North Carolinas Medicaid Audit Experience September 3, 2013 - - PowerPoint PPT Presentation

North Carolina’s Medicaid Audit Experience

September 3, 2013

Presented by:

Knicole C. Emanuel 919.981.4031 kemanuel@williamsmullen.com

2

Why all the Oversight?

> The “F” Word

3

What is a RAC?

> New und nder er Affo fordab rdable e Care e Act – The e Medicai icaid d RACs s - Recove

• very

ry Audito itor r Contr ntractor actors > Let’s first understand the Medicare icare RAC program

• gram.

– States es were re requir quired d to establ ablish ish program

• grams

s in which ch they y would uld contr ntract act with 1 o

• r more

re Medicai icaid d RACs s by December ember 31, 2010. 2010. – Medi dicaid caid RACs are tasked ed with reviewi ewing ng Medicai icaid d claims ms subm bmitted ted by provi

• viders

ders of services vices for

• r which

ch payme ment is made de und nder er 1902(a) (a) of the SSA or a waiver er

• f the State

e plan. n.

4

The Four RAC Regions

*Source: American Hospital Association

5

RAC Effectiveness in Medicare

> RACs s have ve recov covered ered over er $1.03 billion

• n in overp

erpayme ayments. s. (DHHS, OIG “RAC Fraud Referrals”) > CMS estima mates es that the RAC demo monst stra ratio tion program

• gram cost

sts s approxim proximat atel ely y 20¢ for r each ch dollar ar retur turned ed to the Medi dicare care Trust Funds. (CMS “Evaluation of the Three-Year ear Demonstration”) > Sect ction ion 302 of the Tax Relief ef and d Health th Care re Act of 2006 2006 – Made de the RAC program

• gram perm

rmanent anent and d requ quired ired nationwide ionwide expan pansion sion by 2010 2010 – Medi dicar care RAC program

• gram now

w opera eratio tional al nationwi

• nwide

de

6

Relevant Audit Laws

> 42 CFR Parts ts 405, 424, 447, 455, 457 and d 498 > Medi dicar care – Recov covery ery Audi dit Con

• ntra

ractors

• rs (RAC

ACs) ) – Program

• gram Safeguard

eguard Contr ntractors actors (PSC SCs) – Zone ne Program

• gram Integ

egrit rity Con

• ntra

ractors

• rs (ZPICs)

PICs) > Medi dicaid caid – Medi dicaid caid Integri grity ty Contr ntrac actors

• rs (MICs)

ICs) – RACs

7

Medicaid RACs Program

Definit inition ions: s: Medi dicaid caid RAC program

• gram means

ans a recove covery ry audit dit contr ntractor actor program

• gram admini

minist stered ered by a S State e to ident entify ify overpaymen rpayments ts and d underpayme derpayments s and d recoup coup overpaymen rpayments. Medi dicare care RAC program

• gram means

ans a r recovery covery audi dit t contr

• ntractor

actor program

• gram admini

minist stered ered by CMS to identi ntify fy payme ments s and d

• verp

erpayme ayments nts and d recoup coup overp erpayme ayments. s.

8

RACs in Medicaid

> Sect ction ion 6411(a) a) of the Affo fordab rdable e Care re Act expanded anded RAC to Medicai icaid d and d requ quired ired each ch State e to begin in implem ement ntatio ation by Janu nuary ary 1, 2012. 2012. – Ident entificat ification ion of overpaym rpayment nts s and d underpayme derpayments – States es & RAC vend ndor r must t coo

• ordina

rdinate te the recov covery ery audi dit t effort forts – RAC vendors dors reimb mburse rsed d thro rough ugh con

• nting

ingency ency model del

9

Why RACs? (Do We HAVE to?)

> On Septemb tember er 16, 2011, the federal deral Cent nters ers for r Medi dicare care & Medi dicaid caid Services ices (CMS MS) ) pub ublished shed the Final al Rule for Medicai icaid Recovery very Audit it Contract actor

• rs

s (RAC) C). > Und nder er the Medicai icaid d RAC program

• gram,

, States s must st enter er into con

• ntra

racts s consi nsist stent ent with State law in accord cordance ance with 42 CFR FR subp bpart art F w F wit ith one e or more re eli ligi gibl ble e Medicai icaid d RACs s to perf rform rm post st-paym payment ent audi dits s in ord rder er to ident entify ify Medicaid icaid payme ments s that may have e been en und nderpaid erpaid or overpaid rpaid. . > RACs s must st follow low feder deral al and d state guidel delines ines to recov cover er

• verp

erpayme ayments nts or info form rm the N.C. Division

• n of Medical

ical Assist istance ance (DM DMA) A) of under nderpayments. payments.

