Archive for the ‘RACs’ Category

Assessing the Need for Recertification

Thursday, February 20th, 2014

CMS is Looking at the Frequency and Necessity for Recertifications: Assist Clinicians to Properly Assess the Need for Recetification Pre-OASIS

A new RAC audit group created just for home health, hospice, and DME means paying very close attention to documentation accuracy to mitigate risk. Recertifications should not be routine for specific diagnoses. Your agency should be tracking late episodes of care. The longer a patient is on service and receiving care by your agency, the more likely your agency will be at risk for audit selection.

OIG analysis of care, continues to show that the majority of home health providers have less than “one late episode per beneficiary”. Therefore, additional late episodes can mean additional scrutiny.

Discharge Planning

Clinicians are aware that discharge planning should begin upon admission. Care progress should be reconciled to the discharge plan. Supervisors should have weekly progress reports from clinicians and verify any new physician orders, change of condition, and medication changes. Auditors will look for contacts with physicians and changes for care intervention.

On Each Visit

On each visit, clinicians should review what the patient has accomplished since the prior visit. They should review the plan, discuss the accomplishment or progress since the prior visit, discuss what will be done at this visit, list any changes, identify what the patient should complete before the next visit, and summarize the visit before leaving. Summarizing a visit reinforces value.

Ten days prior to recertification

Agencies may not want to leave the recertification of another episode to one clinician alone without a conference with a clinical supervisor. Consider having the clinician answer the following questions, attest and sign their name, and submit it to their supervisor.

  1. Is the patient still homebound? Define how you have made that determination.
  2. Does the patient live alone”
  3. Does the patient have a caregiver? If yes, is this paid care? If yes, does the patient believe (s)he can continue to afford this care? Is there a family member involved in care?
  4. Has there been a change in the patient’s condition in past 21 days? If yes, please describe.
  5. Has there been a change in medications in past 21 days? If yes, please describe.
  6. Are other disciplines involved? If yes, please identify. Are they proposing continued involvement into another episode?
  7. Identify measureable goal achievement since SOC. Which goals were met? Which remain unmet?
  8. What goals will flow to the new episode? Are these achievable within the next episode?
  9. Has the patient actively participated in his/her plan of care?

Have the clinician attest that based upon their clinical judgment, this patient qualifies for another episode of care.


Though this process may appear to be yet another step in an already hectic home health clinical schedule, this evaluation must be completed prior to determining recertification. Submitting answers to the questions with an attestation, makes it more formal and perhaps, more defendable, if an audit should occur.

The New RAC Can Mean More Use of the Five Levels of Appeal

Monday, January 27th, 2014

Recently, it was announced that ALJ, third level of appeals have a backlog in excess of 335,000 determinations for the 65 Administrative Law Judges or 2.5 years before they can view another case. With the advent of the new RAC Audit group, home health and hospice agencies would be well served to understand all levels of appeal. A memo from Chief Administrative Law Judge, Nancy Griswald stated the above figures as well as the fact that hearing rate requests are at an all-time high of 15,000 per week.

It appears that since the MACs, Z-PICs, and RACs have expanded their audits, the appeals have grown rapidly. Though the original demonstration RAC Audit program showed a reticent provider group only appealing 14% of the determinations, this is not the tone of the industry presently.

Medicare offers a five-level appeal process. However, with the RAC process, RACs must also offer an opportunity for the agency provider to discuss the improper payment determination. This usually occurs soon after the initial RAC letter is received. Then, if the agency determines an appeal is in order,  the formal appeals process begins.

Level 1: Redetermination

Redetermination is the examination of a claim by a MAC using different personnel than those who made the original determination. The appeal must be filed within 120 days from the date of receipt of the initial claim determination. To make the request, the agency must download form CMS-20027 at There is no minimum monetary threshold and expect a decision within 60 days.

