Medicare Audit

46th Annual
Educational Conference & Exhibition
Patient Access:
The First Connection to a Lasting Impression
September 21 – 24, 2014
Medicare Audits & Patient Access
Presented by : Michelle Way,
Revenue Cycle Integrity Specialist
Otani Consulting Group, Inc.
Let’s take a minute and discuss ICD-9 vs. ICD-10
◦ Today under ICD-9 billing codes there are 13,000 diagnostic codes. In
order to smooth the billing process and reduce
healthcare, 68,000 ICD-10 codes were developed!
◦ Let’s look at a few of these necessary codes…..
V97.33XD: Sucked into jet engine, subsequent encounter.
What? A patient was sucked into a jet engine, survived, then
sucked in again?
Y93.D: Activities involved arts and handcrafts. What? Arts
and crafts are so dangerous they need a billing code … no hot
glue guns or knitting needles.
V00.01XD: Pedestrian on foot injured in collision with rollerskater, subsequent encounter. What?
W55.41XA: Bitten by pig, initial encounter. What? Do they have
another code for subsequent encounter -- time to get away from
the pig.
But let’s not pick on pigs--W61.62XD: Struck by duck, subsequent encounter. What?
W55.29XA: Other contact with cow, subsequent encounter.
What? What, precisely, is the contact with the cow that has
necessitated a hospital visit?
V91.07XD: Burn due to water-skis on fire, subsequent
encounter. What/How? Can this really happen
W220.2XD: Walked into lamppost, subsequent encounter.
OKAY this one is for me!
No one likes to be audited, especially by the federal
government. However, the increase in Medicare abuse has
caused the Centers for Medicare and Medicaid Services (CMS)
to consistently audit healthcare providers that receive federal
Medicare dollars.
**Patient Financial Services audits are often meant to recover any
inaccurate or improper payments that were made via
Medicare claims.
The best way to survive an audit and make yourself “auditproof ” is to manage your department as best you can in
accordance with all applicable rules/requirements and
regulations governing reimbursement.
Here are a few suggestions…
Know and understand the requirements for Patient Access
 The big ones are: Patients Rights, Advance Directives, Medicare Secondary
Payor, Important Message For Medicare, *Safe Surrender (DHS)
Know and understand the flow of information from the
registration system to clinical systems.
 Facility wide “Team” effort!
Take the time to write things down. Develop P&P as well as
training documents to educate staff on requirements
 Ensure your P&P’s are consistent with CMS guidelines
 If you don’t document your process, the best explanations will be of
little help during an audit
Discuss compliance at every staff meeting
 Ensure that your staff understand the importance of these job requirements
 Elevate their position to a “profession” not just a “position”
Periodic self-audits are also required
 Audit charts to ensure requirements are being adhered too
 Follow up on areas needing improvement
 Maintain records of audits
Training, training, training
 Medicare compliance should be comprehensive training upon hire and a
mandatory refresher annually
 Training on Medicare and the purpose of auditing. Not only will this keep
your staff informed, but training on the books will demonstrate to CMS the
seriousness with which you take the matter
Typically the facility will receive a letter notifying them of
anticipated audit
Once CMS arrives a complete review will be conducted
utilizing a “Surveyors On-Site Checklist”. This document has
5 sections with a total of 57 items listed
 For ABC Hospital the Advance Directive (AD) information on the eHR did not
match the documentation in the registration system - - PROBLEM!!
CMS cited the facility and the facility had 90 days to
respond to CMS with an action plan
 Immediate corrective action was taking place at the facility
CMS had 30 days to accept or reject the proposed facility
action plan
 CMS could not agree to timelines, accuracy goals, improvement timeline
When action plan was approved, CMS had any time after 90
days to come back and audit again
Facility started weekly meetings with all managers that had
areas cited
Registration audited daily all charts on the floors (100%), then
after staff accuracy increased the audits changed to weekly
then monthly
 Employees not improving were put on a PI Plan
Audit results were submitted to Administration for record
keeping and for submission to CMS on facility wide report
Audits continue today and anytime compliance is below 95%
facility returns to weekly auditing
A major issue at ABC Hospital was that the registration
system and clinical charting system did not flow information
back and forth. So if Patient Access asked the AD question,
documented the response - then the nurses inquired about
AD and documented the outcome the documentation often
did not match the registration system = ISSUE!
