Rural Hospital Compliance What Happened to the Simple Life? Kirk Ruddell, CHC HCCA Audio Seminar February 23, 2006 1 Island Hospital Anacortes, WA � 44-bed hospital and 2 clinics � Home Health agency � 100 community providers � 475 employees (330 FTEs) � Pediatrics, ophthalmology, optometry, oncology, OB/GYN, cardiology, orthopedics, dermatology, respiratory medicine, psychiatry, urology, IP/OP surgery, sleep medicine, sports medicine 2 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 3 1
AUDI TI NG AND MONI TORI NG WORKPLAN 4 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 5 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 6 2
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 7 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 8 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 9 3
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 10 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 11 RURAL HEALTH CLI NI CS (RHCs) 12 4
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 13 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 14 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 15 5
Conversion to RHC Status � Hire consultant familiar with RHC conversions � Time frame � Inquiry to effective billing date – about one year 16 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 17 MEDI CARE SECONDARY PAYER (MSP) MEDI CAL NECESSI TY 18 6
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 19 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 20 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 21 7
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 22 HOME HEALTH 23 Home Health Compliance Concerns � Physician orders match actual visits and actual visits match billing � Homebound status � Home Health Beneficiary Notices Initiative (BNI) 24 8
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 25 CARDI AC REHABI LI TATI ON 26 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 27 9
Cardiac Rehab – Our Program � Physician supervision � Located on 2 nd 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! 28 COST REPORTS 29 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 30 10
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 adjustments 31 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 32 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 33 11
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