Subscribe to Guest Blog RSS Feed

Guest Blog

Andrea Stark
reimbursement consultant, MiraVista

We are down to the wire on the ICD-10 transition deadline, and healthcare professionals everywhere are feeling the heat. MiraVista has developed some last minute advice to aid DME suppliers in their final steps:

1.      Focus on the highest and best use for your resources. If you are staring down a massive data set, don’t work top to bottom. Parse out your data set to focus on active rentals, as these orders will create invoices on their own post-transition.

2.      Scale down where you can. Medicare requires that a valid ICD-10 code be present for claims to transmit. If your claim has four ICD-9 codes that need to be mapped, and the product is not diagnosis-driven (such as wheelchairs, hospital beds, commodes, walkers, enteral, oxygen, patient lifts, etc.), then place your most relevant code in the first position and eliminate the other non-priority codes.

3.      Grab that low hanging fruit first. There are two types of ICD-9 codes: (1) those that map neatly to one single code in the ICD-10 code set, and (2) those that map to multiple codes in the ICD-10 code set. Prioritize the one-to-one maps first, as they are the most straightforward and require no digging in medical records.

4.      Leverage the tools available to you. Not sure which codes map to which? The AAPC translator tool is an excellent resource to identify potential matches for your ICD-9 codes. This tool allows you to plug in a single ICD-9 code to identify potential ICD-10 matches.

5.      Make sure you have the “right” code.  If you are heavy in diagnosis-driven products (AFOs, KAFOs, KOs, breast prostheses, glucose monitors, nebulizers, ostomy, PAPs, Group 2 and 3 support surfaces, therapeutic shoes, trach supplies, wheelchair seating, etc.) utilize the future LCDs posted to the CMS website. These LCDs will become active on Oct. 1st and can help you match up your diagnosis driven products.

6.      Know the rules. CMS has notified the industry that DME claims processing logic will be based on the from date of service. Therefore, if your claim has a from DOS on or after Oct. 1st, you must utilize ICD-10 codes. For claims with a from DOS on or before Sept. 30th, claims should be submitted using ICD-9 codes. A single claim cannot, at any time, contain both ICD-9 and ICD-10 codes. Claims submitted with dual codes will be rejected. When submitting claims with ICD-9 codes (with a qualifying from date) the ICD-10 indicator should be 9. When submitting claims with ICD-10 codes (with a qualifying from date of service) the ICD-10 indicator should be 0.

7.      Prepare your team. Claims that do not contain compliant codes after the ICD-10 deadline will be rejected. Suppliers should be checking their front-end rejections, which appear in the form of a 277CA report. ICD-10 rejections will appear with claims status category code (CSCC) A7 (Acknowledgement/ Rejection for Invalid Information) and will be accompanied by one or more of the following claims status codes (CSCs) below:

·         Issue:  The ICD-10 code is not a valid ICD-10 code or is not valid for the date of service reported.

o   CSC 254: Primary diagnosis code and

o   CSC 255: Diagnosis code

·         Issue: Diagnosis code must not contain a decimal

o    CSC 511: Invalid character and CSC 254: Primary diagnosis code  OR

o   CSC 511: Invalid character and CSC 255: Diagnosis code

·         Issue: ICD-10 codes that begin with letter “V”, “W”, “X”, or “Y” are not allowed.

o   CSC 254: Primary diagnosis code and

o   CSC 509: E-Code

·         Issue: Cannot have both ICD-9 and ICD-10 codes on the same claim. If principle diagnosis code is an ICD-9 code the subsequent diagnosis codes must be an ICD-9 code. Likewise, if the principle diagnosis code is an ICD-10 code the subsequent diagnosis codes must be an ICD-10 code.

o   CSC 255: Diagnosis codes

The deadline is approaching quickly and suppliers should take note that rejected claims will ultimately result in stalled revenue. If you need assistance in your transition contact our office.

Andrea Stark is a reimbursement consultant with MiraVista.

Tammy Zelenko
president/CEO, AdvaCare Home Services

This is exactly the situation that we said would happen with this type of model that limits providers and limits access to care  (“Chaos erupts as Univita loses contracts”).

We need to get this story out to Congress and to state Medicaids across the country. Our words mean nothing to them; however, the result of this bankruptcy should resonate loud and clear that the train needs to stop rolling down the track because the only light at the end of the tunnel is the train!

