Ohio Perm Audits
Medicaid Integrity Program
RACs Update
As this issue of our Health Care Update goes to press, the Federal government's focus on health care fraud and abuse continues at the forefront of its activities. The latest changes that affect health care providers are a result of the recently passed health care reform package. Following are the major fraud and abuse initiatives:
- Increased funding
- Mandatory establishment of corporate compliance programs
- Increased False Claims penalties
- Development of data capturing and sharing database between federal and state agencies
- Reduced enrollment in "high fraud risk"
- Provider screening
The Centers for Medicare and Medicaid Services (CMS) conducts a federal audit every three years through a program called Payment Error Rate Measurement (PERM). The PERM program last visited Ohio in 2006, reviewing approximately 1,200 Medicaid claims for dates of service from October 2005 through September 2006. The PERM program is now reappearing in Ohio and providers will be asked to submit medical documentation supporting the claims that were billed. While the 2006 audit did not review the patient’s eligibility criteria, this audit will be taking a closer look at the eligibility files and levels of care.
Provider Education and “Frequently Asked Questions” can be located on the CMS website.
Background
CMS uses National Contractors to conduct the data processing, review the medical necessity and prepare the final calculation for the error rates. A further breakdown of the three sections includes the following:
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The data processing team will review the paid/denied claim file for:
- Duplicates
- Payment for a non-covered service
- Claims that should have been paid by another third-party payer
- Payments made for those residents that have expired or are no longer eligible
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The medical necessity team will randomly select claims for which providers will be asked to supply the medical documentation to support the service delivered, that the service was necessary, and was provided in the proper setting. Medical necessity will not only pertain to room and board claims, but crossover claims and therapy only claims. Typical items that will be reviewed/requested may include (but not be limited to):
o The correct number of units billed
o The diagnosis billed is reflected in the chart
o The provider supplied sufficient documentation
o The provider supplied the documentation in a timely manner
o A determination will be made to ensure that services paid by the Ohio Department of Job and Family Services (ODJFS) reflect the proper revenue and procedure codes as outlined in the Ohio Administrative Code and Survey protocols
o Eligibility will also be reviewed including the level of care
· The calculation for the error rates is best outlined and explained on the CMS website.
The ODJFS online portal has not updated since the original 2006 audit. However, providers are receiving letters from the PERM program and are required to comply. We’ve included a sample request providers could receive relating to these audits.
There are some new phrases (and acronyms) that all providers should be aware of: Medicaid Integrity Program, Medicaid Integrity Contractors, Medicaid Integrity Auditors and Medicaid Integrity Group.
The Medicaid Integrity Program (MIP) was created by the Deficit Reduction Act of 2005. The primary objective of this provider audit program is to identify potential Medicaid overpayments by auditing provider claims. This will determine whether: 1) claims are paid for items and/or services provided and documented properly; 2) correct procedure codes are used to bill for items and/or services; 3) all procedures are in accordance with Federal and State laws, policies and regulations. The Centers for Medicare and Medicaid Services (CMS) has estimated that these audits will recover more overpaid revenue than the Medicare RAC program.
Medicaid Integrity Contractors (MIC) are private companies under contract to conduct the Medicaid audit activities through the Medicaid Integrity Group (MIG). The three MIC types are: 1) Review MICs – analyze Medicaid claims data to determine if provider fraud, waste or abuse has occurred; 2) Audit MICs – audit provider claims and identify any overpayments; 3) Education MICs - offer education to providers and communities on quality of care and payment integrity.
As of January 2010, the program became active in all regions across the country. Ohio is in Region V/VII which also includes Iowa, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska and Wisconsin. Medicaid has awarded Region V/VII contracts to AdvanceMed (Review MIC), Health Integrity (Audit MIC), LLC and StrategicHealthSolutions, LLC (Education MIC).
For more information on the program, including how providers will be notified if selected, please visit the Provider Audit Overview on the CMS website.
RECOVERY AUDIT CONTRACTOR (RAC) UPDATE
It has been approximately six months since Ohio was folded into the RAC program. Following is an overview of the RAC program, its goals, and audit approach:
· RAC was driven by the Medicare Modernization Act and Tax Relief and Healthcare Act of 2006
· The RAC system is designed to supplement the current Medicare Billing Contractor program
· RACs are assigned to regions to assist CMS in the recovery of Medicare overpayments
· RACs are compensated on a contingency fee basis
· The Ohio Region B designated RAC is CGI
· RACs may request and review records over a three year rolling look-back period
· The RAC process is structured to identify overpayments in two ways:
o Automated process for simple errors - does not require a medical record
o Manual RAC Audit for complex errors – requires medical record to be reviewed
2010 RACs Update:
· CMS has implemented a revised policy for FY 2010 on the number of medical records that may be requested by RACs for institutional providers. Under the new guidelines, a RAC may only request up to 200 medical charts per “hospital campus,” per 45-day period, with higher cap limits for larger hospitals and upon approval from CMS on a case by case basis. The definition of “hospital campus”, includes all health providers that fall under the same organizational tax identification number and share the same first three zip code digits. All Medicare providers that fall within this definition of “hospital campus”, including non-inpatient providers and units, will be subject to one RAC limit.
· CMS will be providing a series of “RAC 101” conference calls beginning April 28, 2010, to focus on a general RAC overview and sessions for specific provider types.
Stay tuned to our website for details on the upcoming RAC 101 conference calls, RAC preparation tips and appeal timelines.