EisnerAmper Blog

An EisnerAmper Health Care Services Blog

Auditors to Review Physician Fees ‘Related’ to Denied Hospital Claims

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September 16, 2014

By Michael McLafferty, CPA, MBA, FACHE, FHFMA, FACMPE

McLafferty_MikeAccording to AIS’s Medicare Compliance newsletter, if hospitals suddenly find that more physicians embrace compliance and documentation improvement, it’s probably because Medicare auditors are now authorized to rebuff professional fees “related” to hospital payment denials, according to the Center for Medicare and Medicaid Services (CMS). As of Sept. 8, auditors may deny physicians’ claims based on hospital records, upping the ante for the quality of documentation outside their offices.

Medicare Transmittal 534 issued by CMS on Aug. 8, gives Medicare administrative contractors (MACs), recovery audit contractors (RACs) and zone program integrity contractors (ZPICs) the authority to review physician payments “related” to hospital and other claims that are rejected because they are not considered medically necessary for various reasons.

Transmittal 534 says MACs and ZPICs will soon have the discretion to deny physician claims before or after related hospital versions are submitted. “If documentation associated with one claim can be used to validate another claim, those claims may be considered related,” according to the transmittal, which provides two examples of claims that can be denied as related:

  • Inpatient vs. outpatient: The MAC reviews Part B payments from admitting physicians and/or surgeons if the inpatient admission is denied as not reasonable and appropriate for Part A payment because the services could have been provided in an outpatient or observation bed. If the MAC decides the physician service was “reasonable and necessary,” it will be recoded “to the appropriate outpatient evaluation and management service.”
  • Medical necessity of the procedure: The MAC recoups Part B payments from admitting physicians and/or surgeons post-payment when the patient’s history and physical, physician progress notes or other hospital documentation doesn’t back up the medical necessity of the procedure.

CMS has recently replaced Medicare Transmittal 534 with Transmittal 540 to adhere to CMS’s inpatient recording policy standards.

IRS releases draft of employer reporting form for health reform law compliance

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August 26, 2014

By:  Michael McLafferty CPA, MBA, FACHE, FHFMA, FACMPE

McLafferty_MikeBased on an article in BusinessInsurance.com,  the Internal Revenue Service has issued draft versions of the reporting forms most employers will begin using next year to show that their group health insurance plans comply with the health care reform law.

The long-awaited draft forms, posted late Thursday afternoon to the IRS' website, are the first practical application of employers' health care coverage and enrollment reporting obligations under the Patient Protection and Affordable Care Act since the regulations were finalized in March of this year.

The forms are the primary mechanism through which the government intends to enforce the health care reform law's minimum essential coverage and shared responsibility requirements for employers.
Beginning in 2015, employers with at least 100 full-time employees will be required to certify that benefits-eligible employees and their dependents have been offered minimum essential coverage and that their employees' contributions to their premiums comply with cost-sharing limits established under the reform law. Smaller employers with 50-99 full-time employees are required to begin reporting in 2016.
Additionally, self-insured employers will be required to submit documentation to ensure compliance with minimum essential coverage requirements under the reform law's individual coverage mandate.

“In accordance with the IRS' normal process, these draft forms are being provided to help stakeholders, including employers, tax professionals and software providers, prepare for these new reporting provisions and to invite comments from them,” the IRS said in a statement released Thursday.

The IRS said it expects to publish draft instructions for completing the reporting forms by late August and that both the forms and the instructions would be finalized later this year.

Proposed Changes to the Medicare Physician Fee Schedule for 2015

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July 31, 2014


By Nancy Clark, CPC, CPB, CPMA, CPC-I

Clark_NancyEarlier this month, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would update payment policies and rates for services furnished under the Medicare Physician Fee Schedule (MPFS) in calendar year 2015.  Significant proposed changes include additional payments for chronic disease management, greater transparency in setting fee schedule amounts and a major revision to the global periods of procedures.

Currently, Medicare pays physicians for chronic care management services as part of a face-to-face visit.  In 2013, Current Procedural Terminology (CPT) codes were introduced for the complex chronic care coordination of services.  These codes include services provided outside of a face-to-face visit for managing two or more chronic conditions. Medicare will continue to emphasize primary care management by beginning to make separate payment for non-face-to-face chronic care management services for beneficiaries under certain conditions.   Chronic care management services include regular development and revision of a plan of care, communication with other treating health professionals, and medication management.

