WAYNE H. VAN HALEM President

The van Halem Group, LLC934 Glenwood Ave SE

Suite 200Atlanta, GA 30316

(404) 343-1815, ext 113Wayne@vanHalemGroup.com

Audit Targets:

August 18, 2015

How to Avoid the Crosshairs

KELLY GRAHOVACSr. Consultant

The van Halem Group, LLC934 Glenwood Ave. SE

Suite 200Atlanta, GA 30316

(404) 343-1815Kelly@vanHalemGroup.com

DATA ANALYSIS AND DATA MINING

• Data Analysis is a process of inspecting, cleaning, transforming, and modeling data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, in different business, science, and social science domains.

• Data mining is a particular data analysis technique that focuses on modeling and knowledge discovery for predictive rather than purely descriptive purposes.

CONTRACTORS CONDUCTING DATA ANALYSIS

• Medical Review (DMACs)– Determine codes for widespread review– Determine suppliers for provider-specific review– Calculate error rates

• Recovery Audit Contractors (RACs)– Identify issues for automated or semi-automated reviews– Identify providers for complex review

• Zone Program Integrity Contactors (ZPICs)– Identify, reduce, and prevent fraud, waste and abuse– Identify targets for investigation

QUITE AN INVESTMENT

• Hewlett Packard – Awarded $149.8 million in contracts to conduct data analysis and audit providers (ZPIC Zone 1 & 7)

• NCI Holdings – Awarded $189.3 million in contracts to conduct data analysis and audit providers (ZPIC Zone 2 & 5)

• Contracts are all transitioning to UPICs so there is fierce competition currently to show CMS a return on their investments.

PURPOSE

• Identify areas of potential errors that pose the greatest risk• Establish baseline data to enable the recognition of unusual

trends, changes in utilization over time, or schemes to inappropriately maximize reimbursement

• Identify where there is a need for a LCD• Identify where there is a need for targeted education efforts• Identify claim review strategies that efficiently prevent or

address potential errors (e.g., prepayment edit specifications or parameters)

PURPOSE

• Produce innovative views of utilization or billing patterns that illuminate potential errors

• Identify high volume or high cost services that are being widely over-utilized

• Identify program areas and/or specific providers for possible fraud investigations

• Determine if major findings identified by RACs, CERT, and CMS represent significant problem areas in the DMAC’s jurisdiction.

IMPORTANT• Being an aberrancy does not mean you are doing anything

wrong • If it's legitimate, and you are prepared, you have no need for

concern.

• Highest Reimbursed Codes within a product category– Compare common product categories and the

percentage of the total within the category that bill out at the higher reimbursed codes

– E0260 vs E0255 or E0250– K0004 vs K0001– Upcoding

AUDIT TRIGGERS

• Multiple Mobility Products on the Same Day. Identify providers have billed for both a wheelchair (K0001 – K0007) and other mobility assistive equipment, such as a cane (E0100 – E0105) or walker (E0130 – E0149) on or around the same day.

• Same or Similar

AUDIT TRIGGERS

• Maximum Allowed Amount on Certain Codes• Albuterol, they are allowed 465 mg/month (J7609 –

J7611).• Urologicals allow 200 units per month (A4332, A4351

– A4353). • Identify percentage of their claims that meet or

exceed maximum allowed amounts.

AUDIT TRIGGERS

• Review refill policies to determine if suppliers are sending the maximum allowed amounts on regularly scheduled intervals to determine if services are reasonable and necessary and the refill requests are documented properly

AUDIT TRIGGERS

• Claims for High End Equipment. Identify providers that provided power wheelchairs to a given patient. Assume most patients would have received other type of equipment such as a manual wheelchair or a walker before needing a power wheelchair.

AUDIT TRIGGERS

AUDIT TRIGGERS

• Diagnosis Code Data• What diagnoses codes are you using?• Medicare would not expect that your patient

population all have the same diagnoses for the same equipment

• Medicare excludes diagnoses specific products• Can get even more complex with ICD-10

• Peer Analysis– Medicare compares your data to other similar

suppliers– Review utilization rates/guidelines– Be prepared if you have high utilization with

specific equipment

AUDIT TRIGGERS

• Unbundling– Base codes for certain products may include other

components that are not separately payable– Wheelchairs– Prosthetics– Urologicals

AUDIT TRIGGERS

• Accessories– Do all your patients who receive wheelchairs also

receive the same accessories consistently.– Each separately billed code you intend to seek

reimbursement for must be medically reasonable and necessary and documentation must support that it is.

AUDIT TRIGGERS

• Inpatient claims– Difficult to counter– RACs run this algorithm all the time– Make sure patients understand that you must be

contacted if they are admitted to a hospital or facility– Check on this when doing refill requests or follow up– Recent Update: RACs are limited to DME claims paid on or

after April 1, 2015.

