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Readers Write: The Next Phase for Recovery Audits

November 16, 2016 Readers Write No Comments

The Next Phase for Recovery Audits
By Nicole Smith

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Healthcare providers have reveled in the abatement of audits by recovery auditor contractors that have been silent during the last two years of legal challenges and the procurement process resulting in a tremendous reduction — and in some instances, a pause — of recovery audits. During this down time, the Centers for Medicare and Medicaid (CMS) has been working tirelessly to procure new audit contracts – which they have now done — while dealing with post-award protests and growing concerns from the provider community about the administrative burden audits impose, as well as the methodology in which the contractors had been auditing.

CMS has said multiple times that it is committed to maintaining the integrity of the Medicare program, but its latest priority has been reducing provider burden. With contracts finally awarded to Cotiviti LLC, Performant Recovery, Inc. and HMS Federal Solutions performing post-payment audit reviews for Medicare Part A and Part B, CMS added a new fifth region that will be dedicated to identifying improper payments for durable medical equipment and home health and hospice providers. The fifth region was awarded to Performant Recovery, Inc.

Providers can expect to see some program enhancements that will improve the provider experience once the new contractors resume auditing. Providers should familiarize themselves with the upcoming changes and revise their workflow to efficiently handle Medicare audits.

While recovery audits can impose a tremendous administrative burden on a provider and can have a negative financial impact on a health organization, developing a plan to manage the audit process may prove to be beneficial for providers. For a process that has been largely paper-based up to this point, CMA implemented changes the past two years to streamline the audit submission process after contractors issued more than 2 million requests annually. Thus, CMS recognized the need to develop an electronic process so that providers and health systems could process their responses to audit contractors electronically without paper.

The Electronic Submission of Medical Documentation (esMD) program was developed as part of strategic plan to transform business operations and uphold their commitment to modernize business processes, streamline medical documentation submissions, and sustain enrollment gains in the Medicare program.

Providers have long since felt that the contingency fee basis in which recovery auditors were reimbursed encouraged auditors to target and deny a high volume of high-dollar claims, resulting in false denials and leaving the burden on the provider to appeal the decision – all while the monies paid were recouped. The appeals process can take years and tremendously impacts organizational revenue. CMS revised the way in which auditors will be reimbursed.

Now, recovery auditors will not receive their contingency fee until after the second level of appeal is completed. Additionally, auditors are required to maintain a 95 percent accuracy rate and an overturn rate of less than 10 percent at the first level of appeal. Failure to comply will result in corrective action for the recovery auditor. This is one of the most notable changes that directly addresses concerns of the provider community.

Further testament to CMS’s apparent commitment to minimize provider burden is the ability for providers to electronically file level one and level two appeals through a CMS Certified Health Information Handler (HIH) for esMD. These new esMD use cases alleviate providers from the overwhelming costs of printing, mailing, and tracking of supporting audit documentation while also helping to ensure timely filing, which historically has contributed to denials for providers as well.

Through the updated RAC contract, CMS also will require recovery auditors to provide detailed information about current recovery audit issues. This information is expected to be posted and reviewable on the auditor website for all the see, creating an added level of transparency for the entire process. Providers can proactively prepare for the identified issues by reviewing Medicare billing rules and making sure they are billing in compliance and have all the necessary support documentation in the event of an audit. If providers remain focused on compliance and timely filing recovery, audits should have little impact on the provider – at least that’s the hope.

In addition to the administrative burden of managing Medicare audits, providers have often felt that they had no direct line of communication with CMS regarding the audit process if they encountered an issue related to an audit. Frustration often grew quickly as providers tried in vain to contact someone at CMS while attempting to address any issues they may have had. From my experience with the program, providers often felt bounced around when trying to locate the appropriate person to speak with. To alleviate this problem, CMS created a new position, a provider relations coordinator, designated as the single point of contact for the provider community. The provider relations coordinator is meant to create a streamlined communication outlet for concerns with the recovery audit program.

With the return of the recovery audits on the horizon, providers should use this time to review their internal processes for handling audits and closely monitor regulatory requirements and changes in compliance policies and procedures to develop best practices for their audit program. The program, based on the developments spoken of here, are meant to ensure a more democratic, effective audit process for every party. It is my belief that the program will be less combative, less of a financially-driven attack on health systems by audit contractors, and more of a process designed to right any accidental billing wrongs and return legitimate overpayments to CMS, an equitable approach for all.

Based on the program updates, health systems will have a voice now and will be able to engage CMS directly, if needed, to mitigate any potential overzealousness the previous iteration of the program seemed to create. Perhaps now the audit process will more resemble the image of a negotiating table rather than one where an aggressive takeover seems to be occurring, as was an often-expressed sentiment of those working in the care space.

While program changes may continue, and with all signs indicating that the recovery audit program is here to stay, having a solid plan with proven best practices will minimize the administrative burden. Nevertheless, the news from Washington is good and likely portrays better things to come.

Nicole Smith is VP of operations and government services for Vyne of Dunwoody, GA.

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Reader Comments

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  • Darren Dworkin: Ed - Great post, you raise a bunch of topics CIOs and organizations should be thinking about. Sincerely, Darren, Ge...

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