10

MEDICAID RACs

11

RAC Audits: Key Issues

> Thre ree-year ear look

• k-back

ack period riod > Registere tered nur urses ses or thera rapist sts s are requir quired ed to make e determin erminatio ations s regardi arding ng medical dical necessi cessity, and d cert rtifi ified ed cod

• ders

ers are requ quired ired to make cod

• ding

ng determ erminat inations. ions. > RACs s are e not entit itle led to keep p their ir cont

• ntingency

ingency fees s if if a deni nial al is overt erturned urned on appeal. peal. > Appea peal Rights, s, 42 CFR 455.13 455.13

12

NC New Medicaid Auditors

> Publ blic ic Consu nsulting lting Grou

• up

p (PCG) CG) – October tober 2012 – Fee For r Serv rvice ice Claims ms > HMS – Octobe tober r 2012 – inpatie atient nt and d outpat tpatient ient hosp spital al, , long-term erm care, e, laborat

• ratory,
• ry, x-ray

ay and d speci ecial alize ized d outpat tpatient ient thera erapy py claims ms

13

Public Consulting Group

14

Public Consulting Group

> Publ blic ic Consu nsulting lting Grou

• up

p (PCG) CG) provi

• vides

des indu dust stry ry-leading leading manag nagement ement con

• nsul

sultin ting g and d techn hnolog logy y to help p pub ublic ic sector tor edu ducat cation ion, heal alth, th, hum uman an servic vices, es, and d other er go government ernment cli lient ents s achi hieve eve their ir perf rforma rmance ce go goals ls and d better er serv rve e pop

• pul

ulatio ations s in need. ed.

15

Tentative Notice of Overpayment

16

Tent ntative ive Not

• tic

ice of

• f Ov

Overpaym payment ent

Valid sample of your Medicaid paid claims for dates of service from 11/1/2009 to 4/40/2009

17

Extrapolation

$23,462.40 $418,024.00

18

Extrapolation

$13,442.58 $702,611.00

19

Key Issues in TNO

> Samp mple e Size (Usu sual ally y over er 100) > Payabl able e Imme medi diatel ately > Appea peal: – Extrapolation? – Audit? – Informal? – Office of Administrative Hearings?

20

Have PCG Audits Been Accurate?

Ex Examp mples les of PCG Blund nders ers: From

• m Real Life

e Ex Experien erience

21

Top 10 PCG Bloopers

This is my opinion from my personal

• experience. It in no way is purporting that

these bloopers are occurring in New Mexico, because I do not know. This in no way is an attempt to disparage PCG. Again, these examples are from my own experience.

22

Number 1: Wrong Policy

2008 2008 Enter the at atten ending ding provider’s NPI for the individual dentist rendering service. (This number should ld correspond to the signature in field 53.) 2013 2013 Enter the atten ending ing provider’s NPI for the individual dentist rendering service. (This number must correspond to the signature in field 53.)

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Number 2: Canned Requests

http:/ p://www www.wr .wral.com/news/local/v al.com/news/local/video/12 ideo/1220 2011 1117/ 17/

24

Number 3: No Training

> Bache chelor' lor's s degree gree in any field > Two+

• + years

rs paid d experience erience work rking ing with critic tical al care re provider

• viders,

s, pub ublic ic heal alth th provi

• viders,

ders, or providers… > One e year r of the experience erience must t have ve in includ luded ed provider

• vider

monit nitorin

• ring,

g, Medi dicaid caid or third d part rty y payer er provi

• vider

der billing, g,

• r provi
• vider

der trainin ining > One e year r of the experience erience must t have ve been en in in a home me heal alth th pro rogram gram, , com

• mmu

munity y health lth program,

• gram, hosp

spital al, , privat vate e pract actice, ice, pub ublicly icly-fund funded ed institution… > Audi diting ing experi perien ence ce a plu lus > Publ blic ic sector tor experience erience a plus

25

Number 4: No Communication

> Prov

• vider:

ider: I am calling ng to try to find d out why PCG determin ermined ed all these se claims ims were re non

• ncomplia

compliant. nt. > PCG: : Refer er to DMA websi bsite, e, policy cy ___. > Prov

• vider

ider:

• Ok. Bu

But what at about

• ut Medi

dicaid caid Recipient ipient A, DO DOS

• X. We followed

lowed the policy icy. > PCG: : Refer er to DMA websi bsite, e, policy cy __.

