MAC Prepayment Reviews and Rebilling Denied Inpatient Claims Kathy Reep April 17, 2013
Medicare Administrative Contractor (MAC) Prepayment Review
Why a MAC Issue? • RAC reporting at MAC level • Recompete of MAC contracts Pay it right, the first time…
Executive Order 13520 • Reduce improper payments by – – Refining error rate measurement processes – Improving system edits – Updating coverage policies and manuals – Conducting provider education efforts • 50 percent error rate reduction – To 6.2 percent by 2012
Inpatient Claim Reviews • Transition from QIO to FIs/MACs – QIOs to focus on quality improvement • Will no longer do payment accuracy measurement on inpatient claims – FIs/MACs will review for inpatient medical necessity and coding
Inpatient Claim Reviews • Not random reviews – Targeted based on analysis • Pre- or post-payment basis • To use “clinical judgment” – No specific screening tool to be required – Will involve physicians as needed
Inpatient Claim Reviews • No payment for copying costs • Appeal rights as with other denials – However, filed at initial level with contractor that reviewed the claim and issued denial
MAC Prepayment Review Process • Data Analysis – MACs identify provider billing practices and services posing greatest financial risk to Medicare – Use data analysis to identify issues to include in the medical review strategy
Preliminary Findings • InterQual criteria not met and record did not otherwise support need for inpatient level of care • Cases continue to show lack of severity of illness and/or intensity of service • MD orders observation services and case manager writes inpatient status was appropriate and admission is converted • Admit for 3-day qualifying stay
And for 2013… • Focus on elective surgical procedures • Length of stay not an element in record selection • Pre-payment review (30-100%) • Post-payment review for associated Part B services
DRGs Subject to Prepayment Review (FCSO) • Added November 16, 2012: • 069 | 254 • Added April 11, 2012: • MS-DRGs w/1-day LOS • Added March 21, 2012: • 153 | 328 | 357 | 455 | 473 | 517 • Effective prior to March 1, 2012: • 226 | 227 | 242 | 243 | 244 | 245 | 247 | 251 | 253 | 264 | 287 | 313 | 392 | 458 | 460 | 470 | 490 | 552 | 641
Documentation Requirements • Medical record must contain – Documentation fully supporting medical necessity of the inpatient admission and justification of any procedures performed • History and physical • Discharge summary • Physician progress notes • Operative report • Other relevant information addressing coverage criteria for episode of care prior to hospitalization
Other Contractor Interventions • Exclusion of individual hospitals with sustained low error rates from specific DRG edits beginning in June 2012 • Post-payment recoupment of surgeon, assistant surgeon and co-surgeon claims if the surgical procedure is deemed as not medically reasonable and necessary
Patient Status
Observation vs. Inpatient Status • CMS questions whether and how we might improve our current instructions and clarify the application of Medicare payment policies… – Whether it may be appropriate and useful to establish a point in time after which the encounter becomes an inpatient stay if the beneficiary is still receiving medically necessary care to treat or evaluate his or her condition;
Observation vs. Inpatient Status – Whether the agency should establish more specific criteria for patient status in terms of how many hours the beneficiary is in the hospital, or to provide a limit on how long a beneficiary receives observation services as an outpatient; – Whether the agency should provide additional clarity in the definition of an inpatient; and
Observation vs. Inpatient Status – Whether the agency should establish more specific clinical criteria for admission and payment, such as adopting specific clinical measures or requiring prior authorization for payment of an admission.
Looking at Patient Status • Proposed rule posted March 13 − Hospitals will only have limited time to refile claims • Timely filing • Deadline for comments May 17, 2013 • Administrative ruling also posted March 13 − Interim policy effective with release − In effect only until final rule issued
King & Spalding
King & Spalding
Medicare Audit Improvement Act of 2013 H.R. 1250 • Establish a consolidated limit for medical requests • Improve auditor performance by implementing financial penalties, and by requiring medical necessity audits to focus on widespread payment errors • Improve RAC auditor transparency • Restore due process rights under the AB rebilling demonstration • Require physician review for Medicare denials medical necessity • Allow denied inpatient claims to be billed as outpatient claims when appropriate
Questions?? kathyr@fha.org
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