Innovations in Oncology Management

Volume 2 • Number 1

www.innovationsinoncologymanagement.com

Navigating Payer Audits

overnment and commercial payer audits have increased STAKEHOLDER PERSPECTIVE dramatically in recent years, a trend directly attributable to the growing focus on identifying and preventing overStaying Prepared: Planning payments and reducing waste in the healthcare system.1 Specifically, for Medicare and Commercial audits are intended to uncover instances of improper or insufficient Payer Audits ................................ 6 chart documentation, suspect billing or coding practices, and/or improper Medicare payments.2 An Interview with Patricia Krueger, RPh B:8.375” The majority of the increased emphasis on provider audits is Practice Administrator T:8.125” rooted in the success of the Medicare Recovery Audit program Oncology & Hematology Specialists S:7.625” (formerly known as the Recovery Audit Contractor program), Denville, NJ which was formally established in 2009 after uncovering $1 billion in improper payments during the preceding 3-year pilot period.2,3 Between 2009 and 2014, the Recovery Audit program recouped tinize provider evaluation and management code distributions more than $8 billion in wasteful and fraudulent payments.4 and recognize patterns that would identify providers as outliers compared with their peers within a particular contractor state or Types of Audits region. If a provider’s code level distribution varies by a certain Audits may be conducted by employees or contractors associated percentage from the average distribution profile, as determined by with the federal Medicare program, state Medicaid agencies, or na- Medicare or Medicaid, that provider and his or her medical group tional and regional commercial payers, such as UnitedHealthcare, may be targeted for a focused audit.2 Aetna, and BlueCross BlueShield plans. Good recordkeeping is essential for medical practices because The Centers for Medicare & Medicaid Services (CMS) in- the federal government can audit Medicare patients’ charts for up creased the frequency of provider audits in response to growing to 10 years (ie, the look-back period) after patients’ treatment. In pressure to improve accountability and reduce costs for govern- addition, the look-back period for Medicaid beneficiaries can also ment-funded healthcare programs.2 CMS and its contractors scru- be up to 10 years; however, rules vary from state to state.5,6

Editor’s Note Welcome to Innovations in Oncology Management, a news- by the success of government audit programs, commercial payers letter series for oncology practice administrators, administrative have followed suit and developed auditing programs as well. The staff, advanced practice clinicians, and oncology pharmacists. article featured in this issue––Navigating Payer Audits––discussThe series provides concise, up-to-date information on current es the current landscape of payer audits and provides practical issues that are impacting the business of oncology. Our first tips for practices that are facing a potential audit. In a special newsletter in this second series focuses on navigating Medicare, interview, Patricia Krueger, RPh, a practice administrator, shares Medicaid, and commercial payer audits. her practice’s experience with government and commercial Government and commercial payer audits have increased audits, and provides advice on traversing the payer audit process. significantly in recent years in an effort to identify and prevent We hope you enjoy this newsletter and find it to be a valuable overpayments and reduce waste in the healthcare system. Over resource for your practice. Previous newsletters have explored a the past 5 years, Medicare’s audit program has recouped more variety of topics and can be found by visiting www.innovations Patients, Science, andand Innovation are the foundation everything inoncologymanagement.com. than $8 billion in wasteful fraudulent payments. Encouraged of

we do. At Celgene, we believe in an unwavering commitment to medical innovation, from discovery to development. Our passion is relentless—and we are just getting started. Supported by funding from Celgene Corporation and Celgene Patient Support. Manufacturer did not influence content.

09/14

US-CELG140022(1)

Innovations in Oncology Management

Volume 2 • Number 1

www.innovationsinoncologymanagement.com

Navigating Payer Audits

overnment and commercial payer audits have increased dramatically in recent years, a trend directly attributable to the growing focus on identifying and preventing overpayments and reducing waste in the healthcare system.1 Specifically, audits are intended to uncover instances of improper or insufficient chart documentation, suspect billing or coding practices, and/or improper Medicare payments.2 The majority of the increased emphasis on provider audits is rooted in the success of the Medicare Recovery Audit program (formerly known as the Recovery Audit Contractor program), which was formally established in 2009 after uncovering $1 billion in improper payments during the preceding 3-year pilot period.2,3 Between 2009 and 2014, the Recovery Audit program recouped more than $8 billion in wasteful and fraudulent payments.4

