Therapy Audits and Updates Final 2013

Audits and Current
Therapy Trends
Kimberly Saylor, OTR/L
VP of Business Development
Concept Rehab, Inc.
Objectives for Today:
• Understanding of types of audits being conducted in LTC
• Understand the appeal process of audits on therapy services
• Discuss the current trends of therapy in LTC/SNF setting
• Explore the business-side of therapy
Types of Audits:
• MAC Audits
• RAC Audits
• MMR (Manual Medical Review)
• Medicaid Audits
• Managed Care Audits
What is a MAC ?
• MAC = Medicare Administrative Contractors
• Regional Contracts with CMS
• MACs are responsible for:
• Reviewing, Revising, and Issuing updated Local Coverage
Determination (LCD) guidance covering the services in their area
• Ohio is in Jurisdiction 15
• CIGNA (CGS) is our MAC for Medicare Part A and Part B
• CIGNA website:
• Medical Review (MR) program goal: to reduce payment error
by preventing the initial payment of claims that do not
comply with Medicare’s coverage, coding, payment, and
billing policies.
– Identify noncompliance through analysis of data
– Take action to prevent improper payment with goal of
reducing the paid claims error rate.
• Medical Review Process
• Focused Reviews (Probe)
• Ex: 2009 Focused Review OT/PT (97110)
• Random Reviews
Potential Outcome of ADR
• Full, Partial or Denied Payment
What is a RAC?
• RAC = Recovery Audit Contractor
• Subcontractor that is hired by CMS to detect, correct, and
prevent future improper payments
• CGI Federal  RAC for Region B which includes Ohio
• RAC is paid on a contingency fee basis. This means they are paid
only if they find reason to deny a claim.
• The fee is % of amount of improper payment.
• RACs became permanent in 2010.
• Primary task is to ID
improper PAST Medicare
• 3 year look back period
• Must get CMS ok to conduct
widespread review or
referred to as “issues”
3 Types of RAC Review:
• Automated Review:
• Overpayment data based solely on data billed (no medical
record reviewed.). Audit focused on billing and coding
patterns compared to peers and other providers.
• Semi-Automated Review:
• Claims are reviewed using data and possibly a reviewer to
look at the medical record, if requested.
• Complex Review:
• RAC demands medical records to determine if there was
over payment.
RAC 2005-2007 What Did They Find?
• RAC demonstration project of
2005-2007 recovered over
$1.3 billion mostly
due to:
• 45% Medically unnecessary
• 35% Incorrect coding
• 10% Insufficient documentation
New RAC Prepayment Reviews:
• Officially started August 27, 2012
• Will conduct Pre-payment reviews
on claims that historically have
high rates of improper payments
• Ohio to be reviewed d/t high
claims volumes of short stay
hospital visits
Zone Program Integrity Contractors
• ZPICs handle Medicare Program integrity functions for CMS
• They work with the Medicare Administrative Contractor
(MAC) to handle fraud and abuse within their jurisdiction
• They refer cases of potential fraud to the Dept. of Health and
Human Services (HHS) and Office of Inspector General (OIG)
• ZPICs have the power to suspend claims/ payment for up to
1 year and there is no appeal recourse at this time
• Scrutinize providers across settings; i.e. hospital with hospital
based SNF/HH etc.
• Don’t have a limit on the time they spend looking at the
provider in question
• No ZPIC audit is random. A ZPIC audit is either the subject of a
fraud investigation, or process to review information to
determine if a fraud investigation should be opened.
• ZPIC for Ohio  Cahaba Safeguard Administrators, LLC
Part B Manual Review Process (MMR)
• Specific to Part B Therapy Services - Effective October 1, 2012
and was in place temporarily for 3 months
• Current cap is $1900. Threshold of $3700 for OT and $3700 for
PT/ST combined for Medicare Part B
• American Taxpayer Relief Act of 2012 extended Part B OP
manual medical review (MMR) requirements thru Dec 31, 2013
• MMR – completed on every claim at and after the services
exceed $3,700.
Current MMR Framework
• CMS Finalized 2013 Process
• No more prior authorization
• April 1, 2013 begins RAC
• OH is among the 11 states
in ‘Pre-Pay’ MMR
demonstration RAC
• 39 states in ‘Post-Pay’
Current MMR Process
• MAC issues ADR once $3700 threshold is met
• Provider has 30 days from the date of ADR to submit
• RAC to conduct MMR within 10 business days
• RAC notifies MAC of the decision
• RAC issues detailed review results letter to provider
Medicaid Integrity Contractors
• Established in 2005 as part of the Medicaid Integrity Program
• Three Types of MICs:
• Audit: Conduct post payment audits and identify over payments
which states will collect and work with provider appeals.
• Review: Analyze Medicaid claims to identify high risk areas and
potential vulnerabilities.
• Education: Use findings from Audit and Review MIC to identify and
provide areas of needed education and training to prevent Medicaid
fraud, waste and abuse.
Humana Audits for Skilled Care
• Specifics:
– to ensure accuracy of RUG scores billed
– Post-Payment: going back 2 years
– Providers have 14 – 30 days to respond to request
• Primary Issues:
– Are therapy minutes submitted on MDS supported?
– Are ADL scores supported in documentation?
– Is there evidence of need for COT OMRA?
• Outcome Letter:
– RUG validated
– RUG not validated  Results in re-rugging and request for
overpayment to be PAID back
Humana Audits for Skilled HMO
• Issues:
– Therapy minutes submitted on MDS supported?
– Are ADL scores supported in document?
– Evidence of need for COT OMRA?
• Outcome Letter:
– RUG validated
– RUG not validated  Results in re-rugging and request for
overpayment to be PAID back
Audits will continue until no
more issues can be found!
