Audit Headaches? Then Get Documentation Up Front

For 10 years, I worked in various roles at various Medicare contractors, but I spent much of that time in the area of program integrity working as a fraud analyst, Medicare fraud information specialist and fraud investigator. In my many years in that role, it was ingrained in me that durable medical equipment suppliers were inherently bad. It was my job, as an investigator, to protect the Medicare Trust Fund.

I remember the moment that things started to change for me. I had conducted an audit on a small family-owned HME in the Midwest, a company that had been in business for a very long time. The audit resulted in a significant overpayment that would have a devastating impact on the company’s ability to remain in business. The overpayment was identified because, perhaps, the company had become lax over the years in keeping up with Medicare policies and guidelines and was not getting supporting documentation up front.

I remember the owner of the business, who had inherited it from her father, called me up and cried over the phone, begging me for a different outcome. My hands were tied, and all I could offer her were her appeal rights.

I mention this because with the proliferation of audits, the issue that has, by far, caused the biggest problem for providers is insufficient physician documentation. The burden of being placed on prepayment review or appealing large overpayments is costly and overwhelming for most HME businesses.

After I hung up the phone with the supplier I audited, I realized that I was quite possibly taking away this woman’s livelihood because of careless mistakes in not following convoluted policies. The policies did not require that HME companies get documentation up front, and most companies didn’t.

Years later, the industry still isn’t getting documentation up front in most cases. The big difference, though, is the government’s huge increase in funding for audits and increased oversight that requires suppliers to provide sufficient physician documentation to support their claims. In this specific case, as with countless others, the overwhelming majority of claims denied because the physician documentation was deemed to be insufficient.

Don’t Take the Gamble

I assumed at the time that getting physicians to document things accordingly was easy. I realize now how very wrong I was. Unfortunately, most auditors that work for the government or its contractors haven’t yet come to this same realization. I’ve tried relentlessly to portray the difficulty in this task, but I’m not certain the message gets through.

As the agency responsible for administering Medicare, CMS instructs audit contractors on what to do. These contracts are enormously sought after. The Zone Program Integrity Contractor (ZPIC) Zone 5 contract, for example, was awarded at nearly $108 million. Therefore, these companies must be able to show their worth to CMS. While ZPICs are not reimbursed on a contingency basis like Recovery Audit Contractors (RACs), they do report “cost savings” to CMS that is often touted as a measure of their effectiveness.

During my tenure at Medicare, I did play a role in weeding some really bad guys out of the system, but that was certainly not the majority of companies I audited. What I saw was that CMS was drafting more complex and intricate Local Coverage Determinations when the real fraudulent suppliers don’t care what the policies state. They don’t care that there is a face-to-face requirement or that a detailed written order must contain seven elements. What I saw was that legitimate suppliers providing a needed service to Medicare beneficiaries were getting claims denied for reasons often outside their control, and the policies only made it more difficult for the good guys.

Here’s the thing: We may not agree with the Medicare policies that are in place, but if you want to accept money from the Medicare Trust Fund — taxpayer money — then you must play by their rules. If you have not yet been audited, you will be.

You must be proactive, and you may need to change the way you’ve always operated. You should get as much documentation as you can up front and review it before filing any claims to Medicare. While you’re not required to do so, if you don’t, then you are doing harm to the industry as a whole by taking a gamble that when asked to provide the documentation, it will be there and will be sufficient.

I can tell you now that the odds are not in your favor. In my experience, it is very rare that physician documentation is adequate to meet the strict policy requirements. But as the supplier, you are liable for that payment unless you have a valid Advance Beneficiary Notice on file. That’s a gamble this industry simply cannot afford to take anymore.

Pushing through the Pushback

Many HME providers that have implemented processes to obtain documentation up front report getting pushback from physicians and losing referrals. The most common complaint from physician offices is that HME companies are asking for too much documentation when Company XYZ doesn’t ask for it or just has them complete a form. So they end up losing that physician as a referral source and lose patients to the other company.

This situation may yield short-term results for Company XYZ. But in an audit, it calls into question the integrity of that company’s services and creates an unacceptable level of risk for their reputation and their revenue. If Company XYZ gets an Additional Documentation Request and they provide their “forms,” or if the company attempts to go back to the ordering physicians to get supporting documentation, often it won’t be there. All the money they’ve been paid is now going to be recouped or the claims for equipment they’ve provided will be denied, causing a significant cash flow issue for the company.

Physicians are the gateway to the Medicare program, and nothing can be provided without an order from one. However, they are not accountable, and it’s not clear they ever will be. So now is the time for the HME industry to take control rather than continue down this arduous path.