Types of Audits

Audits may be conducted by employees or contractors associated with the federal Medicare program, state Medicaid agencies, or national and regional commercial payers, such as UnitedHealthcare, Aetna, and BlueCross BlueShield plans. The Centers for Medicare & Medicaid Services (CMS) increased the frequency of provider audits in response to growing pressure to improve accountability and reduce costs for government-funded healthcare programs.2 CMS and its contractors scru-

STAKEHOLDER PERSPECTIVE Staying Prepared: Planning for Medicare and Commercial Payer Audits................................. 6 An Interview with Patricia Krueger, RPh Practice Administrator Oncology & Hematology Specialists Denville, NJ tinize provider evaluation and management code distributions and recognize patterns that would identify providers as outliers compared with their peers within a particular contractor state or region. If a provider’s code level distribution varies by a certain percentage from the average distribution profile, as determined by Medicare or Medicaid, that provider and his or her medical group may be targeted for a focused audit.2 Good recordkeeping is essential for medical practices because the federal government can audit Medicare patients’ charts for up to 10 years (ie, the look-back period) after patients’ treatment. In addition, the look-back period for Medicaid beneficiaries can also be up to 10 years; however, rules vary from state to state.5,6

Editor’s Note Welcome to Innovations in Oncology Management, a newsletter series for oncology practice administrators, administrative staff, advanced practice clinicians, and oncology pharmacists. The series provides concise, up-to-date information on current issues that are impacting the business of oncology. Our first newsletter in this second series focuses on navigating Medicare, Medicaid, and commercial payer audits. Government and commercial payer audits have increased significantly in recent years in an effort to identify and prevent overpayments and reduce waste in the healthcare system. Over the past 5 years, Medicare’s audit program has recouped more than $8 billion in wasteful and fraudulent payments. Encouraged

Supported by funding from Celgene Corporation and Celgene Patient Support. Manufacturer did not influence content.

by the success of government audit programs, commercial payers have followed suit and developed auditing programs as well. The article featured in this issue––Navigating Payer Audits––discusses the current landscape of payer audits and provides practical tips for practices that are facing a potential audit. In a special interview, Patricia Krueger, RPh, a practice administrator, shares her practice’s experience with government and commercial audits, and provides advice on traversing the payer audit process. We hope you enjoy this newsletter and find it to be a valuable resource for your practice. Previous newsletters have explored a variety of topics and can be found by visiting www.innovations inoncologymanagement.com.

PUBLISHING STAFF Senior Vice President/Group Publisher Nicholas Englezos nenglezos@the-lynx-group.com Vice President/Group Publisher Russell Hennessy rhennessy@the-lynx-group.com Publisher Cristopher Pires cpires@the-lynx-group.com Vice President/Director of Sales & Marketing Joe Chanley jchanley@the-lynx-group.com Director, Client Services Zach Ceretelle zceretelle@the-lynx-group.com Senior Editorial Director Dalia Buffery dbuffery@the-lynx-group.com Editorial Director Anne Cooper acooper@the-lynx-group.com Copyeditor Hina Khaliq Senior Production Manager Lynn Hamilton The Lynx Group President/CEO Brian Tyburski Chief Operating Officer Pam Rattananont Ferris Vice President of Finance Andrea Kelly Human Resources Jennine Leale Director, Strategy & Program Development John Welz Director, Quality Control Barbara Marino Quality Control Assistant Theresa Salerno Director, Production & Manufacturing Alaina Pede Director, Creative & Design Robyn Jacobs Creative & Design Assistants Lora LaRocca Wayne Williams Jr Digital Media Specialist Charles Easton IV Web Content Manager Anthony Trevean Digital Programmer Michael Amundsen Meeting & Events Planner Linda Mezzacappa Project Managers Deanna Martinez Jeremy Shannon Project Coordinator Rachael Baranoski IT Manager Kashif Javaid Administrative Team Leader Allison Ingram Administrative Assistant Amanda Hedman Office Coordinator Robert Sorensen Engage Healthcare Communications, LLC 1249 South River Road - Ste 202A Cranbury, NJ 08512 phone: 732-992-1880 fax: 732-992-1881

EDITOR’S NOTE Welcome to Innovations in Oncology Management ™.......................................1

FEATURE Navigating Payer Audits................................................................................. 1

STAKEHOLDER PERSPECTIVE Staying Prepared: Planning for Medicare and Commercial Payer Audits An Interview with Patricia Krueger, RPh, Practice Administrator, Oncology & Hematology Specialists, Denville, NJ.......................................... 6

MISSION STATEMENT Oncology healthcare requires providers to focus attention on financial concerns and strategic decisions that affect the bottom line. To continue to provide the high-quality care that patients with cancer deserve, providers must master the ever-changing business of oncology. Innovations in Oncology Management ™ offers process solutions for members of the cancer care team—medical, surgical, and radiation oncologists, as well as executives, administrators, and coders/billers—including patient financial support services, health policy legislation, and emerging payment models.

