OIG Work Plan 07: High Level Considerations for Billing and Coding Implications for Hospitals- HCCA Web Conference

OIG Work Plan 07:OIG Work Plan 07:High Level Considerations for Billing and High Level Considerations for Billing and Coding Implications for HospitalsCoding Implications for Hospitals

Presenters:Presenters:

Sharon Baur Sharon Baur Manager of Revenue AuditManager of Revenue Audit

TMC HealthcareTMC Healthcare

Christine BachrachChristine BachrachVP – ComplianceVP – Compliance

HealthSouthHealthSouth

Lou Anne Barnhouse, RHIALou Anne Barnhouse, RHIASoutheast Geography LeaderSoutheast Geography Leader

Life Science and Health Care RegulatoryLife Science and Health Care RegulatoryDeloitte & Touche LLPDeloitte & Touche LLP

Sheryl VaccaSheryl VaccaWest Coast Practice LeaderWest Coast Practice Leader

Life Science and Health Care Regulatory Life Science and Health Care Regulatory Deloitte & Touche LLPDeloitte & Touche LLP

2January 07

Background InformationBackground Information• OIG Work Plan-how is it developed?

– OIG has identified high risk priority compliance areas that they perceive are Federal health program vulnerabilities

– Work Plan is a guide to assist organizations in identifying and focusing their compliance efforts

– When reading the work plan, there are references made to each area, ie: (OAS; W-00-07-35300; various reviews; expect issue date: FY 2007; new start)

• [email protected] – list serve • “OAS” (Office of Audit Services)• “OEI” (Office of Evaluation and Inspections)• “OI” (Office of Investigations)• “OCIG” (Office of Counsel to the Inspector General)

3January 07

Background InformationBackground Information• OIG Work Plan Development (cont)

– Work Plan represents repeat areas of previous years with some new areas to prioritize:

• Consider the activity (ie: communications, audits, investigations, CIA’s) which might be occurring in industry around a specific area. For instance, Claims Reviews have been consistently appearing in Corporate Integrity Agreements

• Integrate your focus into your overall business practices

• Billing and Coding areas and focus for presentation today

GENERAL HOSPITAL GENERAL HOSPITAL BILLING AND CODING AREASBILLING AND CODING AREAS

5January 07

Hospital Outpatient Services: Hospital Outpatient Services: UnbundlingUnbundling

Understand the difference between “packaging” under OPPS and “unbundling”

• “Unbundling” results in additional reimbursement for a procedure because the additional procedure charged, although considered a component of the main procedure, carries it’s own Ambulatory Payment Classification (APC)

• “Packaging” was designed to incorporate items and services inherent to a procedure into the reimbursement for that procedure, but the services provided should appear on the claim as separate charges

6January 07

Hospital Outpatient Services: Hospital Outpatient Services: UnbundlingUnbundling

The Final Rule for the Outpatient Prospective Payment System was published in the Federal Register/Vol. 71, No. 226; Friday, November 24, 2006/Rules and Regulations

• http://www.cms.hhs.gov/quarterlyproviderupdates/downloads/cms1506fc.pdf

• Under OPPS packaged services are identified by the Status Indicator “N” and are listed in Addendum B of the Final Rule

• The final rule speaks to “unbundling” and “packaging” of services many times and includes a table of all revenue codes that are considered “packaged” under OPPS

7January 07

Hospital Outpatient Services: Hospital Outpatient Services: UnbundlingUnbundling

The mechanism for obtaining reimbursement for an “unbundled service is the -59 modifier

•The -59 modifier, when added to a CPT or HCPCS code representing a procedure, means a “separate and distinct” service was provided in addition to the main procedure(s)

•Attaching this modifier to the CPT code for the procedure allows the claim to pass through billing edits that are designed to prevent procedure unbundling called National Correct Coding Initiative (NCCI)

•Often the types of services that are “unbundled” are chargemaster driven as clinical departments enter charges for services provided

8January 07

Practical Application: UnbundlingPractical Application: Unbundling

The department actually rendering the service is in the best position to determine if the service was “separate and distinct” if they understand the rules Encourage the clinical departments to develop and have available, reference materials in a format that is easily updatable

9January 07

Practical Application: UnbundlingPractical Application: Unbundling

Confirm your business office has a policy that prevents the -59 modifier from being assigned during the billing process because errors may occur at that stage, as the claim passes

through the claim scrubbing process

Audit claims with the -59 modifier by verifying through medical record documentation that

the service was a distinct procedural service and not a component of another procedure

10January 07

Practical Application: UnbundlingPractical Application: Unbundling

Validate your organization has communicated with clinical departments about it’s charging

philosophy in writing• A charge is a service or supply/device that is ordered by a physician (or included in dictation) AND is documented in the permanent medical record