Level 2: Reconsideration

Reconsideration can be filed if there is disagreement with the findings of the Redetermination. In requesting a reconsideration, which will be completed by a Qualified Independent Contractor (QIC), the agency should follow all instruction provided on the Redetermination receipt. Clearly explain why there is disagreement and include any support documentation for review. If evidence is not included at this appeal stage, it may be excluded from all further appeals. There is no minimum monetary threshold and a decision is usually completed within 60 days of the Reconsideration request. If the QIC cannot render a decision within that timeframe, a notice will be sent stating the right to elevate the case to an ALJ.

Level 3: Administrative Law Judge Appeal

Appealing to the ALJ, requires completion of CMS form 20034 and a request for a hearing. The agency needs to be certain the record is completed with the pages numbered, if submitting to the ALJ. If an attorney is to represent the agency provider, then form 1096 must also be completed and sent with the hearing request.

The ALJ hearing may be requested within 60 days of receipt of the Reconsideration. Be certain to follow all directions  closely for this appeal, including notifying all parties involved of the specific reconsideration and note it on the request for the ALJ.

These hearings may be held by telephone, video conferencing, or face to face. That decision is at the discretion of the ALJ. CMS can elect to attend the hearing. A decision is usually rendered within 90 days.

Level 4: Appeals Council Review

The request for this level of appeal must be made within 60 days of receipt of the ALJ decision and MUST CLEARLY list the issues contested.  The ALJ decision letter will identify the exact procedures to follow when filing the request for the Appeals Council. A decision from this body is usually rendered within 90 days.

Level 5: Judicial Review in the US

This level would require a claim in excess of $1260.00. A request for this level of appeal must  occur within 60 days of receipt of the decision from the Appeals Council.


A discussion period does not delay the Appeals process.

An agency has:

  • 120 days to file a Redetermination request. 30 days to avoid recoupment 42CFR 405.940-58
  • 180 days to file for Reconsideration by a QIC. 60 days to avoid recoupment.

42 CFR 405.960-78

  • 60 days to file a request for an ALJ Hearing: CMS will recoup the payment during this stage. 42 CFR 405.1000-64
  • 60 days to file an appeal to the Medicare Appeals Council 42 CFR 405.1100-40
  • 60 days to appeal to the Federal District Court 42 CFR 405. 1136
  • Always adhere to direction in the decision levels as to changes in timeframes or specific instructions.

The New National RAC: Coming to a Home Health or Hospice in Your Town?

Monday, January 20th, 2014

Four regional Recovery Audit Contractors (RACs) presently conduct audits for CMS for all levels of healthcare: hospitals, physician groups, home health, and others billing Medicare and Medicaid. In the summer of 2013, CMS announced the appointment of a new RAC audit group focused exclusively on home health, hospice, and DMEPOS (durable medical equipment, prosthetics, orthotics, and supplies). The new RAC is to be operational this year, 2014. RACs, in general, have an interesting history.

Using the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and the Tax Relief and Health Care Act of 2006 (TRHCA) to fight fraud and abuse, CMS was granted the authority to make recovery audit contractors a permanent nationwide program, but only after demonstration of effectiveness.

MME directed the DHHS to demonstrate the use of RACs in identifying underpayments and overpayments, as well as in recoupment of overpayments under the Medicare program. A demonstration program was initiated.

From the inception of the RAC demonstration project through March 27, 2008, providers appealed only 14% of the RAC determinations. Of those appealed, only 4.6 % were overturned. Over $1.3 Billion was recovered.  As a result of the RAC findings, Congress required the DHHS to make the RAC program permanent and nationwide by January 1, 2010.


Four RAC Regions were chosen and four RAC audit groups appointed.

 Region A was assigned to Diversified Collection Services headquartered in Livermore, CA with the RAC department address in San Angelo, TX. Their contingency fee was placed at 12.45% of dollars recovered.

  • States covered include: Connecticut, Delaware, Maine, Maryland, Massachusetts, New York, New Jersey, Pennsylvania, and Rhode Island

Region B was assigned to CGI Technologies and Solutions of Fairfax, VA. Their contingency fee was placed at 12.50%.

  • States approved in Region B re Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, and Wisconsin.

Region C was assigned to Connoly Healthcare headquartered in Atlanta, GA.
Their negotiated contingency recovery fee is 9%.

