jk audit & reimbursement update - cny...

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JK Audit & Reimbursement Update

April, 2016

Proprietary and Confidential

Disclaimer

National Government Services, Inc. has produced this material as an informational reference for providers furnishing services in our contract jurisdiction. National Government Services employees, agents, and staff make no representation, warranty, or guarantee that this compilation of Medicare information is error-free and will bear no responsibility or liability for the results or consequences of the use of this material. Although every reasonable effort has been made to assure the accuracy of the information within these pages at the time of publication, the Medicare Program is constantly changing, and it is the responsibility of each provider to remain abreast of the Medicare Program requirements. Any regulations, policies and/or guidelines cited in this publication are subject to change without further notice. Current Medicare regulations can be found on the Centers for Medicare & Medicaid Services (CMS) Web site at http://www.cms.gov.

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No Recording

• Attendees/providers are never permitted to record (tape record or any other method) our educational events

– This applies to our Webinars, teleconferences, live events, and any other type of National Government Services educational event


Agenda

• Cost Report Filing

• PS&R

• Offsetting Guidelines

• Outlier Reconciliation Process

• Interim Rate Review Process

• IRIS National Database Project

• Audit Workload

• Common Audit Issues

• Wage Index – Select Audit Areas

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Cost Report Filing

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Filing Your Cost Report

• Refer to our Cost Report Submission Checklist on our web site

− Go to www.ngsmedicare.com select Part A line of business and your state click on “Cost Reports” menu at top link on right side of page to “Cost Report Submission Checklist”

• Form CMS-339 is listed because some provider types still require a separate submission. It is built into the hospital cost report and not required to be separately filed.

• Must be postmarked by the due date (12/31/15 FYE cost reports are due 5/31/16)

– CMS does not recognize metered postmarks

– If you use a meter, we will use the receipt date for the postmark date

• Ensure accuracy of your subunits listed on Worksheet S-2

− We cannot alter your cost report

− We will request you to re-submit if it does not match our STAR system

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• Please include a contact name and email address if we should have any questions

Options:

− Cost report S-2 Part 2 lines 41-43

− Cover letter or include Cost Report Submission Checklist

− NGS Connex submission form has contact name and email

• We request that you don’t bind any hardcopy documentation that is mailed (we need to scan it for our electronic workpapers)

• Request copy of FISS PIP/Pass Thru report (summary of biweekly payments) from PS&R mailbox [email protected]

• Any lump sum payments/recoupments must be tracked by providers (not available in report format from NGS)

• If you are claiming protested amounts, include an explanation.

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NGS Connex Provider Portal

• Providers are encouraged to use the Web Portal to submit requested information to NGS.

• Create a user account and request a user ID by registering at www.NGSConnex.com

• Advantages of using Connex: No need to encrypt PHI/PII.

Submission is instantaneous.

Connex maintains record of all submissions.

Save shipping time and cost.

More secure than shipping.

• The Connex web site has a link to “Quick Steps Job Aid” which is helpful for new users.

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NGS Connex Provider Portal

• One common mistake is that users forget to hit “submit” after attaching the files to their submission. Look at the “My History” to confirm the submission. Also, the submitted should receive an automatic email confirmation.

• Worksheet S still requires original signature and must be mailed. Ideal submission: Everything through NGS Connex and the 1 sheet of paper (Wkst S with original signature) through the mail.

• Whatever makes the submission complete constitutes the receipt, i.e. if the files are uploaded through NGS Connex on 5/27/16 and the Wkst S is mailed on 5/31/16, the postmark date is considered 5/31/16 and the receipt date will be whenever that Wkst S is received in our office.

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• Cost Reports should be mailed to:

National Government Services, Inc.Audit and ReimbursementCost Report Processing UnitP.O. Box 4900Syracuse, New York 13221-4900

Overnight courier address:National Government Services, Inc.Audit and ReimbursementCost Report Processing Unit5000 Brittonfield Parkway, Suite 100East Syracuse, New York 13057

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Email your passwords for encrypted electronic files to both:

Deb Thomsen

[email protected]

AND

Christine Chamberlain

[email protected]

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Overpayment Check• If your cost report indicates a net payment due to Medicare, a check

must be mailed to the lockbox when the cost report is filed

• Do not include HITECH when determining net payment due to/from

• Please include a copy of your Worksheet S settlement summary with your check to insure proper processing.