Innovations in Oncology Management ™ is published by Engage Healthcare Communications, LLC, 1249 South River Road, Suite 202A, Cranbury, NJ 08512. Copyright © 2015 by Engage Healthcare Communications, LLC. All rights reserved. Innovations in Oncology Management is a trademark of Engage Healthcare Communications, LLC. No part of this publication may be reproduced or transmitted in any form or by any means now or hereafter known, electronic or mechanical, including photocopy, recording, or any informational storage and retrieval system, without written permission from the publisher. Printed in the United States of America. The ideas and opinions expressed in Innovations in Oncology Management do not necessarily reflect those of the editorial board, the editors, or the publisher. Publication of an advertisement or other product mentioned in Innovations in Oncology Management should not be construed as an endorsement of the product or the manufacturers’ claims. Readers are encouraged to contact the manufacturers about any features or limitations of products mentioned. Neither the editors nor the publisher assume any responsibility for any injury and/ or damage to persons or property arising out of or related to any use of the material mentioned in this publication. POSTMASTER: Correspondence regarding subscriptions or change of address should be directed to CIRCULATION DIRECTOR, Innovations in Oncology Management, 1249 South River Road, Suite 202A, Cranbury, NJ 08512. Fax: 732-992-1881.

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2 u MAY 2015

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Medicare Audits CMS has implemented several different audit programs pertaining to healthcare providers who treat patients with Medicare coverage. Recovery Audit Program As previously mentioned, the Medicare Recovery Audit program was established in 2009 after a 3-year Recovery Audit pilot uncovered more than $1 billion in improper payments between 2005 and 2008.2,3,7 An analysis of the pilot program revealed that 42% of the overpayments were the result of incorrect coding, 32% were for treatments deemed medically unnecessary or for incorrect service, 9% were the result of insufficient documentation, and 17% were listed as “other.”2,7 The success of the Recovery Audit pilot program led to the inclusion of Section 6411 in the Affordable Care Act (ACA), expanding the current program to Medicaid and Medicare Part C and Part D.7,8 The Medicare Recovery Audit program uses third-party contractors to identify waste, errors, and improper payments. Nationally, the 4 Medicare Recovery Audit contractors comprise Performant Recovery; CGI Federal, Inc; Connolly Inc; and HealthDataInsights, Inc.7 These contractors must follow Medicare regulations, including national coverage determinations and local coverage determinations (in accordance with their local Medicare administrative contractors [MACs]).9 Initially, Recovery Audit contractors focused the bulk of their efforts on institutions, because the high error rates and high-cost services associated with hospital-based care provided a cost-efficient opportunity to recoup Medicare revenue. Recently, however, Recovery Audit contractors have become more active in reviewing services provided by physician practices.6 Of interest to practices and institutions providing oncology services, Recovery Audit contractors are known to focus on the place-of-service errors (eg, facility vs nonfacility) and on evaluation and management services during global surgery periods.2 Providers may appeal Recovery Audit denials, and should heed the fact that hospitals have had considerable success in appealing adverse rulings, with 75% of the initial decisions overturned in favor of the institution.6 Recovery Audit contractors are paid on a contingency-fee basis; that is, their commissions are tied to the number of claims they deny. Several professional organizations have argued that this compensation arrangement results in overzealous auditing efforts with little regard to the accuracy of the denials.10 For example, the American Medical Association and the American Hospital Association have called for an overhaul and a reform of the Recovery Audit program, respectively.10,11 In February 2014, the Recovery Audit program was temporarily suspended; it was reinstated on a limited basis beginning in August 2014.4,12 According to CMS, the delay in restarting the Recovery Audit program was to enable the various Recovery Audit regions to restructure and allow time for administrative law judges to resolve the lengthy backlog of appeals.13 As a result of the backlog, Recovery Audit contractors were prohibited from processing postpayment patient status reviews of inpatient hospi-