If the industry came together and began educating physicians on the LCDs and requesting the documentation up front, then the physician community would be forced to comply. It’s time for you to make physicians a partner in providing services to your patients. If you tell the physician you can’t provide the service to his or her patient without adequate documentation, and that patient goes somewhere else and the physician is told the same thing, the physician will have no choice but to adjust behavior and processes.

Getting Documentation Up Front

Perhaps someday physicians will be held accountable for their lack of supporting documentation when it comes to other services they prescribe. I’ve even heard some talk of physicians being subject to ZPIC audits if there is a lack of supporting documentation when reviewing claims. I imagine that could certainly be used as an incentive to get appropriate documentation.

For now, here are some extra tips in getting sufficient documentation and keeping your revenue long-term:

• Train your employees regularly on the “Indications and Limitations for Coverage” in the LCDs for all the products you provide so they are familiar with the circumstances in which Medicare will pay for equipment. The auditors will review the clinical records to see that these criteria are met.
• Get documentation up front in all instances. Your employees should be familiar with the coverage criteria and review documentation to assure that the indications are addressed in the physician progress notes. If not, contact the physician’s office to explain what is missing or needed. Maybe once a physician is asked to correct documentation on multiple occasions by multiple suppliers, he or she will document correctly the next time to avoid those recurring requests.
• In cases where physicians do not cooperate, advise the patient that the claim may be denied because the physician will not document that the patient meets the Medicare coverage criteria. Hopefully the patient will get involved and encourage the physician.
• You have to choose not to supply the patient or get an ABN. If the physician documentation doesn’t specify that coverage criteria are met, then the services may be denied for not being medically necessary. Complete a valid ABN and have the patient review and sign it agreeing to be liable. If the physician will not document it, then perhaps the patient does not qualify.
• Stop using forms to document medical necessity unless a policy specifically allows for an approved form. Otherwise, forms are never acceptable on audit to support medical necessity. In truth, forms are actually detrimental in getting the physician to document anything in the progress notes because physicians think filling out the form is all that has to be done. When you use a form, you have all but guaranteed that the claim will be denied or deemed overpaid on audit and cause you more scrutiny.
• Educate your referral sources. CMS has placed the responsibility for educating physicians and other referral sources squarely in the lap of suppliers. This means your options are limited. When a verbal order comes in and you have to contact the physician to get a detailed written order, send it with a cover letter that states the coverage criteria for the product they have prescribed and advise that you need the order signed and a progress note that specifically addresses how the patient qualifies. If you don’t get the documentation, don’t provide the product. You cannot be expected to continue providing equipment for free.

• Your referral sources should also be made aware that you don’t necessarily need months and months of progress notes. In most instances, one progress note that clearly addresses the need for the specific item is sufficient. In this case, it’s quality versus quantity.
• Educate your physicians that if the equipment they prescribe is an ongoing rental, they should schedule follow-up visits with their patients to address specifically the continued need for the equipment. These notes should also be provided to you, and someone in your office should follow up to remind the physician and obtain these notes.
• Contact other suppliers in your area and implement this approach collectively. It is going to take more than one or two companies for these changes to be effective.
• Implement a comprehensive and effective compliance program. Make sure there is an expressed commitment to compliance in your organization that is evident from the top down. Health care providers have a responsibility to assure that claims are filed in accordance with coverage policies and guidelines — whether you agree with them or not.

These are considerably difficult recommendations, but if the industry comes together and implements them, then eventually the tides will be turned in your favor. It’s certainly not an easy road, but unless sweeping changes are made, the situation will only get worse. More and more HME companies will close their doors, and Medicare beneficiaries will lose access to a very vital service.

I am saddened to see the downfall of some legitimate businesses that have been servicing Medicare beneficiaries for a long time being forced to file bankruptcy. I am frustrated that despite hearing the audit horror stories, many providers aren’t heeding the warnings of those who have been through one.

If the industry doesn’t seize the opportunity to take control of this negative situation and improve its image, it will only get worse. CMS has already said that it feels there are too many medical equipment providers. Perhaps the agency is intent on putting companies out of business. Nothing else can explain the current aggressive techniques or the lack of communication or feedback by companies contracted to conduct these Medicare audits.

And the audits are not going to subside. The ZPIC program is being expanded nationally, and thinking you can avoid an audit and conduct business as usual is a mistake. It’s a mistake that can cost you and the industry as a whole. Be proactive, be prepared and work collaboratively with each other.

• Read “CMS Turns Up the Heat” for more information on preparing for ZPIC audits — and what to do if one hits you — from Wayne van Halem.

Author and consultant Wayne van Halem, president of The van Halem Group, Atlanta, has worked as a fraud analyst, Medicare fraud information specialist and senior investigator. An Accredited Healthcare Fraud Investigator and Certified Fraud Examiner, van Halem provides counsel to all entities involved in the participation, administration and oversight of public and private health care plans. You can reach him at 404/343-1815 or [email protected].