• Do not send original signature Worksheet S to the lockbox

• Extended Repayment arrangements should be made for an acceptable payback schedule, prior to submission.

o Call Customer Care at 1-888-855-4356.

o NGS web site information on ERS: www.ngsmedicare.com, click on Overpayment from top menu bar, click on “Apply for an Extended Repayment Schedule”

• Include a copy of the check with the cost report submission.

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Overpayment Check

Checks are to be made payable to National Government Services, Inc. and should be forwarded for New York and Connecticut providers to the following address:

Regular Mail: Express / Overnight Mail:

National Government Services, Inc. U.S. Bank13001 Part A Non-MSP Attn: Lockbox #809366P.O. Box 809366 5300 South Cicero AveChicago, IL 60680-9366 Chicago, IL 60638

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PS&R

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EIDM Recertification

• Recertification by security officials due by 3/15/16

• If not completed by security official, user will need to re-request access to EIDM

• News article posted on NGS website on 3/4/16

• Contact EUS (External User Services)Monday-Friday; 7:00 a.m.-7:00 p.m. ETPhone: 866-484-8049TTY/TDD: 866-523-4759Email: [email protected]: https://eus.custhelp.com


PS&R Detail Requests

• You are allowed one PS&R detail request aligning with your current cost report year at no charge. We provide this to assist with cost report preparation. Any non-aligning or additional requests require the PS&R Detail Request Form and payment of $200.00 per request/year.

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• You can download the request form from our website:• NGSMedicare.com• Select Part A and your state• Provider Resources in top menu bar• Select Forms• Click on “Cost Reports” section of Forms• Provider Request for PS&R Form


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• Mail the form and check in per the instructions on the request form. To expedite the processing of your request, email a copy of the form and check to the PS&R mailbox [email protected].

• Ensure you enter your request into the PS&R online system for the same period as indicated on your request form. Once we confirm payment, we will simply approve the request in the PS&R online system.

• Legacy PS&R requests for dates prior to 2009 do not require entry into Redesign.

Offsetting Guidelines

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• For each overpayment letter for which a provider owes Medicare money, NGS includes a pink piece of paper which describes the offsetting guidelines from the Overpayment Recovery Unit.

• CMS regulations require NGS to begin offsetting against Medicare payments on the 16th day following the date of the demand letter.

• The pink insert details

• What to do when you are sending a check close to the 16th day from the date of the letter

• How to request immediate recoupment from Medicare payments

• How to request an Extended Repayment Schedule



• NGS requires a three day processing time after receipt of the check in the bank lockbox.

• If there is any doubt whether your check will be processed in time, you may fax a copy of your check as well as the 1st

page of the Demand Letter to 315-442-4140. On the fax cover sheet, please identify in the comments section “Request for extension of offset.” The NGS Overpayment Recovery Unit will mark the debt to delay the offsetting process until the check can be processed.

• Not following this process may result in a recoupment from Medicare payments even though you have sent a check.

• Refunds are processed if there are no other outstanding receivables

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Outlier Reconciliation Process

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Background

The actual instructions for each PPS are in the appropriate section of the Medicare Claims Processing Manual (Pub. 100-04) which can be found in the following sections:

IPPS- Chapter 3, Section 20.1.2 - 20.1.2.7

IRF PPS- Chapter 3, Section 140.2.4.4 and 140.2.6 - 140.2.10

LTCH PPS- Chapter 3, Section 150.24 - 150.28

IPF PPS- Chapter 3, Section 190.7.2 – 190.7.2.5

OPPS- Chapter 4, Section 10.7.2 – 10.7.2.1 and 10.7.2.3 – 10.7.2.4

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Criteria

• Referral made to CMS if criteria is met for outlier reconciliation:

• Actual operating or capital CCRs are found to be plus or minus 10 percentage points from the CCRs used during that time period to make outlier payments, and

• Total outlier payments in that cost reporting period exceed $500,000.

