1 AUDI TI NG AND MONI TORI NG WORKPLAN 4 OIG Work Plan FY 2006 [PDF]

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Rural Hospital Compliance

What Happened to the Simple Life?

Kirk Ruddell, CHC HCCA Audio Seminar February 23, 2006

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Island Hospital Anacortes, WA

44-bed hospital and 2 clinics Home Health agency 100 community providers 475 employees (330 FTEs) Pediatrics, ophthalmology, optometry,

ncology, OB/GYN, cardiology, orthopedics,

dermatology, respiratory medicine, psychiatry, urology, IP/OP surgery, sleep medicine, sports medicine

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Island Hospital (cont.)

Level III emergency department Rehab (PT, OT, speech therapy) Birth Center Cancer Care Center Sleep Disorders Center Cardiopulmonary Rehab Diagnostic services – X-ray, CT, US, mammo,

MRI, arteriography, NM, full-service lab

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AUDI TI NG AND MONI TORI NG WORKPLAN

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OIG Work Plan FY 2006

Inpatient-only services in an outpatient setting Outpatient surgeries Unbundling of hospital outpatient services Critical Access Hospitals – cost reports Purchasing rebates and cost reports Medicare Part B radiology payments for

inpatients

Ground ambulance services

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OIG Compliance Program Guidance for Hospitals

Billing for items or services not actually

rendered

Providing medically unnecessary services Upcoding “DRG creep” Inpatient-only services in an outpatient setting Duplicate billing False cost report Unbundling Billing for discharge in lieu of transfer

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OIG Compliance Program Guidance for Hospitals (cont.)

Patients’ freedom of choice Credit balances – failure to refund Incentives that violate the anti-kickback

statute (AKS)

Joint ventures Financial relationships between hospitals and

hospital-based physicians

Stark EMTALA

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OIG Supplemental Compliance Program Guidance for Hospitals

Substandard care and billing HIPAA Billing “substantially in excess” of usual charges Discounts to uninsured patients Gifts and gratuities to patients Cardiac rehab billing Compensation arrangements with physicians Physician recruitment Outpatient coding Gainsharing arrangements

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Comprehensive Error Rate Testing Program (CERT)

“Federally mandated program to monitor and

improve the accuracy of Medicare payments to providers”

Documentation requests on “randomly

selected” claims

Not really helpful, unless outliers identified

“Probe notification” 40 more claims

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Hospital Payment Monitoring Progam (HPMP)

Generates a report called “PEPPER” (Program

for Evaluating Payment Patterns Electronic Report)

Summary statistics of claims with comparison

to other hospitals in state

Very useful for pinpointing auditing areas Not a report of claims errors May not be universally available as state QIOs

not required to release it

See PEPPER example

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How Do I Choose?

Risk Assessment Address areas of greatest risk first

See Health Care Compliance Professional’s Manual,

“Risk Assessment in Small Hospitals“

See workplan example in handouts

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RURAL HEALTH CLI NI CS (RHCs)

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RHC Requirements

Location in:

Rural or non-urbanized area as defined by Census

Bureau, or

A Federal Health Professional Shortage Area

(HPSA), or

A Medically Underserved Area (MUA)

Classification

Provider-based (hospital, SNF, home health agency) Free-standing

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RHC Requirements (cont.)

Staffing

At least one mid-level (NP, PA, CNM) must be available to see

patients 50% of the time clinic is open

Waiver available

One year if unable to hire mid-level in previous 90-day period

One exception

On-site physician at least every two weeks Other requirements

On-site services Arrangements for services not provided on-site Policies and procedures

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RHC Reimbursement Advantages

Free-standing

Cost-based Capped at $70.78 per encounter Coding of visits still advised

Provider-based

Same as free-standing, plus Hospital overhead included in costs No cap on encounter if hospital < 50 beds

Critical Access Hospital-based Same as provider-based but same physician can

cover hospital ED

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Conversion to RHC Status

Hire consultant familiar with RHC conversions Time frame

Inquiry to effective billing date – about one year

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Provider-based RHC Challenges