tal admissions through March 2015; patient status reviews are planned to resume after that point in time.13 Medicare Administrative Contractors The primary function of MACs is to process and pay claims for Medicare Part A and Part B services.6 In addition, MACs conduct postpayment (retrospective) and prepayment (concurrent) claims reviews, and their responsibilities extend to auditing providers and reducing the Medicare claims payment error rate.6 MACs may conduct probe reviews when a provider-specific problem is suspected, but additional documentation is required to substantiate the potential concern.6 Before a provider-specific review takes place, practices and institutions must be notified via a written notice. The notice must include the specific reason as to why the provider was selected, and must disclose whether the review will occur on a prepayment or a postpayment basis. When conducting data analyses to identify potential areas of concern, MACs look for a high volume of services, high cost, and dramatic changes in the frequency of specific services or procedures.6 Providers with identified billing problems may be placed on a prepayment review, in which a percentage of their claims undergo medical review before MAC authorizes payment.6 The length and the scope of the prepayment review are based on the perceived severity of the billing problem.6 Comprehensive Error Rate Testing Program Through claims analysis, Medicare develops thresholds to delineate improper payment rates. In doing so, the Comprehensive Error Rate Testing (CERT) program randomly selects a sample of claims submitted to MACs during each reporting period and requests the corresponding medical records.14 Contractors then evaluate the claims to determine whether they comply with Medicare coverage, coding, and billing rules; if not, errors are assigned to the claims. If medical records are not submitted by the provider in a timely manner, cases are classified as no-documentation claims and categorized as errors. Providers with errors may be sent overpayment and underpayment letters that mandate adjustments for claims that were overpaid or underpaid.14 Because the CERT program uses random samples rather than a predefined sampling methodology to select claims, reviewers cannot conduct a comprehensive evaluation of provider billing patterns that may indicate potential fraud when making payment determinations. For this reason, the CERT program does not and cannot label a claim as fraudulent.2 ZPIC Audits Unlike MACs and Recovery Audit programs, whose auditing is intended to recoup overpayments and prevent errors, Zone Program Integrity Contractors (ZPICs) exist primarily to uncover and to investigate suspected fraud, waste, and abuse. ZPICs are responsible for initiating timely investigations and ensuring that Medicare funds are not paid inappropriately.15,16 Each of the 4 ZPICs––Safeguard Services LLC, NCI Inc, Cahaba Safeguard Administrators, and Health Integrity LLC––

INNOVATIONS IN ONCOLOGY MANAGEMENT u 3

has a unique coverage area and uses government analytics and other proprietary methods to assess billing trends and patterns.16,17 ZPICs flag Medicare Part A and Part B claims that vary from those submitted by the majority of other providers in an area. A case is opened for investigation when irregularities are suspected to involve fraud or abuse.15,16 Because ZPIC audits imply that fraud is suspected, they are serious, and, if contacted, providers should consider seeking legal counsel. ZPICs are empowered to impose administrative actions, such as suspensions, overpayment collections, and referrals to law enforcement and CMS for further sanctions2; some cases have even been turned over to the US Department of Health & Human Services (HHS) and the Justice Department for prosecution.16 Medicaid Audits Medicaid contractor audits are also relatively common and include Medicaid Integrity Contractors (MICs). MICs are similar to Medicare Recovery Audit contractors in that MICs conduct a number of activities intended to uncover payment irregularities and waste.6 There are 3 types of MICs, including audit MICs, review MICs, and education MICs. Under contract with CMS, audit MICs conduct postpayment audits of Medicaid providers to identify overpayments.6 Review MICs analyze claims data to identify aberrant claims and potential billing vulnerabilities and provide leads to audit MICs. Finally, education MICs work with review MICs and audit MICs to educate healthcare providers, state Medicaid officials, and others about Medicaid integrity issues.6 Although audit MICs are not paid on a contingency-fee basis, they may be eligible for financial bonuses based on the effectiveness of their audits.6 The look-back period for Medicaid claims under the MIC program varies from state to state. In addition, states have different policies pertaining to appeals for MIC denials.6 In addition to the MIC program, the ACA legislation expanded the RA program to include Medicaid. Beginning in 2012, state Medicaid agencies were allowed to contract with RA contractors in order to identify underpayments and overpayments and recoup overpayments.2,17 Individual states have a substantial leeway in establishing their own program parameters depending on the issues facing their state. The states can also coordinate their recovery efforts with other government entities performing audits, including federal and state law enforcement agencies, such as the Federal Bureau of Investigation, HHS, and the state Medicaid Fraud Control Unit.2,17 Commercial Payer Audits More recently, commercial or private payers, encouraged by the success of the government programs in recouping cost-savings, have instituted their own audit initiatives.2 In doing so, they are using similar techniques to those of the government auditors to scrutinize claims submitted by their network providers and hospitals.2 Similar in intent to the Medicare and Medicaid Recovery Audit program, commercial payer audits, however, pose a distinct