26

Number 5: That’s Not Required!

> Denial: ial: No prior ior authori horizatio ation. > Outpat tpatient ent Behavi avioral

• ral Thera

erapy py (OBT) BT) allows ws 16 unma managed naged visits for r children. dren. > PCG reviews ews an unma managed naged OBT visit (no no prior ior auth is requir quired ed) ) and d holds lds claim m non

• ncompl
• mpliant

ant for r lack of prior ior auth….WHAT?

27

Number 6: Three Year Limit!

> Date of Audit: it: Marc rch h 5, 2013 > Date of Servic vice: e: February ruary 2, 2010 > 42 C.F.R. 455.508 (f), “The entity y must st not review ew claims ms that are older er than an 3 y years rs fro rom m the date e of the claim, m, unless ess it r recei ceives ves appro proval val from

• m the State.
• e. “

28

Number 7: No Medical Necessity

> Assert ertiv ive e Comm mmuni nity ty Treat eatme ment Team m (ACTT) CTT) > No medi dical cal necessi cessity ty found und (desp despite e prior ior authori horizat zation) ion) due e to prov

• vider

ider not t exhau haust sting ing lesser er services ices befo fore re request questing ing ACTT

29

Number 8: Lack of Consent

> PCG cites noncompliance due to “lack of signed consent” by the Medicai icaid d recipi cipient. ent. > Recipie ipient is 10. Mothe her r signed ed the con

• nsen

sent. t. > But mother ther has a different ferent last name me than an child. d.

30

Number 9: Extrapolation Errors

> Clust sters ers > Modifi dificat cation ion/R /Red eduction uctions s Change ange the Ex Extra rapolat polation ion Data

31

Number 10: Medical Jargon

> In a PCG audi dit for r a dent ntal al provider

• vider,

, PCG cited ed that t the CDT cod

• de

e was incor corre rect becau cause se there re was no evidence ence of shaving ving or restructuring ructuring the bon

• ne

e on the serv rvice ice note. e.

32

Number 11: CPT Code Confusion

90806 Individual therapy 45 – 50 min

33

Administrative Burden

34

Participants continue to report dramatic increases in RAC denials and medical record requests.

*Source: American Hospital Association, RACTRAC Survey, 1st Quarter 2013

35

Administrative Burden

Of Of all hospi spitals tals manag naging ing the RAC pro rocess ess* * duri ring ng the 1st quar arter ter of 2013, 63% % spent ent more re than an $10,000, 0, 46 46% % spent ent more re than an $25,000, 0, 10 10% % spent ent more re than an $100,000 00

*Results of AHA RACTRAC Survey, 4th Quarter 2012

36

Medicare RAC Denials*

Medically Unnecessary Short Stay Other Medically Unnecessary Reasons Incorrect Coding Other reasons Incorrect Coding Status Insufficient Medical Documentation Medically Unnecessary Inpatient Stay

• f Longer than 3 days

37

Medicare RAC Denials*

> 94% of hospitals indicated medical necessity denials were the most costly complex denials. > 68% of medical necessity denials reported were for 1-day stays where the care was found to have been provided in the wrong setting, not because the care was medically unnecessary.

*Results of AHA RACTRAC Survey, 4th Quarter 2012

38

Audit Recommendations, cont.

Appeal! Appeal! Appeal!

39

42 CF CFR 455.13 .13

Medi dicaid caid RAC provider

• vider appea

peals. s. States es must st provide

• vide appeal

peal right hts s und nder er State law or admi minist nistra rativ ive e procedu

• cedure

res s to Medicai icaid d pro roviders iders that seek review ew of an advers erse e Medi dicaid caid RAC determi erminati nation.

• n.

40

Are Appeals Fruitful?

