Posts Tagged: medicare reimbursements

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Connolly Adds Nine RAC Approved Issues

Wednesday, August 4th, 2010

RAC-LOGO-CGIThe RAC contracted for the southern and southeastern states, Connolly Healthcare, continues to post new automated issues concerning dose-versus-units-billed, further proving that injections and infusions is a major target for RAC review, and a continuing concern for provider reimbursement, especially for physicians and outpatient settings.

The List

Below are the nine new issues, posted earlier this week. Follow the links to each one, in the eduTrax RAC New Issue Database®, which can be seen with simple free registration at myedutrax.com.

Who’s Getting Stuck?

You’ve billed for it, even been paid for it. But will you get to keep the money? And you can’t take the injection back…

This is like getting an injection with a barbed needle: feels ok going in, but coming back out it hurts like <insert your favorite expletive>.

For both providers and payers, there’s no confusion about one thing: injections and infusions can be tricky to properly bill.

Instruction Available

The eduTrax® site has two excellent courses available for their paid subscribers, and these can also be purchased as downloads or CDs. Short previews are available to give you an idea of their quality and content:

BLUE-PREVIEW-ON-Button Coding Injections and Infusions — reviews the recent changes to injections and infusions codes and offers guidance on correct capture of these services. (3 minute preview)

BLUE-PREVIEW-ON-Button RAC Focus: Injections & Infusions — discusses why, how & where physicians must be involved, and addresses code selection based upon time and service provided. (8 minute preview)

Click here to send us an Email for more information or to place an order.


Still No Medical Necessity Approvals

To date, there are still no issues posted & approved for review of Medical Necessity for any issue.

As usual, we wait…

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Posted in Medical Coding News, RAC New Issues Alerts | No Comments »

Region B RAC Adds Review of Inpatient Admit Orders, 95 DRG Validations

Sunday, July 25th, 2010

RAC-LOGO-CGIIn the continuing posting of issues, the RAC contracted for the upper midwestern states, CGI Federal, has now joined Connolly Healthcare in its posting of an issue that can possibly recoup all Medicare Part A charges for an inpatient claim, and still not even touch the dreaded issue of Medical Necessity.

The List

Below are the 15 new issues, posted last week. Follow the links to each one, in the eduTrax RAC New Issue Database®, which can be seen with simple free registration at myedutrax.com.

1 Date of Death-DME
2 Inpatient Admissions without a Physician’s Inpatient Admit Order
3 MSDRG 052, 053, 054, 055, 056, 057, 058, 059, 060, 061, 062, 063, 067, 068, 069, 070, 071, 072, 073, 074, 077, 078, 079, 080, 081, 082, 083, 084, 085, 086, 088, 089, 090, 091, 092, 093, 097, 098, 099, 101, 102: DRG Validation for Nervous System Disorders
4 MSDRG 165: DRG Validation for Major Chest Procedures
5 MSDRG 168: DRG Validation for Other Respiratory System O.R. Procedures
6 MSDRG 175, 176, 180, 181, 182, 183, 184, 185, 186, 187, 188, 192, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206: DRG Validation for Respiratory
7 MSDRG 242, 243, 244: DRG Validation for Permanent Cardiac Pacemaker Implant
8 MSDRG 247, 249, 251: DRG Validation for Percutaneous Cardiovascular Procedures
9 MSDRG 326, 327, 328: DRG Validation for Stomach, Esophageal and Duodenal Procedures
10 MSDRG 371, 372, 373: DRG Validation for Major Gastrointestinal Disorders and Peritoneal Infections
11 MSDRG 405, 406, 407: DRG Validation for Pancreas, Liver and Shunt Procedures
12 MSDRG 474, 475, 476: DRG Validation for Amputation for Musculoskeletal System and Connective Tissue Disorders
13 MSDRG 490, 491: DRG Validation for Spinal Fusion
14 MSDRG 533, 534, 537, 538, 562, 563: DRG Validation for Musculoskeletal Fractures
15 Prosthetic Additions When Billed With Initial Or Preparatory Knee Prosthesis