– No dollar threshold for CMHC

• Cost report goes on hold until CMS approves the outlier reconciliation.

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Outlier Reconciliation

• Approval received from CMS notifying NGS to proceed with outlier reconciliation

• NGS send letter to provider notifying them that the outlier reconciliation is in process

• NGS checks if there are any pending claims for the cost reporting period (should be none in order to proceed)

• NGS updates provider specific file to the CCRs calculated after desk review adjustments applied

• NGS requests lump sum utility to be run at the data center

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Outlier Reconciliation

• NGS receives output from data center

• NGS reconciles outlier payments to PS&R

• Time Value Money is calculated based on the differences identified in the lump sum utility output

• The provider specific file records are restored to the CCR values prior to when the outlier reconciliation process began

• NGS Audit team applies the adjustments to the cost report

• Adjustments are sent to the provider to review

• Proceed with NPR

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Interim Rate Review Process

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• The Medicare regulations require that interim payments be reviewed to ensure that they approximate reimbursement and to protect the program from loss due to overpayments

• All PPS providers may receive additional payments for items reimbursable on a reasonable cost basis (pass thru payments) and, as applicable, for the adjustment of the indirect cost of medical education (CMS Pub 15-1, §2405.2 and §2405.3.)

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Interim Rate Review Process - PIP

• Providers that meet the requirements in regulations at 42 CFR 413.64 and in CMS Pub 15-1 §2407 may elect to receive interim payments for inpatient operating costs under PIP (Periodic Interim Payments) in equal biweekly amounts.

• Approval of this election is at the discretion of the MAC and must be specifically requested by the provider, including those providers on PIP prior to becoming subject to PPS.

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• Once PIP is granted by the MAC, it may continue to be used only where the MAC is assured that the provider continues to meet requirements necessary to remain on PIP (e.g., timely and accurate submission of information requested by the MAC) and that proper payments are being made under this method.

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• PIP requirements:• Timely submission of data includes submission of a bill

within 30 days of discharge of a Medicare patient

• The MAC will monitor providers on PIP for timely submission of bills and timely and accurate submission of interim financial data• To remain on PIP, providers must submit 85 percent of their bills timely

and accurately. Timely and accurately means that 85 percent of its bills are submitted within 30 days of discharge and pass front-end edits for consistency and completeness. A bill is not considered received unless it can pass MAC edits.

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• In the event a provider fails to meet the requirements to stay on PIP

• The MAC will request the provider to submit a corrective action plan detailing what steps the facility is taking to come into compliance with the requirements.

• The MAC will continue to monitor the provider to ensure the timeliness increases over the next quarter.

• The MAC may make a recommendation to the CMS RO to remove the provider from PIP if either the provider does not submit a corrective action plan or continues to fall below the 85% timeliness

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• Providers may opt out of PIP at anytime

• In the event a provider is removed from PIP because of the inability to meet the necessary requirements, interim payments will be converted to a per claim basis.

• If the provider changes MAC or is terminated from the Medicare Program, then all interim payments will be discontinued effective with thru dates of service corresponding to the date of change or termination.

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• If material, payment for items reimbursable on a reasonable cost basis are made on a bi-weekly interim basis subject to retrospective adjustment based on a submitted cost report:

• Direct Medical Education/Allied Health Education Costs

• Kidney Acquisition costs for providers approved

• Costs for anesthesia services provided in a provider by qualified non-physician anesthetists (certified registered nurse anesthetists and anesthesiology assistants) employed by the provider, effective for cost reporting periods beginning on or after October 1, 1984 and before October 1, 1987

• Part A Bad Debts for uncollectible deductibles and coinsurance

• Part B Bad Debts for uncollectible Deductibles and Coinsurance, Part B Direct Medical Education costs, Part B Allied Health Education costs, and Part B Kidney Acquisition costs (Return on Equity)

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Interim Rate Review Process - Frequency

PPS Hospitals on PIP, with GME and/or Paramedical Education 2 (JK MAC completes 4)

