Minnesota Department of Human ServicesRecovery Audit Contract (RAC)

Provider Outreach & Education Presentation April 18, 2013

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Agenda • Introduction

• HMS Overview

• Minnesota’s Medicaid RAC Program

• Complex and Credit Balance Reviews:MethodologyApproach & OverviewReview Process

• Provider Portal

• Answer Common Questions

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Health Management Systems

Presenters Lonnette Chilefone, Director, Minnesota Programs Joleen Bond-Livingston, Vice President, Recovery Audit

Glenda Lloyd, Manager, DRG Coding Validation - RAC

Mary Leigh Covington, Divisional Vice President Credit Balance

Jeffrey Norman, Sr. Program Integrity Provider Services Supervisor

HMS OVERVIEW

JOLEEN BOND-LIVINGSTONVICE PRESIDENT, RECOVERY AUDIT

About HMS• We provide cost containment services for healthcare

payers

• We help ensure that claims are paid correctly (program integrity) and by the appropriate responsible party (coordination of benefits)

• As a result, our clients spend more of their healthcare dollars on the patients themselves

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Background Recovery Audit Contractor• Medicare Modernization Act of 2003 created a

demonstration project to identify Medicare overpayments– The program was operational from 2005 through 2007– Following success of the demonstration project, the program

was made permanent in 2008

• Section 6411(a) of the Affordable Care Act expanded RAC to Medicaid and required each State to begin implementation by January 1, 2012

– Identification of overpayments and underpayments– States & RAC vendor must coordinate recovery audit efforts– RAC vendors reimbursed through contingency model

HMS- Medicaid RAC Standards

Reduce provider abrasion, provide education, customer service and limit administrative costs.

Possess in depth knowledge of Minnesota Medicaid policies, regulations and MMIS processes.

Maintain an understanding of the state’s operating environment – political, provider associations, agency goals.

Experienced in coordinating with other state audit entities.

Have established processes for:

a) Receiving and Formatting Medicaid Data,

b) Proven provider relations and

c) Seamless recovery function.

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RAC Process: Flow

Minnesota Policy Review

Pilot Data Mining (Based on Policy

Guidelines)

Recovery

Improper Payment Scenarios

Design Approval from Minnesota

Automated &

Complex Review

Trend Analysis &

Provider Education

System Remediation

Transparency &Collaboration

with Minnesota

Key RAC Considerations• Diverse focus on multiple provider and claim types

• Minnesota approval on all initiatives

• Supplement and wrap around existing Minnesota efforts

• Pilot approach to confirm issue/scenario

• Comprehensive provider education

• Same appeal rights as other DHS post-payment reviews

• 360 degree claim review– Clinical– Regulatory– Billing

• Comprehensive panel of experts– Physicians, Nurses, Coders– Data analysts– Financial auditors

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Overview of Review Process

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Analysis And Identification

Education, Process Improvement

Review/Audit

• Program Analysis • Data Mining/Scenario Design• State Approval

Record Request

• Provider Contact• Record Request/Receipt• Tracking/follow up

• RN/Coder Review • Physician Referral• QA and Client Review/Approval

Notification and Recovery

• Notification Letter• Reconsideration/Appeal• Recovery Support

• Provider Association Meetings• Program Recommendations• Newsletter/Website

HMS RAC Support Staff• Experienced staff performing reviews according to

provider types included in contract:– Certified Coders– Registered nurses– Specialized Therapy Professionals – Review panel of over 1,000 physicians

• HMS has in-depth knowledge of– Minnesota Medicaid billing & reimbursement

practices– Claims adjudication process– Medicaid data processed by Minnesota MMIS

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HMS Audit Support

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HMS Provider Services’ staff are practiced at establishing and maintaining effective

communication with providers and strive to resolve provider issues on the first call

