Part 2 of a Four-Part Series: The following questions and answers from health care attorney Jeff Baird of Brown & Fortunato are Part 2 of a four-part series addressing prepayment reviews; post-payment audits; a comparison of reviews conducted by the DME MACs with audits conducted by the ZPICs; and in the final installment, contractor abuses and the steps that the American Association for Homecare and industry stakeholders are taking to correct the abuses.
Question: What type of post-payment audits do DME MACs conduct?
Answer: MACs conduct medical review audits. Post-payment medical review of claims requires that a benefit category review, statutory exclusion review, reasonable and necessary review, and/or coding review be made after claim payment. These types of reviews are designed to give the MAC the opportunity to make a determination to either affirm payment of a claim (in full or in part) or deny payment and assess an overpayment.
Question: What are CMS' objectives pertaining to medical review post-payment audits?
Answer: CMS' stated objectives are to increase the effectiveness of medical review payment safeguard activities; exercise accurate and defensible decision-making pertaining to medical review of claims; and collaborate with other internal components and external entities to ensure correct claims payment and to address situations of Medicare fraud, waste and abuse.
Question: What do medical review functions include?
Answer: Analyzing data; writing and reviewing local coverage determinations; reviewing claims and educating providers; comprehensive error rate testing; advance determination of Medicare coverage; probe reviews; supplier education; and medical review of claims not for benefit integrity purposes.
Specific efforts may include proactively identifying potential medical review-related billing errors concerning coverage and coding made by providers through analysis of data and evaluation of other information; placing emphasis on reducing the paid claims error rate by notifying the individual billing entities of medical review findings and making appropriate referrals to provider outreach/education and ZPIC Benefit Integrity units; taking action to prevent and/or address the identified error; and publishing LCDs to provide guidance to the public and medical community about when items and services will be eligible for payment.
Question: How is a medical review post-payment audit initiated?
Answer: The MAC is required to give the provider written notice of the following: that the provider has been selected for audit and the specific reason for such selection; if the basis for selection is comparative data, the contractor must provide comparative data on how the provider varies significantly from other providers in the same specialty payment area or locality; the list of claims that require medical records; and the OMB Paperwork Reduction Act collection number.
Question: How does the MAC make its coverage determination?
Answer: The contractor may review a claim regardless of whether an NCD, coverage provision in an interpretive manual or LCD exists for that service. A contractor must first consider coverage determinations based on the absence of a benefit category or based on statutory exclusion.
Next, a contractor then considers whether the claim was "reasonable and necessary." A service is reasonable and necessary if the contractor determines that the service is safe and effective; not experimental or investigative (subject to a narrow exception); and appropriate, including the duration and frequency that is considered appropriate for the service, in terms of whether it is furnished in accordance with accepted standards of medical practice; furnished in a setting appropriate to the patient's medical needs and condition; ordered and furnished by qualified personnel; one that meets, but does not exceed, the patient's medical need; and is at least as beneficial as an existing and available medically appropriate alternative.
There are narrowly defined exceptions to the "reasonable and necessary" requirement. A contractor must deny a claim (in full or in part) whenever there is evidence that the item or service was not rendered or was not rendered as billed; was furnished in violation of the self-referral prohibition; was furnished, ordered or prescribed on or after the effective date of the provider's exclusion; or was not furnished or not furnished as billed.
Question: In conducting a medical review post-payment audit, what documentation does the MAC review?
Answer: The contractor may use any information it deems necessary to make a post-payment claim review determination. The contractor may review any documentation submitted with the claim and request documentation from the provider or from a third party. A contractor may, but is not required to, review unsolicited, supporting documentation that is submitted with a claim.
A contractor may deny a claim without reviewing such documentation in two instances: when clear policy serves as the basis for denial; "clear policy" means a statute, regulation, NCD, coverage provision in an interpretive manual, or LCD that specifies the circumstances under which a service will always be considered non-covered or incorrectly coded; or in instances of medical impossibility.
Question: What is an Additional Documentation Request (ADR)?
Answer: A contractor may request additional documentation from a provider by issuing an ADR. The ADR must specify the specific pieces of documentation needed to make a coverage or coding determination. The purpose of the documentation is to support the medical necessity of the item or service provided.
The treating physician, another clinician or the provider may supply the documentation. The documentation may take the form of clinical evaluations, physician evaluations, consultations, progress notes, physician letters or other documents intended to record relevant information about a patient's clinical condition and treatment.
At the end of the day, what the contractor is looking for are contemporaneous physician progress notes. If these are absent, then it is unlikely that the provider will prevail at the audit stage.
A provider has 30 days to respond to an ADR. The contractor may, but is not required to, grant an extension. The contractor will pend the claim for 45 days. A contractor may, but is not required to, issue (at most) two reminders prior to the 45th day. If the provider does not submit the requested documentation within 45 days, the contractor will deny the service as not reasonable and necessary, except for certain ambulance claims.
If the provider timely responds to the ADR, but the documentation submitted fails to support medical necessity, the contractor will deny the claim (in full or in part). The contractor may issue an ADR to a third party (e.g., a physician), but only if it also first or simultaneously requests the same information from the billing provider. The beneficiary is not considered to be a third party.
Question: What time deadlines are imposed on the contractor, once it receives additional documentation, to report back to the provider?
Answer: When the contractor timely receives documentation in response to an ADR, it must make a medical review determination and mail a notification letter to the provider within 60 days of receiving the documentation. The contractor may begin counting with the receipt of each medical record in the contractor's mailroom; each new medical record will have an independent 60-day time period associated with it.
Alternatively, the contractor may wait until all requested medical records are received in the contractor's mailroom; the date on which the last of the requested medical records is received will represent the beginning of the 60-day time period. The 60-day count is suspended if the matter is referred to a ZPIC.
Question: May a contractor reopen a claim after the provider is late in responding to an ADR?
Answer: If a contractor receives the requested information from a supplier after a denial has been issued, but within a reasonable number of days (generally 15 days after the denial date), then the contractor may reopen the claim.
If a claim that was denied for failure to submit requested documentation is appealed, then the appeal department will send the claim to the contractor for reopening if all of the following conditions are met: a provider failed to timely submit documentation requested through an ADR; the claim was denied because the requested documentation was not received timely; the requested documentation is received after the 45-day period with or without a request for redetermination or reopening; and the request is filed within 120 days of the date of receipt of the initial determination.
Series
To read more of Baird's comments on HME legal issues, see his Law School columns in HomeCare.
Jeffrey S. Baird, Esq. is chairman of the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas. He represents pharmacies, infusion companies, home medical equipment companies and other health care providers throughout the United States. Baird is board-certified in health law by the Texas Board of Legal Specialization. He can be reached at 806/345-6320 or jbaird@bf-law.com.