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Medicare Audits: DRG Downcoding in Hospitals: Algorithms Substituting for Medical Judgment, Part 1

This article is written by our good friend, Ed Roche. He is the founder of Barraclough NY, LLC, which is a litigation support firm that helps us fight against extrapolations.

e-roche

The number of Medicare audits is increasing. In the last five years, audits have grown by 936 percent. As reported previously in RACmonitor, this increase is overwhelming the appeals system. Less than 3 percent of appeal decisions are being rendered on time, within the statutory framework.

It is peculiar that the number of audits has grown rapidly, but without a corresponding growth in the number of employees for Recovery Audit Contractors (RACs). How can this be? Have the RAC workers become more than 900 percent more efficient? Well, in a way, they have. They have learned to harness the power of big data.

Since 1986, the ability to store digital data has grown from 0.02 exabytes to 500 exabytes. An exabyte is one quintillion bytes. Every day, the equivalent 30,000 Library of Congresses is put into storage. That’s lots of data.

Auditing by RACs has morphed into using computerized techniques to pick targets for audits. An entire industry has emerged that specializes in processing Medicare claims data and finding “sweet spots” on which the RACs can focus their attention. In a recent audit, the provider was told that a “focused provider analysis report” had been obtained from a subcontractor. Based on that report, the auditor was able to target the provider.

A number of hospitals have been hit with a slew of diagnosis-related group (DRG) downgrades from internal hospital RAC teams camping out in their offices, continually combing through their claims data. The DRG system constitutes a framework that classifies any inpatient stay into groups for purposes of payment.

The question then becomes: how is this work done? How is so much data analyzed? Obviously, these audits are not being performed manually. They are cyber audits. But again, how?

An examination of patent data sheds light on the answer. For example, Optum, Inc. of Minnesota (associated with UnitedHealthcare) has applied for a patent on “computer-implemented systems and methods of healthcare claim analysis.” These are complex processes, but what they do is analyze claims based on DRGs.

The information system envisaged in this patent appears to be specifically designed to downgrade codes. It works by running a simulation that switches out billed codes with cheaper codes, then measures if the resulting code configuration is within the statistical range averaged from other claims.

If it is, then the DRG can be downcoded so that the revenue for the hospital is reduced correspondingly. This same algorithm can be applied to hundreds of thousands of claims in only minutes. And the same algorithm can be adjusted to work with different DRGs. This is only one of many patents in this area.

When this happens, the hospital may face many thousands of downgraded claims. If it doesn’t like it, then it must appeal.

Here there is a severe danger for any hospital. The problem is that the cost the RAC incurs running the audit is thousands of time less expensive that what the hospital must spend to refute the DRG coding downgrade.

This is the nature of asymmetric warfare. In military terms, the cost of your enemy’s offense is always much smaller than the cost of your defense. That is why guerrilla warfare is successful against nation states. That is why the Soviet Union and United States decided to stop building anti-ballistic missile (ABM) systems — the cost of defense was disproportionately greater than the cost of offense.

Hospitals face the same problem. Their claims data files are a giant forest in which these big data algorithms can wander around downcoding and picking up substantial revenue streams.

By using artificial intelligence (advanced statistical) methods of reviewing Medicare claims, the RACs can bombard hospitals with so many DRG downgrades (or other claim rejections) that it quickly will overwhelm their defenses.

We should note that the use of these algorithms is not really an “audit.” It is a statistical analysis, but not done by any doctor or healthcare professional. The algorithm could just as well be counting how many bags of potato chips are sold with cans of beer.

If the patient is not an average patient, and the disease is not an average disease, and the treatment is not an average treatment, and if everything else is not “average,” then the algorithm will try to throw out the claim for the hospital to defend. This has everything to do with statistics and correlation of variables and very little to do with understanding whether the patient was treated properly.

And that is the essence of the problem with big data audits. They are not what they say they are, because they substitute mathematical algorithms for medical judgment.

EDITOR’ NOTE: In Part II of this series, Edward Roche will examine the changing appeals landscape and what big data will mean for defense against these audits. In Part III, he will look at future scenarios for the auditing industry and the corresponding public policy agenda that will involve lawmakers.