MINNESOTA MEDICAID RAC

LONNETTE CHILEFONEDIRECTOR, MINNESOTA PROGRAMS

Minnesota Audit Areas• Complex Reviews – Clinical based on DRG

– Three year look back from paid date

• Credit Balance Reviews – Financial

– Five year look back from paid date

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Complex Reviews• When analysis identifies a potential improper payment that cannot be automatically validated

• Claims flagged for further review

• Additional documentation is requested

• Audit to determine if improper payment

•Findings communicated with provider

•Look back period is three years from paid date15

Credit Balance Reviews

•Not clinical reviews

•Financial reviews

•Payments and adjustments exceed the claim cost

•Can occur as a result of many variables

•Provides for identification of Root Cause

•Look back period is five years from bill date

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Minnesota Medicaid RAC Program Audit Areas

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Financial Audits Clinical Complex Reviews

Current Clinical Complex

Review DRG Validation Audit

Credit Balance

Provider Types Approved to Date

Acute Care Hospitals Acute Care Hospitals Acute Care Hospitals

Medical Record Limits

Not applicable- Financial Audit only

150 records per month not to exceed 450 per quarter

* Note: DHS may authorize exception on a case-by-case basis.

Provider Type :In-patient Hospital

• 150 records per month• Audit Frequency TBD

Type of Audit On-site or desk reviews Desk reviews Desk reviews; few could become on-site

Audit Notification HMS letterheadAccompanied by the DHS authorizationletter on DHS letterhead

HMS letterheadAccompanied by the DHS authorizationletter on DHS letterheadletterhead

HMS letterheadAccompanied by the DHS authorizationletter on DHS letterhead

Types of Records • In patient and outpatient hospitalization

• Medical records• Varies by audit

• Medical records For example:Discharge summaryPhysician ordersLabs, x-raysMedication Records

Audit Areas Continued

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Credit Balance Audit

Complex Reviews

CurrentComplex Review DRG Validation

Audit

Who to Contact? HMS Provider services

Source of Audits and Frequency

All acute care hospitals: variable based on audit results

Data mining and algorithms: variable based on audit results

Data mining and algorithms: variable based on audit results

Claim Selection Claim-by-claim Varies per audit. May use sampling in the future.

Claim-by-claim

Entrance Conference

Yes on-site or by conference call

No, but provider may contact HMS Provider Services anytime

No, but provider may contact HMS Provider Services anytime

Exit Conference Yes on-site or by conference call to review worksheets

No, but provider may contact HMS Provider Services anytime

No, but provider may contact HMS Provider Services anytime

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Review Process

• Providers will receive audit notifications HMS letterhead that will be accompanied by the DHS authorization letter on DHS letterhead.

• Audits will be conducted as desk reviews by experienced certified coders with access to a panel of physicians.

• During this period, HMS may be in contact with the provider to ask questions or to request additional information. The provider may contact HMS at any time to discuss their review.

• After the review process is completed, result letters are sent to providers to communicate:

ˍ Detailed description of final determinations ˍ Improper payment amount ˍ Option to appeal

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Review Process• Receipt of records is extremely important to accurately and effectively

conduct the audits in a timely manner.

• Initial records request requires receipt of the records by HMS, no later than the end of the 30th business day from receipt of the letter documented by standard postal delivery tracking methods

• Failure to produce records will result in the determination that your agency was improperly paid for all services under review for the requested dates of service resulting in a refund request for these amounts

• Case reviews to be completed within 60 days from receipt of complete medical records

Review Process• Extrapolation will NOT be applied for hospital DRG inpatient review

overpayment amounts identified

• Current Minnesota appeal process will be utilized• Concentrated effort made to assure that audit letters are detailed and

specific, helping reduce the burden of appeal on all parties

• Providers are encouraged to call HMS’ Provider Services to discuss and

resolve issues

MN RAC toll free number: 855-394-8063• Call volumes are monitored to address potential issues which may be used in

educational sessions

Questions for DHS may be sent via email to DHS.RAC@state.mn.us

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Review Process Responsibilities

HMS• Send Draft Audit Findings Letter with

results of review.

