Coding & Reimbursement

Government Targets Improper Payment

By Suzanne L. Corcoran, COE

Although not specific to healthcare, the Improper Payment Elimination and Recovery Act was signed by President Obama on July 20, 2010. It expands the requirements for identifying programs and activities susceptible to improper payments with a goal of reducing and recovering them. This month, we will discuss how the Act impacts you.

Q. Is there a report identifying the value of improper Medicare and Medicaid fee for service payments?

A. Yes, there is. Every year, the Centers for Medicare and Medicaid Services (CMS) audits a sample of fee-for-service claims to determine if they were paid appropriately. The results are extrapolated to the universe of claims paid for the year. The Medicare and Medicaid improper payment rates are issued annually as part of the US Department of Health and Human Services (HHS) Agency Financial Report.

Q. Do federal agencies publish advanced warning for services likely to be scrutinized?

A. Yes; for example, the annual publication of the Office of Inspector General Work Plan, published each fall, identifies a series of items applicable to ophthalmology. These include:

• Place of Service Errors
• E/M Services During Global Surgery Periods
• E/M Services
• Compliance with assignment rules
• Modifiers GA / GZ / GY and appropriate use
• Durable Medical Equipment claims submitted with modifiers
• Error-Prone Providers
• Payments for drugs, particularly Avastin and Lucentis

Q. What is a “CERT” audit?

A. The Comprehensive Error Rate Testing program reviews claims and medical records to determine compliance with Medicare coverage, coding and billing rules. The testing issues include:

• No documentation
• Insufficient documentation
• Medical necessity
• Incorrect coding
• Other (duplicate payments, no benefit category, other billing errors)

Q. How should I respond to a CERT record request?

A. You must respond by submitting copies of the information requested. This may require securing supporting documentation from another source (e.g., hospital, ASC). Keep a copy of exactly what was sent and pay attention to the specified due date. Because one focus of the CERT program audit validates the identity of the provider, ensure that the documentation contains a valid signature that is legible or submit a signature log identifying the provider's signature and typewritten name.

Q. What is the Recovery Audit Contractor (RAC) program?

A. CMS has contracted with four independent agencies, known as RACs, to execute a program identifying improper payments, waste, fraud and abuse within the Medicare and Medicaid programs.

Q. May we appeal a RAC demand?

A. Yes. There is an appeals process available to medical practices. Although not a formal part of the appeals process, there is a discussion period that allows you to contact the RAC reviewer with additional information. You may also begin the formal appeals process of redetermination, reconsideration, and administrative law judge hearing.

Q. Has the Medicare claims appeals process changed?

A. Not recently. A series of changes occurred in January 2006 as required by the Medicare Modernization Act of 2003 §521.

These changes included revised time frames for appeals, introduction of qualified independent contractors, movement of the Administrative Law Judge function from the Social Security Administration to the Department of HHS, revised time requirements for issuance of appeals decision notices, and a process to correct minor issues without an appeal.

Q. Where can I learn more about the various levels of appeal?

A. In January 2011, the HHS and CMS published a brochure called “The Medicare Appeals Process” as part of their Medicare Learning Network on the topic. It is available on the CMS Web site.

Q. Is there a way to mitigate potential overpayments in my office?

A. Yes. Compliance programs require you to regularly audit and monitor your claims. By doing so, you find and correct issues promptly. Training physicians and staff follows which reduces potential errors.

Q. Are compliance programs mandatory?

A. Not yet, but the PPACA §6401 indicates that they will be mandatory for participation in federally funded programs. No deadline has been announced for required participation. OM

Suzanne L. Corcoran is vice president of Corcoran Consulting Group. She can be reached at (800) 399-6565 or www.corcoranccg.com.