Recent OIG Billing Audits Are Reflective of Risk Areas for Hospital Billing

The Office of Inspector General Audit Division has released the results of a billing audit that it performed relative to Norwood Hospital, a 264-bed acute care facility located in Norwood, Massachusetts. The audit included certain identified claims for inpatient and outpatient services provided to beneficiaries from July 2008 through June 2010.  The OIG  audit covered $1,204,371 in Medicare payments for 198 claims (123 inpatient and 75 outpatient) that were judgmentally selected by the OIG as potentially at risk for billing errors.  A complete report of the Norwood audit can be found at: Norwood OIG Audit Report

The audit found that the Hospital complied with Medicare billing requirements for 99 of the 198 claims. However, 99 claims had errors, resulting in overpayments totaling $206,836. The OIG determined that the overpayments occurred primarily because the Hospital did not have adequate controls to prevent incorrect billing of Medicare claims and did not fully understand the Medicare billing requirements.

The audit of Norwood was part of the OIG’s routine process to identify certain billing areas that are at a high risk of error.  The OIG has announced that it plans to conduct more of this type of review on an ongoing basis.  As such, the nature and outcome of this review process can be instructive to hospitals who may find themselves on the receiving end of one of these audits.
The OIG has outlined the general areas where it will focus its audits and has identified these areas as “risk areas.”  Risk areas identified by the OIG includ claims billed for:

• inpatient short stays,
• inpatient same-day discharges and re-admissions,
• inpatient claims billed with high severity level DRG codes,
• inpatient claims paid in excess of charges,
• outpatient claims billed with modifier -59,
• outpatient claims billed during inpatient stays,
• outpatient evaluation and management services billed with surgical services,
• outpatient claims paid in excess of charges, and
• outpatient dental services.

The report from the OIG identified more specific errors that the Hospital was found to have made and wich led to the overpayment determination.  These specific findings are quite instructive.  Facilities should consider including these areas as potential risk areas for targeted internal review.  In some cases, these areas a facility may wish to provide focused training and instruction to billing staff of other relevant employees in order to reduce the risk of inaccurate claims being made.

Some of the specific areas that were a problem in the Norwood audit included:

• Incorrect billing of Medicare Part A for beneficiary stays that should have been billed as outpatient or outpatient with observation services.
• One claim did not have a valid physician order to admit the beneficiary for inpatient care
• Incorrect billing for inpatient claims with same-day discharges and re-admissions.
• Billing with incorrect DRG codes for several cases with high severity level DRG codes.

 ESRD PPS Form CMS-265-11

Effective January 1, 2011, §153(b) of the Medicare Improvements for Patients and Providers Act (MIPPA) requires the implementation of a bundled ESRD prospective payment system (ESRD PPS). The ESRD PPS provides a single payment to ESRD facilities that will cover all of the resources used in providing outpatient dialysis treatment, including supplies and equipment used to administer dialysis (in the ESRD facility or at a patient’s home), drugs, biologicals, laboratory tests, training, and support services.

Form CMS-265-11 must be completed by all independent end stage renal dialysis (ESRD) facilities that are not hospital-based for cost reporting periods ending on or after January 1, 2011.   Submit the form to your fiscal intermediary (FI)/Medicare administrative contractor (MAC) (hereafter referred to as contractor) no later than the last day of the fifth month following the close of your cost reporting year.

Advanced Diagnostic Imaging Service Accreditation Requirement

Providers of the technical component of advanced diagnostic imaging procedures will be subject to new accreditation requirements starting January 1, 2012.  Advanced diagnostic imaging procedures include diagnostic magnetic resonance imaging (MRI), computed tomography (CT), and nuclear medicine imaging such as positron emission tomography (PET).  X-ray, ultrasound, fluoroscopy procedures, and diagnostic and screening mammography are excluded from the accreditation requirement.

The 2008 law that created the accreditation requirement also required CMS to designate accrediting organizations.  CMS has approved three national accreditation organizations – the American College of Radiology, the Intersocietal Accreditation Commission, and The Joint Commission – to provide accreditation services for suppliers of the technical component of advanced diagnostic imaging procedures.

The accreditation requirement applies to all providers of advanced diagnostic imaging services, including physician offices that provide these services.  However, the accreditation applies only to the provision of the technical component and not the physician interpretation component of the procedures.