  • States in this region include Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

Region D was assigned to Healthdatainsights headquartered in Las Vegas, NV with a contingency fee of 9.49%.

  • States assigned to this region included Alaska, Arizona, California, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.


The new RAC audit group will cover all home health, hospice, and DMEPOS throughout the US. It is anticipated that there will be similar regulations and processes.

Presently, there are two types of RAC reviews termed automatic and complex. The automatic audit requires no person to review the records because a computer generated algorithm drives the audit with a focus on the easier incorrect claims, where an obvious overpayment exists; e.g. medically unlikely.

The complex reviews are more time consuming and require the RAC team of clinicians and coding specialists to actually review the records of the audited claims. A second request of the agency may be made. The focus of these RAC audits has involved medical necessity, therapy utilization, and coding errors. RACs forward a detailed review results letter following all complex reviews. Following that letter, the RAC will notify the MAC who can issue an electronic Remittance advice  (RA) to the provider and the appeal timeline begins. Overpayments are recouped by offset unless the provider has submitted a check or valid appeal by day 30.

Good Coding: Helps Your Agency Keep Its Revenue Bad Coding: Can Mean You Lose Your Revenue

Friday, May 17th, 2013

PPS has always meant that “close enough” isn’t good enough. A digit off can be costly. Coding to the highest level of specificity can be complex and confusing. CMS has published Coding Guidelines and the Coding Clinic remains the source document for any coding questions.   Per CMS and as per the Federal Register, “The  Coding Clinic by AHA is the US Official Clearinghouse for Coding.”

Agencies have hired coders, some are credentialed, some not.  All usually do not have audits of their coding compliance.  As a result, when asked, “Are you leaving dollars on the table?” most administrators pause.  Most acknowledge they believe their coding may be costing them at least $200-$400 per episode.  Why continue to lose dollars?

Agencies have usually decided to complete their coding themselves, but that is changing.  In the past, agencies have hired coders, certified or otherwise. Some coders are routinely reviewed and audited, most are not.  Most agencies rely on their coders. They put a portion of their financial welfare in the hands of unreviewed coders.  Lessen the worry regarding dollar loss and the quality of your agency coding by instilling specific processes. At the very least, contract for routine third party coding and billing audits.

If you were to use a third party coding firm, be certain they have external audits performed on their coding.  Quality third party coding firms should have quarterly internal audits and annual external audits completed in their firms. Who has audited them? What are the firm’s names?  Yes, the audits are an increase cost, but ar $e you losing 200-$400 per episode of care delivered? Are you flagging your firm for a RAC, MAC, or Z-PIC audit?

You should take a close look at the coding completed in your agency. Look at the use of case-mix diagnoses and at comorbidities. Down coding can be as costly as upcoding, just in different regulatory ways, if it brings on an audit. Have your ADRs increased? Do you know the number of codes used routinely in your firm? Do you know the top 10 diagnoses assigned?  How many of the present 16,000 codes are your coders using? How much will preparing for ICD-10 cost you?  Is a plan in place now? How strong is your coder in anatomy, physiology, diagnostics, and pharmacology? How many of the 68,000 codes will they use?

Experts know that much training is required for ICD-10. If you do not properly prepare, how much more will it cost you? Perhaps it really is time to consider a third party coding specialty firm.

Consider a firm that has experienced, highly credentialed coding specialists. Ask if they employ a full time coding internal auditor. Ask if they have weekly training sessions paid for by the coding firm to keep their coding specialists current. Ask if they have a full time Compliance Officer, a compliance committee, and have current program policies and procedures. Ask if the firms’ employees are required to annually attend corporate compliance and HIPAA inservices. Ask if the coding specialists are reviewed quarterly. Ask about internal and external audits of the coding teams’ work. Ask about their % of documented accuracy as stated by an independent auditor.  If the coding agency is under 97% accuracy documented by independent external audit, look elsewhere. All of the above items are costly to the coding firm but a top coding firm should be investing in quality.

And lastly, identify the coding firm’s indepth ICD-10 curriculum for their coding specialists. Also, identify their overall plan for ICD-10 implementation including their plan for parallel coding of ICD-9 and ICD-10.  Do not continue to lose dollars. Make a move now.

