Medicare Update

Region C Recovery Audit Contractor Posts New Audit Issues for DRG Validation

Connolly Healthcare, the Medicare recovery audit contractor (RAC) for Region C, recently updated its CMS approved audit issues for RAC review.

Specifically, Connolly Healthcare recently posted at least 24 new CMS approved audit issues on its website for inpatient hospitals pertaining to DRG validation.

The issues affect providers in the states of Alabama, Colorado, Florida, Georgia, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.  The issues are briefly described below:

• Upper limb and toe amputation for circulatory system disorders with MCC: MS-DRG 255
• Cirrhosis and alcoholic hepatitis with MCC: MS-DRG 432
• Septicemia without mechanical ventilation 96+ hours without MCC: MS-DRG 872
• Nonextensive O.R. procedure unrelated to principal diagnosis without CC/MCC: MS-DRG 989
• Nonextensive O.R. procedure unrelated to principal diagnosis with MCC: MS-DRG 987
• Other respiratory system O.R. procedures without CC/MCC: MS-DRG 168
• Extensive O.R. procedure unrelated to principal diagnosis without CC/MCC: MS-DRG 983
• Other respiratory system O.R. procedures with CC: MS-DRG 167
• Other digestive system diagnoses with CC: MS-DRG 394
• Inflammatory bowel disease with CC: MS-DRG 386
• Major gastrointestinal disorders and peritoneal infections without CC/MCC: MS-DRG 372
• Other respiratory system O.R. procedures with MCC: MS-DRG 166
• Major small and large bowel procedures without CC/MCC: MS-DRG 331
• Major small and large bowel procedures with CC: MS-DRG 330
• Major small and large bowel procedures with MCC: MS-DRG 329
• Major chest procedures without CC/MCC: MS-DRG 165
• Major chest procedures with MCC: MS-DRG 163
• Major chest procedures with CC: MS-DRG 164
• Respiratory system diagnosis with ventilator support 96+ hours: MS-DRG 207
• Septicemia without mechanical ventilation 96+ hours with MCC: MS-DRG 871
• Extensive O.R. procedure unrelated to principal diagnosis with MCC: MS-DRG 981
• Extensive O.R. procedure unrelated to principal diagnosis with CC: MS-DRG 982
• Nonextensive O.R. procedure unrelated to principal diagnosis with CC: MS-DRG 988
• Coagulation disorders: MS-DRG 813

All of the above issues include a statement that medical necessity is excluded from review at this time.

For more information on the new issues, see the CMS approved audit issues for Region C, which can be found here.

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Related Post: CMS Releases FY 2010 RAC Additional Documentation Request Limits for DRG Validation

CMS Posts New FAQ on HCPCS/CPT Codes and Medicare Recovery Audit Contractors

On November 17, 2009, the Centers for Medicare & Medicaid Services (CMS) posted a new Frequently Asked Question (FAQ) on the Medicare Recovery Audit Contractor (RAC) Program.

As reflected on the CMS website, the new FAQ reads as follows:

Feedback

Will CMS require Recovery Audit Contractors (RAC) to post all HCPCS/CPT Codes included in their audit that are posted on their websites?

Answer

The Statement of Work for the Recovery Audit Contractors (RAC) requires CMS approval on all new issues prior to widespread review.  As a condition of approval, all RACs are required to post the new issue to the RAC website prior to releasing demand letters and/or additional documentation requests (outside of the ten (10) claim sample).  At this time, CMS requires a description of the issue, dates of service, a link to the applicable policy and the provider type impacted.  CMS encourages all RACs to post affected codes when less than 5 codes are present for the issue.

When not present, CMS recommends that providers use the applicable policy to locate the affected codes.

It also appears that CMS may have updated the following FAQs:

Why is CMS using recovery audit contractors?

Who should providers contact with questions concerning Recovery Audit Contractors (RAC) communications?