PPS Hospitals not on PIP, no GME or Paramedical Education 1

IPF and IRF Hospital/units on PIP or having pass thru costs 2

Critical Access Hospitals on PIP 4

Critical Access Hospitals not on PIP 2

Swing Beds attached to Critical Access Hospitals 2

SNFs on PIP or having pass thru costs (#) 2

Rural Health Clinics 2

FQHCs (for cost report begin dates on/after 1/1/16) 1

Long Term Care Hospitals on PIP or having pass thru costs 2

Children’s Hospital on PIP 4

Children’s Hospital not on PIP 2

Cancer Hospitals on PIP 4

Cancer Hospitals not on PIP 2

Hospices on PIP 4

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Interim Rate Review Process - Frequency

• For providers who require 2 rate reviews to be completed each year, generally reviewed:

• At the beginning of the cost reporting period

• In conjunction with the providers tentative settlement

• For providers who require 4 rate reviews to be completed each year, generally reviewed

• At the beginning of the cost reporting period

• Within the second quarter of the cost reporting period

• In conjunction with the providers tentative settlement

• Within the fourth quarter of the cost reporting period

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Interim Rate Review Process - Payment

• Interim Payments for costs will be determined for PIP and non-PIP providers by estimating the reimbursable amount for the year using Medicare principles of cost reimbursement.

• The total number of annual payments must equal 26.1

• The first bi-weekly payment for the cost report period will be paid after the first 2 weeks of the cost report period

• The biweekly payment amounts should be recorded as a whole number, except the first/last payment of a fiscal year, which may be a decimal

• CMS has clarified Publication 100-06, Chapter 3, Section 60 stating that Medicare Administrative Contractors cannot issue lump sum settlements after the end of a provider’s fiscal year end

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National IRIS Database Project

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IRIS

• In response to OIG recommendations, CMS will develop a national IRIS database

• CMS contracted with CGI Federal to develop the system

• Will be used to address overlapping rotations as well as to enhance cost report verification capabilities

• MACs and Software Vendors assisted in a consulting role with the development of this system

• Project began in 2015 and is ongoing

• Update as of March 31st – NGS projects that CMS will release policy changes on the use of IRIS within the FY 17 IPPS proposed and final rule.

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IRIS

• Anticipate CMS publishing a revised IRIS instruction manual and edit specifications

• Once the system goes live: IRIS files will be uploaded to the database as part of the cost report acceptance process. Will be subjected to new database edits that will replace IRISFIV3 edit specifications

• Current projection is to implement new edits with the FYE 6/30/16 cost report/IRIS submissions

• Similar to current process, failure for provider to clear system edits would result in rejection of cost reports

• Providers should expect new edits to include enforcement of FTEs calculated from IRIS to agree to the cost report

• Database will be loaded with historical IRIS files and used for cost report auditing

• IRIS Vendors working with CGI to match programming specifications.


IRIS

• IRIS file naming scheme

• Please submit IRIS files beginning with the 12/31/15 submissions in the following file naming scheme, this a courtesy request, it is not a filing requirement but may be for future IRIS/cost report submissions• M######_YYYY-MM-DD.dbf

• A######_YYYY-MM-DD.dbf

– ###### = Medicare provider number

– YYYY-MM-DD = IRIS/Cost Report FYE in this format (with all parts including leading zeros)

– Free form text is allowed after the FYE, in order to indicate amended submissions or any other such annotations

– Example 1 – provider # 01-2345 FYE 6/30/2015 initial IRIS/cost report submission

» M012345_2015-06-30.dbf

» A012345_2015-06-30.dbt

– Example 2 – provider # 01-2345 FYE 6/30/2015 1st amended IRIS/cost report submission

» M012345_2015-06-30 Amended 1.dbf

» A012345_2015-06-30 Amended 1.dbf

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IRIS

• Next Phase (Efforts just beginning)

• Redesign IRIS file type

• .dbf file to XML+XDS file format

• Redesign format to match cost reporting requirements

• i.e. Add IPF, IRF sections, etc., etc., etc….

