The Auditors Are Coming! Are You Prepared for an OIG/BIU Audit?

1
The Auditors Are Coming! Are You Prepared for an
OIG/BIU Audit?

• By
• Jane Wilkinson-Bunch

2
2009 OIG Work Plan

• At the Beginning of each fiscal year, the OIG
  identifies vulnerabilities in DHHS programs and
  activities, and works to improve their efficiency
  and effectiveness
• It is a year-round project that continually
  changes with new information, new issues and
  shifts in the priorities in the Congress,
  President and Secretary

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WHAT IS CORPORATE COMPLIANCE?

• For a DME supplier, compliance means being aware
  of all of the laws, policies and regulations
  affecting DME operations and ensuring the company
  follows all of them.
• The HHS OIG has established requirements for
  compliance programs throughout the healthcare
  industry.

4
WHAT IS CORPORATE COMPLIANCE?

• The compliance requirements are based on past
  lessons learned in the OIGs ongoing efforts to
  reduce fraud, waste and abuse in healthcare.

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WHAT IS CORPORATE COMPLIANCE?

• To assist the industry, the OIG has published
  Compliance Program Guidance for virtually every
  type of healthcare entity.
• An effective compliance program takes time and
  commitment it is worth the effort to do it and
  to do it right!

6
WHY IMPLEMENT A CORPORATE COMPLIANCE PLAN?

• The Quality Standards for DME Suppliers published
  on August 14, 2006 require suppliers to
• implement business practices to prevent and
  control fraud, waste, and abuse by
• Using procedures that articulate standards of
  conduct to ensure the organizations compliance
  with applicable laws and regulations and
• Designating one or more individuals in
  leadership positions to address compliance
  issues.

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Employee Education and Testing

• Sample Test Questions
• What does the KX modifier represent?
• Explain what capped rental means
• Identify three capped rental modifiers?
• How are items in the capped rental category
  billed?
• Who completes Section A of a CMN?
• Name one item that you would bill with a span
  date.
• When is an ABN used? Explain.

• Educational Tools
• DMERC Supplier Manual
• Supplier Bulletins
• EOBs
• Medicare Seminars
• Online Training programs(such as VGM University)
• Trade publications
• State/National Associations
• Company In-services
• Employee evaluation process

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MEDICARE FRAUD

• 70 BILLION IN IMPROPER MCARE BILLING EVERY YEAR
• 700 MILLION OF THIS COMES FROM DME
• GAO REPORTS A LOT OF THIS IS DUE TO A POOR
  PROCESS IN ALLOWING FRAUDULENT PROVIDERS IN THIS
  INDUSTRY!
• REPORT SUSPECTED FRAUD WITH THE OIG AT
  800-447-8477!

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2009 Areas Focused on forHome Medical Equipment

• DME Payments for Beneficiaries Receiving Home
  Health Services
• Therapeutic Shoes
• KX and KS Modifiers
• Medical Necessity of DME
• Medicare Pricing of Equipment and Supplies

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Beneficiaries Receiving Home Health Services

• A review of medical records for DME items and
  supplies for beneficiaries receiving HHA
  services, to determine if the items and supplies
  were reasonable and necessary for the
  beneficiaries condition

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Therapeutic Footwear

• Determination will be made whether therapeutic
  footwear was reasonable and necessary for the
  beneficiaries whom it was provided.
• Previous OIG report indicates that a significant
  percentage of beneficiaries did not have adequate
  documentation to support the medical necessity of
  the footwear

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Therapeutic Shoes and Inserts for Diabetic
Patients

• Physician Order (coverage good for 1 calendar
  year) Must be signed by Dr. treating patient for
  diabetes
• Must also be treated for diabetes
• ICD-9 CM Codes 250.00-250.93 AND
• Patient must meet medical policy guidelines
• KX Modifier, RT right, LT left
• Pair is reported as two units
• Prescribing physician writes order for shoe,
  modifications, and/or inserts (may be a
  pedorthist, M.D.,D.O., podiatrist or orthotist)