More to Come

We’ll have more to say about the review of Physician orders, soon…

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Posted in From the road..., Medical Coding News, RAC New Issues Alerts, Uncategorized | No Comments »

The Whistleblower Wore a Wire

Tuesday, July 20th, 2010
Pocket-Size Wire Recorder

Equipment Available before passage of the Healthcare Reform Act of 2009

After bringing  a False Claims Act case to the attention of federal agencies, a Florida whistleblower remained working at WellCare Health Plans offices and then even went so far as to wear a hidden wire (probably just like you see on television) during business meetings, helping the Justice Department (DOJ) in an 18-month undercover operation to capture evidence of alleged fraudulent practices by WellCare officers and employees.

All of this has come to light as of June 25, 2010, when a U.S. District Court judge ordered the complaint unsealed. The original complaint is still not available, but the complaint filed on June 21, in the US District Court for the Middle Florida District, is now available.

(Find it here and other documents related to the case here.)

Might we see an episode of Law & Order soon with this kind of a case? I think it’s pretty gutsy to wear a wire for the Feds, but in this case, the pay-off is much more than just “doing the right thing” or even protecting future victims. Whistleblowers get pretty hefty pay-days, with or without a wire. Perhaps the investigators used that pay-day as a carrot? Wear a wire, get more evidence, you get a bigger pay-day?

Wait… A Settlement was Reached?

Three years later, WellCare reportedly announces that it has agreed to a “Preliminary Settlement” with the Department of Justice, Civil Division, to pay $137.5 million to “settle their pending inquiries.” (Notice that there is no mention of any criminal inquiries…) You can see what WellCare filed with the SEC about this, here. (We can’t seem to find any documents from WellCare or the government, yet, about this supposed settlement.)

Evidently, the whistleblower was not invited to the negotiation where a  settlement was reached, and understandably is not keen on the mere $137.5 million settlement that the government has agreed to with WellCare. According to the whistleblower’s attorney, “…the proposed settlement would permit taxpayers to be unfairly disadvantaged by a settlement that pays less than half of what our pleadings suggest was stolen, to say nothing of the requirement of triple damages under the False Claims Act.“  The attorney and his client estimated that WellCare received over $400 million to perhaps as much as $600 million in fraudulent payments, from a combination of Medicaid and Medicare programs.

Since whistleblowers get 15-25% of the total penalties and damages paid by the offending party, it’s pretty easy to see why this whistleblower is upset — he could be missing out on 15-25% of perhaps as much as $800 million.

The $137.5 million, however, is still only “preliminary” and must be approved in court. We’ve searched the web and there are yet no announcements by the DOJ or any of its Civil Divisions, nor by the OIG or the FBI, related to this settlement. One has to wonder, how did they arrive at this number, which is so much smaller than the alleged frauds? Oh, and, what about penalties and damages? Aren’t those supposed to be added on?

Even if the whistleblower’s figures are inflated, there still appears to be significant fraud. Did the FBI not find much then?

Where’s the beef?

According to several news reports, the DOJ amassed over 1,000 hours of audio and video evidence of alleged fraudulent conduct by WellCare. The whole investigation took almost four years, and included a raid by over 200 federal agents from the FBI, DOJ and the OIG, on the WellCare Tampa headquarters, where they seized many computers and files.

In the complaint, the whistleblower alleges that WellCare purposefully and knowingly over-billed the seven states that it contracted with as a Medicaid HMO. It appears that WellCare used accounting “tricks” to move money around to inflate costs, thereby avoiding having to pay back monies to the state Medicaid programs.