We need to let consumers know that this will happen to their care if they don’t get involved. They need to shout that they are not going to let their benefits continue to erode right in front of them by preventing quality providers into these networks.

The only way that you get quality is through competition and when you limit competition you limit care.

The model of limited providers and limited reimbursement will never be able to sustain the exponential growth of the baby boomers. We need to make this front page news everywhere!

This is exactly what we needed to happen; however, unfortunately, it’s at the cost of the providers who will never get paid for the services and equipment rendered and the patients who are being held hostage by their state Medicaids for allowing this to happen.

Let’s not let this opportunity pass us by; let’s use this as our springboard to get their attention to the real issue that they have created.

I can’t even begin to image what is going to happen to the rural areas when they get hit with reimbursement cuts and to the patients who won’t have providers to care for them.

What immediate action steps can we take to get this story in front of our legislators, managed care companies and the consumers? We must act quickly!

Bob Lichtenstein
Hollywood Medical Supply

I am reading the Univita story in the latest edition and something is missing or was lost in translation (“Chaos erupts as Univita loses biz,” p. 1, September 2015).

Univita did not contract with AHCA (Agency for Healthcare Administration) who oversees the Statewide Medicaid Managed Care (SMMC)—Managed Medical Assistance Program (MMA). Univita contracted with the various standard managed health care plans. I do not know if all the plans were using Univita, but many where.

It is easy for us to point the finger at AHCA, however, it was the health plans who were trying to save money on DME. Many of the plans are large providers who have DME contracts for Medicare Advantage and similar plans. They know what DME costs. It is the health care plans who signed the DME contracts with Univita, not AHCA.

It would seem reasonable that AHCA has some sort of contractual performance requirements for the health care plans. Given that assumption, shouldn’t industry be watching to see what AHCA’s direction is regarding the affected health care plans noncompliance or nonperformance of contract?

Univita is history; we should be looking forward to see if the managed care plans will have adequate reimbursement levels to provide the DME services mandated by AHCA. Florida Medicaid has many provision of service requirements exceeding Medicare. The health care plans need to take this into consideration, too.

—Bob Lichtenstein, Hollywood Medical Supply, Hollywood, Fla.

Ryan McDevitt
Laboratory Tactical Consulting

As the summer nears its end, I’m always excited to experience the HME News Business Summit. Liz approached me earlier this year to lead a panel on connected health and as we’ve worked to assemble the content, we’ve created a foundation to frame the discussion around, but we’d like a bit of input from providers.

We’re curious what questions you have about increasing your use of technology and data collection between your devices and your business.

I’ll summarize your questions and bring them to the Summit stage in Nashville, where Tim Murphy at Philips Respironics, Jim Hollingshead at ResMed and Robin Randolph at Fisher & Paykel will join us to share their thoughts on connected health.

As a consultant in home care, there are two things that seem apparent to consider about the term “connected health” and what it really means.

1. The existing niche where your company excels that could benefit from the addition of technology and data collection.

For example, excelling at patient care of a specific condition will provide details and data to use in outside relationships. Collecting empirical data and distilling it is less of a challenge than it has been in years because of integration with tools like Microsoft Power BI and DOMO. This translates to outcomes-driven examples of your successes in the home.

2. Being prepared to launch a newer, tech-based strategy still requires traditional budgeting, timelines and concept presentations.

Investing in technology can be intangible, particularly at first. It’s important that you build a fully vetted project concept before pushing off to development. If you’re going to take the step of increasing technology investment on a device that you already dispense, you want to be confident of what payoff can be expected for the risk. This should include a budget, a payback goal and a revenue projection.

Don’t overestimate the value of buzzwords and don’t be shy about your concepts. Technologies like video chat and connected devices can deliver efficiencies to the patient’s continuum of care. There is also pending legislation that could increase parity in billing for clinical professionals.

Granted, these may not be your current revenue streams, but as we move to a more outcomes-based model, being able to prove success is easier than it has ever been. Using these details to confidently instruct your teams is a valuable tool to navigate a changing market like home care.

I’m curious to hear what you want to know about connected health and how it might affect your business.

Send me an email (ryan@labtactical.com) or tweet a question with the hashtag #hmesummit and we’ll be sure to take it under consideration when preparing to discuss the subject with leads from Respironics, ResMed and Fisher & Paykel.

Still need to register? Go to www.hmesummit.com for more information.