 

There Is Only One Head Chef in the Medicaid Kitchen, Part Deux!

In a groundbreaking decision published today by the Court of Appeals (COA), the Court smacked down Public Consulting Group’s (PCG), as well as any other  contracted entity’s, authority to wield an “adverse decision” against a health care provider. This solidifies my legal argument that I have been arguing on this blog and in court for years!

The Department of Health and Human Services (DHHS) is the “single state agency” charged with managing Medicaid. Federal law requires that that one agency manage Medicaid with no ability to delegate discretionary decisions. Case law in K.C. v. Shipman upheld the federal law. See blog.

Yet, despite K.C. v. Shipman, decided in 2013, in Court, DHHS continued to argue that it should be dismissed from cases in which a contracted vendor rendered the adverse decision to recoup, terminate, or suspend a health care provider. DHHS would argue that it had no part of the decision to recoup, terminate, or suspend, that K.C. Shipman is irrelevant to health care provider cases, and that K.C. v. Shipman is only pertinent to Medicaid recipient cases, to which I countered until I was “blue in the face” is a pile of horse manure.

DHHS would argue that my interpretation would break down the Medicaid system because DHHS cannot possibly review and discern whether every recoupment, termination, and/or suspension made by a contracted vendor was valid (my words, not theirs). DHHS argued that it simply does not have the manpower, plus if it has the authority to contract with a company, surely that company can determine the amount of an alleged overpayment…WRONG!!

In fact, in DHHS v. Parker Home Care, LLC, the COA delineates the exact process for the State determining an overpayment with its contracted agent PCG.

  1. DHHS may enter into a contract with a company, such as PCG.
  2. A private company, like PCG, may perform preliminary and full investigations to collect facts and data.
  3. PCG must submit its findings to DHHS, and DHHS must exercise its own discretion to reach a tentative decision from six options (enumerated in the NC Administrative Code).
  4. DHHS, after its decision, will notify the provider of its tentative decision.
  5. The health care provider may request a reconsideration of the tentative decision within 15 days.
  6. Failure to do so will transform the tentative decision into a final determination.
  7. Time to appeal to OAH begins upon notification of the final determination by DHHS (60 days).

Another interesting part of this decision is that the provider, Parker Home Care, received the Tentative Notice of Overpayment (TNO) in 2012 and did nothing. The provider did not appeal the TNO.

However, because PCG’s TNO did not constitute a final adverse decision by DHHS (because PCG does not have the authority to render a final adverse decision), the provider did not miss any appeal deadline. The final adverse decision was determined to be DHHS’ action of suspending funds to collect the recoupment, which did not occur until 2014…and THAT action was timely appealed.

The COA’s message to private vendors contracted with DHHS is crystal clear: “There is only one head chef in the Medicaid kitchen.”

Federal Audit Spurs NC to Recoup from Dentists Who Accept MPW!!

When providers receive Tentative Notices of Overpayment (TNOs), we appeal the findings. And, for the most part, we are successful. Does our State of NC simply roll over when the federal government audits it??

A recent audit by Health and Human Services (HHS) Office of Inspector General (OIG) finds that:

“We recommend that the State agency:

  • refund $1,038,735 to the Federal Government for unallowable dental services provided to MPW beneficiaries after the day of delivery; and
  • increase postpayment reviews of dental claims, including claims for MPW beneficiaries, to help ensure the proper and efficient payment of claims and ensure compliance with
    Federal and State laws, regulations, and program guidance.”

MPW is Medicaid for Pregnant Women.  Recently, I had noticed that a high number of dentists were receiving TNOs.  See blog.  I hear through the grapevine that a very high number of dentists recently received TNOs claiming that the dentists had rendered dental services to women who had delivered their babies.

Now we know why…

However, my question is: Does NC simply accept the findings of HHS OIG without requesting a reconsideration review and/or appeal?

It seems that if NC appealed the findings, then NC would not be forced to seek recoupments from health care providers.  We already have a shortage of dentists for Medicaid recipients.  See blog and blog.