One of the most distrubing allegations concerns WellCare’s apparent complete lack of compassion and utter arrogance in handling care for a large number of newborn babies. One of the examples cited by the whistleblower involved not only unlawfully denying care to 475 newborns for the purpose of eliminating the costs of caring for them, but then rewarding the staff who executed those denials (and perpetrated the fraud) by honoring them with a large, expensive corporate dinner meeting.

Read the complaint, form your own opinion. But keep in mind, the government has yet to file ITS complaint.

But Wait…There’s More

This has been going on for years, now. So, one wonders, what happened to the WellCare officials who (allegedly) perpetrated these frauds?  According to at least one news report, they have all been replaced since then, and there is an ongoing criminal investigation into former executives accused of committing  frauds.

Nevertheless, there also appears to be an ongoing feud between the press — specifically Health News Florida — and the Florida state Insurance Commissioner Kevin McCarty, about the whole case. Health News Florida reported on July 1, 2010, that McCarty sent them a letter saying there is “no question” that some of WellCare’s dealings (under former management) were illegal, but that the whistleblower complaint also included “unfounded allegations.”

“Unfounded” or not, someone else in the Florida state government is still very concerned about all that fraud and wants somebody prosecuted: after the whitstleblower complaint was unsealed, the Florida secretary of healthcare administration sent a letter to Florida’s Attorney General and urged him to “investigate and attempt to prosecute officials at WellCare.”

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Posted in From the road..., Medical Coding News | No Comments »

Reduced Payments Proposed

Sunday, March 1st, 2009

But No Details Provided Yet.

President Obama released his budget proposal, including broad reforms to the payment systems in health care, as reported by the New York Times, last week (Pear, New York Times, 2/27). The FY2010 proposal includes $2 trillion in mandatory spending, including Medicare and Medicaid (Calmes, New York Times, 2/27).  Mandatory spending for Medicare would total $453 billion, and mandatory spending for Medicaid would total $290 billion (Washington Post, 2/27).

However, the proposal also would decrease spending for Medicare and Medicaid to help finance a reserve fund, included in the plan and intended to help finance and expand health insurance to all residents(Taylor, AP/Kansas City Star, 2/26). Half of the reserve fund would be financed with increased revenue from tax changes and half with reduced spending in health care programs (Levey, Los Angeles Times, 2/27). The proposed reductions in payments to providers are “sure to incite battles with doctors, hospitals, health insurance companies and drug manufacturers,” according to the AP/Detroit Free Press (Crutsinger, AP/Detroit Free Press, 2/26).

The Christian Science Monitor comments that the reserve fund “would represent a huge change in national direction, as it implies that the U.S. will move towards some sort of universal health care system” (Grier, Christian Science Monitor, 2/27).   There will likely be a “battle” over “how to finance Mr. Obama’s national health insurance plan,” which “will significantly expand the cost of government,” the Washington Times reports (Lambro, Washington Times, 2/27).

President Obama plans to release a detailed proposal in April, but the plan likely will not include additional details on health care reform, as he hopes to draft legislation with lawmakers, The Hill reports (Young, The Hill, 2/26).  Obama said, “With this budget, we are making a historic commitment to comprehensive health care reform.  It’s a step that will not only make families healthier and companies more competitive, but over the long term, it will also help us bring down our deficit” (Sanchez, CongressDaily, 2/26).

An opinion piece in the New York Times by David Leonhardt had this to say:  Obama’s plan to “lift the incomes of the middle class and poor through … an overhaul of health care” is “likely to meet stiff opposition from some doctors and insurers.”  He adds that Obama’s budget would begin “paying for investments that would eventually allow Medicare officials to refuse to pay for medical treatment” that is proven to be relatively ineffective, which would “vastly reduce the government’s long-term budget deficit” and likely would “bring down private health costs, since insurers typically follow Medicare’s lead” (Leonhardt, New York Times, 2/27).

NPR‘s All Things Considered on 2/26 provides a 4 minute audio overview here. (Open that link and then click on the Listen Now button just under the title.) Find their complete article on the budget proposal here.

