Onerous Audits

HME providers should brace for increased scrutiny of claims submitted to the Medicare program through stepped up audits. Medicare audits may be nearly as onerous as the prospect of competitive bidding because the improper payment issue is a big concern for some policymakers in Washington.

Late last year, the HHS Office of Inspector General conducted a study of 2009 HME claims and estimated that more than 50 percent were improper — one of the highest error rates in Medicare. This report caught the attention of Congress, which is pressuring CMS to “fix” the problem.

This means life will likely get harder for home care providers due to additional audits, at a time when payments are being cut and the regulatory burden is increasing through the HME sector.

CMS established the Comprehensive Error Rate Testing (CERT) program to sample claims randomly and measure errors or improper payments. Under the program, any claim that was paid when it should not have been is considered improper — for instance, claims where documentation from the physician’s medical record is missing or insufficient, claims for medically unnecessary services or incorrect coding.

The CERT report for 2009 projects an error rate of 51.9 percent for HME. While the report points out that “the error rate is not a measure of fraud” and that HME providers must rely on accurate and complete physician notes to justify medical necessity, this has not deflected attention; it has only increased the belief that there needs to be additional scrutiny.

The CMS report offered a lengthy explanation why the HME error rate was much higher than other types of providers in Medicare. “CMS’ stricter adherence to policies disproportionally affected DME claims. More DME claims were determined to be paid in error because of the more strict enforcement of documentation requirements rather than allowing for clinical review judgment….”

But in spite of the explanations, policymakers still use these reports to heap additional regulatory burdens on HME providers.

The CERT post-payment audits cause problems due to their reliance on physician documentation. HME providers must adhere to all applicable CMS manuals and regulations when going through CERT audits, meaning that documentation requirements go beyond what is listed in the local coverage determination. And CERT will adhere to legible doctor signature requirements when deciding to accept medical documentation.

Also, Zone Program Integrity Contractors (ZPICs) are conducting pre-payment audits on HME providers in Florida and Texas. Some providers say ZPICs are requesting large numbers of claims and holding all payments on those claims pending submission and review of any requested documentation. The program for recovery audit contractors (RACs) was expanded to all 50 states this year. The RACs are looking into wheelchair bundling, urological bundling, knee orthotic bundling and multiple HME rentals within a month.

And the new health care reform law requires states to establish contracts with RAC auditors by Dec. 31, 2010, to recoup overpayments for services provided under Medicaid programs and state waivers.

We all know the HME sector has zero tolerance for fraud and abuse. But with bounty-hunting RAC auditors who get paid for finding improper payments — even when the payments turn out to be correct — it’s no wonder many HME providers feel they are viewed as “guilty until proven innocent.”

AAHomecare is working with CMS to reduce error rates. However, the heart of the problem is the complexity of the documentation requirements. Think about denied HME claims this way: Federal regulators are questioning and overturning physicians’ judgments more than 50 percent of the time. This is an indictment of the audit system.

We must streamline this process and reduce the hassle factor for HME providers.

Read more AAHomecare Update columns.

Tyler J. Wilson is president and CEO of the American Association for Homecare, headquartered in Arlington, Va. You can reach him at [email protected]. For more information on critical home care issues, visit the association’s Web site at www.aahomecare.org.