The past 30 days have witnessed important RAC updates. And the next 30 days will bring even more activity as Congress’s moratorium on Recovery Auditor patient status reviews expires on October 1, 2015 and quality improvement organizations (QIOs) take on the task. With so much news, a new blog post was warranted. This post provides a quick summary of audit happenings—with a focus on the important two-midnight rule changes. CMS releases fact sheet
On July 1, 2015, the Centers for Medicare and Medicaid Services (CMS) released a fact sheet
with proposed updates to the two-midnight rule, specifically concerning when inpatient admissions are appropriate for payment under Medicare Part A. Also for two-midnight cases, a record limit has been set of 50 records per year per facility, with a recommended turnaround time of 30 days. Concurrently, CMS notified the public of upcoming changes in its education and enforcement strategies. Those changes are slated to begin in October.
Although the language of the still-in-flux rule remains vague and there’s still confusion surrounding it, CMS plans to deliver more formal education through the QIOs to help clarify the two-midnight rule. QIOs begin patient status reviews
Starting October 1, quality improvement organizations (QIOs) will conduct their first line of patient status reviews of providers to determine the appropriateness of Part A payment for short-stay inpatient hospital claims. If the QIOs see abusive patterns, they have the ability to send the results of those reviews to the Recovery Audit Contractors (RACs) for follow-up. These reviews were previously conducted by the Medicare Administrative Contractors (MACs).
From October 1 through December 31, short-stay inpatient hospital reviews conducted by the QIOs will be based on Medicare’s current payment policies. Beginning on January 1, 2016, QIOs and Recovery Auditors will conduct patient status reviews in accordance with any policy changes finalized in the Outpatient Prospective Payment System (OPPS) rule and effective in calendar year 2016.
Recovery auditors may conduct patient status reviews only for those providers that have been referred by the QIO as exhibiting:
• Persistent noncompliance with Medicare payment policies
• High denial rates and repeated failure to adhere to the two-midnight rule
• Failure to improve performance after QIO educational intervention
Meanwhile, Recovery Auditors may continue to conduct reviews of claims for other reasons, including CMS-approved claim reviews for medical necessity and correct coding unrelated to patient status. These changes will not affect other auditors such as MAC and Comprehensive Error Rate Testing (CERT) reviews for overall errors and other audits conducted for the purpose of identifying fraudulent behaviors, such as Zone Program Integrity Contractor (ZPIC) reviews. Probe and Educate gets update
MACs’ third round of Inpatient Probe and Educate reviews ends September 30, although some provider education may continue beyond this date. After October 1, 2015, MACs may continue to conduct CMS-approved claim reviews unrelated to patient status, such as coding reviews and reviews to determine medical necessity. More post-payment news
Finally, CMS has instructed MACs and Qualified Independent Contractors (QICs) to limit claims to the reasons initially stated in post-payment reviews. For example, suppose a contractor denies a claim due to a diagnosis-related group (DRG) coding error. In the past, during the appeals process, a MAC might find that the coding was actually correct and then overturn the initial denial, but still issue an unrelated denial for a short-stay violation, or another discrepancy that was not initially flagged. Some providers say this happened a lot, while others say it didn’t occur that often. So the importance of this rule change is subjective. Some providers will be greatly affected, others less so.
Regardless, MACs and QICs can no longer change the reason for post-payment review once the process has begun.
According to the CMS publication MLN Matters, “For redeterminations and reconsiderations of claims denied following a post-payment review or audit, CMS has instructed MACs and QICs to limit their review to the reason(s) the claim or line item at issue was initially denied. Post-payment review or audit refers to claims that were initially paid by Medicare and subsequently reopened and reviewed by, for example, a Zone Program Integrity Contract or (ZPIC), Recovery Audit, MAC, or Comprehensive Error Rate Testing (CERT) contractor, and revised to deny coverage, change coding or reduce payment. If an appeal involves a claim or line item denied on a prepayment basis, MACs and QICs may continue to develop new issues and evidence at their discretion and may issue unfavorable decisions for reasons other than those specified in the initial determination.”
This clarification and instruction applies to redetermination and reconsideration requests received by a MAC or QIC on or after August 1, 2015. It will not be applied retroactively. Stay tuned…keep informed
As these changes go into effect, please keep abreast of news, changes and impact here—at HealthPort’s Audit Insights blog.