For more information, call 714.524.2500

ICD-9-CM Official Guidelines for Coding and Reporting

Effective October 1, 2008

The Centers for Medicare and Medicaid Services (CMS) and the National Center for Health Statistics (NCHS), two departments within the U.S.

Federal Government’s Department of Health and Human Services (DHHS) provide the following guidelines for coding and reporting using the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM). These guidelines should be used as a companion document to the official version of the ICD-9-CM as published on CD-ROM by the U.S. Government Printing Office (GPO).

These guidelines have been approved by the four organizations that make up the Cooperating Parties for the ICD-9-CM: the American Hospital Association (AHA), the American Health Information Management Association (AHIMA), CMS, and NCHS. These guidelines are includedon the official government version of the ICD-9-CM, and also appear in “Coding Clinic for ICD-9-CM” published by the AHA.

These guidelines are a set of rules that have been developed to accompany and complement the official conventions and instructions provided within the ICD-9-CM itself.

The following are the CMS ICD-9 Site:

  1. CMS ICD-9 Site

  1. Attachment D

  1. Coding Clinic

Operational coding advice and guidelines for ICD-9-CM are published quarterly by the American Hospital Association (AHA) in Coding Clinic for ICD-9-CM (Coding Clinic). The Editorial Advisory Board (EAB) for Coding Clinic consists of representatives of AHA, the American Health Information Management Association (AHIMA), NCHS, CMS, the American Medical Association (AMA), the American College of Surgeons, and other hospital coders and physicians. Four of those parties (AHA, AHIMA, NCHS, and CMS) are identified as Cooperating Parties for Coding Clinic. The Cooperating Parties must agree on the coding guidance before it can be published in the Coding Clinic. Anyone may send issues to AHA for EAB discussion.

Proper Coding, Homebound Status, and Awareness of Common Edits: Paid But Will You Retain Your Revenue? An Update.

Tuesday, January 22nd, 2013

No matter which MAC or RAC reviews your agency, high risk probes are on the rise. The intermediaries are mandated by CMS to monitor areas of greater risk. The RACs are paid by contingency on aberrant findings and their algorithms are making findings easier. When MACs or RACs find trends of concern they will launch probes. Some of these high risk areas include revenue in relation to diagnoses in relation to visits, certain stand alone diagnoses or diagnoses in combination with certain numbers of episodes or number of visits.

In late 2012, RAC auditors began sending out chart requests expansively. They were and continue to target specific issues such as medical necessity, seeking to have those specific issues approved by CMS. Once approved, other RACs can investigate those same issues in their areas. One issue all RACs are looking at involves specific numbers of therapy in specific episodes with specific diagnoses.

NAHC’s Mary St Pierre, VP, Regulatory Compliance, identified in the fall of 2012, that Comprehensive Error Rate testing (CERT) contractor inquiries are also on the rise. The CERTs are the QA component of MAC billing. In addition, they also oversee Z-PIC claim payments and the denials issued. They are looking at Face to Face documentation of medical necessity and homebound status documentation.

The OIG remains focused on both home health and hospice citing “Six Measures of Questionable Billing” especially in home health.

The OIG has announced that, in 2009 and again in 2010, Medicare-Medicaid paid over $54 billion in improper payments. There have been 2500 persons/entities indicted from Federal health care programs. There have been 625 criminal actions with over 400 civil actions including actions involving the False Claims Act. There have been another 2400 investigations that yielded expected results. The GAO has reported that improper payments due to fraud and abuse are escalating.

Dollars and processes have been approved to target areas of high risk. Monitoring that the principal diagnosis code accurately portrays the patient’s focus of care is a MAC missive. Probe edits are one such process expected by CMS from the MACs to achieve that goal. Monitoring for homebound status is yet another area of review.

The Edits

Specificity requirements to support codes have always been expected but are being actively scrutinized now. Expect specificity and complexity to rise even higher with ICD-10.

Coding Specialists must also keep clients or their agency aware of edits and trend areas with insufficient documentation to substantiate proposed diagnosis.