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Therapeutic Shoes and Inserts for Diabetic
Patients

• Be sure you have documentation that the personnel
  fitting your shoes and inserts have appropriate
  training and you document how the patient was
  fitted
• Check state licensure requirements for O P

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Some States Require Licensure for Therapeutic
Shoes

• These are some of the following states that
  require state Licensure to provide diabetic
  shoes
• Alabama, Arkansas, Florida, Illinois,
  Mississippi, New Jersey, Ohio, Oklahoma,
  Tennessee, Texas, Rhode Island and Washington
• There are more requiring licensure constantly, so
  check your state requirements regularly!!

15
KX and KS Modifiers

• When a claim is filed with the KX or KS modifier,
  the provider, upon request, must provide
  documentation to support the claim for payment
• OIG has found that many suppliers had little or
  no documentation to support the claims,
  therefore many of these claims should not have
  been paid

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Most Items Requiring KX Modifier

• Diabetic Shoes and Inserts
• Urological Supplies
• Group I, II and III Support Surfaces (including
  wheelchair cushions)
• Diabetes Monitor Supplies (insulin dependent)
• Dialysis Supplies (Epoetin Alpha-Epo)
• Refractive Lenses
• Bedside Commodes
• Cervical Traction Equipment (E0849)
• Conductive Garment (E0731)
• Ankle Gauntlets

• Orthopedic Footwear
• Continuous Positive Airway Pressure Devices
  (CPAP) Supplies
• Respiratory Assist Devices Supplies
• All Walkers Accessories
• Negative Pressure Wound Therapy Pump
• High Frequency Chest Wall Oscillation Devices
• Hospital beds Accessories
• All Wheelchairs Accessories
• Trapeze Bars

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Medical Necessity of DME

• Determine the appropriateness of Medicare
  payments for items such as Power Wheelchairs,
  Wound Care equipment and supplies and orthotics
• Assessment will include documentation to support
  claim, documentation to support medical necessity
  and whether the beneficiary actually received the
  item

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Medicare Pricing of Equipment and Supplies

• Comparison of Medicare payment rates for certain
  medical equipment and supplies with rates of
  other Federal and State Programs as well as
  wholesale and retail prices
• Review will cover such items as Wheelchairs,
  Parental Nutrition, Wound Care equipment and
  supplies, and Oxygen equipment and supplies

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CERT Audits

• CERT program calculates error rate for
• Carriers
• DMERC (Durable Medical Equipment Regional
  Carries)
• FI (Fiscal Intermediaries)

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History of CERT

• DHHS and OIG produced Medicare FFS error rates
  from 1996 through 2002
• Initial sampling method only estimated the
  national FFS paid claim error rate (the
  percentage of dollars that Carriers/DMERCs/FIs/QIO
  s erroneously allowed to be paid)
• CMS decided to establish additional measurements
  for the performance of the Carriers/DMERCs/FIs/QIO
  s, and to analyze the the cause of errors

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New Measurements

• Provider compliance error rates (measure how well
  providers prepared claims for submission)
• Paid claims error rates (measure how
  accurately Carriers/DMERCs/FIs made coverage,
  coding, and other claims payment decisions)
• CMS began publishing their findings in 2003

22
Usage of CERT

• The program uses random samples and therefore is
  not used to measure fraud. Reviewers are often
  unable to see provider billing patterns that
  indicate potential fraud when making payment
  determinations
• CERT can, however, detect fraudulent behavior
  when the CERT documentation contractor is unable
  to locate a provider or supplier when requesting
  medical record documentation (a lack of response
  would cause a no documentation error)

23
Reporting Periods

• November 2006 report would contain claims
  submitted in the 12 month period ending March
  31, 2006
• May 2007 report would contain claims submitted in
  the 12 month period ending September 30, 2006
• November 2007 will contain claims submitted in
  the 9 month period ending march 31, 2007