And if the federal auditors audit in similar fashion to our NC auditors, then the appeal would, most likely, be successful. Or, in the very least, reduce the recouped amount, which would benefit health care providers and taxpayers.

Whenever NC receives a federal audit with an alleged recoupment, NC should fight for NC Medicaid providers and taxpayers!!  Not simply roll over and pay itself back with recoupments!

This audit was published March 2015.  It is September.  I will look into whether there is an appeal on record.

OIG Finds Questionable Billing! California Medicaid Dentists: Expect Withholdings or Other Penalties!

Currently, dentists who accept Medicaid are ripe for pickings as targets for regulatory audits from both the federal and state governments. Actually, this is true for any provider that accepts Medicaid. It just happens that, recently, I have noticed an uptick in dental audits both in North Carolina and nationwide. Some dentists, who accept pregnancy Medicaid, may even bear the burden of determining pregnancy prior to a teeth cleaning…however, that is a topic for another day.  Although, I tell you what, if my dentist asked whether I were pregnant prior to cleaning my teeth, he may have an abnormally red cheek the remainder of the day and I may join Crossfit.

Moving on….

Generally, dentists tend to not accept Medicaid. The reimbursement rates barely cover overhead. Add high regulatory compliance requirements, the likelihood of undergoing audits, and the government’s robust and zealous desire to tackle fraud, waste, and abuse (FWA), and it is no wonder why most dentists opt to not accept Medicaid. See blog. And blog.

Those dentists (and other providers) that do make the decision to accept Medicaid, these brave and noble souls, are subject to onerous audits; the result of a recent California audit is probably sending shock waves through the California dental community.

335 dental providers in California have been targeted by OIG as having questionable billing issues. Sadly, this is only the beginning for these 335 providers. Now the state will audit the providers, and these 335 providers may very well become the subject of a payment withhold in the near future.

What will happen next?

I will look into my crystal ball, otherwise known as experience, and let you know.

First, the Office of Inspector General (OIG) recently published a report called: “QUESTIONABLE BILLING FOR MEDICAID PEDIATRIC DENTAL SERVICES IN CALIFORNIA.

One can only imagine by the title that OIG found alleged questionable billing. Otherwise the title may have been, “A Study into Medicaid Billing for Medicaid Pediatric Dental Services,” instead of “Questionable Billing.” With such a leading title, a reader knows the contents before reading one word.

What is questionable billing?

Importantly, before addressing what IS questionable billing, what is NOT questionable billing? Questionable billing is not abhorrent billing practices. Questionable billing is not wasteful billing or abusive billing. And questionable billing is certainly not fraudulent billing. That is not to say that some of these questionable billing will be investigated and, perhaps, fall into one the aforementioned categories. But not yet. Again, these dentists have a long journey ahead of them.

In this context, questionable billing seems to mean that the OIG report identifies dentists who perform a higher number of services per day. OIG analyzed rendering dental providers’ NPI numbers to determine how many services each rendering provider was providing per day. Then OIG compared the average Medicaid payment per kid, number of services per day, and number of services provided per child per visit. OIG determined a “threshold” number for each category and cited questionable billing practices for those dentists that fell egregiously outside the thresholds. Now, obviously, this is a simplistic explanation for a more esoteric procedure, but the explanation is illustrative.

This study of California Medicaid dentists is not first dental study OIG has undertaken. Recently, OIG studied Medicaid dentists in New York, Louisiana, and Indiana. What stands out in the California Medicaid dental study is the volume of dentists involved in the study. In Indiana, OIG reviewed claims for 787 dentists; in New York it reviewed claims for 719 dentists, and in Louisiana, OIG studied 512 dentists’ claims, all of whom rendered services to over 50 Medicaid children.

In California, OIG studied 3,921 dentists.

Why such a difference?

Apparently, California has more dentists than the other three states and more dentists who accept Medicaid. So, if you are Medicaid dentists, apparently, there is more competition in California.