What is the name and contact information for each Recovery Audit Contractor (RAC)?

Will the Recovery Audit Contractors (RAC) review evaluation and management (E&M) services on physician claims under Part B?

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CMS Redesigns Medicare Provider Statistical & Reimbursement System

Over the last week, I have received a few inquires about a Medicare provider's responsibility with respect to obtaining a Provider Statistical & Reimbursement (PS&R) system report for cost report filing purposes.

On June 12, 2009, the Centers for Medicare & Medicaid Services (CMS) issued Transmittal 153 (Change Request 6519) announcing that the redesigned PS&R system (PS&R Redesign) is available for use.

According to Transmittal 153, the PS&R Redesign is to be used for filing and settling all cost reports with fiscal years ending on January 31, 2009 and later. Further, Transmittal 153 states in part:

"The PS&R Redesign will allow all users (Providers, FIs/MACs, CMS) the ability to download summary PS&R reports via the internet. Users will be able to log on to the system and request their summary reports on an as-needed basis.  FIs/MACs will no longer have to produce and distribute these summary reports to their providers. It will be the provider's responsibility to obtain their own reports needed for their cost report..."

To gain assess to the PS&R Redesign, Transmittal 153 indicates that users must establish an Individuals Authorized Access to CMS Computer Systems (IACS) account and be approved for PS&R access. Transmittal 153 also states that "[t]he Provider IACS verification process...may take weeks to complete the entire process." So, providers (that file cost reports) should not delay registration.

Information on the IACS process can be found here. Transmittal 153 also contains information regarding IACS registration including a web link.  Also, see MLN Matters article MM6519.

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CMS Directs Medicare Contractors to Take Action on OIG Reports

The Centers for Medicare & Medicaid Services (CMS) recently issued Transmittal 574 and alerted various Medicare contractors (including Part A/B Medicare Administrative Contractors) about 4 Department of Health and Human Services' Office of Inspector General reports (OIG Reports).

Among other things, Transmittal 574 instructs certain Medicare contractors to "review the claims data particularly for services mentioned in the OIG reports" and "take appropriate action consistent with their individual prioritized strategy (e.g., establish automated prepayment edits, develop pre and postpayment reviews, educate physicians/suppliers), if the data warrants any action." 

Transmittal 574 has an effective/implementation date of November 9, 2009.

The OIG Reports identified in Transmittal 574 are set forth below.

• Medicare Part B Chemotherapy Administration: Payment and Policy (OEI-09-08-00190)
• Prevalence and Qualifications of Nonphysicians Who Performed Medicare Physician Services (OEI-09-06-00430)
• Inappropriate Medicare Payments for Chiropractic Services (OEI-07-07-00390)
• Medicare Part B Billing for Ultrasound (OEI-01-08-000100)

Certain Medicare providers and suppliers may want to take a look at the OIG Reports.

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OIG Work Plan Reveals Possible Risk Areas for Medicare Providers and Suppliers

On October 1, 2009, the Department of Health and Human Services' Office of Inspector General (OIG) released its Work Plan for fiscal year 2010 (Work Plan).

The Work Plan addresses the areas and issues the OIG intends to audit, evaluate and inspect during fiscal year 2010.  The Work Plan also provides some insight into the areas and issues that may evolve into future OIG enforcement activities. Therefore, health care providers and suppliers should consider the Work Plan in relation to their operations.

This post briefly highlights some of the Work Plan priorities for hospitals, physicians and other health care providers with respect to Medicare Parts A and B. Work Plan priorities for Medicare provider and supplier types not addressed in this post (e.g., home health agencies) will be covered in subsequent posts.

CMS Releases Revised ICD-10-CM/PCS Fact Sheet

The Centers for Medicare & Medicaid Services (CMS) recently released a revised publication titled ICD-10-CM/PCS: An Introduction Fact Sheet (August 2009).