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IPIA

• Improper Payments Information Act
• Requires use of Gross figures when reporting
  improper payment amounts and rates
• A gross improper payment amount is calculated by
  adding underpayments to overpayments

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CERT Methodology

• Randomly selected sample of approximately 120,000
  claims
• Request medical records from providers who
  submitted the claims
• Review the claims, and medical records, for
  compliance with Medicare coverage, coding, and
  billing rules

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Initial CERT Letter Example
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First Example Page

• Introduction and short description of CERT
  program

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Second Example Page

• Describes what you need to do to comply with CERT
  program
• Has a due date. Ensure you have information back
  to CERT by the due date without exception

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Third Example Page

• Instructions to follow to get the information
  back to the CERT contractor
• States that if items requested are not sent in by
  the required date they will assume the services
  on the claim were not rendered

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Fourth Example Page

• Provides you with beneficiary information, CCN
  number, HCPC, DOS

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Fifth Example Page

• Gives a list of documentation requested. List is
  very extensive.
• Spells out how to correctly copy and send the
  information. Ensure all copies are legible

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CERT Attestation Letter

• Used when files have been partially or completely
  destroyed

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CERT Tech Stop

• Used when you provided documentation but CERT is
  requesting additional information
• Must be responded to by the date indicated

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CERT Physician Letter
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Will You Be Audited?IS JANE BUNCH SOUTHERN? ?

• Targeted Audits
• Bill more than one million per year
• Limited product mix
• Beneficiary /other complaints
• Frequent claims for abused items
• Recurring errors on claims
• Abnormal charge pattern
• Dramatic changes in fees
• Repeated billing for overutilization
• Routine Audits

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TARGETED TYPES

• Program Integrity
• Reviews documentation and record content
• Utilization Review
• Verifies need and frequency
• ECS
• Authenticity/signature on file
• Phone/Fax
• Mail (Love Letter from CMS)
• On-site
• RAC Audits
• CERT Audits
• Are you prepared to survive?

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Your Internal Audit Should Include

• Review of Documentation Requiring Beneficiary
  Signature
• Assignment of Benefits
• Supplier Standards
• Release of Information
• Rental/Purchase Option
• Delivery Ticket/Pickup Slip
• HIPAA Notice of Uses/Privacy Practices
• ABN (Advanced Beneficiary Notice)
• Review of Medical Necessity Documentation
• Physician Orders
• WOPDs
• CMNs

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Patients Medical Records

• The CMN is not enough if audited
• Attempt to obtain the following
• Physicians Office Records
• Labs and X-Rays related to diagnosis
• Hospital Records
• Nursing Home records
• Home Health Agency Records
• Records from other Healthcare Professionals
• The medical records should contain objective
  data to support the physician statement,
  diagnosis or condition.

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Auditing The Delivery Ticket

• Patients Full Name Address
• Quantity of equipment and/or supplies delivered
• Detailed description of the item being delivered
• Brand name of equipment or supplies
• Serial and/or lot numbers
• Patients/Designee signature and date

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Delivery Ticket Requirements

• Signature date must be the date that the item was
  received by the beneficiary or designee
• Designee is
• Any person who can sign and accept the delivery
  of durable medical equipment on behalf of the
  beneficiary. Relationship must be noted on
  delivery slip
• 7 days to call...
• 5 days to bill...
• 48 hours following discharge after hospital /
  discharge ...

52
Auditing the AOB Form

• Assignment of Benefits
• Equipment / supply itemized
• New signed form required for each new product
  class
• Must be itemized with each supply or piece of
  equipment the patient is authorizing you to bill.
• Patient unable to sign Requirements must be met

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Auditing the ABN

• Advanced Beneficiary Notice
• Specific situation/reason noted
• Must be obtained before delivery
• Correct use of modifiers
• GZ beneficiary did NOT sign ABN
• Upgrade with NO ABN
• GL free upgrade provided
• GK item physician actually ordered
• Item must be billed correctly
• GA upgrade provided and supplier has obtained a
  signed ABN from beneficiary before item was
  delivered
• Patient signature and date
• Correct form used?

