RACs, MACs, Z-Pics: The Home Health Industry and Insufficient Documentation for Medical Necessity and ICD-9 Coding
Part 1 of 3 series on RACs, MACs, and Z-PICS:
CMS has now stated in the proposed PPS rule, “that after review of 2008 data that evidence continues to suggest that some Home Health Agencies may be providing unnecessary therapy.”
The RACs have also identified that insufficient documentation for medical necessity will be the first area of focus for their audits. But no agency should believe that only therapy documentation will be scrutinized. Skilled nursing with observation and assessment (O/A) continues to be high on the list for visit and episode denials. Link
In 2008, claims chosen with 10-11 therapy visits and discharges 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 CY2011 proposed rule (dated July 23, 2010) requires objective evidence that the patient will improve. The rule also expects therapy patients to be assessed every thirty days and at the time of the 13th and 19th visit. It is expected that there will be more objective data inclusive of range of motion measurements, strength findings, and ADL dysfunctions with progress or regression noted. As previous; only the qualified therapist, not therapy assistant, will conduct the required assessment or reassessment.
Two new G-codes have been established to monitor therapy assistant visits. The current case-mix weight structure was designed based on data that home health patients received visits by qualified therapists 79% of the time with assistants visiting only 21% of the time. The new codes attached to both PTA and COTA will allow CMS to determine if that presumed fact is true.
CMS has Unleashed the Auditors
Annually, CMS receives 1.2 billion claims. That breaks down to 4.3 million claims per work day, 574,000 claims per hour, and 9,579 claims per minute. Fraud and abuse are on the rise and the pressure is on.
CMS has unleashed the age of the auditor with the advent of the RACs, MACs, CERTs, MICs, Z-PICs, and now, the HEAT.
RACs- The RACs are the contingency motivated Recovery Audit Contractors (retrospectively focused). The RAC Demonstration Project of 2005-2007 recovered over $1.3 billion, mostly due to medically unnecessary services (45%), incorrect coding (35%), and insufficient documentation (10%). With four RAC approved firms covering specific geographic regions, they are expected to continue their positive recovery program. The RAC demonstration project yielded a cost of only .22 cents for every $1.00 recovered.
MACs – Medicare Administrative Contractors have been transitioning in and replacing the Regional Home Health Intermediaries (RHHIs). There will be 15 MACs with 4 focusing only on DME claims. Though providers fear the RACs, they are well aware of the power of the MAC. This auditing body can impose “severe administrative action” such as up to 100% prepayment review, payment suspension, and use of statistical sampling for overpayment estimation of claims (current and prospective focus).
CERTS - To better calculate the performance of the FIs and MACs, as well as to look at the reasons for their errors, CMS decided to look at a number of additional rates. The additional rates include
- provider compliance error (how well providers prepared claims for submission)
- paid claims error rates (measures how accurately FIs and MACs make coverage, coding, and other claims payment decisions). CERTs randomly select a sample of about a 100,000 claims each reporting period.
- CERTs review the claims for proper Medicare coverage, coding, and billing rules, and if not in compliance, they assign an overall error rate.
CERTs also identify if providers received overpayment letters or notices of adjustments to be made for claims that were overpaid and underpaid. CERTs are considered the Quality Improvement specialists who track and trend the performance of Fiscal Intermediaries and Medicare Administrative Contractors.
Z-PICs – Zone Program Integrity Contractors will perform Medicare Program integrity functions for CMS. They will interact with each MAC to handle fraud and abuse issues within their jurisdictions. Z-PICs are seen to consolidate the work of present CMS Program Safeguard Contractors (PSCs) and Medicare Drug Integrity Contractors (MEDICs) and are divided into 7 zones.
Bill Dombi, Chief Legal Representative for NAHC stated (4/20/2010), “If an agency receives a RAC letter, they should just call their legal counsel” The Z-PICs act with the Department of Justice and FBI and act as the investigators when fraud is very strongly thought to have been found. The Z-PICs have the power to suspend claims for up to a year and the agency has no appeal recourse during that time. That power can cripple a financially devastate an agency.
HEAT –This auditing body are considered the more aggressive investigator of essentially DME and Home Health. There has been expansion of DOJ/CMS/HHS Inspector General Medical Strike forces to Baton Rouge, Brooklyn, Detroit, Houston, LA, Miami-Dade, and Tampa Bay.
This is the technologically oriented auditing body using state of the art technology to expand the CMS Medicaid provider audit program. This program leadership has meetings with top anti-fraud leaders in Congress/Law enforcement/Private sector.
CMS states, “Providing additional resources to our civil enforcement efforts under the False Claims Act to increase dollars recovered; data sharing, including access to real time data; detect patterns of fraud through technology; strengthening partnerships among Federal agencies between public and private sectors.”
Clearly, with all of the auditing bodies, CMS is making a bold statement; fraud and abuse will not be tolerated.. Unfortunately, in this kind of environment, innocent casualties can occur. Agencies need to take action now.
NOTE: Fiscal Intermediaries reviewing denials May 28, 2008- October 31, 2009 identified lack of medical necessity and homebound status unsupported in the medical record. In addition, ADRs were not received in a timely manner.
ADRs are on the rise. In 2007 47% of ADRs were denied by Fiscal Intermediaries
Tags: CMS, ICD-9CM Coding, MACs, Medicare Reimbursement, RACs, Z-PICs