 There is also a potential billing implication to the new accreditation requirement.  It appears that the end result of requiring accreditation may be that the technical and professional component will not be able to be billed globally following the effective date of the accreditation requirement.  It appears that separate billing would be required due to the fact that the technical component will need to be billed with a “code 95″ indicator while the professional component will not.  This billing issues has not been clarified by CMS.  Providers should seek guidance prior to the January 1, 2012 effective date.

The takeaway is that providers should not only deal with the accreditation requirement but must also re-examine how the services are billed.  This is particularly true in a physician practice that provides both the technical and professional component of advanced diagnostic imaging tests.

EMTALA Applicability to Hospital, Critical Access Hospital Inpatients and Hospitals With Specialized Capabilities

CMS Requests Comments On Current EMTALA Transfer Policies to Specialty Hospitals

On December 23, 2010, the CMS issued an advance notice of proposed rule-making regarding the creation of two new policies under the Emergency Medical Treatment and Labor Act.  The CMS is requesting comments regarding the possible need to revisit current policies relative to the applicability of EMTALA to hospital inpatients and the responsibilities of hospitals with specialized capabilities, respectively.

EMTALA imposes specific “anti-dumping” obligations on certain Medicare-participating hospitals and critical access hospitals. For example, the hospitals have certain obligations relative to individuals who come to a hospital’s “dedicated emergency department” and request examination or treatment for a medical condition.  These obligations apply to all of individuals, whether or not they are Medicare beneficiaries or whether they have health care coverage.

EMTALA requires dedicated emergency departments to perform medical screening examinations for individuals who come to the hospital and request examination or treatment for a medical condition. If an emergency medical condition is found to exist, the hospital is obligated to provide that individual with either necessary stabilizing treatment or an appropriate transfer to another medical facility where stabilization can occur.

Hospitals also have certain obligations under EMTALA to accept appropriate transfers from other hospitals. Hospitals with specialized capabilities or facilities (such as burn units, shock-trauma units, neonatal intensive care units or with respect to rural areas, regional referral centers as identified by the Secretary in regulation) are not permitted to refuse to accept an appropriate transfer of an individual who requires these types of specialized capabilities or facilities if the hospital has the capacity to treat the individual.

The current proposed rule-making notification concerns patients who have already been admitted to one hospital but after admission require the specialized care of a specialty hospital to stabilize an emergency medical condition.  The obligations regarding specialty hospitals to patients who have already been admitted to other hospitals have been in a state of flux since 1999, when the United States Supreme Court considered the case of Roberts v. Galen of Virginia, 525 U.S. 249 (1999).  That care addressed whether EMTALA applies to hospital inpatients. As a result of that case, the United States Solicitor General advised the Court that regulations would be developed clarifying HHS’s position on this issue.

CMS proposed these regulations in 2002.  The 2002 proposed rule proposed that EMTALA continued to apply to admitted individuals who were not stabilized but did not otherwise apply to inpatients. However, it was clarified that EMTALA obligations would continue to apply to individuals whose conditions go in and out of apparent stability rapidly and frequently. The 2002 proposed regulations would not have extended the EMTALA requirements to stabilized inpatients even if they subsequently become unstable.

This policy was changed in the final rule which provided that EMTALA did not apply to any patient that presents with an emergency medical condition and is stabilized or when the hospital admits the patient, even though the patient may not be completely stabilized when admitted.  The end result of the 2003 final rule is that EMTALA does not apply to any inpatient, even one who was admitted through the dedicated emergency department, for whom the hospital had initially incurred an EMTALA obligation to stabilize, even in cases where the patient remained unstabilized after admission as an inpatient.

Further information was provided as part of the 2008 IPPS proposed rule which provided additional discussion and “clarification” regarding the responsibilities of hospitals with specialized capabilities to accept appropriate transfers of hospital inpatients.  CMS stated in 2008 that the obligation of EMTALA does not end for all hospitals once an individual is admitted as an inpatient of the hospital where the patient first presented with the emergency medical condition.  CMS’ position was that the admission only affected the EMTALA obligation of the hospital where the patient first presented with the emergency medical treatment and was subsequently admitted.   Specialty hospitals were obligated to accept transfer requests of unstable patients with emergency medical conditions as long as they have treatment capacity, even in cases where the patient has already been admitted to the initial hospital to which the patient presented.  CMS reasoning was that an inpatient admission at the admitting hospital did not end the EMTALA obligations of the specialty hospital and would contradict the intent of EMTALA to assure that specialty hospitals use their available specialty treatments to stabilize patients.