72-hour rule

Normally involves ancillary services If provider-based, office visits must also be bundled

Mid-level provider available 50% of the time

Exception – clinics located on an island

Hospital control must be substantial QA requirements

Medical staff committees responsible for QA, UR, and

coordination and review of clinic services “to the extent practicable”

Changes from rural to “urban” MSA

May still qualify as HPSA or MUA

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MEDI CARE SECONDARY PAYER (MSP) MEDI CAL NECESSI TY

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MSP Questionnaire (Black Lung Form)

Ensures that Medicare is not the primary payer if

another payer should be

Black lung benefits Government program or research grant Department of Veteran’s Affairs Work- or accident-related Disability Kidney transplant/End Stage Renal Disease (ESRD) Former employer/current spouse or parent health plan Questions must be asked at each IP and OP admission Copy of our MSP form in handouts

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Medical Necessity – History

Medicare will only pay for tests that are “medically

necessary”

Physicians who order and those who perform services,

procedures, tests are equally responsible

Hospitals should make an effort to collect payment for

“unnecessary” tests

Primary mechanism is Advance Beneficiary Notice

(ABN)

Some hospitals/labs tried to bill physician if patient

could not be billed

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Medical Necessity History (cont.)

Medicare past:

Writing off all charges with no effort to collect =

kickback to patient

Compliance issue

Medicare present:

Not mandatory, but “best practice” If you don’t want to get paid, that’s your business! Reimbursement issue

Pendulum could swing back other way

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Medical Necessity – Our Approach

Currently using a manual system

Checking notebooks Cumbersome, time-consuming and inaccurate Losing ~ $400,000 per year in charges

Software

Checks all tests against all diagnoses Much faster, more efficient Prints “custom” ABN for patient to sign

Three options:

Agree to pay if Medicare does not and sign ABN, or; Decline to pay and not have tests performed, or; Decline to pay and have the tests done anyway

Cost of the software paid in three months Copy of our current ABN in handouts

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HOME HEALTH

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Home Health Compliance Concerns

Physician orders match actual visits and actual

visits match billing

Homebound status Home Health Beneficiary Notices Initiative

(BNI)

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Home Health Beneficiary Notices Initiative (BNI)

Effective October 1, 2005 Requires notification of a Medicare home

health patient:

Within 2 days or 2 visits That visits ordered will run out and they will no

longer be eligible for Medicare coverage

Form outlines options and patient’s right to

appeal

A copy of our form is included in the

handouts

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CARDI AC REHABI LI TATI ON

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Cardiac Rehab Issues

Physician supervision

Must be “available” during exercise

“Incident-to” billing

Physician professional services required

OIG audit

Most hospitals fell short But no repayment demanded

Requirements are very subjective

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Cardiac Rehab – Our Program

Physician supervision

Located on 2nd floor of same building

Incident-to

Progress report on each patient

Baseline Midway through program One month post graduation

Form is faxed to PCP and cardiologist Progress report form is in your handouts

Pending issuance of NCD:

Policies and procedures up to date and followed Document, document, document!

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COST REPORTS

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Cost Reports – A “Snooze Fest”?

Not to the OIG! Used to report your hospital’s actual cost of

doing business

Previous – cost-based reimbursement

If costs exceeded what Medicare paid, you received

a check

Now – DRGs and APCs

Statistics Rate of reimbursement based on complexity and

wage index

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Cost Reports – Wage Index

Calculated using total wages and total hours worked Pivotal in determining payment rates for MSA

Inaccuracy can inflate or deflate rates for other hospitals as

well as your own

CMS discovers careless reporting OIG conducted several cost report audits of wage

index data

A couple of things to look at:

Compare wage index data from year to year Talk to staff about changes resulting from Medicare

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Cost Reports - Rebates

Fiscal intermediaries (FIs) expect hospitals to

pass rebates savings on to Medicare

Must be reported as separate line item Hard to track because rebates can come from

many different areas

Work with cost report staff to ensure that

rebates are accounted for properly

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Loss of Transitional Corridor Payments (TCP)