Andrea Stark
reimbursement consultant, Mira Vista

A new enforcement of quantity details on detailed written orders for enteral nutrition is manifesting in claim denials.

CGS recently updated the language on the enteral documentation checklist (as of Jan. 27, 2015) that mentions a new description for quantity on the detailed written order to be represented on a “per fill” basis. This is new terminology and a compliance expectation that CGS and other MACs are now beginning to enforce.

We have not seen these quantity errors in prior claims because the medical reviewers were using discretion to calculate proper quantities using other elements on the detailed written order. However, because there are so many variations and fluctuations with the prescription and how claims are billed, they are now requiring the orders to be more specific to avoid denial. The provider education departments are also increasing their discussion of this expectation. The MACs are interpreting this nuance to be a part of the quantity requirement of the LCD.

This enforcement has been hardest felt in Jurisdiction C, but other MACs are incorporating this into their education, as well. To avoid future denials, providers are encouraged to secure updated orders for nutrition that comply with the details of a per-fill quantity:

·      Quantity to be dispensed (Should correspond with the total amount of each item to be provided per refill. This information may be expressed as cans, bottles/bags, cases, or billing units [1 unit=100calories]).

Under this new guidance the contractors are expecting language to appear on detailed written orders along the lines of:

·      1200 calories per day X 30 days X 12 refills

·      120 units at 100 calories X 30 days X 12 refills

If the patient is on a formula that consists of 300 calories per can, the suitable example might read:

·      4 cans per day X 30 days X 12 refills.

If you provide enteral nutrition, we encourage you to connect directly with your POE (Provider Outreach & Education) department of your MAC to confirm their expectations as there may be slight nuances from DME MAC to DME MAC. As additional details become available on this topic, MiraVista will keep you informed.

Andrea Stark can be reached at andrea@miravistallc.com.

I would like to respond to Doug Harrison’s letter to the editor "Warning shot" (see below). I am on the side of those who think the PMD demo is working in as much as it does give the provider some assurance that their claim is not technically flawed in some way before the equipment is delivered to the customer. If a prior authorization process helps keep expensive claims out of audit hell, it’s a good thing. Utilization may be down, but legitimate utilization is probably no better or worse than it ever was. What’s important is that what’s provided through the Medicare program gets paid for and stays paid for.

Mr. Harrison has a lot of gall to warn us about the “sadistic pain and suffering inflicted by CMS.” Overly aggressive advertising and abusive business practices by some in the business exploited Medicare beneficiaries and led directly to the punitive regulatory environment everyone else must now live with. Notoriety surrounding the fall of the Scooter Store has been used by industry critics to damage the credibility of everyone in the power mobility business.

Warning shot

Please think hard about this warning! In the March issue of HME News, industry stakeholders proudly state that the “PMD demo is working” (page 19). What do they mean by “working”? Utilization is down by 69%. A substantial number of other articles in the same issue (and every other issue for the last few years) describe, in horrific detail, the sadistic pain and suffering inflicted by CMS’s various audit schemes. So, what do the PMD demo and these schemes have in common? The PMD demo allows Medicare to inflict all of the same ridiculous and sadistic “standards” on all claims before they’re processed. It’s no surprise that utilization is down by 69%. The big surprise is the industry and the press keep celebrating this as a success. Please watch out for prior authorizations coming to any other product categories! Imagine the joy of having to pass 100% of your business through the irrational hurdles of today’s punitive audit environment. You might be lucky to have 31% of your claims survive. Is that enough for your business to survive?

—Doug Harrison, founder, The Scooter Store

I need to call a patient's family and tell them that I either have to pick up the hospital bed they are renting from me, or they have to sign a document that states they are willing to pay privately.

I provided them a bed and the claim for that bed was randomly picked by the Medicare contractor Noridian to be audited. An audit of a claim should not scare anyone—you would expect that they look at the documentation and see if the patient needs the equipment. Well it does not work that way.

Medicare first goes through every piece of paper looking for a mistake. When there is a mistake, it is an all-or-nothing mistake. It finds any type of mistake and the DME company gets its money taken back. It could be something like a doctor signing an order, but not dating his signature. Not fixable, not payable. Noridian states a 91% denial rate for three quarters in 2013.

DME companies are not dumb. We have had to figure out what words Medicare needs to see to cover equipment and make sure the doctors say something along those lines. You see, we have clients who need equipment and the doctors want to know what has to be done to accomplish that. Medicare will not make sure the doctors are educated; we are forced to.