A second recertification of Lymphoma will trigger a long used edit.

Recertifications with a primary diagnosis of Diabetes and a secondary diagnosis of CHF will be monitored if the edit continues after a MAC quarterly review. Because the FIs have found merit, this edit has continued for years.

Other Edits include:

Recertifications with a primary diagnosis of Alzheimer’s disease, Schizophrenia disorders, or Long Term use of anticoagulants with no therapy ordered.

Claim Denial Potential

The above diagnoses run a great risk for denial because of probe edits and recertifications. Those records are reviewed also for homebound status. There must be “clear documentation that it is with considerable and taxing effort for the beneficiary to leave home, otherwise the episode or specific visits could be denied for lack of homebound status. (74% of ADRs reviewed for lack of homebound status were denied).”

Common documentation deficiency areas include lack of progress in:

* Repetitive clinical notes frequently seen stating the same things over and over with no patient progress identified; how is it that the clinician is unable to teach a new med successfully within a visit or two?

* Notes from different disciplines that reflect a lack of plan coordination

* Visit notes that do not substantiate orders and goals on Plan of Care/485.

* Clinical interventions without orders.

* If a chronic diagnosis is the primary reason for ongoing care, the skilled nurse should be VERY VERY clear as to why (s)he is still making visits.

* If visit notes do not EACH stand alone and justify care, the clinical visits are at risk.

The casemix co-morbidities; such as CHF, CAD, COPD, DM, Parkinson’s disease should be included in the diagnoses list. If they are standing alone, the nurse should carefully justify the skilled need because of the chronic disease.

* In justifying observation and assessment, note if:

* There is significant change in meds, treatments, or conditions

* There is teaching, reteaching, and training needed

* The condition or disease symptomology has exacerbated or changed in another way

* Teaching on new medications must include instruction or intervention on the related diagnosis.

The clinician providing injections such as insulin require specific documentation to support the need; specifically, why the patient cannot self inject the med such as tremors, impaired cognitive function, and no willing and capable caregiver.

Though we have heard this over and over, one of the most common home health reasons for denial is that the documentation does not support medical necessity.

Therapy is STILL under scrutiny

Functional ability improvement is expected or why is therapy present?

Therapy may be covered if the patient or caregiver received teaching that is reasonable and necessary.

In 2008, claims chosen with 10-11 therapy visits and discharge in episode two had a 74% rate of denial essentially due to poor or insufficient documentation displaying no or low progress and/or incongruence between care and OASIS assessment. The 2012-13 expectations are rigorous and denials are imminent if documentation is insufficient or inadequately substative.

The therapy treatment plan must:

* Relate to the exact diagnosis that has required therapy intervention.

* Identify visit frequency and duration.

* Identify the present and prior functional level.

* State specifically the procedures, treatments, and/or exercises to be performed.

* Clearly list the reasonable and measureable goals to be achieved.

* Care must be specific, safe, and effective supported by the diagnoses according to accepted practice.

* Specify the rehab potential.

* Specify the discharge plan.

Additional Ways to Decrease Risk

Adequate documentation begins with the correct diagnosis and being alert for edits. Besides agency PI projects, consider professional coding teams to decrease risk. Third party coding and auditing can provide the buffer needed to diminish risk and increase compliance. It is hard for one or two or a few in-house coders to not only keep up with the average 350 coding changes each year but to also locate the ever changing edits of each FI. The edits are usually disclosed AFTER the MAC probe results. Third party coding firms, like Select Data, monitor the FI sites, newsletters, and alerts to dig for present edits.

Agencies need to be aware the edits will increase over the next year as CMS, the RACs, the MACs, and the Z-PICs ready for ICD-10 and the move from the present 17,000 codes to over 68,000 codes or a 400% increase in codes. Will there be a 400% increase in edits also? Will there be a 400% increase in claim denials? Let us hope not.

Protecting justly due reimbursement starts with proper data gathering, coding to the highest level of specificity with sufficient documentation, and coding specialists looking out for the specific documentation needed. Do you have the coding specialists that you need in place to assist you in protecting your justifiably deserved reimbursement?