Juxtapose that, in California, in 2012, only 3 periodontists, 3 prosthodontists, 2 endodontists, and 1 oral pathologist provided services to 50 or more children with Medicaid in California.

Going back to the audit findings…

OIG considered dentists who exceeded its identified threshold for one or more of the seven measures to have questionable billing.

The result?

OIG identified 329 general dentists and 6 orthodontists out of 3,921 providers as having with questionable billing. But these findings are only the beginning of what will, most likely, become a long and tedious legal battle for these 335 providers. Lumping together so many dentists and claiming questionable billing practices will inevitably include many dentists who have done nothing irregular. Many other dentists, will have engaged in unintentional billing errors and may owe recoupments. But I foresee a very small number of these dentists to actually have committed fraudulent billing.

Here is an example found in the OIG’s report, OIG identified that 108 dentists provided stainless steel crowns to 18% of the children served by these dentists, compared to an average of only 5% of children receiving stainless steel crowns by those served by all general dentists (non-Medicaid).

Another example is that 98 dentists provided pulpotomies to 18% of the children, while the statewide percentage is 5% to undergo pulpotomies.

Do these examples show that 108 dentists providing stainless steel crowns and that 98 dentists providing pulpotomies are improperly billing?

Of course not.

It is only logical that dentists who accept Medicaid would have a significantly higher number of pulpotomies compared to dentists who service the privately insured. Usually, although not always, a Medicaid recipient will have more issues with their teeth than those privately insureds. In order to qualify for Medicaid, the family must live in poverty (some more than others with the expansion of Medicaid in some states). Some of kids in this population will have parents who do not harp on the importance of dental hygiene, thus allowing many kids in this population to have decay in their teeth. Obviously, this is a generalization; however, I am confident that many studies exist to back up this generalization.

Therefore, if you accept  my generalization, it makes sense that Medicaid dentists perform more pulpotomies than private insurance dentists.

And stainless steel crowns go hand in hand with pulpotomies. Unless you extract the tooth after the removal of the decay, you will need to provide a stainless steel crown to protect the tooth from future damage.

What will happen next?

OIG admits in its report that “our findings do not prove that providers either billed fraudulently or provided medically unnecessary services, providers with extreme billing patterns warrant further scrutiny.”

Which is precisely what will happen next…”further scrutiny”…

The OIG report recommends to California that it:

• Increase its monitoring of dental providers to identify patterns of questionable billing
• Closely monitor billing by providers in dental chains
• Review its payment processes for orthodontic services
• Take appropriate action against dental providers with questionable billing

It is that last recommendation, taking appropriate action, which will determine the future course for these 335 Medicaid providers. Because, as many of you know if you have followed my blog, the California Department of Health Care Services (DHCS) has a large toolbox with a considerable amount of tools for which it may yield its power against these providers…right or wrong. The same goes for all state Medicaid agencies. When it comes to a Medicaid provider and a Medicaid state agency, there is no balance of powers, in fact, there is only one power. Instead the scales of justice have one arm on the ground and the other raised in the air. There is an imbalance of power, unless you arm yourself with the right allies.

Possible future actions by DHCS:

• Payment suspensions
• Withholds of all reimbursements
• Post payment review
• Prepayment review

And combinations thereof.

DCHS stated that “it will review the dental providers referred by OIG and will determine by December 2015 what appropriate action may be warranted. Should there exist any provider cases not previously evaluated by existing program monitoring efforts, DHCS will take appropriate action through the available channels.”

First, December 2015 is a short timeframe for DCHS to audit 335 providers’ records and determine the proper course of action. So, expect a vendor for DCHS to be hired for this task. Also, expect that an audit of 335 providers in 7 months will have flaws.

These California dentists and orthodontists need to arm themselves with defense tools. And, quickly. Because it is amazing how fast 7 months will fly by!!

The report also states that OIG will be undertaking a study in the future to determine access to dental care issues.  I will be interested in the result of that study.

These possible penalties that I already enumerated above are not without defenses.

These 335 CA Medicaid dental providers have administrative remedies to prevent these possible penalties.   In other words, these 335 CA Medicaid dental providers do not have to take this lying down. Even though it appears that an imbalance of power exists between the state agency and the providers, these providers have appeal rights.