Most DME companies are not crooked. I am definitely not a crooked person and Sandcreek Medical is not a crooked company. We fight every claim we are denied and we win most times. In fact, most of the DME companies have started fighting every claim and that has created a new problem. The final level of appeal, alone, is out 27 months to 12 years, depending on who you ask. Either way, you cannot afford to work your way through the appeals process anymore.

This particular claim is for a bed needed to take a patient home from the nursing home. The patient's daughter asked us about procuring a bed and we explained we needed chart notes from the doctor stating the need. She said that her mom had seen the doctor, so that part should be taken care of.

I explained that very few doctors will document the need for medical equipment without some one pushing them on how much documentation there needs to be. As usual, when we received the documentation from the doctor, there was no talk of needing a hospital bed, let alone the required phrases Medicare wants to see in the notes, i.e. “frequent changes of body position” “alleviate pain” and “immediate change of body position”

So this family had to take their mom back to the doctor for a visit that would document the need for the bed. I provided them a sheet that explains the basic rules of Medicare and that there needs to be talk of the reasons she needs the bed. Well this doctor did a fair job. I would have liked a little more detail, but I did not get it. I believe in my heart that she needed and still needs the bed. Then I did what every DME company in America does: hope that this claim will not be chosen for an audit.

Here is the real problem. Medicare has changed the rules of the game. According to its own statements, the agency cannot use clinical inference to say, “Oh yeah, this client really does need a hospital bed.” Instead, it has to go to the Local Coverage Determination or LCD for the rules and it sticks to the letter of the rule. Hence, a hospital bed will not be covered if a doctor did not have a statement like this: “This patient needs positioning in ways not feasible in an ordinary bed. This patient needs frequent changes in body position in order to alleviate pain.” If those words were not in the chart notes, then Medicare was going to deny the claim. In the real world, that means one of three things: 1) The DME company is going to loose money, 2.) the patient is not going to get the equipment they need, or 3.) the patient will have to pay privately. With the tighter profit margins and amount of time and money it takes to fight claims, many times we are forced to tell the patients they have to pay.

Back to changing the rules of the game. I believe that Medicare started to see the words it wanted to see in the chart notes. It saw the word “frequent” and it saw the word “alleviate.” It should be happy, but instead of quoting the LCD verbatim, we have a new weapon called the PIM 5.7. Now Medicare is going to focus on the statement, “For any DMEPOS item to be covered by Medicare, the patient’s medical record must contain sufficient documentation of the patient’s medical condition to substantiate the necessity for the type and quantity of items ordered and for the frequency of use or replacement (if applicable).” What is sufficient enough and when is it inapplicable—that is up to Medicare and its auditors.

Medicare still wants to know that it is frequent, but how frequent. It wants to know not only that it will alleviate pain, but also what are the levels of pain, and the frequency of that pain, or how the bed is likely to alleviate that pain. It wants to know if the patient has had experience with this equipment before. It wants to know if the patient has had any therapeutic interventions. Most importantly, it wants it detailed and it does not want any vague answers.

Unfortunately, in our business we deal with real people in their worst part of life. Some times a hospital bed is needed for someone who is dying and the doctor does not really know that the hospital bed will alleviate his or her pain. The doctor knows that the patient is in pain, and the patient needs a hospital bed to be able to be at home with family. The doctor is sometimes just hoping that the bed will alleviate pain. Sometimes morphine will not alleviate the patient’s pain.

Below is Medicare's answers to why this patient does not meet the medical criteria for the bed. As you read these statements, remember that the doctor is required to document this in his normal chart notes. Even if he wanted to write a letter or a 500-word essay stating why this client needs a hospital bed, the letter or essay would not be considered part of the medical record. The documentation must be in the doctor’s normal chart notes. This particular doctor has a unique way of doing his chart notes. He has forms where he will X out words and circle others. He will write little statements to the side and makes notes that tell him how the patient is doing. These same chart notes have been used for years and used to document conditions that are more complex than a hospital bed referral. I do not believe that his chart notes could ever get a hospital bed covered and that is sad.