AUDIT TRIGGERS

• Rule Changes– Changes in rules can lead people to change

behavior in an effort to circumvent them– Group II vs. Group III PMDs after capped rental

change– Vents being provided to avoid capped rental or

competitive bid limitations– Increases in billing for non-competitive bid items

AUDIT TRIGGERS

• High Dollar Volume Claims– Medicare has identified supplier that submit high

dollar volume claims– High dollar volume has been identified as $1000– High focus on prepayment review

AUDIT TRIGGERS

• Cross-claims analysis– Compare your claims data with that of other

provider types– Is there a relationship with the referring

physician?– Is the patient on home health (homebound)– Inpatient claims

AUDIT TRIGGERS

• Location of provider, beneficiary, and referral sources– Medicare would expect that referral sources,

patients and suppliers are generally within close proximity of each other

– Mail-order exclusion

AUDIT TRIGGERS

• Date of Death– This algorithm is regularly run by various

contractors including MACs, RACs, and ZPICs– These denials are "red-flag" denials for Medicare

AUDIT TRIGGERS

• Compromised HICNs– Medicare numbers sold on the black-market– Beneficiaries found guilty of fraud– HIPAA violations– Medical Identity Theft

AUDIT TRIGGERS

• Modifiers– What modifiers do you use consistently?– KX Modifiers

•Are you using this one properly?– ABN modifiers

•Are you ABNs valid?– Function-level modifiers

AUDIT TRIGGERS

• New Provider Analysis– As a new provider is enrolled, their data is more

heavily scrutinized – New providers are flagged based on various pieces

of data obtained during the enrollment process and background checks

TARGET BUSINESS PRACTICES

• Referring NPI concentrations. Compare the referring NPI field to identify situations in which some providers may have a significant relationship with a referring doctor because they account for a large percentage of their claims.

TARGET BUSINESS PRACTICES

PHYSICIAN RELATIONSHIPS

• Multiple Suppliers– Aggressive internet marketing and lead-

generating businesses– Two or more suppliers billing for the same

supplies for the same patients at the same time.

TARGET BUSINESS PRACTICES

DO YOU

HAVE LOW

BACK PAIN?

TARGET BUSINESS PRACTICES

• Direct to Beneficiary Marketing• While perfectly legal, CMS does not like this business

model• Expects the physician to be the one initiating care,

not the patient or supplier.• Manage lead generation services closely and discuss

referrals with physicians• Often times, patients do not qualify

TARGET BUSINESS PRACTICES

• Orthotics– Back Braces– Knee Braces– Ankle Foot Orthotics– Multiple Orthotics on the same idea– “Arthritis Kits” or “Ortho Kits”– Are you familiar with the KX modifier requirements for

AFOs and Knee Orthotics?

TARGET BUSINESS PRACTICES

• Non-Invasive Ventilation– Changes in technology and payment rules led to

significant volume increase– CMS still views this product as a “life-saving” product– Pricing category put the “life-saving” constraints on

coverage• Continuous rental, Generous fee

– The CMS solution to increased availability for the technology is to change the pricing category

• Remember the E0471

NIV

• “Point being that it is theoretically possible to increase availability of non-invasive ventilation to a less seriously ill group of patients but that comes at a cost…Many manufacturers and suppliers want increased coverage but want to retain the high fee and continuous rental status. In Medicare as in so many areas of life you can't have your cake and eat it too.”

• A LCD for this product is unlikely anytime soon.

• The NCD says vents are covered for respiratory failure due to COPD and neurological diseases and the payment category says that the patient has to be at the life threateningly ill stage before the vent can be covered.

• There is no diagnosis code or specific lab test that allows for automation of that coverage.

• It all rests on a clear discussion in the medical record that:– (1) the underlying condition and – (2) whatever evidence is appropriate for the condition

to show that without ventilator support the patient is a real risk of death.

NIV

TARGETED BUSINESS PRACTICES

• Add-on payment for face-to-face examination for Power Mobility Devices– Medicare requires that the treating physician, when

prescribing a PMD, conduct a F2F to determine the medical necessity and write a prescription

– To receive compensation, the prescribing physician can bill for an E/M service and has the option of billing for an add-on payment for the sole purpose of documenting the need for the PMD.

SUPPLIER BENEFITS

• Audit preparation– Minimize impact of intense regulatory oversight

• Maintains compliance– Identify issues internally– Implement immediate and decisive corrective actions if

necessary• Streamlines organization and increases efficiency• Informed management• Improves internal communication• Improves overall quality (care, billing, reimbursement, services)

SUPPLIER BENEFITS

• An informed supplier aware of their data has an advantage in a competitive industry

• CMS only wants to do business with the most compliant of organizations– Accreditation– Surety Bonds– Competitive Bidding– Intense regulatory oversight

• Number of suppliers declining while numbers of consumers increasing = A BUSINESS OPPORTUNITY for the savvy supplier

TAKEAWAYS

• CMS only has access to the data you send them• If you send the data, you should be conducting your own

analysis to identify aberrancies• An aberrancy does not mean that fraud exists, but it means

you may be the target of an audit• Be aware and prepared to explain your aberrancies• Documentation is your only defense in an audit• Be proactive in obtaining documentation• Conduct regular risk assessments• Don’t be scared. Be prepared.

Stay Connected The van Halem Group - A Division of VGM Group, Inc.

@vanHalemGroup

The Details Matter – blog.vanhalemgroup.com

Kelly Grahovac, Sr. Consultant

101 Marietta St NWSuite 1850

Atlanta, GA 30303

Kelly@vanHalemGroup.com404.343.1815

www.vanHalemGroup.com