• Work one-on-one with the provider to resolve any disputed cases, if provider requested reconsideration.

• Send Final Calculation of Overpayment letter to provider indicating remaining interest owed after claim adjustment requests have been processed.

• Support appeals process when applicable

Providers• Review Draft Audit Findings and respond

within 30 calendar days of signed receipt of letter

• If in agreement with findings remit payment within 30 days

• If not in agreement with findings, submit a request for reconsideration within 30 days

• Review Final Calculation of Overpayment letter and:

● Agree and proceed with repayment, or

● File an appeal within 30 days

DIAGNOSIS RELATED GROUP (DRG) AUDITS

Glenda Lloyd, MBA, BS, RHIA

Diagnosis Related-Group(DRG) Validation

• The purpose of DRG validation is to ensure that diagnostic and procedural information and the discharge status of the member, as coded and reported by the hospital on its claim, matches both the attending physician's description and the information contained in the member’s medical record.

Validation Sets

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• Target analysis identifies situations in which demographics, billing attributes, diagnosis codes, procedure codes, and/or factors affecting the DRG assignment appear to be inconsistent with other attributes of the claim or case documentation within the medical record, and in instances where providers have billed for a higher paying DRG in an outlier status.

CREDIT BALANCE OVERVIEW

MARY LEIGH COVINGTONGDIVISIONAL VICE PRESIDENT, CREDIT BALANCE

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• Currently serves 24 State Medicaid agencies, Medicaid Managed Care Organizations (MCO) and Commercial Insurance Plans

• 14 years of experience working with providers on credit balance audit projects

• Credit Balances Audits (CBAs) are focused on financial reimbursements to the provider

• Primarily the CBAs are focused on reviewing the Provider’s Accounts Receivables (AR), Remittance Advices (RA), Explanation of Benefits (EOB) and miscellaneous relevant financial documents.

• Experience determining and communicating with the provider the root cause of the identified overpayments or accounts resulting in credit balances

HMS Credit Balance Audit (CBA) Overview

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• A credit balance occurs when the sum of payments received plus adjustments exceed the total charges on a claim

• Just because an account is sitting in a credit balance does not mean money is due back to the payer

• Common causes of credit balance include:

• Payments from third party payors and from Medicaid

• Duplicate Medicaid payments• Charge reversals/adjustments/transfers• Duplicate adjustments made to an account

What is a Credit Balance?

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Approach

•COB•Retroactive payments•Double payments• Incorrect payments

ROOT CAUSES

35% 65%MONETARY

NON-MONETARY

HMS provides a root cause analysis to prevent future credit balances.

• Inaccurate postings•Charges written off in

excess of amounts actually billed

•Provider A/R collection systems modeling net revenue at the time of

billing Not all overpayments are credit

balances; not all credit balances are overpayments

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1. Audit notice and Initial Contact 2. Entrance Conference3. Review all active and inactive accounts in credit

balance status as of the notice date– Remote/Desk Reviews– Provider Self Disclosure

4. Review and Finalize findings– Provider Attestation Process

5. Exit Conference6. Recovery and Reporting

Credit Balance Audits: Process Overview

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• Open communication with providers throughout the audit process

• Root cause analysis assists providers in preventing future overpayments

• Insure providers are up to date on the latest billing and reimbursement methods utilized by MN DHS

Credit Balance: Provider Education

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Minnesota Provider PortalJeff Norman

Provider Portal• The Provider Portal is a secure

website that allows providers manage their RAC reviews.

• More than 15,000 providers currently use HMS’s Provider Portal.

• Contact information can be updated by providers.

• Contains HMS contacts.

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Provider Portal

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Secure website for each provider to manage reviews

Provider Portal

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Provider Portal

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Provider Portal

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Provider Portal

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Provider Portal

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Provider Portal

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Questions