As you read the statements from Medicare, pay close attention to this: “Verbiage such as pain is vague, subjective, and insufficient. Clear objective documentation and quantifying information is lacking.  This type of verbiage does not provide a clear picture of the beneficiary's pain.” Then keep in mind that Medicare does not have objective rules on what frequent is. It cannot tell you what level of pain is acceptable. It cannot tell you what functional limitation it is looking for, or what therapeutic intervention is acceptable. It will not tell you exactly why the documentation does not support that the beneficiary requires frequent changes of body positioning and it will not say exactly what part of pages 5-8 are illegible, just that they are partially illegible.

What Medicare is really saying is, do as we say, not as we do. It is saying that we must provide clear, objective data, written in the doctor’s normal chart notes, and only the agency can be subjective on the reasons it denies the equipment. It says that verbiage such as pain is vague, subjective and insufficient—the doctor used the words severe pain. Maybe that was one of the illegible words; I do not know because Medicare does not have to be clear, objective, or quantified.

Noridian Medicare Denial Documentation

Medical records submitted to not support the beneficiary has a medical condition which requires positioning of the body in ways not feasible with an ordinary bed, the beneficiary requires position of the body in ways not feasible in an ordinary bed in order to alleviate pain, the beneficiary requires the head of the bed to be elevated more than 30 degrees most of the time due to congestive heart failure, chronic obstructive pulmonary disease, or problems with aspiration or the beneficiary requires traction equipment.

The documentation does not support the beneficiary requires frequent changes in body position and or has an immediate need for change in body position and or has an immediate need for change in body position.

When a hospital bed is needed for positioning, the medical documentation should describe the severity and frequency of the symptoms of the medical condition that necessitates a hospital bed for positioning.

The information should include the beneficiary's diagnosis and other pertinent information including, but not limited to, duration of the beneficiaries condition, clinical course, (worsening or improvement), prognosis, nature and extent of functional limitations, other therapeutic interventions and results, past experience with related items, etc.

Verbiage such as pain is vague, subjective, and insufficient. Clear objective documentation and quantifying information is lacking.  This type of verbiage does not provide a clear picture of the beneficiary's pain.

Medical documentation should describe the severity and frequency of the symptoms of the medical condition that necessitates a hospital bed for positioning and how it will alleviate pain.

A semi-electric hospital bed is covered if the beneficiary meets one of the criteria for a fixed and requires frequent changes in body position and/or has an immediate need for a change in body position.

ABN dated 11/14/2014 invalid as incomplete section C.

Pgs. 5-8 partially illegible.

Deny E0260

I now have to do the part of the job I do not like. I am going to have to call the family and give them a choice between paying privately for the bed, or having me pick the bed up. I no longer can fight a bed like this through the appeals process. Money is too tight and the time it takes is too long. You see, you would think that the requirement of an Administrative Law Judge hearing your case in 60 days would happen within 60 days. Somehow that has turned into a minimum of 27 months and a letter asking us to be patient, but that is a different issue.

I now have to do the part of the business that I do not like and I have to call this patient and say that the bed is not covered. I am also going to say that until patients start contacting their elected officials, these are only going to be seen as numbers and not as someone's mother.

Gary Rench is the owner and manager of Sandcreek Medical in Sandpoint, Idaho, a small DME and respiratory company started in 1989. He can be reached at grench@sandcreekmedical.com.

by: Guest Blogger - Thursday, November 20, 2014

We all know that Black Friday and Cyber Monday are nearly upon us, however we are in a very unique industry in that most people will not be purchasing medical supplies for gifts. So the question becomes, how can we use these manufactured holidays to sell more cash and retail items. 

Below I have listed a few ways in which you can use creative marketing and advertising to reach more customers and attract potential new ones.

Play into consumers’ state of minds

Gift cards: Your customers will already be in the “shopping state of mind” so to speak, so play into this by offering them gift cards to stores where they may already be planning to make purchases. For example, you could have a promotion that says “Spend $75 or more today on Incontinence items and receive a $5 gift card to Target.” It’s not a lot, and I know some of you may be saying “My margins on cash already thin, I can’t afford to give away $2 dollars let alone $5!” I would agree with you on that, however by offering a discount around the “shopping state of mind” season, you will evoke a great brand building interaction with your customer.

Offer something free

Shipping: If you have an online store, free shipping is the No. 1 discount by far. Try to offer free shipping site wide for Cyber Monday. Research your competition and ask yourself, “How can I do this better? What can I do that is more compelling and unique?” 