What does it all mean?

No details are yet provided, and President Obama seems to be leaving all the nitty-gritty details to Congress, which appears eager to tackle the issues, albeit with purely partisan lines still being drawn. Since the partisan divide still exists, lobbyists with deep pockets still hold court in Washington, and health care spending occupies one seventh of our economy, President Obama and Congress have their work cut out for them, especially since the President is urging Congress to do all this in one year.

We’ll keep watching and reporting details, which will have to be worked out by Congress. Be sure to signup for the email updates for this blog.

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Posted in Medical Coding News | 2 Comments »

How Much Do RACs Take?

Sunday, November 9th, 2008

Unfortunately, this is not a simple question… We thought this needed some clarification, at this time.

We have mentioned before that the RACs take back 100% of a claim when they issue a demand letter. (See Can I Resumbit? and Principal Diagnosis for examples).  We stand by those posts, but perhaps they need some explaining. You should consider them accurate, however, given past experience. During the pilot program, the RACs demanded 100% and very rarely allowed any resubmit of a claim. In the future, however, there may be some different experiences, depending upon the prevailing winds, the attitudes of any specific RAC program contractor, and perhaps the price of tea in China, who knows.

At eduTrax we are dubious that the RACs will demand less than 100% of a contested claim, since they are authorized to do so (currently), and they are, after all, PAID based upon the dollar amounts that they recoup.  See how much they make HERE.

We do allow that there is the possibility that a RAC will only demand the difference between their interpretation of the correct payment versus what was actually paid. But we’d like to point out that there is no reason to believe that the RACs actually participate in the program out of any altruistic concerns for the state of healthcare in the USA.

The RAC contractors participate for the oldest reason there is — they are well paid to do so, and the more they recoup, the more they profit. See our post on the recent delay in the program, initiated only due to legal wrangling by two firms who lost out on their bids to become RAC contractors. See the news article about it on our Latest News page, at www.myedutrax.com.

The only good thing we can say is that, absent any fraudulent activities or intent, the MOST they will demand is 100% of the specified reimbursements.

We realize that is not very reassuring. Many of our clients have decided to reserve 100% of reimbursement for any cases they can internally identify as problematic, through our audits and use of our courses and tools. We believe this to be a wise practice. We can all hope that they can only lose the difference between the amount that should have been submitted, versus the amount that was filed and paid. But there is, at this time, no evidence to support that hope.

For the sake of argument and to explain further, the possibility exists that RACs will only demand the difference between the correct versus the incorrect reimbursement. For example, as we explained in Too Late to Query, using an incorrectly coded case for a secondary diagnosis, if a RAC demands the entire amount of the claim, then the facility is out about $9000. If however, the RAC only demands the difference between the correct & incorrect coding, the facility is only (only?) out about $3000. The problem we have with this idea/hope involves the motivation of the RAC: they are in this for profit, nothing else. Let’s call these “fees” commissions, which is more accurate…

The difference between the two potential demand letters is $9000 versus $3000, a difference of $6000. The commission for the Region A RAC is 12.5%: the choice then is $1125 versus $375. Why would the RAC choose the smaller commission?

Of course, the RAC must return any commissions paid to them for demands that are successfully appealed. We have seen that the likelihood of appeals is low (less than 15% were appealed in the demonstration project) and the likelihood of being overturned on appeal is even lower (less than 5% were overturned). (Find the CMS Report here.)

And finally, there’s this — the AHA has estiimated that it costs a provider an average of $2000 to file an appeal for a claim in the RAC process.

So, armed with that knowledge, how many claims will YOU file appeals for?

Now you know why we’ve said the RACs will take 100% of the claim, not just the difference between the right and wrong reimbursements. There’s no incentive for them to NOT take 100%.

