In 2014, the Centers for Medicare and Medicaid Services (CMS) started a program that combined the process of reviewing a sample of claims with providing follow up education as a way to help reduce errors in the claim submission process. This is called the Targeted Probe and Educate Program (TPE). The goal of the program is to help providers and suppliers identify errors made and quickly make improvements. CMS has acknowledged that since its inception the program needs improvements and that this type of review can be burdensome. Most providers and suppliers never experience a TPE review; however, for the ones that receive notification, here are the top five things you should know before moving forward:
CMS contractors such as Unified Program Integrity Contractors (UPICs) are tasked with ensuring that Medicare pays the right amount for covered services by legitimate providers. Specifically, a UPIC’s main goal is to identify cases of suspected fraud, waste and abuse, and additionally, to take immediate administrative action to protect federal program funds. Within its administrative action toolkit, apart from the common pre- or post-payment reviews and payment suspensions, UPICs have the ability to refer cases of potential fraud to law enforcement agencies.
When providers or suppliers self-report overpayments to Medicare Part C Managed Care organization, there is some uncertainty on what lookback period applies and whether there actually is an overpayment obligation. Is it Medicare’s 60-day overpayment rule that applies or do the Managed Care Part C organizations impose a different lookback period for overpayments?
CMS (The Centers for Medicare & Medicaid Services) published its Final Rule clarifying the procedures applicable to the statutory requirement under the Affordable Care Act (“ACA”) for providers and suppliers to self-report and return overpayments. (The Final Rule was published on February 12, 2016). The Final Rule applies to Medicare Parts A and B and addresses the procedures that a provider or supplier need to follow to investigate, identify, quantify to self-report and return an overpayment. The Final Rule clarifies the obligations of Medicare providers and suppliers to report and return overpayments for claims originating only under Medicare Parts A and B. The final rule does not address, or reference, the obligations of providers to return overpayments to Medicare Advantage organizations for Part C claims.
Aside from the half million already pending before the Office of Medicare Hearings and Appeals (OMHA), OMHA indicates that it receives more appeals each year than its total annual adjudication capacity and has hit its maximum limits given their current resources. With these numbers, the current estimated wait time is 3 years for an Administrative Law Judge (ALJ) to process an appeal. Though recent developments in the litigation involving the U.S. Department of Health and Human Services (HHS) and American Hospital Association (AHA) offered little hope for a resolution, OMHA’s implementation of new settlement initiatives may present a better strategic option for appellants.
Since the implementation of the ZPIC audit and RAC audit programs, healthcare providers and suppliers have experienced increased scrutiny in the pursuit of overpayments and fraud. Medicare’s most vital tool in its progressive search is the use of statistical sampling. In theory, statistical sampling offers a reliable and low cost approach to addressing large volumes of claims. However, this process gives the government a huge advantage as it places a heavy assumption on a large number of claims without actual review of the claims. Thus, it is important for providers and suppliers to understand the process and know how to challenge such studies in order to minimize potential repayment obligations and retain their revenue.
What is statistical sampling?
Statistical sampling draws a random sample from a universe of claims and extrapolates or projects the results of the sample to the entire universe of claims. In other words, the Medicare contractor will select a sample of claims to review from a look back period or examination period of typically two or three years. For this example, let’s say that the review finds a 40 percent error rate in the sample, meaning 40 percent were not found to meet Medicare requirements for payment. In this case, a contractor will apply the 40 percent finding to the entire two years’ worth of claims and deny these claims based on the sampling results.
The Centers for Medicare & Medicaid Services (CMS) relies on its Medicare Administrative Contractors (MACs) to serve as guardians of the Medicare trust fund through the MACs taking steps to prevent improper payments. Despite that reliance, in its most recent report to the US Senate Finance Committee, the Government Accountability Organization (GAO) reports that improper payments totaling $41.1 billion (no, that is NOT a typo, that is a “b”) occurred during 2016 in the Medicare fee-for-service program . That figure represents an overall 11% percent improper payment rate.
How many of us would feel good about being “wrong” in our core job function 11% of the time? Not very many of us, I suspect.
The GAO report goes on to quote the MACs as generally having ongoing concerns about the following types of claims as those which pose the greatest financial risk to the Medicare trust fund.
Short inpatient acute care stays and claims for both skilled nursing and inpatient rehabilitation
Evaluation and management (including office visits, hospital visits, emergency room visits, and home visits for assisted living and nursing homes) and ambulance services
Home health therapy services and home health or hospice stays that were longer than average
So, what does CMS plan to do to hold its MACs more accountable and to further the objective of reducing improper payments? On August 14th CMS announced an expansion of an ongoing pilot program “Targeted Probe and Educate” Medical Reviews (TPE).