Email Blast

Leverage the hype: Use Black Friday and Cyber Monday as an excuse to reach out to your customer base. As we talked about previously, everyone is already in the shopping state of mind, and from my experience customers are more open and receptive to advertising based around these days for our industry.

Get personal: The holiday season is the perfect time to get personal with your customers. Try working in “from the desk of” email blasts. These are emails that come from C-level executives and usually have a small blurb about the holiday season and how important the customers are to the business (which they really are). 

In the fast moving age we live in, it can be difficult to keep up with the large companies and brands that have huge advertising budgets and planning. However we have the unique opportunity to really shine in our industry as our customers trust us with the most important gift of all, health. Use this time of the year to let your true colors shine as a provider, vendor, or manufacturer.  Tell your story, tell customers why it’s important that their health and well-being matters. I’ve always liked the saying I learned when I first started in this industry: “Our patients never take vacations from getting sick, and we never take vacations from providing them the products and services that allow them to live the best possible life” 

Justin Racine serves as Marketing & eCommerce Manager for Geriatric Medical in Woburn, Massachusetts. Geriatric Medical is a medical supply distributor that stocks thousands of name brand and generic products at the lowest possible price. As Marketing & eCommerce manager, Justin is in charge of overseeing all marketing and eCommerce efforts for both Geriatric Medical and its customers.

Van Miller
CEO and founder, The VGM Group

Editor’s note: The following is a letter to the editor from Van Miller that appeared in the Waterloo Cedar Falls Courier in July. The letter is in response to another reader’s letter decrying fraud and abuse in the Medicare program—a letter that ended with, “Here’s to audits, let there be more.”

It’s absolutely amazing how some people look at statistics and make an overall generalization. Bob Black’s June 25 letter to the editor expressed an opinion without apparently knowing much about the underlying subject matter. I would like to correct the misunderstanding and set the record straight.

Providers of home medical equipment for Medicare/Medicaid patients are under siege through the use of “audits.” Black refers to an FBI estimate on Medicare/Medicaid “fraud,” which is a term they frequently use loosely to also include “improper payments.” This includes situations where a patient and his/her doctor order equipment for use in the home, that equipment is delivered and used by the patient, and then years later (after an “audit”) the government finds there is insufficient documentation in the file to support that ordered equipment under Medicare’s then-current interpretations of what is required. In the case of home medical equipment companies, which, percent-wise, are less than 3% of total Medicare expenditures, here is the real story about the misuse of post-payment audits.

Companies that do the audits are private independent contractors that are paid hundreds of millions of dollars or a contingency. To show the government a return on its investment, they often find minor technical errors or omissions in documentation (most often the doctor’s records) and do not take into account the medical need for the services provided.

These contractors have little oversight as evidenced in this 2011 report by the Office of Inspector General. Because the vast majority of these audit “recoveries” are based on physicians not crossing the Ts or dotting the Is in their records, the preliminary audit findings are eventually overturned through the appeal process. The administrative law judge that finally gets to hear the facts finds the patient did need the equipment, his/her doctor did order the equipment and the provider did deliver the equipment. However, at this time, the appeal process can take up to three years or more. In the meantime, these audit contractors are paid a percentage of claims “found” to be “improper.” It is essentially a “gotcha” game played years later with someone else’s records being found inadequate by someone who is paid to do so.

Meanwhile, many of the providers, especially smaller providers, are being put out of business because they can’t sustain their business. Imagine if you were told years after the fact that your employer was taking back the pay they gave you because they found that someone above you in the company didn’t fill out your paperwork correctly that month. Imagine the hours and hours of work that must go in to defending these post-pay audits years later, while you are otherwise struggling to take care of current patients.

There are lower levels of administrative appeal, but these are almost knee-jerk denials by Medicare staff that have no incentive to spend time on old problems. On the rare occasion they do, 70% of the audit denials are easily overturned. Medicare has recently adopted a policy of not paying the auditing companies until the first two appeal steps are completed. This doesn’t help much because most of the time those first two appeals processes are not substantive (for example, they might stamp a thousand claims “reviewed” in one morning). Again, most will be overturned when actually reviewed by an administrative law judge, thus the auditing companies are being paid a percentage of those denials.

If space permitted, I could also explain how home medical equipment suppliers save Medicare/Medicaid hundreds of millions of dollars a year by allowing patients to be treated outside of hospitals and nursing homes.

