.
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7/17/2015
CERT
Comprehensive Error Rate Testing
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7/17/2015
CERT:
 Selects randomly a sample of approximately
100,000 claims submitted to Carriers, FIs, and
MACs during each reporting period.
 Requests medical records from the health care
providers that submitted the claims in the sample.
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7/17/2015
CERT
 Review claims in the sample and the associated
medical records for compliance with Medicare
coverage, coding, and billing rules.
 Assign errors to the claims, if applicable.
 CERT program cannot, label a claim
fraudulent, since they use random sampling.
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7/17/2015
CERT Medical Record Requests:
 If the provider failed to respond to the initial request after 30
days, the CERT Contractor sent up to three subsequent letters
in addition to follow-up phone calls to the provider.
 If no documentation was received from the provider once 75 days
had passed since the initial request, the CERT Contractor
considered the case to be a no documentation claim and counted it
as an error.
 The CERT Contractor considered any documentation received
after the 75th day ―late documentation.
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7/17/2015
Five categories of error under CERT
 No documentation.
 Insufficient documentation.
 Medically unnecessary service.
 Incorrect coding.
 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).
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7/17/2015
Improvement in CERT program:
 May 31, 2009 - Based on CMS policy, during the
course of a complex medical review, a claim must be
denied if the signature on the medical record is
absent or illegible.
 Through their audit, OIG found that CMS
contractors were not uniformly applying this
policy. Thus, CMS provided guidance to the CERT
contractor that claims should be counted as an
error if the CERT reviewer could not identify the
author of the medical record entry.
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ZPIC
Zone Program Integrity Contractor
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Who are the ZPICs?
 ZONE
 PROGRAM
 INTEGRITY
 CONTRACTORS
 Formally known as the Program Safeguard
Contractors (PSC).
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ZPICs Analysis of Data should:
 Identify potential errors that may be the greatest
risk (i.e.: covered vs. non-covered services).
 Establish baseline data which will enable the
contractor to find unusual trends.
 Help identify where there may be a need for a
new LCD (Local Coverage Determination).
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7/17/2015
ZPICs Analysis of Data should:
 Identify high volume
or high cost services
that are being widely
over utilized.
 Identify possible fraud
investigations of
program areas and/or
specific providers.
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7/17/2015
ZPICs Responsibilities
 Obtain data for all
beneficiaries for whom the
AC(s) or MAC(s) paid the
claims.
 Required to store at a
minimum the most recent 36
months worth of data
(including Part A, Part B, and
DME) for the jurisdiction
defined in their task order.
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7/17/2015
Be aware of the ZPICs
 Hired indirectly (or in connection with other CMS affiliated
contractors) by CMS. (For instance, Advance Med Corporation
was awarded a $107,957,737.00 five-year contract for
Zone 5=which is the ZPIC for NC & SC.)
 Vitally important that providers facing ZPIC audits immediately
and effectively address targeted audit issues.
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7/17/2015
ZPICs Appeals
To appeal a claim
reviewed by a ZPIC, it
forwards the records to
the CMS affiliated
contractor (typically a
MAC) so that it can
handle the appeal.
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HEAT
Health Care Fraud Prevention and
Enforcement Action Team
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7/17/2015
What is a HEAT audit?
 Health Care Fraud Prevention
 Enforcement
 Action
 Team
 Began in May 2009, Dept. of Justice and HHS formed this team
to fight Medicare Fraud.
 It has become a Cabinet-level priority for both DOJ and
HHS.
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HEAT Responsibilities
 To prevent fraud and abuse in the
Medicare and Medicaid programs by
busting fraud perpetrators who are abusing the
system and costing billions of dollars.
 To reduce health care costs and improve
the quality of care by eliminating perpetrators
who are preying on Medicare and Medicaid
beneficiaries.
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7/17/2015
HEAT Responsibilities
 To highlight best practices by providers
who are dedicated to ending waste, fraud and
abuse in Medicare.
 To build upon existing partnerships that
already exist between the DOJ & HHS to
reduce fraud and recover taxpayer dollars.
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OIG
Office of Inspector General
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OIG
 RACs are NOT responsible for reviewing claims
for fraudulent activity.
 RACs are responsible for referring to CMS
any potential fraud identified through the RAC
audits. For example, the OIG may be notified of
potential fraud identified by the RAC.
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MANAGE THE AUDIT
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Manage the Audit Process
 Size of the organization
 High performing staff members
 Management Staff
 Outsourcing
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Workflow Processes
 Decide upon a Leader.
 Denote an Location = lockbox or address.
 Scan all correspondence into shared drive and
into a database/spreadsheet.
 Stamp the date received on all correspondence.
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Workflow Processes
 Notify HIM immediately when the letter has been
placed on shared drive and/or into the database.
 Consider designating a high-performing clerk
into the HIM clerk.
 Coordinate with the file clerk and Release of
Information (ROI) clerk to process record
requests quickly.
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Staffing and Budgeting
 Review your current staffing-do you have enough
staff to handle the requests?
 Work with your Release of Information (ROI)
company to discuss the volume of requests.
 Budget for increased supplies, staffing, resources,
consultants, legal fees, etc.
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Self Assessment
 Self test your coding staff yearly.