Jurisdiction K Audit Workload

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JK Audit Workload

• Option Year 3 - 3/1/2016 to 2/28/2017

• Approximate JK inventory (NY, CT, ME, MA, NH, VT, RI) 430 Hospitals

2,600 Other than hospitals (i.e. freestanding: SNF, HHA, ESRD, CORF, Home Office, etc.)

• Medicare cost report audit Workload Desk reviews/Audits (FY 14 cost reports for cases that are not backlogged)

HITECH Audits (FY 14 cost reports)

Final Settlements (including cases put on hold: FY 12 SSI, FY 13 SSI, FY 05 SSI, FY 04 and prior SSI pending CMS, outlier reconciliation, etc.)

Wage Index desk reviews – Finalizing FY 13 cost reports and beginning FY 14 cost reports in September

Re-openings/Appeals

Medicare Secondary Payer audits (20 NY hospitals)

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JK Audit Workload

• Current plan of Subcontractors for OY3

• Kujawa & Batteau, PC (CPA)

• HITECH Cost Report Audits

• Figliozzi & Company (CPA)

• Cost Report Audits

• Systematic Medical Billing

• MSP Audits

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Common Audit Issues


Common Audit Issues

• Medicare Cost Report common areas of review/adjustment:

• Bad Debts

• Incomplete Listings, Missing Data

• Missing remits/UBs/patient account histories

• Incomplete Charity/Free care applications

• Delays in billing patients

• Return from Collection Agency

• Collection Activity after the date deemed uncollectible

• Professional Fees claimed

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Common Audit Issues

• Medicare Cost Report common areas of review/adjustment (cont.):

• DSH

• Non-allowable codes

• Medicare Part C days included

• Duplicate claims

• IME/GME

• Displaced residents

• PPS hospital rotates a resident to a CAH, it cannot claim the rotation

– Does not qualify as a “offsite” or “non-hospital” rotation

• Incorrect weighting based on Initial Residency Period

– Large gaps in time from graduation to identified PGY (program year)

– Time spent in program that does not lead to certification is counted toward the IRP limitation

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Common Audit Issues

• Medicare Cost Report common areas of review/adjustment (cont.):

• Cost Areas

• Matching of costs and charges

• Improper cost allocation methodologies to allocate indirect costs

• Reporting Physician Time on w/s A-8-2 (and S-3 Part II) for time splits

• Allocation of Home Office costs via A-8-1 (includes S-3 Part II)

• HITECH

• Charity Care Charges and Policy

• HITECH Assets and Depreciation (CAHs)

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Wage Index – Select Audit Areas


Wage Index

• Malpractice Insurance

– Source if reviewed – Insurance policy which lists out the physiciansʹ names specifically

– 9/1/1994 Pg.45358 • To clarify the allowability of malpractice insurance costs for purposes of the wage index,

only those policies that list actual names or specific titles (for example, President of the hospital) of covered employees may be included in the wage index. General malpractice liability coverage maintained by hospitals is not recognized as a wage‐related cost for purposes of the wage index. We note that effective with cost reporting periods beginning on or after October 1, 1994, malpractice insurance costs related to salaried physicians should be separately reported since physiciansʹ salary costs may be excluded from the wage index in FY 1999.

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Wage Index

• Wage Related Costs

– Summary documentation needed to identify allocation methodology from S‐3 Pt. IV to S‐3 Pt. II lines 17‐25

– S‐3 Part IV should tie to S‐3 part II lines 17‐25 in total

– Allocation methodology must be appropriate for each type of wage related costs

•Most are to be allocated on basis of salaries

•Hours is appropriate for Medical, Dental, Day Care and Tuition

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Wage Index

• Column 2 – Salaries

– Direct salaries including paid vacation, holiday, sick leave, other paid‐time‐off (PTO), severance pay, and bonus pay

– Paid vacation, holiday, sick leave, other PTO, severance pay, and bonus pay must be reported in the same cost center as the related direct salaries and wages.