According to CMS, the revised publication provides general information about ICD-10-CM/PCS, including the benefits of adopting the new coding system, structural differences between ICD-9-CM and ICD-10-CM/PCS, and implementation planning recommendations.  The revised publication can be found here.

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CMS Releases Transcript of ICD-10-CM/PCS Physician Specialty Group Conference Call

The Centers for Medicare & Medicaid Services (CMS) has released the written and audio transcript summaries of the Introduction to ICD-10-CM/PCS for Physician Specialty Group Representatives Conference Call, which occurred on June 23, 2009. They are available in the "downloads" section of this CMS webpage.

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CMS to Host National Provider Conference Call on ICD-10-CM/PCS

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will host a national conference call regarding ICD-10-CM/PCS from 1:00 p.m. - 2:30 p.m. (EDT) on May 19, 2009.

According to CMS, the conference call will include a discussion of the following topics:

• An overview of the ICD-10 final rule, which requires the implementation of ICD-10-CM/PCS on October 1, 2013;
• The differences between ICD-9-CM and ICD-10-CM/PCS codes;
• The use of the General Equivalence Mappings that have been created to assist in converting policies, edits and trend data from ICD-9-CM to ICD-10-CM/PCS; and
• The resources that are available to assist in planning for the transition from ICD-9-CM to ICD-10-CM/PCS.

CMS reports that discussion materials and registration information can be accessed here.

CMS Revises Instructions on Good Cause and Medicare Claim Reopenings

On January 16, 2009, the Centers for Medicare & Medicaid Services (CMS) released Transmittal 1671, which revises part of the Medicare Claims Processing Manual (Pub. 100-04) and addresses what constitutes new and material evidence as it relates to good cause for reopening a Medicare claim.

In Transmittal 1671, CMS also establishes policies related to good cause reopenings, including a requirement that a Medicare contractor clearly document in the case file the new and material evidence that represents good cause for reopening. CMS also states that "[a] contractor's decision to reopen based on the existence of good cause, or refusal to reopen after determining good cause does not exist, is not subject to appeal." In doing so, CMS cites 42 CFR 405.926(l) and 405.980(a)(5), which indicate that the decision to reopen (or not reopen) is not an initial determination, is final and not subject to appeal.

In making such a statement, CMS may be reinforcing at least 2 recent Medicare Appeals Council (MAC) decisions (See In the case of Providence St. Joseph Medical Center and In the case of Memorial Hospital of Long Beach) in which the MAC found that CMS expressly declined to establish an evidentiary burden of proof for reopenings in the Interim Final Rule, which revised the Medicare appeals process. The MAC also found that the enforcement mechanism for good cause standards lies with CMS's evaluation and monitoring of Medicare contractor performance, not the appeals process.

Bottom line. Medicare providers and suppliers may find it difficult to successfully challenge a Medicare contractor's good cause finding as part of the Medicare appeals process unless there is a change in Medicare policy or the MAC decisions are overturned or superseded. 

Background:

Pursuant to 42 CFR 405.980(b), a Medicare contractor may reopen and revise an initial determination or redetermination between 1 year and 4 years from such determination for good cause.  According to 42 CFR 405.986(a)(1), "good cause" may be established when there is new and material evidence that:

• Was not available or known at the time of the determination or decision; and 
• May result in a different conclusion.

As reflected in 42 CFR 405.986(a)(2), "good cause" may also be established when the evidence considered in making a determination or decision clearly shows on its face that an obvious error was made at the time of the determination or decision.

CMS Posts Transcript from ICD-10-CM/PCS National Provider Conference Call

The Centers for Medicare & Medicaid Services (CMS) has posted the transcript from the November 17, 2008 ICD-10-CM/PCS national provider conference call for physicians on the ICD-10/CMS Sponsored Calls page of the CMS website. Visit the ICD-10/Overview page and the related pages of CMS's website to keep up to date on ICD-10-CM/PCS developments.