4 u MAY 2015

set of issues for hospitals and medical practices.1 Commercial audits tend to be timelier and occur much closer to the actual patient encounter than government audits. In addition, commercial auditors will often go directly to the practice or institution to review the medical records when evaluating contracted claims.1 Similar to government payers, commercial payers often hire third parties to perform audits on behalf of the plan.2 Unlike Medicare and Medicaid postpayment audits, many commercial payers conduct prepayment audits that may withhold payments for outstanding claims.1 These auditors scrutinize medical necessity documentation to ensure that it is complete and accurate and look for inappropriate charges or miscoding. In addition, they identify charges for inpatient services that should have been classified as outpatient services.1 Audits by commercial plans may be triggered by repeated claims submission errors; internal changes to claims management policies or procedures; and by individual reports, including patient complaints, whistle-blowers, or employer requests.2 Some payers will mine their claims data to search for physicians who report an unusual percentage of high-acuity evaluation and management codes or certain procedure codes compared with their peers. In some cases, commercial payer audits are conducted at random.2 Commercial payer audits are divided into 2 groups, claims reviews and formal audits.2 Claims reviews take place when payers request to review contracted claims as a preliminary investigative step to decide whether to engage in a formal audit. When a practice or an institution receives notification of a formal audit, it should ensure that the payer follows the process outlined in the providerâ&#x20AC;&#x201C;payer contract.2 In some instances, the contract language may reference payer policies or procedures that are not explicitly written in the contract itself; if this is the case, this documentation should be obtained from the payer and carefully reviewed to ensure that the auditor is in compliance.2 When conducting audits, commercial payers must comply with state regulations that govern audits and overpayment recovery.2 Local state medical societies can be useful resources for information about the commercial audit appeals process for payers in each state.2

Navigating Commercial Payer Audits

When practices receive an audit notification from a commercial payer, they should first confirm that they will be required to participate; payers may send out a Heralding Notice, which notifies providers that the payer intends to conduct an audit, but does not indicate that a specific practice has been targeted. However, if the practice receives a Notice of Audit, it is being audited.18 When practices receive a Notice of Audit, they should first determine the scope and the intent of the audit.18 Not all payer requests for medical records are recovery audits. For example, payers who participate in the National Committee for Quality Assurance Accreditation program may have medical records audited as part of their Healthcare Effectiveness Data and Information Set data gathering process. Furthermore, it is important to identify which payerâ&#x20AC;&#x2122;s department is conducting the audit and whether

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it is asking for medical records. If the audit is being requested by the payers’ Special Investigations Unit, it is likely that it is seeking to recover overpayments to investigate potential fraud.18 When notified of an impending audit, it is important to identify how many claims the payer is pursuing; a larger number of claims may indicate that the payer intends to conduct a comprehensive review, in which case they may seek to extrapolate their recovery efforts to a broader universe of claims.18 In its 2014 Administrative Guide for providers, UnitedHealthcare, the largest private payer in the nation,19 notified contracted providers that they may “select and audit a statistically valid random sample (SVRS) of claims, or a smaller subset of SVRS in order to obtain an estimate of the proportion of claims that were, in fact, paid in error. The estimated proportion—referred to as the error rate— may then be projected across the relevant universe of claims to determine any overpayment, as permitted by law or regulation.”20 Practices that have been notified of a fraud or a recovery audit should consider assembling an experienced team to pull the proper medical records; review coding, billing, and documentation; and interface with payer representatives. When auditors are on site, there may be opportunities for the staff to interact with the auditors and help them find the information needed to support the practice’s position.1,18 In some cases, practices may want to consider retaining an attorney to represent their interests.18 It is important to ensure that practices select and submit the correct information requested by the auditors and that they comply with the auditors’ requests before the deadline.18 If a payer withholds payment or asks for a recoupment of claims payment as a result of the audit, practices should request time to review the audit findings. In addition, practices should ensure that the payer provides a thorough explanation for each claim that was incorrectly paid or coded.18 In the event of an adverse judgment, there should be an opportunity to appeal the decision; before a formal appeal, however, there may be a chance to submit a rebuttal or an informal appeal.18 Practices should understand the process by which the payer calculated their error rate, and challenge determinations that do not appear to be accurate. If a practice decides to file a formal appeal, it should follow the process detailed by the payer organization.18 The best way to handle audits is to prevent them altogether. Although audits cannot always be avoided, practices can take steps to minimize their risk for being targeted.18,21 For example, practices should ensure that they are using current billing codes and modifiers.18 In addition, practices should ensure that the time spent with patients by oncologists and by advanced practice clinicians is appropriately documented; documentation should support the level of code submitted.18 Furthermore, practices should consider conducting an internal audit annually to recognize and correct potential deficiencies.21 Finally, practices should ensure that all staff are trained to follow CMS and commercial payer policies regarding proper coding and documentation.21 Although these efforts may require a substantial commitment of time and resources, the cost may be minimal compared with the resources and the fiscal burden of a large-scale external audit. u