41

Appeal Success Rates

Appe peals als Perce rcent nt of Deni nials als Appe peale aled Numbe ber r of Deni nials als Awaiting ing Appe peals als Determinatio ermination Perc rcen ent of Appe pealed aled Deni nials als Overtu rturn rned ed Nationwide 160,747 44% 122,437 72% Region A 42,158 51% 10,107 79% Region B 33,315 45% 23,097 79% Region C 60,849 39% 46,876 76% Region D 52,749 48% 43,357 60%

*Results of AHA RACTRAC Survey, 4th Quarter 2012

42

72 % Appeal Success

43

Medicaid Appeal Process

> Inform formal al reconsiderat consideration ion review iew (15 days) ys) > Attend nd reconsiderati consideration

• n review

ew at DMA > DHHS Hearing ring Officer ficer Decision sion > Appea peal Decision sion to Office fice of Admi minis nistrat trativ ive e Hearing rings s (OAH) AH) (60 days) s) > Notice ce of Cont ntested ested Case e Hearing ring

44

Medicaid Appeal Process

> Mand ndator atory y Medi diat ation ion (Impasse) mpasse) > Ex Extrap apol

• latio

ation Ex Expert ert – Challenge Sample Size – Challenge Clusters – Challenge Modified Extrapolation > OAH Heari ring ng > Judicia icial Review, ew, if necessa cessary ry

45

Example of Our Success

From $702,611.00, to…

46

Decision

…to $336.84

47

Example of Our Success

48

North Carolina Injunctions

> Judge ge Order dered ed DHHS/ S/contracted contracted company mpany to STAY the suspen spension sion of Medi dicaid caid reimb mburseme ursements s pend nding ing litigation. ion. > Judge ge Ordere dered MCO to STAY it its refu fusal sal to contract ntract wit ith a provider

• vider pend

nding ing litigation. ion. > Judge ge Ordere dered DH DHHS HS to STAY it its terminat mination ion of pro rovider ider from

• m Medi

dicaid caid program

• gram pending

nding litigation

• n.

> Judge ge Order dered ed MCO to STAY all determ erminat ination ions s of medical dical necessi cessity y pend nding ing litigation. ion.

49

New Mexico Statutes 27-11-3

> New Mexico ico Statut utes es 27-11 11-3. . Review w of Medicai dicaid d provider

• viders;

s; con

• ntrac

tract reme medies; dies; penal naltie ties > C. Subj bjec ect to the provi

• visions

sions of Subsec bsection ion D o D of this is sect ction, ion, after er affo fordi rding ng a a Medicaid icaid pro rovider ider written en not

• tice

ce of hearing aring not less than n ten days s before fore the hearing aring date e > and d an oppo pportu rtunity y to be heard ard, , > and upon

• n making

ng appropriat propriate e admini minist stra rativ tive e find ndings, ngs,

50

New Mexico Statutes 27-11-3

> (1) ) impose

• se an admi

minis nistrat trativ ive e penal nalty ty of not more re than n five thou

• usand

sand dollars ars ($5,00 000) 0) for r engagi aging ng in any practi actice ce describe scribed in Paragraphs agraphs (1) thro rough ugh (6) ) of Subsection bsection B of this is section ion; provided

• vided that each

ch separate arate occurre currence nce of such ch practi actice ce shal all const nstitute tute a separ parat ate e off ffense ense; > (3) ) suspend pend or revoke

• ke the cont
• ntract

ract between ween the provi

• vider

der and d the depar partment ment pur ursua suant to the terms ms of that con

• ntra

ract.

51

New Mexico Statutes 27-11-3

> D. If a con

• ntra

ract betwee ween n the depar partmen tment t and d a Medi dicaid caid provider

• vider explicit

icitly y speci ecifies fies a dispu pute te resol soluti ution

• n mecha

chanism nism for r use e in resol solving ing dispute putes s over r perfor rformance ance of that cont

• ntract,

ract, the dis ispu pute e resol solutio ution mechanism chanism speci ecified fied in in the con

• ntra

ract shall be used ed to resol solve ve such ch disput sputes es in lieu of the mecha chanism sm set forth rth in Subsection bsection C of this section ion. > E.

• E. If a Medi

dicaid caid provi

• vider's

der's con

• ntrac

tract so specifi ecifies, es, the Medi dicaid caid prov

• vider

ider shal all have e the right ht to seek de novo vo revie iew w in in dis istrict rict cour

• urt of any deci

cisio sion by the secret cretary ary regardi arding ng a c con

• ntrac

tractual tual dispu pute. te.

52

New Mexico

Thank You