1) Basic Anatomy
2) Coding conventions
3) Case studies/vignettes
4 AHIMA CCS and/or CCS-P books.
• Discuss results with each coder.
• Educate staff on areas of weakness.
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Educate Physicians and other providers
 Develop testing
modules for
physicians.
 Include within annual
assessments.
 Consider simple
documentation tips.
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Five best practice debridement documentation
components
 Technique-
(surgically excised, debrided, cut).
 Instrument.
 Nature of tissue removed.
 Appearance and size of wound.
 Depth of debridement.
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Wound Debridement Question
How many best practice components are
necessary to assign an appropriate Wound
Debridement code?
1) One
2) Three
3) Five
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Wound Debridement - Answer
 The correct answer is #3 = FIVE.
 The 5 Best Practice Components needed to
document debridement include:
1) Technique.
2) Instrument.
3) Nature of tissue removed.
4) Appearance and size of wound.
5) Depth of debridement.
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Utilize Tools
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Tools to assist in audits
 Excel spreadsheets
 Internal and external
databases
 AHIMA Governmental
and External Audit
Toolkit
 PEPPER REPORTS
 OIG WORKPLAN
 AHA RacTrac
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Tracking RAC activity
 Track all correspondence
(approvals and
denials).
 Be aware of duplicate
audits from different
agencies
 Develop a database or an
excel spreadsheet.
 Communicate with
Hospital Association.
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Utilize free tools
 AHIMA Governmental and





External Audit Toolkit.
CMS Open Door Forums.
Hospital Association.
PEPPER reports.
CERT reports.
OIG annual reports.
 Network with your peers.
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CMS Open Door Forums
Live dialogue between
provider community and
CMS & assists providers in
understanding program
issues.
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Hospital and/or Medical Association
 Participate in monthly
conference calls with
your Hospital
Association.
 Attend face-to-face
meetings in order to
network with others
and hear the
questions.
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PEPPER
 P=Program for
 E=Evaluating
 P=Payment
 P=Patterns
 E=Electronic
 R=Reports
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PEPPER
Each hospital will now be compared to other
hospitals in three (3) comparison groups:
State
MAC/FI area
Nationally
*Hospital data with a numerator or denominator lower than eleven
(11) will not be displayed. *
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PEPPER
 Uncover potential DRG errors.
 Reveal MSDRGs that are problematic.
 Compare hospital performance.
 Educate in areas of need.
 Assist in improving documentation.
 http://www.pepperresources.org/
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Office of Inspector General (OIG)
 Distributes annual work-plan.
 Describes audits and evaluations that are
underway or are in the plans to initiate in the
Fiscal Year ahead.
 Use as a guide in determining areas to monitor
coding/documentation patterns.
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What is a Voluntary Disclosure
Repayment of monies that have been
inappropriately received to Medicare, Medicaid,
Tricare Commercial Payers.
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Three Step Process
Identification of an issue that resulted in an
overpayment
2. An internal review to determine the amount of
the overpayment
3. Reporting and repayment
a) DOJ
b) OIG
c) Carrier or Intermediary
1.
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Identification
Issues that result in Voluntary Disclosures can
come from many sources.
 Routine compliance review
 Hotline calls
 Employee complaints
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Voluntary Disclosure Conclusion
The process may be painful and the result
may not be favorable but:
It is faster, cleaner and cheaper to clean up
your own house than having the Government
drop by for a three year visit.
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Good news
If your daily practices in
coding/billing
documentation are
excellent, you may never
receive correspondence
from the government.
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Practice Oral Discussions
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Role play “Discussions” with governmental
auditors
 Have the medical record accessible.
 Flag pertinent pages of information.
 Stick with the current issue under review.
 Be prepared with applicable supporting
documentation and guidance.
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RESOURCES
 CMS RAC website: http://www.cms.gov/rac/
 AHA Coding Clinic for ICD-9-CM:
http://www.ahacentraloffice.org/
 PEPPER Resources:
http://www.pepperresources.org/
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RESOURCES
 CERT: https://www.cms.gov/cert/ &
http://www.cms.gov/CERT/Downloads/CERT_Report.pdf
 Office of Inspector General (OIG): https://oig.hhs.gov/
 Medicaid PERM: http://www.cms.gov/PERM/
 Medicaid Integrity Program (MIC/MIP):
http://www.medicaid.gov/Medicaid-CHIP-ProgramInformation/By-Topics/Program-Integrity/MedicaidIntegrity-Program-General-Information.html
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RESOURCES
 Medicare Administrative Contractors:
http://www.cms.gov/Medicare/MedicareContracting/MedicareContractingReform/PartAandPartBM
edicareAdministrativeContractor.html
 ZPICS:
http://www.providermagazine.com/archives/archives2012/Pages/0512/All-About-ZPICs.aspx
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RESOURCES
 HEAT:
http://www.stopmedicarefraud.gov/aboutfraud/heattaskfor
ce/index.html
 Marion, Pat. Compliance Concepts, Inc. Voluntary
Disclosures. Physician RAC Summit. Jan. 2011.
 Bryant, Easterling & Wilson. Inpatient Coding Challenges vs.
Clinical Indicators. AHIMA National Convention. Sept.
2012.
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Content Developed by:
 Donna D. Wilson, RHIA, CCS, CCDS, CPHM
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