References

1. Adampoulos H, for Becker’s Hospital Review. Tracking and trending: how hospitals should handle the rise in commercial audits. May 28, 2014. www.beckers hospitalreview.com/finance/tracking-and-trending-how-hospitals-should-handlethe-rise-in-commercial-audits.html. Accessed April 1, 2015. 2. American College of Emergency Physicians. Preparing for payer audits: ACEP Reimbursement Committee 2013. www.acep.org/uploadedFiles/ACEP/practice Resources/issuesByCategory/reimbursement/Preparing%20for%20Payer%20 Audits.pdf. Accessed April 1, 2015. 3. Centers for Medicare & Medicaid Services. Centers for recovery auditing in Medicare and Medicaid for fiscal year 2012. www.cms.gov/Research-StatisticsData-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/ Recovery-Audit-Program/Downloads/Report-To-Congress-Recovery-Auditing-inMedicare-and-Medicaid-for-Fiscal-Year-2012_013114.pdf. Accessed April 7, 2015. 4. The Advisory Board Company. CMS resumes some (but not most) RAC audits. August 6, 2014. www.advisory.com/daily-briefing/2014/08/06/cms-resumes-somebut-not-most-rac-audits. Accessed April 1, 2015. 5. Terry K, Ritchie A, Marbury D, et al, for Medical Economics. Top 15 challenges facing physicians in 2015. December 1, 2014. http://medicaleconomics.modernmedicine.com/medical-economics/news/top-15-challenges-facing-physicians2015?page=full. Accessed April 1, 2015. 6. Oplink. Economics are driving the increase in audits. July 2012. www.oplinc. com/newsletter/BestPracticesReviewJuly2012.html. Accessed April 1, 2015. 7. Centers for Medicare & Medicaid Services. Recovery audit program. Updated September 26, 2014. www.cms.gov/Research-Statistics-Data-and-Systems/MonitoringPrograms/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/. Accessed April 1, 2015. 8. US Congress. The Patient Protection and Affordable Care Act. Public Law 111-148. 2010. http://housedocs.house.gov/energycommerce/ppacacon.pdf. Accessed May 10, 2015. 9. Centers for Medicare & Medicaid Services. Medical review and education. Updated June 24, 2014. www.cms.gov/Research-Statistics-Data-and-Systems/MonitoringPrograms/Medicare-FFS-Compliance-Programs/Medical-Review/. Accessed April 8, 2015. 10. American Hospital Association. RAC auditing reform is essential to fix urgent, critical problems. www.aha.org/advocacy-issues/rac/index.shtml. Accessed April 1, 2015. 11. American Medical Association. AMA calls for overhaul of recovery audit process. Press release. December 3, 2014. www.ama-assn.org/ama/pub/news/news/2014/ 2014-12-03-overhaul-recovery-audit-process.page. Accessed April 1, 2015. 12. The Advisory Board Company. CMS puts RAC audits on hold. March 6, 2014. www.advisory.com/daily-briefing/2014/03/06/cms-puts-rac-audits-on-hold. Accessed April 1, 2015. 13. Tillman T. The winding road of RAC audits. How to ensure your facility stays ahead of the curve in a constantly changing landscape. Health Manag Technol. 2014;35:16-17. 14. Centers for Medicare & Medicaid Services. Medicare program integrity manual chapter 12––the comprehensive error rate testing. www.cms.gov/Regulations-andGuidance/Guidance/Manuals/downloads/pim83c12.pdf. Accessed April 1, 2015. 15. Centers for Medicare & Medicaid Services. The role of the zone program integrity contractors (ZPICs), formerly the program safeguard contractors (PSCs). www. cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLN MattersArticles/downloads/SE1204.pdf. Accessed April 1, 2015. 16. Carlson J, for Modern Healthcare. Under the microscope: intensity of scrutiny by ZPICs draws provider complaints, attention from feds. February 22, 2013. www. modernhealthcare.com/article/20130222/MAGAZINE/302239959. Accessed April 1, 2015. 17. Medicaid RACs. Legislation and guidance. www.medicaid-rac.com/legislationguidance/. Accessed April 1, 2015. 18. Verhovshek J, for American Academy of Professional Coders. Respond to a payer audit. January 1, 2014. http://news.aapc.com/respond-to-a-payer-audit/. Accessed April 1, 2015. 19. Namovicz-Peat S, Trompeter E. AIS’s Directory of Health Plans: 2015. Washington, DC: Atlantic Information Services, Inc; 2015. 20. UnitedHealthcare. Physician, Health Care Professional, Facility and Ancillary Provider 2014 Administrative Guide. www.uhcrivervalley.com/downloads/provider/ manual/ProviderManual_Master_2014.pdf. Accessed April 1, 2015. 21. Merritt M, for Cancer Network. Code correctly to avoid RAC audits at your practice. February 27, 2013. www.cancernetwork.com/login?referrer=http%3A// www.cancernetwork.com%2Fcode-correctly-avoid-rac-audits-your-practice. Accessed April 1, 2015.