• Verify there is a written record, at the department level, to identify what is included in the procedure charge for each service they provide

11January 07

Observation Services - DialysisObservation Services - Dialysis The OIG continues to focus on Observation

Services in general because overpayments have continued to be identified at many hospitals

• Issues with Observation compliance are related to the complexity of delivering the service

• Physician orders may indicate “observation status”, which is sometimes not caught by admission personnel when the bed is requested, and the patient’s status is mistakenly carried through to billing as an inpatient

12January 07

Observation Services - DialysisObservation Services - Dialysis

• The OIG believes some hospitals are admitting patients for dialysis treatment and that they stayed 24-48 hours

• Medical reviewers determined that the stays were intended to be observation status based on physician order

• CMS requires the physician order to clearly state the level of care the patient requires– “Admission to inpatient status”– “Admission to observation status”

13January 07

Observation Services - DialysisObservation Services - DialysisThe OIG considers this a risk because if a claim

was erroneously submitted as an inpatient and reimbursed under the Inpatient Payment System as a Diagnosis Related Group (DRG) the potential for significant overpayment exists

• DRG 316 Renal Failure is reimbursed at approximately $6,681 per stay (excluding additions for disproportionate share or IME)

• Observation is currently reimbursed by Medicare ONLY for asthma, chest pain and congestive heart failure as an admitting or principal diagnosis, therefore the observation for other diagnoses would not be paid

• Outpatient dialysis provided urgently to an ESRD patient by a hospital that does not have a certified dialysis facility, is approximately $330

14January 07

Practical Application: Practical Application: ObservationObservation Review your facility’s admission process to

ensure physician orders for patient status are considered a regular order and processed accordingly

Talk with case management/utilization management to determine how often Observation and One Day Stays are reviewed and whether that information is trended

15January 07

Practical Application: Practical Application: ObservationObservation Ask that the organization to assist by developing

tools and controls to help clinicians and others to identify observation status patients• Set up flags as reminders in your clinical documentation

and billing system to ensure physicians, nurses, ancillary services, and support departments - such as case management, health information management, the business office and others know the patient’s status

• Ask if your organization has provided education for nursing to identify services which would not normally be reported for an inpatient and may be reimbursable under OPPS (i.e. infusions, injections)

16January 07

Practical Application: Practical Application: ObservationObservation Ask your business office about denials or

reductions in reimbursement related to observation services and one day stays with a dialysis or renal disease (ESRD or Chronic Renal Failure) as a primary diagnosis to assist in identifying whether this issue is a risk for your organization

Review the PEPPER report (Program for Evaluating Payment Patterns Electronic Report) to see how your facility compares to state and national data related to one day stays

Audit claims

17January 07

Medicare Hospital: Medical Medicare Hospital: Medical Appropriateness and Coding of DRG Appropriateness and Coding of DRG

ServicesServices

• DRG Coding also listed on last year’s work plan.

• OIG will analyze inpatient hospital claims to identify providers who exhibit high or unusual patterns for selected DRGs.

• OIG will determine the medical necessity, the appropriate level of coding and reimbursement for a sample of service billed by these providers.

18January 07

Practical Application: Medical Practical Application: Medical Appropriateness and Coding of DRG Appropriateness and Coding of DRG

ServicesServices

• Review inpatient hospital top 50 DRG cases ranked by volume and dollar amount

• Review cases for principal Dx, principal procedure, overcoding, undercoding and inconsistent documentation

• Review coding policies and procedures to determine if they are current

• Determine that the coding department is using the current encoder

19January 07

Other Medicare Services: Other Medicare Services: Medicare Duplicate Claims Medicare Duplicate Claims

• OIG will determine whether the Medicare program has made payments for duplicate claims.

• OIG will examine the current edit process to determine whether the process is effective in identifying potential duplicate claims and preventing overpayments.

20January 07

Practical Application: Practical Application: Medicare Duplicate ClaimsMedicare Duplicate Claims

• Review patient accounting policies and procedures for claims processing

• Determine if it is the policy of patient accounting to re-bill accounts with no response from third party payors

• Determine if patient accounting uses a bolt-on software system to scrub claims then determine the internal controls.

• Determine if Medicare claims processing is completed differently from other payors

21January 07

Inappropriate Payments for Inappropriate Payments for Interpretation of Diagnostic X-Rays in Interpretation of Diagnostic X-Rays in

Hospital Emergency DepartmentHospital Emergency Department

• OIG will determine the extent of inappropriate payments for the interpretation of diagnostic x-rays performed in emergency departments.

• In 2004, more than 2.5 million diagnostic x-rays were performed in Medicare certified hospitals with emergency departments.