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ABN cont

• Routine" or Blanket" ABNs to Medicare
  beneficiaries are not permitted
• An ABN should not be given to a Medicare
  beneficiary unless the supplier has a genuine
  reason to expect that Medicare will deny payment
  for some or all of the services.
• Assigned and non-assigned claims
• ABNs are only good for ONE YEAR!

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NEW ABN FORM

• (A) Notifier(s)
• (B) Patient Name (C) Identification Number
• ADVANCE BENEFICIARY NOTICE OF NONCOVERAGE (ABN)
• NOTE If Medicare doesnt pay for
  (D)_____________ below, you may have to pay.
• Medicare does not pay for everything, even some
  care that you or your health care provider have
• good reason to think you need. We expect Medicare
  may not pay for the (D)_____________ below.
• (D)
• (E) Reason Medicare May Not Pay (F) Estimated
• Cost
• W HAT YOU NEED TO DO NOW
• Read this notice, so you can make an informed
  decision about your care.
• Ask us any questions that you may have after
  you finish reading.
• Choose an option below about whether to receive
  the (D)_____________listed above.

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NEW ABN FORM CONTD

• Note If you choose Option 1 or 2, we may help
  you to use any other
• insurance that you might have, but Medicare
  cannot require us to do this.
• (G) OPTIONS Check only one box. We cannot choose
  a box for you.
• ? OPTION 1. I want the (D)__________ listed
  above. You may ask to be paid now, but I
• also want Medicare billed for an official
  decision on payment, which is sent to me on a
  Medicare
• Summary Notice (MSN). I understand that if
  Medicare doesnt pay, I am responsible for
• payment, but I can appeal to Medicare by
  following the directions on the MSN. If Medicare
• does pay, you will refund any payments I made to
  you, less co-pays or deductibles.
• ? OPTION 2. I want the (D)__________ listed
  above, but do not bill Medicare. You may
• ask to be paid now as I am responsible for
  payment. I cannot appeal if Medicare is not
  billed.
• ? OPTION 3. I dont want the (D)__________listed
  above. I understand with this choice
• I am not responsible for payment, and I cannot
  appeal to see if Medicare would pay.
• (H) Additional Information
• This notice gives our opinion, not an official
  Medicare decision. If you have other questions
• o n this notice or Medicare billing, call
  1-800-MEDICARE (1-800-633-4227/TTY
  1-877-486-2048).
• Signing below means that you have received and
  understand this notice. You also receive a copy.
• (I) Signature
• (J) Date
• According to the Paperwork Reduction Act of 1995,
  no persons are required to respond to a
  collection of information unless it displays a
  valid OMB control

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Auditing Financial Hardship

• Acceptable Form Utilized
• Completed and signed
• Patient meets hardship guidelines
• Hardship Approval
• Policy and Procedure developed
• Poverty Guidelines
• New one every Feb/March

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2009 HHS Poverty Guidelines
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• EFFECTIVE AUGUST 18, 2008
• NORIDIAN ADMINISTRATIVE SERVICES, LLC WILL ASSUME
  THE DUTIES OF THE SADMERC FROM PALMETTO GBA
• 830 AM UNTIL 400 PM PDAC CONTACT CTR HOURS
  877-735-1326
• WWW.DMEPDAC.COM

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Summary

• Audit now to be prepared later
• Compliance plan adopted?
• HIPAA Implementation
• Test employees regularly

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Jane Wilkinson-BunchPresident/CEOJanes
Healthcare Consulting, Inc.[phone]
cell(770) 517-9109 faxBillhme_at_aol.comAn
advocate for the Independent HME provider