The second that any of these providers receive correspondence from DCHS, it is imperative that the provider contact its attorney.

Remember, some appeals have very short windows for which to appeal.  Do not miss an appeal deadline!!

Extrapolated Medicaid Audits Continue: Be Proactive! (Or Move to West Virginia)

Extrapolated audits are no fun, unless you work for a recovery audit contractor (RAC).  You get a Tentative Notice of Overpayment (TNO) that says the auditor reviewed 100 dates of service (DOS), found an overpayment of $1,000, so you owe $1 million dollars.  Oh, and please pay within 30 days or interest will accrue…

North Carolina’s 2nd recovery audit contractor (RAC) is ramping up.  HMS had a slower start than Public Consulting Group (PCG); the Division of Medical Assistance originally announced that HMS would be conducting post-payment reviews last October 2012 in its Medicaid Bulletin.  NC’s 1st RAC, PCG came charging out the gate.  HMS has been a bit slower, but HMS is active now.

HMS is performing post-pay audits on inpatient and outpatient hospital claims, laboratory, specialized outpatient therapy, x-ray and long-term care claims reviews.

According to the December 2013 Medicaid Bulletin, the findings for the first group of automated lab reviews were released in early November 2013.  Additional lab reviews are expected to be completed and findings released by late December 2013.  The post-payment reviews are targeting excessive drug screening.

And specialized therapy service providers, you are next on the list!

How will the providers know the results of an HMS post-payment review? Same way as with PCG.  You will receive a Tentative Notice of Overpayment (TNO) in the mail with some crazy, huge extrapolated amount that you supposedly owe back to the state.

If you receive a TNO, do not panic (too much), take a deep breath and read my blog: “You Received a Tentative Notice of Overpayment, Now What?”

Or “The Exageration of the Tentative Notices of Overpayments.”

Remember, most of the post-payment reviews that I have seen have numerous auditing mistakes on the part of the auditor, such as the auditor applying the more recent clinical coverage policies rather than the clinical coverage policy that was applicable to dates of services audited.

DMA Clinical Policy 1S-4 “Cytogenetic Studies“, for example, was recently revised February 1, 2013.  Obviously, an auditor should not apply the February 1, 2013, policy to a service provided in 2012…but you would not believe how often that happens!

So what can you do to be prepared?  Well, realistically, you cannot be prepared for audit ineptness.

But you can be proactive.  Contact your insurance policy to determine whether your liability insurance covers attorneys’ fees for regulatory audits.  It is important to be proactive and determine whether your insurance company will cover attorneys’ fees prior to undergoing an audit.  Because if you find out that your liability insurance does not cover attorneys’ fees, then you can upgrade your insurance to cover attorneys’ fees.  I promise, it is way better to pay additional premiums than get hit with $25,000+ bill of attorneys’ fees.  Plus, if you wait until you are audited to determine whether your liability insurance covers attorneys’ fees and you realize it does not, then the insurance company may not allow you to upgrade your insurance.  The audit may be considered a pre-existing condition.

So…proactiveness  is imperative.  But you can always move to West Virginia…

In a survey of 18 states conducted by the National Conference of State Legislatures (NCSL) and published August 29, 2013, NCSL determined that 10 states use extrapolations with the RAC audits, 7 do not and 1 intends to use extrapolations in the future. (No idea why NCSL did not survey all 50 states).

Delaware, Maryland, New Hampshire, Pennsylvania, Vermont, West Virginia, and Wisconsin do not use extrapolations in Medicaid RAC audits.

So moving to West Virginia is an option too…

Are PCG’s Extrapolated Medicaid Audits in Violation of State Statute?

Public Consulting Group (PCG) is one of the contracted entities conducting Medicaid post-payment audits in North Carolina. I’ve heard rumors that NC Department of Health and Human Services (DHHS) is not renewing PCG’s contract, although I have found no evidence to corroborate this rumor.