It was found that when CMS identified one deficiency in
an area they tended to dig really deep in anything that fell
under that umbrella. For example: When CMS found that
restraints were not done correctly, they started digging deep
into all Patient Rights areas, which resulted with the findings
and tremendous focus on Advanced directives.
Each time CMS came back to review the status of the action
plan they would survey a different area and potentially find
another item to add.
The Medicare Secondary Payer (MSP) program is designed to
reduce costs to the Medicare program by requiring other
insurers of health care for beneficiaries to pay primary to
Medicare. It applies in three situations: where there is liability
insurance, e.g. for an accident; where there is workers
compensation coverage, e.g., for a job related injury; and
where there is an employer’s large group health plan (EGHP)
 Source:
Written notice sent to hospital CFO
Advises CFO to expect a listing of claims selected and a letter of
instruction, which arrives within 2 weeks with a deadline to return
selected claims
Auditor completes claim desk review – 40 claims
CMS then sends next notice to hospital of on-site review
On-site review and exit interview followed by written conclusion
of hospital’s compliance with MSP regulations
Hospital Reviewer requested 40 claims per hospital with supporting
 UB04
 MSP Admission Questionnaire
 Beneficiary’s Medicare Summary Notice (MSN)
 Admission Policies that identify “Other Payer” primary to Medicare
 Registration Policies that describe the process and systems used to meet
 Billing policies that identify “Other Payer” primary to Medicare and
Medicare “No Pay” billing procedures
 Medicare Secondary Payer Training Manuals and policies
Informed Management of pending review
Dispersed audit letter to all related departments
Assigned a point person for audit coordination- PFS Auditor
Established an MSP Review Committee composed of Billing,
Registration and Audit Team. Weekly meeting scheduled to keep all
Assigned teams to gather requested documentation
PFS Auditor coordinated assembling audit material
Teams reviewed all related policies & training material
Scheduled in-services with Billing and Registration
PFS Audit and Managers reviewed signage, brochures, and team
delivery of required materials & explanation of forms being signed
during admission interviews
Anything you discuss with Hospital Reviewer should be reviewed in
advance for correctness
Be truthful, state facts, and don’t give opinions
Keep all answers short and to the point
Meet all deadlines indicated in the submission documents
Keep copies of all submissions
Our reviewer was new and needed to see lots of detail to verify our
processes were thorough
Your team members do these functions everyday
Dear Mr. Lawson:
Office of inspector General Office of Audit Services
REGION IV Room 3T41 61 Forsyth Street, S.W. Atlanta, Georgia 30303-8909
This final report provides you the results of our Review of Hospital Medicare Secondary Payer Issues.
The objective of this review was to determine whether XXXX Medical Center (the hospital) complied with Medicare
Secondary Payer (MSP) regulations regarding both inpatient and outpatient settings during its Fiscal Year (FY)
ended June 30,2012.
Our review showed that, for 64 percent of the claims reviewed, the hospital could not provide sufficient
documentation to demonstrate compliance with Medicare guidelines and it’s policies and procedures regarding
the completion and adequacy of MSP questionnaires. We are concerned that this condition could lead to
Medicare absorbing a share of the costs applicable to other payers and to credit balances being generated and
requiring unnecessary administrative expenses to resolve. In this respect, a review of 25 credit balances showed
that in 7 instances, Medicare was billed in the wrong order. In reviewing these credit balances, we also found
that the hospital did not always refund Medicare credit balances in a timely fashion.
We are recommending that the hospital: not bill Medicare unless hospital personnel have obtained and filed a
completed MSP questionnaire; implement and provide, within 60 days, effective education and training to every
staff person associated with collecting admission information

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