February 13, 2009

Medical billing teams prepare for CMS reviews

Medical billing teams prepare for CMS reviews

To protect the Medicare trust fund, the Centers for Medicare and Medicaid Services (CMS) is rolling out the Recovery Audit Contractor (RAC) program to identify incorrect payments to hospitals, doctors and other providers.

A three-year RAC demonstration project in California, Florida, New York, Massachusetts, South Carolina and Arizona found $900 million in overpayments and $38 million in underpayments. RAC audits are scheduled to begin in Tennessee in August, retroactive to October 2007.

As a large Medicare provider, Vanderbilt University Hospital may be a prime target.

“We're assuming someone has already posted a sign outside saying 'RAC auditors this way,'” said Debby Robin, M.D., medical director of care access.

It's easy to fall afoul of CMS criteria for medical necessity — who should be categorized as inpatient status and who should be categorized as observation status; which surgical procedures are inpatient, which are outpatient.

CMS requires that attending physicians make these determinations, but physicians aren't billing specialists.

So at Vanderbilt, Utilization Management nurses review medical records and patient status concurrently with care, then prompt attending physicians to provide more explicit medical documentation as needed.

In preparation for RAC audits, that review and prompting is being ratcheted up:

• On inpatient units, Utilization Management staff are being redeployed to review the status of Medicare patients within eight hours of admission.
As patient status questions arise, Robin will provide guidance, contacting attendings as needed.

• As surgical procedures are scheduled, Utilization Management will review patient status orders to ensure compliance with CMS criteria.

• Since surgical plans sometimes need to be changed, patient status orders can be problematic for surgical patients. Robin is working with surgeons and the OR to find solutions to get patient status correct before and after surgical procedures.

• A Utilization Manage-ment nurse/case manager will be in the ER 16 hours a day to review status orders and assist physicians in determining appropriate patient status.

• Once it's determined that a patient meets criteria for inpatient status, the order will be “frozen” in the system. “Once they are an inpatient, always an inpatient,” Robin said.

For more information on RAC audits, see the Amercian Hospital Association Web site, www.aha.org.