• Do not report the direct salaries and wages of an employee in one cost center and report the employee’s paid vacation or bonus pay in a different cost center

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Wage Index

• Column 2 – Salaries

– All salaries must have corresponding hours, except bonus pay

– Source for salaries is the trial balance (per CR instructions)

– Capital related salaries, hours and wage related costs not allowable

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Wage Index

• Column 5 – Hours

– Paid hours include regular hours (including paid lunch hours), overtime hours, paid holiday, vacation and sick leave hours, paid time‐off hours, and hours associated with severance pay

– Source documentation for hours is the payroll reports

– Must be actual paid hours. Backing in to hours, prorating or estimates not allowable

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Wage Index

• Contract labor

– Ensure dollars are for actual time working (i.e., cost of supplies, travel, meals are not allowable)

– Support for hours must come from the vendor, if not clear in the invoice, vendor must supply other evidence to support actual hours working at the hospital

– Backing in to hours, prorating or estimates not allowable

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Wage Index

• Contract labor– Summary documentation:

• Spreadsheet identifying vendor, type of service, invoice #, TB account, W/S A cost center, dollars and hours

– Source documentation: • Contract

• Invoices

• Trial Balance

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Wage Index

• Contract Labor ‐ Line 11

– Services pertaining to direct patient care furnished under contract rather than by employee

– No part B services

• Contract Labor – Line 12

– Contracted top level management

•Example – CFO, CEO, COO, Dept. directors, Administrators

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Wage Index

• Contract Labor – Line 13 – Physicians ‐ Part A services, excluding teaching time.

• Summary documentation: – spreadsheet breaking out salaried and contracted physicians, split between Part A, B & Supervision

– This should identify trial balance account # for each physician and W/S A cost center

• Source documentation: – Salary – Contracts and Invoices

– Hours ‐ Part A, B & Supervision split is based on time studies

» Adequate study required based on current year analysis (Refer to CMS 15‐1 Section 2313.2 E)

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Wage Index

• Pension Reviews – Defined Benefit Plan

– Plans which meet the applicable requirements for a qualified pension plan under Section 401(a) of the Internal Revenue Code.

– Union, State/Local, and Multi‐facility plans which are Defined Benefit Plans are included in the three year average calculation• For plans involving multiple entities, a worksheet must be submitted to support how the contributions are allocated to each entity including the hospital cost report under review.

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Wage Index

• Pension Reviews – Defined Benefit Plan (Cont.)

– Starting in FY 2017, the 3‐year average is based on pension contributions made during the base cost reporting period plus the prior 2 cost reporting periods• For a short CRP, use contributions from a 36 month period beginning at the end of current cost report period.

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Wage Index

• Submission of source documentation for contributions reported on CMS worksheet

•Examples of acceptable documentation: Pension trust or insurance statements, or Schedule SB of IRS Form 5500

• Other required documentation

– CPA Financial Statements

– Trial Balance and/or WS A grouping sheet

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Wage Index

• Pension Audit Common Issues– Incomplete information to identify how to report on cost report

– Summary documentation needed to reconcile the DBP from the CMS worksheet to S‐3 Pt. II.

– Reconciliation should include:

• Breakout of each deferred compensation type (i.e. 401K, each individual defined contribution plan, each individual defined benefit plan)

• List the dollars and source (aka TB acct, CMS template)

• Trace to S‐3 Pt. IV Wage Related Costs

• Provide dollar allocation and formula from S‐3 Pt. IV to S‐3 Pt. II lines 17 to 25

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Questions


Audit & Reimbursement Contacts

Gene Nickerson [email protected] 207-253-3325

Sandra O’Connor sandra.o’[email protected] 315-442-4986

Kathy Hales [email protected] 317-841-4585

Kyle Browning [email protected] 618-731-1655

Kevin Glorioso [email protected] 315-442-4046

Justin Clark [email protected] 603-222-7532

Randy Bailey [email protected] 618-204-5825

Christine Chamberlain [email protected]

Chuck Cote [email protected] 207-253-3308

Ray Powelson [email protected] 603-222-7550

Lynn Watts [email protected] 765-620-8513

Kelly Foster [email protected] 315-442-4045

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