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Posted in October Series on RACs | 1 Comment »

Too Late to Query

Thursday, November 6th, 2008

When a RAC requests a medical record for review, it is unlikely that the RAC will accept a Query from a physician in retrospect. RACs have only on rare occasions accepted a Query Form provided by an MD long after the claim was filed. If the specificity is not there when you’re coding a claim, that’s the time to send out the Query Form. Let’s look at an example of mis-coding due to a lack of specificity in the documentation, which was… oops… not queried at the time.

A patient is documented with aspiration pneumonia (507.0) and renal disease. The pneumonia codes to 507.0 as the Principal Dx. The Secondary Dx is more problematic, since the physician needs to give more specificity to get the most accurate code. With no specifics, it should be coded as Chronic Kidney Disease, Unspecified, code 585.9. But often, we’ve seen such a case coded as 585.6, End Stage Renal Disease (ESRD). However, if the MD does not say “end stage” in the documentation, then the case MUST be coded as Unspecified.

What’s the difference? The 507.0 Pneumonia with a 585.6 End Stage Renal Disease code will group to MSDRG 177 — a typical facility would get about $9,025.00 for that. But if the secondary is 585.9, the Unspecified code, then the grouper returns MSDRG 179, which only pays about $6240. The difference, then, is almost $3000. And that’s just if you undercode.

What happens if you overcode and then the RAC does an audit? THAT will cost you the entire claim.

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Posted in October Series on RACs | 2 Comments »

Principal Diagnosis Errors

Tuesday, November 4th, 2008

Principal diagnosis is defined in the Uniform Hospital Discharge Data Set (UHDDS) as the condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital. This is the same definition found in ICD-9-CM and clarified in Coding Clinic. Further, according to Coding Clinic, selecting principal diagnosis includes findings that result from history of illness, any mental status evaluation, physical exam, diagnostic tests or procedures, any surgical procedures, and any pathological examination. Any condition established after such study may or may not confirm the admitting diagnosis.

From an inpatient perspective, principal diagnosis is one of the main drivers for facility reimbursement. Therefore, if the principal diagnosis is incorrect, the reimbursement is incorrect, and the door is wide open for RAC recoupment.

How do you choose the principal diagnosis when you code? Perhaps you use an encoder, a common practice. When you finish coding, you can check to see if you have chosen an optimal code. What you need to know is that the RACs use software that basically does the opposite — they use software “scrubbers” that look at your claims to see if a case has been “maximized,” perhaps causing an improper payment.

One of the most tricky parts of all this is that you must be sure that your principal diagnosis meets both the coding guidelines and medical necessity. We’ve mentioned medical necessity in a previous post, but here’s how the government defines it:

Medical necessity is a service that is reasonable and necessary for the diagnosis or treatment of illness or injury, or to improve the functioning of a malformed body member.

Keep in mind that a RAC can demand repayment for either incorrect coding or lack of medical necessity shown in the documentation. Below is an example of incorrect coding, to show what it can cost your facility.

Consider a patient admitted with Acute respiratory failure due to an overdose of anti-depressants, and subsequently coded as 518.81, Acute Respiratory Failure, which groups to MS-DRG 189 — average payment, $6683.

A RAC review would fault this, however, as incorrectly coded: the Acute respiratory failure was due to the overdose. Therefore, the claim should not have been coded with the admitting diagnosis. Rather, it should have been coded with principal diagnosis of 969.0, Poisoning by psychotropic agents w/o MCC, grouped to MS-DRG 918 — average payment, $3369.

The loss to the facility is 100%, or $6683, and you have no opportunity to resubmit the claim.

Careful attention is required! On our eLearning portal, we have a course that provides much more detail than this post can provide. Go to www.myedutrax.com, then Login or Register for free, and see this course: RACs in Review, A Look Forward: Coding and Billing for Principal Diagnosis.

Or click here to watch a short preview of the course.