For 2015, CMS is proposing a new process for establishing MPFS payment rates that will be more transparent and allow for greater public input prior to payment rates being selected. Under the new process, payment changes will go through a notice and comment period before being adopted.  These changes will begin for the establishment of the 2016 MPFS.

Recent amendments to the Affordable Care Act have directed CMS to identify potentially “misvalued codes.”  These codes have been identified by reviewing high-expenditure services by specialty that have not recently been reviewed.  Additional measures include a public nomination process through which misvalued codes could be identified by external parties.  Approximately eighty codes will be added to this year’s list.

Directly relating to this initiative, CMS is proposing to transform all 10- and 90-day global codes to 0-day global codes beginning in 2017.  The Office of Inspector General has identified many surgical procedures that include payment for more visits in the global period than are being furnished.  In order to address potential misvaluation of services, it is proposed that visits prior and subsequent to a surgical procedure be billed separately, not inclusive to the surgery.  This initiative could have a profound effect on Medicare reimbursement and billing procedures for surgeons and their staff.

The complete rule can be found here.  

Surgical Checklists Unused in 10% of Hospitals, CMS Data Shows

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July 28, 2014

By Michael J. McLafferty, CPA, MBA, FACHE, FHFMA, FACMPE

McLafferty_MikeHealthLeaders recently published a disturbing article about new data available on the Centers for Medicare & Medicaid Services' (CMS) Hospital Compare website.  Given the evidence of how surgical checklists can reduce deaths and complications, it's a mystery why nearly 10% of hospitals still don't mandate their use and why another 12% can't say for certain whether or not checklists are being used.

One week ago, the CMS Hospital Compare website started publically reporting which of 4,136 hospitals across the country use surgical checklists and which ones don't.

That, one would think, is a pretty big deal, introducing a level of transparency that would please Brigham & Women's Hospital surgeon Atul Gawande to no end. Gawande's work has shown that a Safe Surgery Safety Checklist can reduce by up to one-third deaths and complications resulting from retained objects, infections, unplanned reoperations, and other procedural horrors such as wrong-site or, heaven forbid, wrong-person surgery.

Amazingly, despite so much evidence showing the importance of using such checklists, the website shows that, for the calendar year 2012 when the reports were collected, 366 hospitals said they still don't use them and 497 couldn't say whether they did or not.

Specifically, CMS is now reporting on whether hospitals use a 12-point version of the checklist, one that stops everything at three "critical points" of an operation: before anesthesia, before skin incision, and after surgical site closure but before the patient leaves the operating room.

Beware of Cloned Medical Records

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July 18, 2014

By Nancy Clark, CPC, CPB, CPMA, CPC-I

Clark_NancyMore health care providers utilize electronic health records (EHR) than ever before.  In part, this is due to government incentives.  As the transition from paper medical records to EHR continues, payers and auditors are noticing a problem with these records: cloning.  According to Medicare,“documentation is considered cloned when each entry in the medical record for a beneficiary is worded exactly like or similar to the previous entries. Cloning also occurs when medical documentation is exactly the same from beneficiary to beneficiary. It would not be expected that every patient had the exact same problem, symptoms, and required the exact same treatment.”

An intention of EHR implementation is to simplify medical record documentation; however, caution must be taken not to over utilize the “cut and paste” or “carry forward” features.  Questions are raised when documentation for complaints of allergies and severe chest pains have the exact same physical exam documented.  While some aspects of an exam would be performed for both complaints, it is unlikely that the exam would be identical.  Therefore, care must be taken to substantiate a significant, separate office visit.

Some providers rely on the “free text” entries to summarize their assessment.  If the template associated with this visit is not modified, the resulting documentation may indicate that the “patient presents with abdominal pain.” Later in the same documentation, the review of organ systems may indicate that gastroenterological (GI) system is “negative,” meaning the patient has no abdominal complaints.  This practice is seen frequently, and results from the provider not removing default entries in the standard template.  From an auditor’s perspective, this decreases the authenticity of the documentation.