INNOVATIONS IN ONCOLOGY MANAGEMENT u 5

STAKEHOLDER PERSPECTIVE

Staying Prepared: Planning for Medicare and Commercial Payer Audits An Interview with Patricia Krueger, RPh Practice Administrator, Oncology & Hematology Specialists, Denville, NJ

ayer audits have become an inevitable fact of life for today’s oncology practices. Until a few years ago, the majority of audits were conducted by government agencies, such as Medicare, Medicaid, or their contractors. In recent years, however, encouraged by federal and state agencies’ successful payment recoupment efforts, national and regional commercial payers have increased their audits of medical practices and hospitals. To better understand Medicare and commercial payer audits, Innovations in Oncology Management™ spoke with Patricia Krueger, RPh, a community-based practice administrator based in Denville, NJ. Ms Krueger discussed her oncology practice’s experience with government and private auditors and provided practical advice on preparing for and successfully navigating the payer audit process.

What is your practice’s approach to payer audits? QQ:Patricia Krueger (PK): In our practice, all audit notifications

must come to my desk first to make sure that we understand the nature and the purpose of the audit, as well as to identify the auditing body. There are many different types of audits, including Medicare audits, commercial payer audits, pharmacy audits, and medical audits. Some audits are systematic, and others are specific to certain claims. Many of the audits are conducted by third parties; therefore, it is important to know who the contractor represents.

them electronically. We had to attach the doctor’s schedule to each audit code.

Q: Have you had any particularly challenging Q audits?

PK: We had one audit where the auditor required all the nursing notes for certain patients receiving intravenous chemotherapy. That was a very cumbersome audit, because we had to document all the start and stop times of intravenous chemotherapy. The auditors wanted to make sure that we were billing appropriately for chemotherapy administration times. Pulling together the documentation was challenging.

you retained legal counsel because of an audit? QQ:PK:Have No, we have not. We are an independent practice, and

legal representation is very expensive. However, we have used an experienced consultant to provide advice regarding audit processes and procedures; she has been very helpful to our practice. been any upside to the audits? QQ:PK:HasAs there a matter of fact, a few of the outside contractors com-

mented that, in some cases, our E/M coding was overly conservative, and we could have upcoded and still have been compliant. That feedback was very helpful to me from a business perspective, because we learned that we might be “leaving money on the table” in some circumstances.

are auditors typically looking for? would you describe the commercial audits? QQ:PK:What QQ:PK:How Patient-specific claims audits typically scrutinize medical There are 2 types of commercial audits. Random claims-spe-

necessity documentation. The larger, systematic audits look for documentation that relates to coding, especially for evaluation and management (E/M) codes and current procedural terminology codes. In one of our Medicare audits, the contractor who was conducting the audit asked to see the schedule of each of the doctors. We have an electronic medical record (EMR) system, and were required to provide the electronic schedule. For every physician extender, the auditors wanted to confirm that the doctor who signed off on the prescription was physically in the office seeing the patients. That was a critical part of the audit, because we have several physician assistants working under the physician’s license; the doctors had to verify that they were present and sign off on