After receiving voluminous comments regarding the imposition of this obligations on specialty hospitals, CMS backed down when it issued the final IPPS rule in August of 2008. The final policy in 2008 was to end the specialty hospital’s EMTALA obligation as to an individual with an emergency medical condition upon admission to the facility to which the patient initially presented.  The specialty hospital’s EMTALA obligations were ended upon the initial admission even if the patients condition remained unstable following admission. CMS cited as part of its justification for this reversal that the previously stated policy could negatively impact patient care by increasing inappropriate transfers.  CMS also stated concern that the new policy could cause some facilities to limit the care that they provide which would reduce the emergency services available in the community.  Concern was also stated that patients that were admitted for elective procedures would not have the same right to transfer if their condition subsequently required.

CMS’ current notice of rule-making results from awareness that there continues to be varying opinions on whether EMTALA obligations continue once a patient is admitted or whether EMTALA obligations continue for patients who are not stabilized and require the services of a specialty hospital.  The current notice of rule-making asks for comments that address whether the existing rules should be revisited.  CMS requests “real world examples” to demonstrate whether it would be appropriate to revisit the rules. CMS also requests information regarding situations where specialty hospitals have refused to accept the transfer of a patient in need of their care for stabilization.

Comments on this rule will be accepted until February 22, 2011.

Anti-kickback Statutes and Safe Harbor Regulations

Overview: On the books since 1972, the federal anti-kickback law’s main purpose is to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions. Straightforward but broad, the law states that anyone who knowingly and willfully receives or pays anything of value to influence the referral of federal health care program business, including Medicare and Medicaid, can be held accountable for a felony. Violations of the law are punishable by up to five years in prison, criminal fines up to $25,000, administrative civil money penalties up to $50,000, and exclusion from participation in federal health care programs.

Because the law is broad on its face, concerns arose among health care providers that some relatively innocuous — and in some cases even beneficial — commercial arrangements are prohibited by the anti-kickback law. Responding to these concerns, Congress in 1987 authorized the Department to issue regulations designating specific “safe harbors” for various payment and business practices that, while potentially prohibited by the law, would not be prosecuted.

Hospital Inpatient Value-based Purchasing Program:New Rules Proposed By CMS

CMS has  issued a notice of proposed rule-making to the Federal Register on January 13, 2011 concerning the hospital value-based purchasing program.  The new program has become known as the VBP Program.  CMS was required to develop this program under the Accountable Care Act.

The hospital value-based purchasing program, which would apply beginning in FY 2013 to payments for discharges occurring on or after October 1, 2012, would make value-based incentive payments to acute care hospitals, based either on how well the hospitals perform on certain quality measures or how much the hospitals’ performance improves on certain quality measures from their performance during a baseline period. The higher a hospital’s performance or improvement during the performance period for a fiscal year, the higher the hospital’s value-based incentive payment for the fiscal year would be.

CMS is accepting public comments on the proposed rule through March 8, 2011.

The proposed regulations can be found at this link.

 CMS Interpretive Guidelines – Anesthesia Conditions of Participation

On December 11, 2009 CMS released updated Interpretive Guidelines for the Anesthesia Services Condition of Participation (CoP) for Hospitals as an attachment to S&C memo 10-09. Among other things, this guidance was a response to requests for clarification of the distinction between analgesia and anesthesia, given that the regulation at 42 CFR 482.52(a) limits the administration of anesthesia to certain types of practitioners.

The guidance now specifies that hospitals must establish policies and procedures that address whether specific clinical situations involve anesthesia versus analgesia. In addition, hospitals must also specify the qualifications for each category of practitioner who administers analgesia and their supervision requirements. These policies must be based on nationally recognized guidelines. For those procedures that require the administration of anesthesia, the regulations at 42 CFR 482.52(a) concerning who may administer anesthesia continue to apply.  Hospitals that provide Anesthesia Services must also periodically evaluate the effects of their policies regarding the administration of analgesia and anesthesia on the safety of patients and adopt appropriate modifications to these policies as necessary.

With respect to the pre-anesthesia evaluation, the evaluation must be completed within 48 hours prior to surgery or a procedure requiring anesthesia services. However, some individual elements may be performed prior to that period, so long as they are reviewed and appropriately updated within the 48 hour timeframe.