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Posted in October Series on RACs | 1 Comment »

Colonoscopy in Focus

Wednesday, October 29th, 2008

Colonoscopies are another focus area for the RACs (sorry, the pun is unintended, this time), as mentioned in a previous post and as found in the RAC Evaluation Report.

Why are Colonoscopies targeted by the RACs?

Basically, again, they’ve been often incorrectly coded. Pay attention to the quantities, in particular. These claims can be automatically flagged by the RAC software “scrubbers” — those are little software programs that can “scrub” thru the millions of Medicare claims (including YOURS) and flag anything that meets specific conditions. How do they automatically flag these Colonoscopy claims? Unfortunately, it’s easy…

In the RAC Evaluation Report, only data from New York state was published. But there, they recovered $2 Million in 5000 claims. The errors predominantly involved the quantities billed.

For example, a provider performed seven biopsies, then billed 45380 seven times. The code, however, specifically states that it can only be billed once, for either single or multiple biopsies performed.

Now you can see why it’s easy for the RACs to find these errors. The good news is that it is just as easy for you to go thru your own records and find these same errors, NOW, and prevent future errors.

We recently finished our series of Live eLearning eVents on how to prepare for the RACs. Here is a short preview of the course on Colonoscopies & EGDs, which is available on our eVehicle, at www.myedutrax.com. To see the top ten reasons you should subscribe to our portal, click here.

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Posted in October Series on RACs | No Comments »

Excising Debridements

Tuesday, October 28th, 2008

And you thought payers were picky? RACs are downright cutting. (sorry, we couldn’t resist)

Wound debridements are on the likely targets list, as listed in a previous post. (The list, by they way, comes directly from the RAC Evaluation Report issued by CMS this past summer.)

Why is Wound Debridement on the list?

Because it is often poorly documented — or that’s what the RACs think now, from past experience. So, they point their software scrubbers at your data (they have every bit of it, you know), and out pops all your debridement claims. Instant list of records to request. You’re lucky that they now have limits on what they can request in any 45-day time period. Ok… back to the debridements.

Debridements come in two forms, Excisiional and Nonexcisional:

Excisional debridement — surgical removal or cutting away of devitalized tissue, necrosis or slough.

Nonexcisional debridement — nonoperative brushing, irrigating, scrubbing, or washing of devitalized tissue, necrosis or slough. Includes snipping of tissue followed by Hubbard tank therapy.

Note the key difference is the “cutting” aspect — essentially, the use of a sharp edged instrument.

Here’s an example. A claim was submitted for an Excisional Debridement, with Procedure code 86.22 assigned. Upon review by a RAC, however, it was noted that the physician wrote “debridement was performed.”

The RAC determined that the claim was incorrectly coded, and repayment was requested.

We’ve said it before, we’ll say it again… documentation is now more important than ever before, and specificity in the documentation is KING.

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Posted in October Series on RACs | No Comments »

Likely RAC Targets

Sunday, October 26th, 2008

If you study the RAC reports, such as those posted on our portal, you can readily pick out the main targets that RACs focused on during the demonstration project, and it is very likely that these same targets will be the ones that they will continue to monitor.

Those initial targets for RACs were as follows:

  • One-day Stays – especially Chest Pain/Back Pain/Gastroenteritis
  • Inpatient Surgeries that could be performed as Outpatient
  • Wound Debridement/Skin Graft
  • Sepsis/Septicemia
  • Pleural Effusion with CC
  • Extensive OR Procedure, unrelated to the Principal Diagnosis
  • Digestive System Diagnoses with CC
  • Medical Necessity, especially Admission for Inpatient Rehabilitation

We’ll be discussing these each, in turn, in the near future. Also, we have just completed a series of Live eLearning eVents at eduTrax, and these will be published shortly in a collection recorded courses, available by subscription at www.myedutrax.com.

For a short preview of one of our courses, click here to open a new window for a short 2-minute preview of the first in our series.

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Posted in October Series on RACs | 1 Comment »

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