6 u MAY 2015

cific audits are conducted to ensure that the proper medical necessity documentation has been provided for a service or a procedure. We customarily bill the next day after a patient is seen and receive an explanation of benefits (EOB) notification approximately 10 to 14 days after the date of service. Occasionally, we will see that the payer has determined a zero payment in the EOB, even if the patient is an active member who is eligible for benefits. When we receive these EOBs, we do not wait for a letter asking for medical documentation. Instead, we proactively call the payer and ask for the reason for the zero payment. By being proactive, we can provide the documentation quickly and avoid lengthy payment delays. After they receive the requested documentation, the payers usually pay fairly quickly.

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We also get retrospective audits (ie, postpayment audits) from some of our payers, and the look-back period can be up to 18 months. Because of the high volume of audits, we have instituted a policy that allows 1 auditor monthly. Sometimes audits are delayed by 6 months to a year, but we feel it is necessary to minimize disruption and the uncompensated use of office time and resources. So far, our local payers have abided by this policy.

Q: How do commercial payers notify you about these postpayment audits? PK: We receive notification letters. Because we receive a copious amount of mail from our payers, it is important to carefully review all correspondence received from payers in order to avoid missing an audit request.

Q: In a systematic audit, how many medical records do your commercial payers usually request? PK: Our commercial payers typically request approximately 20 to 25 patient records, sometimes more. In the past, when we had paper medical records, it was a problem because we had to retrieve the records from storage. It is easier with an EMR system, but the records still need to be printed and collated.

Q: As the practice administrator, what steps do you take in response to an audit notification? PK: We assign responsibility to a single point person––one of the managers in the office. The point person is responsible for direct contact with the auditor; he sits next to the auditor while he or she is in the office. He is experienced in commercial audits, knows the rules, and understands what the auditors are looking for from the practice. The auditors are not allowed to roam around the office or navigate our EMR system. In case any issues arise, we try to schedule the onsite visit on a day when I am in the office as well.

Q: Have you seen an increase in commercial payer audits in the past year or 2? PK: The commercial audits have been steady, but we have not experienced a noticeable increase in the past year or so.

are Medicare audits different from commercial audits? QQ:PK:HowApproximately 55% of our patient population has

Medicare coverage, so we take these audits very seriously. It is important to understand and to follow Medicare guidelines; the guidelines can be complicated, and they often change. The medical necessity criteria are different for each drug or procedure.

With the increase in personalized medicine, many drugs have diagnostic requirements now, too. Commercial payers often use Medicare guidelines as a template for their auditing efforts, but Medicare guidelines are usually more restrictive than commercial payer guidelines. Therefore, we make sure that we include the documentation required by Medicare in our EMR system. By following Medicare requirements for all of our patients, we rarely experience an issue with our commercial payers.

Q: What does your practice do to remain in a state of readiness for audits? PK: We are proactive––our practice is compliant and we follow the guidelines. Having a solid EMR system makes all the difference in the world, because it self-directs the way that we document an office visit. Various templates are available for all the information that we need to document in the EMR, including patient’s medical history, physical examinations, E/M codes, previous diagnostic testing, and patient care plans. The templates are helpful because all we need to do is to make sure that everything is documented. The template for E/M services has been especially important in ensuring that we are prepared for audits. In addition to the EMR system, we make sure that all the nurses and physician assistants are fully trained and up to date. Training is an ongoing process, because requirements change, and we need to make sure that the clinical staff are staying compliant.

Q: Before we close, are there any other insights you would like to share with your peers? PK: To recap, the onus is on the provider to know the rules and the regulations for proper coding and billing, as well as for the meaningful use of an EMR system. Ignorance of the rules is not an acceptable excuse for noncompliant coding or billing when an audit takes place. Physicians and the clinical staff are clinically focused; therefore, it is the responsibility of the practice administrator and the support staff to take the lead in ensuring that everyone understands the Medicare guidelines, based on current requirements for meaningful use and documentation. You must also be cognizant that the requirements, especially from Medicare, are not static; they constantly change. It is a substantial burden to dedicate busy staff members to audits, but there is no other option. However, if you follow the guidelines, keep your staff trained, and maintain a state of readiness, you should feel confident and comfortable in responding to any type of audit. u

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