Regardless, right now, PCG is here and the Medicaid post-payment audits continue. And PCG continues to extrapolate.  For more information as to the extrapolations, see my blog: How Does $100 Become $100,000? Check for Clusters!

But is PCG legally allowed to extrapolate? Oh, of course it is allowed to legally extrapolate!! The contract between DHHS and PCG allows PCG to extrapolate, right? But…what if….the extrapolations are not being conducted legally?

N.C. Gen. Stat. 108C-5 states, in pertinent part:

“(i) Prior to extrapolating the results of any audits, the Department shall demonstrate and inform the provider that (i) the provider failed to substantially comply with the requirements of State or federal law or regulation or (ii) the Department has credible allegation of fraud concerning the provider.

Prior to extrapolating, the Department must demonstrate and inform…

Prior to…

Of all the Tentative Notices of Overpayment (TNO) that I have seen, the actual TNO states the extrapolated amount and states that the audit is extrapolated because “(1) the provider  failed to substantially comply with the requirements of State or federal law or regulation or (ii) the Department has credible allegation of fraud concerning the provider.”  There is no more detail.  The TNO literally regurgitates the statutory language into the TNO.  Does that constitute “demonstrating”?  Better yet, if a provider receives the information that “(1) the provider  failed to substantially comply with the requirements of State or federal law or regulation or (ii) the Department has credible allegation of fraud concerning the provider” CONCURRENTLY with receipt of the extrapolated amount, does that notice meet the statutory criteria of PRIOR TO?

Question #1: Does regurgitating the statutory language meet the requirement that the State demonstrate the noncompliance?

Question #2: Does the Department sending the reason for the extrapolation concurrently with the extrapolation meet the statutory requirement to inform the provider prior to extrapolating?

Let’s start with Question #1…

Last night I was checking my daughter’s homework.  She had to read an article on Abraham Lincoln.  Then she had to answer reading comprehension questions about the article.  One question was something like, “What is this article primarily about?”  The article discussed the Civil War, Lincoln, the Gettysburg Address, Lincoln’s top hat, Lincoln’s assassination and Lincoln’s gravesite.  My daughter answered “B: Abraham Lincoln’s presidency.”  (Which was wrong). 

What if I told her she was wrong, but never explained why?  I believe the conversation would go something like this: “You’re wrong.”  “Why?” “Because you’re wrong.”  “But WHY am I wrong.”  “Because you are wrong.”

In the above scenario, I informed my daughter that she was wrong.  But I failed to demonstrate how or why she was wrong.

Similarly, N.C. Gen. Stat. requires that the Department  demonstrate and inform the provider that the provider failed to substantially comply with the requirements of State or federal law or regulation or that the Department has credible allegation of fraud concerning the provider.

Inform + Demonstrate = Statutory compliance

So, does PCG demonstrate and inform the providers that the provider failed to substantially comply with the requirements of State or federal law or regulation or that the Department has credible allegation of fraud concerning the provider, simply by restating the identical language in the TNO?

“Why?” “Because you’re wrong.”

Ok, how about Question #2…?

How important is something to occur prior to versus concurrently? I mean, at least it is done, right? Who cares whether the action is done prior to or concurrently? 

Think of skydiving.  I tell you to be sure to put on your parachute prior to jumping.  Instead you hold your parachute, leap out of the plane, and attempt to put on your parachute contemporaneously as jumping.  With the amount of air resistance you encounter after you jump, you are unable to get the parachute secured and you die.

Let’s look at a less grotesque example…Think about eating…I tell you to open your mouth prior to inserting the piece of chocolate cake into your mouth.  Instead you insert the piece of chocolate cake into your mouth while you concurrently open your mouth.  Sure, you get some cake into your mouth, but the majority of the chocolate cake is smeared all over your face.

Can PCG send you one letter saying you are non-compliant while concurrently informing you of the extrapolated amount? Or is that a bit like squashing chocolate cake into your face?

Are PCG’s Extrapolated Medicaid Audits in Violation of State Statute?

Medicaid Providers: Know What the “Way Back Machine” Is? Perhaps, You Should!