So, Mr. Black, I would appreciate it if you’d call me so I can further explain why this audit process is not just “annoying and a pest,” but rather how it’s putting honest and efficient small businesses out of business and helping to drive healthcare costs higher and higher.

Van Miller is CEO and founder of The VGM Group.

Jamie Loper
co-founder, DMEevalumate

As Elmer Fudd would say “Be vewwy, vewwy quiet...I'm hunting wabbits!” The Centers for Medicare and Medicaid Services (CMS) may not be hunting rabbits, but they’re hunting the very elusive greenbacks.

On September 1, 2012, CMS implemented the prior authorization (PA) for power mobility devices (PMDs) demonstration in seven states: Cal., Fla., Ill., Mich., N.C., N.Y. and Texas. CMS claims that spending per month on power mobility devices in the seven demo states has decreased since September 2012, as has spending per month on power mobility devices in the non-demo states. Looking at the statistics provided by CMS, it appears that roughly half (50% to 52%)of requests during the first year of the demonstration were non-affirmed, with the basis for the denials that the beneficiaries do not qualify for the benefit based on the documentation submitted. On April 4, 2014, CMS requested approval to expand the PA Demonstration for PMDs to 12 additional states. Are you ready MD, N.J., Pa., Ind., Ky., Ohio, Ga., Tenn., La., Mo., Wash. and Ariz.?

In a stealthy scouting move during 2012, CMS also signed a five-year contract with Strategic Health Solutions, LLC, a supplemental medical review contractor (SMRC), to perform reviews aimed at lowering improper payment by determining whether Medicare claims were billed in compliance with coverage, coding, payment and billing practices. In a move that should be lauded by the DME industry, Strategic is paid by CMS based on a flat fee arrangement; that is, unlike the Recovery Audit Contractors (RACs), SMRC is not paid a contingency fee for alleged overpayments. SMRC work is also not intended to overlap with that of RACs, but as seen below, their work has inevitably overlapped, causing inefficiencies.

CMS directed one of SMRC’s initial focuses to be post-payment medical review of PMD claims from those states not included in the demonstration project. These post payment reviews were to determine whether the claims submitted were billed in compliance with the PMD policies. The post-payment reviews were not to be limited to K0823; CMS directed SMRC to include all power mobility devices, including complex rehab. The project consisted of a random sampling of 1,200 claims—300 claims per the four DME MAC jurisdictions. SMRC was supposed to conduct their post payment review on claims that had not been audited by another contractor, yet 369 of the 1,200 claims (31%) had previously been reviewed by another Medicare contractor. The 831 remaining claims from this initial sampling with dates of service July 1, 2011—December 31, 2012, revealed an overall total error rate of 60%.

CMS posted an update to its website on February 18, 2014, explaining the wind-down of current outstanding claim reviews to finish out the current recovery auditor’scontracts.The rational for this wind-down was time needed to prepare for the next round of RACs. It is important to note that on March 7, 2014, CMS posted an update reminding providers the Recovery Audit Programs would continue to conduct automated reviews through June 1, 2014. Two RACs have filed “pre-award” protests with the Government Accountability Office (GAO), regarding some of the changes planned by CMS for the next round of five-year RAC contracts. CGI Federal and HMS Holdings (which owns HealthDataInsights) object to CMS’s changes to the next RAC installment. CMS said it would, among other things, revise the number of medical records that RACs can request from providers, reducing them for providers with low claim denial rates, and not pay RAC contingency fees for overpayments until it was clear they would survive the second level of appeal.

If a RAC comes hunting at your company, could you withstand a 60% denial rate? Your company should take advantage of this wind-down time to gear up. CMS is attempting to make its hunting trips as profitable as possible, therefore high-risk providers will be targeted. In other words, failing an audit increases the chances of another audit in the near future. In order to pass audits it is important to ensure that all face-to-face documentation is compliant before delivering the equipment. Encouraging your referral sources to use an algorithmic face-to-face program ensures that medical necessity policies are followed and equipment that is vended will pass muster.

Be prepared for hunting season; don’t get caught out in the open like a sitting duck! Adjust billing practices today and make sure you are in compliance with CMS policies. Look to those who have positive experiences with the PA demo. Perform self-audits on paperwork before the equipment is dispensed. Always have two or even three different people review paperwork. Use checklists. Eliminate the unfavorable odds. If the hunting is good at your company a RAC will return looking for more wabbits.

 

Pages