Centers for Medicare & Medicaid Services (CMS) created a new page on its Recovery Audit Contractor (RAC) website entitled “Provider Resources.” CMS indicated that it will post on this page any new issues the RACs have proposed to audit and are being evaluated by CMS for approval. It is like a glimpse behind the curtain to see the Great Oz. This is a fantastic resource for providers.  CMS posts a list of review topics that have been proposed, but not yet approved, for RACs to review. You can see the future!

Topics proposed for future audits:

• Inpatient Rehabilitation Facility (IRF) Stays: Meeting Requirements to be considered Reasonable and Necessary;
• Respiratory Assistive Devices: Meeting Requirements to be considered Reasonable and Necessary;
• Excessive or Insufficient Drugs and Biologicals Units Billed;
• E&M Codes billed within a Procedure Code with a “0” Day Global Period (Endoscopies or some minor surgical procedures);
• E&M Codes billed within a Procedure Code with a “10” Day Global Period (other minor procedures);
• E&M Codes billed within a Procedure Code with a “90” Day Global Period (major surgeries);

Over the next few weeks, intermittently (along with other blog posts), I will tackle these, and other, hot RAC audit topics.

IRFs are under fire in North Carolina, South Carolina, Virginia, and West Virginia!

Many patients with conditions like stroke or brain injury, who need an intensive medical rehabilitation program, are transferred to an inpatient rehabilitation facility.

Palmetto, one of Medicare’s MACs, conducted a prepayment review of IRFs in these four states. The results were bleak, indeed, and will, most likely, spur more audits of IRFs in the future. If you are a Medicare provider within Palmetto’s catchment area, then you know that Palmetto conducts a lot of targeted prepayment review. Here is a map of the MAC jurisdictions:

You can see that Palmetto manages Medicare for North Carolina, South Carolina, West Virginia, and Virginia. So Palmetto’s prepayment review covered its entire catchment area.

North Carolina Results A total of 28 claims were reviewed with 19 of the claims either completely or partially denied. The total dollars reviewed was $593,174.60 of which $416,483.42 was denied, resulting in a charge denial rate of 70.2 percent.

South Carolina Results A total of 24 claims were reviewed with 16 of the claims either completely or partially denied. The total dollars reviewed was $484,742.68 of which $325,266.43 was denied, resulting in a charge denial rate of 67.1 percent.

West Virginia Results
A total of two claims were reviewed with two of the claims either completely or partially denied. The total dollars reviewed was $32,506.21 of which $32,506.21 was denied, resulting in a charge denial rate of 100 percent.

Virginia Results
A total of 39 claims were reviewed with 31 of the claims either completely or partially denied. The total dollars reviewed was $810,913.83 of which $629,118.08 was denied, resulting in a charge denial rate of 77.6 percent.

In all 4 states, the most cited denial code was “5J504,” which means that “need for service/item not medically and reasonably necessary.” Subjective, right? I mean, who is better at determining medical necessity: (1) the treating physician who actually performs services and conducts the physical; or (2) a utilization auditor without an MD and who as never rendered medical services on the particular consumer? I see it all the time…former dental hygienists review the medical records of dentists and determine that no medial necessity exists…

When it comes to IRF Stays, what is reasonable and necessary?

According to Medicare policy and CMS guidance, the documentation in the patient’s IRF
medical record must demonstrate a reasonable expectation that the following criteria were met at the time of admission to the IRF. The patient must:

• Require active and ongoing intervention of multiple therapy disciplines (Physical
  Therapy [PT], Occupational Therapy [OT], Speech-Language Pathology [SLP], or
  prosthetics/orthotics), at least one of which must be PT or OT;
• Require an intensive rehabilitation therapy program, generally consisting of:
  ◦ 3 hours of therapy per day at least 5 days per week; or
  ◦ In certain well-documented cases, at least 15 hours of intensive rehabilitation
  therapy within a 7-consecutive day period, beginning with the date of admission;
• Reasonably be expected to actively participate in, and benefit significantly
  from, the intensive rehabilitation therapy program (the patient’s condition and
  functional status are such that the patient can reasonably be expected to make
  measurable improvement, expected to be made within a prescribed period of time
  and as a result of the intensive rehabilitation therapy program, that will be of practical value to improve the patient’s functional capacity or adaptation to impairments);
• Require physician supervision by a rehabilitation physician, with face-to-face
  visits at least 3 days per week to assess the patient both medically and functionally
  and to modify the course of treatment as needed; and
• Require an intensive and coordinated interdisciplinary team approach to the
  delivery of rehabilitative care.

Did you notice how often the word “generally” or “reasonably” was used? Because the standard for an IRF stay is subjective. In fact, I would wager a bet that if I reviewed  the same documentation as the Palmetto auditors did, that I could make a legal argument that the opposite conclusion should have been drawn. I do it all the time. This is the reason that so many audits are easily overturned…they are subjective!

Therefore, when you get an audit result, such as the ones referenced above:

APPEAL! APPEAL! APPEAL!