This blog pertains to all Medicaid providers regardless the state and regardless the Medicaid service provided.

Heard of the “Way Back Machine?”  Perhaps, you should have!!!

Scenario: 

You are a Medicaid provider, and you get a Tentative Notice of Overpayment (TNO) based on a Medicaid post-payment review by Public Consulting Group (PCG) or HMS in the extrapolated amount of $800,000 based on a sample size of 100 dates of service (DOS) and multiplied out to some extrapolation universe. You look at the extrapolation data and determine tha you were not even paid $800,000 during the time frame PCG determined was the universe. Or you say…What???…My documents complied with policy!

What do you do?

Sound like a horrible SAT question? Or sound like reality?

Hopefully you answered the former, but if you answered the latter, read on…

You’ve read my blogs before and understand the importance of appealing PCG or HMS’ extrapolated audit.  But you do not have the financial means to hire an attorney.  Or you honestly believe that if the Department of Health and Human Services (DHHS) reviewed your documents that its employees would also agree that PCG or HMS was wrong.  Or you, personally, want to self-audit to determine the veracity of the audit.  Or for whatever reason, you want to know whether PCG or HMS was correct for your own well-being. 

How do you self-audit….the audit?

This may be one of the best “tips” I have given… (sorry for tooting my own horn, but, seriously, this blog can be helpful! I had a client that pointed out he/she had no idea about this “tip.”)

PCG and HMS conduct post-payment reviews.  This means that PCG and HMS are looking at 1-2-3-year-old medical records.

Think about how quickly Medicaid changes.  Now think about the number of times in which the DMA Clinical Policy applicable to your practice has been revised in the last few years.

When I say DMA Clinical Policy, I mean, if you provide Outpatient Behavioral Therapy, Policy 8C is applicable.  If you provide dental services to Medicaid recipients, then Policy 4A is applicable.  If you provide durable medical equipment (DME) to Medicaid providers, then Policy 5A is applicable.  For a full list of the NC Medicaid policies, please click here.

The DMA Clinical Policies change significantly throughout the years.  For example, DMA Clinical Policy 8A, revised January 1, 2009, allowed Community Support for adults and children.  Yet Policy 8A, revised August 1, 2013, does not even allow Community Support (obviously Community Support was disallowed prior to August 2, 2013, but I am making a point).  Also, now we have 16 unmanaged outpatient behavioral therapy visits for children, whereas a couple of years ago we had 26 unmanaged visits.

The point is that when PCG or HMS audits your particular service, the auditors are not always experts in your particular service, nor experts in your particular service’s Clinical Coverage Policy.  See my blog on Dental Audits Gone Awry.  In this blog I show the required (or lack thereof) education/experience to become a PCG auditor.

Therefore, it is imperative that you have access to the applicable Clinical Coverage Policy applicable for the DOS audited.

But, if you google 2009 clinical policy for NC Medicaid dental services, you can’t find it.

So how are you supposed to get access to these old policies that are being used (or mistakenly NOT being used) in Medicaid audits for the older DOS?

It is called: The Way Back Machine.

I know, cheesy!  But I did not name it.

The “Way Back Machine” website looks like this:

Way Back Machine

The beauty of the “Way Back Machine” is that you can go to any current website.  Copy the internet address.  Paste that internet address into the “Way Back Machine” where you see “Way Back Machine” and a white box appears in which to type the website address. Type in the address, and hit the button “Take Me Back.” VOILA…time travel!!!!

Small Tip: I have found that if I use the internet address for the specific policy for which I am researching, I am less successful than if I use the general DMA Policy address found here.  Once you get to the appropriate year on DMA’s general policy website, you can click on the specific policy in which you are interested.

Using the “Way Back Machine,” you can go to the DMA Clinical Policy (for whatever Medicaid service) applicable years ago.

You should never need to go more than 3 years back, as Recovery Audit Contractors (RACs) without permission by DHHS, cannot audit DOS more than three years ago.

But, you need to review the Clinical Policy for [fill-in-the-blank] Medicaid service 2 years ago? No problem! Use the “Way Back Machine” and travel back in time.