• OIG will determine whether services were medically necessary and if the tests were interpreted contemporaneously with the patient’s treatment.

22January 07

Practical Application: Inappropriate Practical Application: Inappropriate Payments for Interpretation of Diagnostic X-Payments for Interpretation of Diagnostic X-

rays in Hospital Emergency Departmentsrays in Hospital Emergency Departments

• Determine if the hospital emergency department follows CMS OPPS guidelines for coding and billing

• Determine how physician interpretations are compensated by the hospital

• Determine if the interpretation charge is controlled by hospital charge capture or another method

• Review emergency department claims to determine the number of interpretations billed on average.

REHAB HOSPITAL REHAB HOSPITAL BILLING AND CODING AREASBILLING AND CODING AREAS

24January 07

IRF ClassificationIRF Classification

• OIG will audit whether admissions met regulatory requirements and billed in compliance with Medicare regulations

• Compliance threshold is 60% for cost reporting periods ending 7/1/06 – 6/30/07

25January 07

Practical Application: IRF ClassificationPractical Application: IRF Classification

• Monitor Cases (and calculated compliance percentages) based on categories– Qualifying

• Definite– IGC (Impairment Group Code)– Etiologic Diagnosis

• Possible– Cormorbid Condition– Arthritis Condition

– Total Non-Qualifying

• If facility’s Medicare mix is >50% then Medicare only, if Medicare < 50% then FI may review all patients to determine if compliance threshold

26January 07

Practical Application: IRF ClassificationPractical Application: IRF Classification

• Determine Process for Reviewing Possible Qualifying Cases (to determine if facility believes would qualify)– May want to document where the

medical record supports (i.e. physician progress notes dated xx, therapy treatment notes dated yy, etc.

27January 07

Practical Application: IRF ClassificationPractical Application: IRF Classification

• If FI requests records for review– Consider sending entire record (not just

the part requested by the FI)– Consider annotating (by using tabs) to

point to the part of the record the facility believes supports the qualification

28January 07

IRF Compliance with Medicare IRF Compliance with Medicare RegulationsRegulations

• OIG will review payments to IRF to determine extent to which they were made in accordance with Medicare requirements including – discharges paid as transfers and – outlier claims

29January 07

IRF Compliance with Medicare IRF Compliance with Medicare Regulations – Discharge StatusRegulations – Discharge Status

• OIG report "Nationwide Review of Inpatient Rehabilitation Facilities' Compliance With Medicare's Transfer Regulation," (A-04-04-00008) identified $11.9 Million in Overpayments

• Done based on information from the Common Working File

30January 07

Practical Application: IRF Medicare Practical Application: IRF Medicare Regulations – Discharge StatusRegulations – Discharge Status

• Review process for determining discharge status– Consider whether any post discharge

confirmation to be completed– If facility does determine patient

admitted to another facility confirm that claim was paid as transfer not discharge• Per the OIG report, FIs were to implement

edits to CWF to prevent payment, but actual status of edit is unknown

31January 07

IRF Compliance with Medicare IRF Compliance with Medicare Regulations – Outlier ClaimsRegulations – Outlier Claims• OIG report "Medical Review of Touro

Rehabilitation Center’s Services for Medicare Outlier Claims for 2002," (A-04-04-00010) found for 69 of the 100 outlier sample claims, the services were not medically necessary (44 claims), were not reasonable (21 claims), or were not adequately documented (4 claims).– OIG recommended repayment of $3.3 million– Touro disagreed with the results

32January 07

Practical Application: IRF Medicare Practical Application: IRF Medicare Regulations – Outlier ClaimsRegulations – Outlier Claims

• Determine what is current outlier payments compared to total payments (at Touro 37% or total IRF payments was Outliers in 2002)

• Review high outlier payment cases for accuracy of items on the detail bill

33January 07

IRF Late AssessmentsIRF Late Assessments

• OIG will review the accuracy of Medicare payments when assessments are entered late. They will determine how FIs make the adjustments– Payment penalty is 25% reduction in

payment

34January 07

Practical Application: IRF Late Practical Application: IRF Late AssessmentsAssessments

• Review process for PAI submission– Particularly for atypical submissions

(unexpected transfers, documentation missing, etc.)

– How is process monitored – noted in computer billing system, manual log, etc.

• Review dates for submission of PAIs compared to discharge dates. If no monitoring system is present, dates of actual submission may be difficult to locate

35January 07

Questions?Questions?

• Speaker Contact Information:Sharon: 520-324-1986

[email protected] Christine: 205-970-5853,

[email protected] Anne: 704-887-1583 [email protected] Vacca: 714 436-7710 [email protected]