Probe and Educate Program Implementation

The past several weeks have been filled with CMS policy and implementation changes: PROBE & EDUCATE PROGRAM CHANGES. On January 31, 2014, CMS announced that the Inpatient Hospital Prepayment “Probe & Educate” review process is extended through September 30, 2014. Medicare Administrative Contractors (MACs) will continue to review claims, and in general, recovery auditors will not conduct post-payment status reviews of inpatient hospital claims for dates of service on and after October 1, 2013 through September 30, 2014. How are the Probe & Educate Reviews proceeding? As of February 7, 2014, 29,158 records have been requested, and 6,012 have been reviewed. According to CMS denials have been issued because of missing or flawed inpatient orders, short stays where the record fails to support an expectation of 2 midnights, short stays related to procedures not on the inpatient only list and physician certifications not supported by clinical documentation. We have reviewed a number of denials and find broad language in the denial rational that the documentation does not support inpatient services, as well as statements regarding failure to meet “certification requirements.” On February 24 CMS announced that it is requesting that Medicare Administrative Contractors re-review all claim denials to ensure that the MAC is issuing denials in accordance with the evolving guidance issued by CMS. CMS is asking providers to talk with the MAC to determine whether a denial has been “re-reviewed” before filing a formal appeal. CMS will waive the 120 day timeframe for filing redetermination requests received before September 30, 2014 for Probe and Audit claim denials that occurred on or before January 30, 2014.

Critical changes in guidance include a change in guidance related to when and how the two midnight time frame is calculated for transfer cases and care received in an Off-Campus ED. Originally, CMS instructed admitting physicians to include all time spent receiving services continuously in the four walls of the hospital. New CMS guidance provides that the clock starts “for transfers when the care begins in the initial hospital.” (click here) The transferring hospital is supposed to apply the 2-midnight benchmark based on the expected length of stay of the beneficiary for hospital care within their facility. In addition CMS also provided that time spent in an off-campus provider-based ED should be considered for purposes of the 2-midnight benchmark.

CMS has also announced changes to the Recovery Audit Program (RAC). On February 12, 2014 the Office of Medicare Hearing and Appeals (OMHA) held a Medicare Appellant Forum in Washington DC. The Forum followed an announcement that OMHA would not assign new cases to Administrative Law Judges for 28 months. In FY 2012 OMHA received 1,200 appeals a week; in FY 2013 the number grew to 15,000 per week. Simply stated, OMHA does not have the capacity to meet the need. OMHA is working on solutions to address the backlog, including new streamlined processes for adjudication and alternative dispute resolution processes as well as use of statistical sampling and extrapolation. It is clear that the programs and processes require reform. Perhaps in recognition of the process issues with the RAC program, CMS announced a pause in the RAC program while new contractors are put in place. CMS also announced that it is requiring changes in the new contracts to include the following:

(To view on the CMS website click here)

  1. Recovery Auditors must wait 30 days to allow for a discussion prior to sending the claim to the MAC for adjustment.
  2. Recovery Auditors must confirm receipt of a discussion request within 3 days of receipt.
  3. Recovery Auditors will not receive any contingency fee earned on denials until the second level of appeal is exhausted and the denials are upheld.
  4. ADR limits will be diversified across claim types and business lines (inpatient, outpatient); and
  5. ADRs will be adjusted in line with provider’s denial rate with a higher denial rate corresponding to greater ADR requests. (This a bit frightening for providers who have high denial rates, but are successful on appeal. It is not clear how this change will be enforced, but it has significant implications).

Once Recovery Auditors resume auditing claims, services provided during the “pause” time frame are subject to audit. In addition, CMS recently released Change Request (“CR”) 8425 to provide that Medicare review contractors (including MACs, RACs and ZPICs (Zone Program Integrity Auditors)) have the discretion to deny “related” claims when conducting a review. The definition of a related claim is whether documentation from one claim can be used to validate the second claim; for example, if a hospital claim is denied because the stay was not medically necessary, the claim for physician services may be denied as well. Tying together claims by different providers will create new obligations and opportunities to assess adequacy of documentation across the continuum. While the change may encourage physicians to produce more complete documentation for hospital services, it also imposes on the hospital responsibility for ensuring that procedures in the hospital are supported by medical necessity documentation that may be present only in the physician office. The challenges continue.

Because of the rapidity with which changes are being implemented, it is imperative to continuously review and revise processes for compliance with the new rules. We have identified three areas of particularly great risk for hospitals: 1. Certifications continue to be problematic. Case managers are spending time ensuring that appropriate signatures on forms are obtained. However, the medical documentation to support the patient status “conclusion” seems to be increasingly poor. The care delivery team needs to make certain that patient presentation and response to treatment, order sets and services support the patient status determination. 2. There is confusion is regarding actual time in the hospital versus expected patient stay at the time the admission decision is made. In order to avoid audits some hospitals are re-billing every stay where the patient did not stay two midnights unless the patient died or was transferred. There are times when the patient improves more rapidly than expected or where the patient requests discharge and the physician does not provide clear documentation that the discharge is against medical advice, but simply facilitates a more extensive home care plan; or where the physician reached conclusions supported by the medical evidence at the time the decision was made, but new information alters the treatment plan. In short, before re-billing (which in many cases works to the detriment of both the patient and hospital) be certain that there is careful review of the medical record by a physician before making the decision that medical necessity cannot be supported; and, 3. Timing of orders continues to be problematic. Patient status determinations are often deferred until the patient has spent one night in an outpatient setting and is approaching a second midnight. Patient status should be a conscious, well-reasoned decision by a physician when a patient is placed in a bed. Outpatient status with observation services is appropriate where the patient is expected to require services in the hospital of a short duration (less than 2 midnights) or where it is unclear whether the patient is expected to require services in the hospital spanning two midnights—it is not appropriate to put the patient in a “default” setting until the case can be reviewed by case management or until a determination is made that the patient is actually going to stay two midnights. The failure to make determinations timely can have significant downside to patients and to the hospital.

Responding to Probe Audits and Internal Audits. We are actively reviewing cases sent to the MACs under the Probe & Educate audits. Reviewing these cases allows us to identify compliance issues and opportunities for improvement for clients. We can also work with hospital staff to communicate with the MAC, and where necessary to facilitate the appeal. Because the new rules on re-billing reinstate filing limitations on re-billing, we are also assisting clients and counsel with structuring internal auditing and re-billing review processes. There are two distinct processes that are in place for dealing with audits, recoupments and processes for re-billing. The first process deals with dates of service prior to October 1, 2013 and the second, with dates of service on and after October 1, 2014. We are available to assist with each process, and to augment the services you have in-house. The changes are many and the resources are few; please let us know how we can assist you, whether you need education services, concurrent review support, audit support, appeal support or compliance assistance. We will keep you informed of current developments. Please keep us informed of your current, pressing needs. As always, we want to provide assistance as you work every day to fulfill your mission.

If you have any questions please do not hesitate to call Joan Ragsdale (205-970-8804) or Ann Purdy (205-314-8859).

MedManagement, LLC
1500 Urban Center Drive
Suite 325
Birmingham, AL 35242

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