7 Things to Know
The basics of what the provider and supplier communities need to know about the TPE program follows.
The silver lining here is that providers and suppliers with minimal aggregated billing pattern deviations from their peer group coupled with good audit track records may now experience fewer MAC medical review audit requests.
TPE will be concentrated on providers and suppliers with “the highest claim error rates or billing practices that vary significantly from their peers”.
In the first round of reviews, MACs will review a 20-40 record probe sample of claims for each lucky provider or supplier selected to participate in TPE.
Providers and suppliers who perform well during the first TPE audit, or who demonstrate significant improvement during the second or third audit may be removed from the TPE audit cycle for a period of up to 12 months.
Each provider and supplier with moderate and high error rates during round one TPE audits will receive provider-specific education, be given approximately 45 days to improve its rate of compliance, and will advance to a bonus round two TPE audit.
Providers and suppliers who fail to improve during the round two TPE audit will again receive provider-specific education, be given another 45 days to improve processes and controls to improve rates of compliance, and will advance to the third round of TPE audits.
Providers and suppliers who perform poorly during the final TPE audit round could be placed on 100% prepayment review, be subject to the dreaded “extrapolation”, and/or be referred to the appropriate Recovery Auditor, Zone Program Integrity Contractor or a Unified Program Integrity Contractor. It goes without saying that none of these are desirable outcomes.
7 Steps to Readiness
Many providers and suppliers are outliers relative to some component of their billing pattern. Use all the resources at your disposal to “know your numbers” and where your areas of exposure or risk most likely exist.
Closely review results and findings from any recent internal audits or reviews conducted pursuant to your compliance program.
If you have experienced recent external medical review audits, evaluate those results. If there were denied claims, identify the issue or issues leading to the denials. Then, identify the root causes of errors. Finally, and most importantly, resolve the problems which lead to denied claims.
If you provide health care services in any of the areas mentioned above which are deemed highest risk by the MACs, examine on your billing patterns in those service lines.
Pay attention to what your MAC says about TPE and areas of emphasis for audit. If you provide those health care services, examine your billing in those areas.
Drill down into any area where your billing pattern materially deviates from your peer group and make sure you understand the basis for the deviation.
If there is no obvious business rationale or justification for a considerable deviation from the “norm” do a deeper dive of your charge capture and billing practices to determine whether any process or practice needs further evaluation and/or adjustment.
These suggestions should position you for a successful outcome if / when you are selected to participate in the TPE audit program.
On February 11, 2016, the Center for Medicare and Medicaid Services (CMS) issued the final overpayment rule commonly referred to as the “60 Day Rule”. Physicians, labs, hospitals, and other providers that receive reimbursement under Part A or B must comply with the 60 Day Rule or face penalties under the False Claims Act.
The 60 Day Rule requires that overpayments (e.g., payment for coding errors) be reported and returned to CMS within 60 days after the date on which the overpayment was identified. Identification of the overpayment was addressed at length in the regulation. The 60-day clock to identify overpayments starts ticking “when the person has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.” Reasonable diligence means that the provider takes steps to uncover overpayments and steps to quantify the amount of the overpayment.
USA v. Pediatric Services of America – settlement under the False Claims Act involving a health provider’s failure to investigate credit balances on its books to determine whether they resulted from overpayment by a federal health care program.
The U.S. Attorney for the Northern District of Georgia announced that Pediatric Services of America Healthcare, Pediatric Services of America, Inc., Pediatric Healthcare, Inc., Pediatric Home Nursing Services (collectively, “PSA”), and Portfolio Logic, LLC agreed to pay $6.88 million ($6,882,387) to resolve allegations that PSA, a provider of home nursing services to medically fragile children, knowingly (1) failed to disclose and return overpayments that it received from federal health care programs such as Medicare and Medicaid, (2) submitted claims under the Georgia Pediatric Program for home nursing care without documenting the requisite monthly supervisory visits by a registered nurse, and (3) submitted claims to federal health care programs that overstated the length of time their staff had provided services, which resulted in PSA being overpaid.
“Participants in federal health care programs are required to actively investigate whether they have received overpayments and, if so, promptly return the overpayments,” said United States Attorney, John Horn. “This settlement is the first of its kind and reflects the serious obligations of health care providers to be responsible stewards of public health funds.”
Chiropractors who are confused re when and how they can bill Medicare patients for their services would be well advised to read this recent Fact Sheet on the topic from CMS, which addresses of being non-par with Medicare and how to bill Medicare patients properly.
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