Understanding the
Appeal Process
How to Prepare for an Audit?
• Have facility specific procedure
outlined for gathering records
• Identify key personnel
• Billing, Medical Records,
Nursing, Therapy
• Outline individual responsibilities
• Establish timeframes
• Work from checklists to assure
Submitting Information for an Audit
• Timing is important!
• Audits are very time sensitive - Know your deadlines
• Always send packets using certified mail, Fed Ex,
or UPS
• Tracking receipt a must!
• Some contractors accept fax or CD/DVD in TIFF
• Submit ‘other’ records that help support medical necessity of
therapy services
• Social services’ notes that support PLOF
• Nurses’/Restorative notes that support reason for referral or decline
• Physician notes/H&P that support decline
What do I do if all or portions of
my claim are denied?
• Know your appeal rights
• Uniform Process for Medicare
Denied Claims
• MAC and RAC have same appeal process
• 5 Levels in Appeal Process
First Level of Appeal:
• Records examined by the MAC – different department than one
who reviewed ADR.
• You have 120 days from the date of the initial determination to
file a redetermination.
• Must be requested in writing.
• Include additional supporting documentation to make your case.
• Appeal letter to summarize rebuttal.
Second Level of Appeal:
• Reconsideration by a Qualified Independent Contractor (QIC)
• Must be filed within 180 days of date of redetermination decision letter.
• Appeal letter and important to send all supporting documentation at this
– May not be granted permission to submit further documentation
beyond this level of appeal.
• QIC will make decision in 60 days.
• Website Link to check status of Level 2 Appeal:
Third Level of Appeal:
Administrative Law Judge Hearing
• Administrative Law Judge (ALJ) Hearing
• Request this hearing within 60 days of the date of the reconsideration
decision letter.
– Must receive permission by Judge to submit any additional
documentation at this level
– Must have ‘good cause’
• Must be a claim of at least $140.00.
• Hearing held by phone or video-telephone.
• Decision issued within 90 days
Third Level of Appeal:
Administrative Law Judge Hearing
NOTE: ALJs are currently delayed due to the volume of
requests being received
Fourth Level of Appeal:
Medicare Appeals Council
• If dissatisfied with ALJ decision a request may be made to the
Medicare Appeals Council.
• Must be requested within 60 days of the date of the ALJ
decision letter.
• Appeal submitted in writing.
• Generally a decision is issued by the Council within 90 days of
the request for review.
Fifth Level of Appeal:
Federal District Court
• If dissatisfied with Council decision may submit final appeal to
Judicial review in Federal District Court
• Current threshold is $1,400.
• Must request this review within 60 days of the date of the
Council’s decision letter.
Humana Appeal Process
3 Levels to Humana Appeal Process
Level 1:
• 30 days to contact Humana and notify you are appealing
• 120 days to submit appeal.
• Appeal reviewed by original reviewing organization
Level 2:
• 120 days to submit appeal
• Appeal reviewed by 3rd party vendor
Level 3:
• 120 calendar days to submit appeal.
• Depends on type of audit and expertise required.
• A physician will review all medical necessity cases.
• Appeals reviewed by Humana:
• Internal Clinical Physician Review Team
• Internal Coding Team
Keys to Successful Appeals
• Individualize appeal letters at each level
• SAMPLE templates can assist with this process
• Focus on specific rebuttals
• Decision letters as you advance in appeal process
provide more details of reasons for UNFAVORABLE
• Familiarize self with LCDs and CMS Manual information
• Copy and paste regulations from these resources in your appeal letters
• Don’t trigger an audit!!
Keys to Successful Claims
DOCUMENTATION of Medical Necessity
• Supportive Medical and Treatment Diagnosis
• Details of specific reason for referral – helpful if supported elsewhere
• Detailed Prior Level of Function to justify decline
• Discipline specific, objective, functional goals
• Objective evidence that treatment is effective and progressive
• Routine updates to the Plan of Care
• Appropriate frequency and duration of therapy relating to diagnosis
• ADL scores are consistent with RUG category
• Avoid technical denials
• Physician signatures, certifications, co-signatures, dates etc.
• Treatment requires skills of therapist
• Hint: why are restorative services not an option
Skilled Terminology Hints
Non-Skilled Buzz-Words
Color of theraband
Skilled Buzz-Words
Acute exacerbation
Evaluating effectiveness of
Inhibition or Facilitation
Minimum, moderate,
maximum resistance
Therapy Updates and
Current Trends
Recent Therapy Updates
• MPPR increased to 50% April 2013
• G Codes implemented 7/1/13
• Therapy Cap expires 12/31/13
• MDS RUG changes 10/1/13
– Medium and Low Criteria
– Co-Treatment Changes
Therapy-Specific Optimization
• RUG Distribution
– ADL End Splits
• Part B Services
– Case Mix
• Managed Care Management
• Technology
• Outcomes
• ACO Positioning
Therapy Service Extenders
• Out-patient
• Wellness and Education
• Home Care
• In-house and Other Strategic Alliances
• Physician Collaborations
• Clinical Specialties
• Person-Centered Care Initiatives
• CCRC-Specific Models
Medicare Appeals Process:
Medicare Benefit Policy Manual Chapter 15, Section 220: Guidance/ Manuals/
Downloads/ bp102c15.pdf
MMR FAQ Document: Downloads/
MMPR Medlearn Matters Article (9/28/12):
MMPR Medlearn Matters Article (7/6/2013):
Therapy CAP Fact Sheet:
Resource Links
AOTA Medicare Resources:
CGS Contact Information:
Join the CGS ListServ to receive updates from CIGNA by email:

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