Wouldn’t it be great if we could travel back in time “for real?” Prior to RACS…prior to PCG…prior to HMS….? We need a “Way Back Machine” for Medicaid providers (and me) “for real!”

An Extreme Uptick in NC Medicaid Overpayments for June 2013, But Not in Collections! Something Faulty With the System???

Have you ever heard the phrase:

“If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck?”

Similarly, if something looks odd, it generally is.  So when North Carolina overpayments go from $10 million to $80 million from one month to another, I think, “Something is fishy.”  Especially when the A/R, or accounts receivable does not increase.

Now digressing….Humans are, generally, creatures of habit.

In my life, during my week days, I wake up early in the morning, go for a run with my dog, take a shower, go to work, at some point in the day, blog, go home and eat a family dinner, wind-down in front of the TV with my husband, and then go to bed. Repeat…Monday, Tuesday, Wednesday, Thursday, and Friday.

In order for me to change my routine (during the week days), it would take a substantial catalyst.  For example, if, tomorrow, I won $1 million from a lottery, I would guess that my work day would differ, in that I would, most likely, work less. (Although, in my case, that may not be true, since I enjoy my work so much…but you get the point).  Or if my husband were injured or to become sick…my work day would change because I would need to be by his side.

But, generally, my work day schedules are habitually identical.

Generally speaking, the same is for a corporation or a “corporate life.”  As in, corporations are run by management (people, who are creatures of habit) so a corporate entity, generally, conducts its business daily in a like-manner…until some substantial catalyst occurs.

For example, a pharmaceutical company would run normally day-to-day, but when a new drug is approved by the FDA and inserted in the market, the company business may change to adapt to the new product.

Recently, I found a graph of activity with overpayments in Medicaid in North Carolina. The graph was created by Program Integrity (PI), part of the Division of Medical Assistance (DMA).

Apparently, in June 2013, the amount of overpayments identified by the State or third-party contractors significantly rose from the months prior.   See the below graph:

Uptick photo

I understand that the picture quality may not be great.  But the title of this graph is, “Original notice of overpayment versus account receivable setup amount for same case.”

This is a graph taken off the Division of Medical Assistance (DMA), Program Integrity (PI) website.  The whole report can be found here.

The blue-ish-purple line denotes the original amount of overpayment that was sent to the provider by the auditing entity (whether the audit is conducted by Public Consulting Group (PCG), HMS, DMA or another entity)…or the original amount the provider is told they are expected to pay to the State for Medicaid document noncompliance.

Notice that from July 2012 through May 2013, generally, the blue-ish-purple line is consistent. There is a small spike in January 2013, but for the most part, the blue-ish-purple lines are under $20 million in overpayments identified.

Then we get to June 2013. Holy crap, right??? The blue-ish-purple line went from under $10 million in overpayments found in May 2013 to almost $80 million.

A jump of over $70 million!!! (What kind of catalyst caused that activity?)

A jump of more than the 5 preceding months added together!

What I also find very interesting in this graph is the green line.

The green line demonstrates the amount of money actually owed to the State once the appeals are exhausted and someone, whether it be a judge or a DHHS hearing officer, decides is ACTUALLY owed…or ACTUALLY received.

In June 2013, while $80 million in overpayments were found, less than $5 million was actually recouped by the state.  In other words, for whatever reason, over $75 million  in overpayments was found to NOT be owed to the State, despite the original contention that the money was owed to the State.

Is the method used by the State (or whatever 3rd-party contractor) to determine the Medicaid overpayments SO FLAWED and SO INACCURATE that almost all the recoupments are wrong?

I get it. No method is perfect. But I would expect to see a method of recoupment that 10-15% of the overpayments were overturned. BUT ALMOST ALL RECOUPMENTS ARE OVERTURNED? (Or found to not be owed to the State).

I would seriously begin to question the method used to determine these faulty overpayments. Or, if not the method, the implementation.

But, be it the method or the implementation…something is seriously wrong here!!!

It may look like a duck, swim like a duck, and quack like a duck…but it, most definitely, is NOT a duck!