Additionally, Medicare has stated that it will not reimburse services when it is deemed that the documentation is cloned.  The Medicare Claims Processing Manual, Chapter 12, section 30.6.1A  states “Cloned documentation does not meet medical necessity requirements for coverage of services rendered due to the lack of specific, individual information. All documentation in the medical record must be specific to the patient and her/his situation at the time of the encounter. Cloning of documentation is considered a misrepresentation of the medical necessity requirement for coverage of services. Identification of this type of documentation will lead to denial of services for lack of medical necessity and recoupment of all overpayments made.”

So, what is a provider to do?  In an American Academy of Professional Coders’ article by Rhonda Tews,  it is suggested that providers develop not one but several separate templates. Each template would be based on a level of medical decision making—low, moderate, or high—and also identify a new or established patient to the practice.  The corresponding documentation of the visit would vary according to the severity of the complaint. At the very least, this is a start for more specific documentation.  Additionally, templates can be created for frequent complaints, such as respiratory issues (cough, cold, flu), abdominal pain, musculoskeletal complaints, and other common reasons to seek medical attention.  Templates should be created as reminders to physicians to ensure complete documentation, not to supply the context of the medical record.

It should be noted that EHRs have many valuable features, including improved efficiency, coordination of care, patient access to medical records and ease of transferring records between physicians. The latter could save lives when patients are seen by physicians outside of their primary medical office, such as in an emergent care episode out-of-state.  As long as care is taken to tailor the record to the specific patient encounter, EHRs will continue to be a valuable tool in health care.

Primary Care Doctors: 6% of Compensation Based On Quality Metrics in 2013

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July 10, 2014 

By Michael J. McLafferty, CPA, MBA, FACHE, FACMPE, FHFMA

McLafferty_MikePart of the drive to a value-based health care delivery system will be gearing physician compensation to value-based metrics such as quality and customer service, according to the Medical Group Management Association.

"This is going to be a gradual shift. … It will be a trend that we will see evolve," said Todd Evenson, VP of data solutions and consulting services at the Englewood, CO-based organization.  "We're on the cusp of this information being available."

MGMA has been conducting an annual physician compensation survey for three decades. Beginning in 2012, the MGMA began collecting data on physicians who reported having a portion of their compensation linked to a pair of value-based metrics: quality and customer satisfaction. Primary Care doctors had 3% of their compensation based on quality metrics in 2012.

The data collected in 2012 and 2013 show modest levels of linkage between compensation and the value-based metrics, but there is the start of an upward trend, Evenson says. "We are just at the beginning. You have to be able to measure quality. We're even on the front end of that process."

Pay Attention to Medicare Revalidation Letters

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July 2 2014

Clark_NancyBy Nancy Clark, CPC, CPB, CPMA, CPC-I

Section 6401(a) of the Affordable Care Act (on Page 685) established a requirement for all enrolled providers and suppliers to revalidate their Medicare enrollment information under new enrollment screening criteria. This revalidation effort applies to those providers and suppliers that were enrolled in Medicare prior to March 25, 2011.

The Centers for Medicare and Medicaid Services (CMS) require a provider, supplier, or organization to verify the accuracy of its enrollment information every five years.  At times, “off-cycle” revalidations may be required.  These unexpected revalidations may be caused by health care fraud issues, national initiatives, complaints, or reasons that would cause CMS to question the compliance of the provider or supplier.  Random reviews are also a possibility.

Failure to submit the appropriate required enrollment forms may result in the deactivation of Medicare billing privileges.  Providers should submit the appropriate CMS-855 form in conjunction with any other requested information.  Additional document requests include a CMS-588 Electronic Funds Transfer Authorization Agreement form and a copy of IRS CP-575, or other appropriate certification of the business’ employer identification number (EIN).

Currently, CMS is actively targeting providers who are not registered in the Medicare Provider Enrollment, Chain, and Ownership System (PECOS), in order to facilitate inputting the provider’s data.  They are also pursuing providers who do not currently receive electronic funds transfer (EFT) payments, and those who have not updated their enrollment in the last five years.
In order to comply with ongoing Medicare regulations, providers should report any significant changes to their Medicare Administrative Contractor (MAC) on a timely basis.  These changes include a change in ownership, practice location, billing service or correspondence address.

Providers are encouraged to review all correspondence from CMS on a timely basis.  Keep in mind, though, that a revalidation should not be submitted prior to receipt of a request from Medicare.  For more information on Medicare Revalidation please click here

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