Auditor Update: Part III

professional doctor person working at hospital, medical health care and clinic medicine concept

Federal healthcare audits are back with a vengeance following a brief COVID-related pause.

In August 2020, the Centers for Medicare & Medicaid Services (CMS) was required to resume Comprehensive Error Rate Testing (CERT) program activities that were temporarily suspended in response to the COVID-19 public health emergency (PHE). Based upon the 2020 fiscal year (FY) report (2020 CERT Report), it’s no surprise that CMS and others continue to undertake aggressive audit activity against all types of Medicare providers and suppliers.

Despite the FY 2020 report evidencing a continuation in the decline in the overall improper payment rate (from 7.25 percent in 2019 to 6.27 percent in 2020), there remain improper payments of over $25 billion. While the average improper payment rate for Part A and Part B is only around 5 percent, this rate represents overpayments of about $22 billion. The Part A inpatient hospital improper payment rate was calculated at 3 percent, yet represents $3.6 billion (adjusted for A/B rebilling). Of that total, 2.7 percent represent overpayments and .3 percent are associated with underpayments. Chest pain (about $15,000 per claim) continues to represent the highest improper payment rate of 26.9 percent, and a dollar value of approximately $79 million, with 100 percent of the errors being associated with medical necessity. The No. 2 service type with a high improper payment rate is percutaneous intracardiac procedures (about $21,500 per claim), with a rate of 22.1 percent but almost $127 million in improper payment value, wherein 100 percent of the errors are associated with insufficient documentation. Notably, the improper payment rate (unadjusted for A/B rebilling) for 0-1-day stays was 19.9 percent, representing $1.9 billion, supporting the position that inpatient stays of less than two days are still problematic for CMS. (Improper Payment Data).

The real problem for providers and suppliers is not, in and of itself, the continued high rates of improper payment; rather, it’s the billions of dollars associated with those rates. When one digs a little deeper to get at the heart of improper payments, the vast majority are due to missing and/or insufficient documentation to support a claim. This phenomenon continues to plague providers across Part A, Part B, and durable medical equipment (DME), with some improper payment rates supported by documentation issues exceeding 70 percent of the claims reviewed. Documentation issues accounted for more than $15 billion of the $25-plus billion in improper payments (Fiscal Year 2020 Agency Financial Report). It is important to recognize, however, that just because a claim is determined to be improper does not mean that the services were not medically necessary; rather, the majority of the time, the documentation was insufficient to support coverage or was0 not provided to the auditor.

Targeted Probe-and-Educate

On Aug. 12, CMS announced the restart of the Targeted Probe-and-Educate (TPE) program. According to CMS, this program is designed to reduce denials and educate providers and suppliers with respect to the submission of correct claims. The Medicare Administrative Contractors (A/B MACs and DME MACs) will be performing the review and providing the education. Some common claim errors that CMS has indicated they might be looking for include missing signatures, missing or incomplete certifications, documentation not supporting medical necessity, and missing documentation.

CMS has indicated that providers and suppliers may be subject to TPE if they have high error rates or unusual billing patterns. While it is interesting that CMS has indicated that most providers and suppliers will never need TPE, CMS has indicated that your organization may be subject to TPE on the basis that there is a high national error rate on a particular topic (even though your organization may not have a high error rate on that topic). Unfortunately, you could be doing everything correctly, but because other providers and suppliers are not, you may be subject to a TPE audit. The MACs will allow you to have up to three education sessions to help you become compliant, but after that, the MAC is required to refer you to CMS for further action – which can include 100-percent pre-payment review, referral to a RAC, or anything else that CMS deems appropriate.

Proper Documentation to Support Claims

While CMS has indicated that the majority of providers will not be chosen for TPE, that seems at odds with the CERT findings that over 60 percent of improper payment errors are due to documentation-related issues; this concern is widespread among many providers. CMS identifies four common claim errors, and all of them relate to documentation (Targeted Probe-and-Educate | CMS). CMS has indicated that these errors are simple and easily corrected, yet providers continue to find themselves in trouble for documentation issues. One of the best ways to make sure you are properly documenting the medical record and maintaining claim integrity is to conduct regular internal audits of your processes and operations and adjust, as needed. This way, when the MAC sends you a request for documents for a TPE audit, you can be confident that your TPE experience should end after round 1.

Print Friendly, PDF & Email
Facebook
Twitter
LinkedIn

Steven Greenspan, JD, LLM

Steven Greenspan, JD, LLM, serves as the Chief Strategy Officer for Engage Health Solutions. In this role, Steven leverages his in-depth knowledge of healthcare regulatory compliance and the resulting challenges faced by providers and payors alike, to lead the enterprise strategic growth initiatives at Engage. Engage utilizes their unique RAC and national payor experience to partner with health systems to improve operational and financial performance, by addressing the vulnerabilities that remain despite costly initiatives which result in continued unnecessary audit activity and inappropriate denials. The Engage experience drives a program that not only corrects existing issues but goes beyond to prevent the problems that plague appropriate and accurate reimbursements.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Frank Cohen shows you how to leverage the Comprehensive Error Rate Testing Program (CERT) to create your own internal coding and billing risk assessment plan, including granular identification of risk areas and prioritizing audit tasks and functions resulting in decreased claim submission errors, reduced risk of audit-related damages, and a smoother, more efficient reimbursement process from Medicare.

April 9, 2024
2024 Observation Services Billing: How to Get It Right

2024 Observation Services Billing: How to Get It Right

Dr. Ronald Hirsch presents an essential “A to Z” review of Observation, including proper use for Medicare, Medicare Advantage, and commercial payers. He addresses the correct use of Observation in medical patients and surgical patients, and how to deal with the billing of unnecessary Observation services, professional fee billing, and more.

March 21, 2024
Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Explore the top-10 federal audit targets for 2024 in our webcast, “Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets,” featuring Certified Compliance Officer Michael G. Calahan, PA, MBA. Gain insights and best practices to proactively address risks, enhance compliance, and ensure financial well-being for your healthcare facility or practice. Join us for a comprehensive guide to successfully navigating the federal audit landscape.

February 22, 2024
Mastering Healthcare Refunds: Navigating Compliance with Confidence

Mastering Healthcare Refunds: Navigating Compliance with Confidence

Join healthcare attorney David Glaser, as he debunks refund myths, clarifies compliance essentials, and empowers healthcare professionals to safeguard facility finances. Uncover the secrets behind when to refund and why it matters. Don’t miss this crucial insight into strategic refund management.

February 29, 2024
2024 ICD-10-CM/PCS Coding Clinic Update Webcast Series

2024 ICD-10-CM/PCS Coding Clinic Update Webcast Series

HIM coding expert, Kay Piper, RHIA, CDIP, CCS, reviews the guidance and updates coders and CDIs on important information in each of the AHA’s 2024 ICD-10-CM/PCS Quarterly Coding Clinics in easy-to-access on-demand webcasts, available shortly after each official publication.

April 15, 2024

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

SPRING INTO SAVINGS! Get 21% OFF during our exclusive two-day sale starting 3/21/2024. Use SPRING24 at checkout to claim this offer. Click here to learn more →