Rural hospitals < 100 beds and sole

community hospitals received TCP effective August, 2000

Terminated 12/31/05 Compensate for revenue loss in move from

cost-based to OPPS reimbursement

Large payments made prospectively and

excess paid back on cost report

Impact for many hospitals will be minimal

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OBSERVATI ON VS. I NPATI ENT

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Common Handling of Observation (OBS) Status

Physician admits to a level of care by checking off a

box

Care Management or Utilization Review applies a set of

criteria (e.g. InterQual)

If physician order differs from criteria, care manager

asks physician to change order

Result:

Physician writes new order Physician yells at care manager Both

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Physician Perception

Most physicians have no idea what observation

means

Medicare vs. Managed Care vs. Medicaid

For patients it means:

Different care Different setting

For the physician it means different

reimbursement

NONE OF THESE CONCERNS ARE ACTUALLY

TRUE!

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Observation Facts

Any bed in the hospital can be considered an

bservation bed for Medicare

You do not need a special OBS unit Patient gets same services either way IP and OBS are statuses for claims and billing,

NOT patient care

Bottom line: Same service, same bed, same

physician reimbursement

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Transmittal 299, Change Request 3444 – The Facts

September 10, 2004

Effective 4/1/04 Implemented 10/12/04

Status changes from IP to OBS

Prior to discharge IP claim not submitted Physician concurs with UR Concurrence documented on chart

Condition Code 44 must go on claim

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Transmittal 299, Change Request 3444 – The Fallout

Lack of UR 24/7 leads to write-offs, or False claims! CMS practically guaranteed that all claims with

Condition Code 44 would be audited

AHA has recommended that CMS revise

requirements

Notify admitting physician of status change and

document

No response yet from CMS

How to deal with this?

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Our Approach

Changing OBS to IP requires only a physician’s order

CMS regulations do not prohibit change after discharge

Admit to appropriate status when clear Admit to OBS when it’s not clear (50% + ) Result:

Every chart is reviewed by care management Those meeting IP criteria were changed, even after discharge Very few Condition Code 44 Very few write-offs

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A New Approach – Physician Advisor

InterQual is only a screening tool Physician Advisor works with UR staff Patients normally classified as OBS using InterQual

nly are now placed into IP status with proper

documentation

Average daily reimbursement for one day stay:

IP = $5,100 OBS = $400

May be the ideal solution to maximize reimbursement

and minimize compliance risk

One hospital’s experience – 10:1 ROI!

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MI SCELLANEOUS TOPI CS

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Board Reporting

OIG CPGs and the Federal Sentencing Guidelines

stress that the governing body and senior management must:

Set the tone for compliance programs Be knowledgeable about the program Exercise reasonable oversight Be actively involved

Report quarterly to Finance Committee

Auditing and Monitoring Investigations Miscellaneous compliance activities

An example of my report is included in the

handouts

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Compliance Rewards and Incentives

“Recommended” by FSGO Monthly newsletter

Article Compliance quiz Riddles, brainteasers, etc.

First three people with 100% on quiz get a

free latte

Promotes interest in compliance An example of one of our newsletters is

included in your handouts

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Modifiers -25 and -59

NCCI edits are designed to block payments

when services should be bundled

Modifiers allow overriding of NCCI edits for

legitimate reasons

Can be (and are!) misused Modifier 25

Used to bill for both a procedure and a “separately

identifiable” E&M service

OIG audit – 35% did not meet criteria $538

million in Medicare overpayments

Review clinics and ER

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Modifiers -25 and -59 (cont.)

Modifier 59

Overrides certain NCCI code pairs Used for service on same day but different session,

site, etc.

OIG audit – 40% were billed incorrectly $59

million in improper Medicare payments

See decision tree in handouts See also Report on Medicare Compliance,

1/16/06

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How To Cope

Don’t try to do it all at once Don’t try to do it by yourself

Cultivate collaborative relationships

Educate your CEO and Board

Make a case for increased resources

The OIG acknowledges and recognizes:

The difference between large and small hospitals That small hospitals may have limited resources

Compliance programs can be affordable,

supportable, and relevant to available resources

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