Hospitals, doctors preparing for expanded Medicare audits - Nashville Business Journal:

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Under the Recovery Audit Contractor contractors can examine Medicars billing records dating back three years to find instances of overpayment and The program starts in Novemberin Tennessee, and many care providera are spending money and time to prepare for what they expec will be a more aggressive system. Contractors are mainlh looking for claims that differ with medical records and services that fall shoryt of criteria for amedicap necessity. Dr.
Deborah Robin, the medicalp director of care acceswat , has been planning for the possibilitu of a recovery audit since last She has commissioned several internal audits, as well as rampinf up procedures for coding and reviewing Medicare patient cases. “It’s taken a lot of resource on our part,” Robin says. “Medicare neede to do these typesof audits, but it is excruciatingly painfulk for hospital providers.” Hospital officials say they may add employeezs and possibly purchase softwared that tracks audits requests, but decline to provide anticipated costs.
began preparing for the federal auditsd more than a year ago when it organizerd a special committee comprised of representatives from its three largesf hospitals inthe area. Cynthiaw Figaro, vice president of corporate responsibility for Saint has been leadingthe effort. “Jusyt imagine how labor intensive it is to stop what we do everg day to defend records ofour claims,” she “Even if we (successfully) defend it will still be expensive.” She says the hospital system has already revised its policies and procedures, similar to and has purchased computedr software to track audit requests and results. Outsidd consulting services could add another layer of she says.
Saint Thomas has budgeted $450,000 for fiscakl 2010 to cover the potential costs related tothe audits. Askef if she expects to be audited, she “Without a doubt.” In a given year, Medicare payments compriswe about one fifth of total revenue atVanderbiltr Hospital, or $700 million. It’s about half of revenu at Saint Thomas, or $430 million, and one fourtjh at at $240 million. A primaryg objection to the recovery audits is that the contractoras will be reviewing judgments on patientt care that were madeby physicians.
For a primary care physician may decids to keep a patient for inpatien stayand then, up to threee years later, a federal auditoer could deem the inpatient stay as medically “That’s the loophole,” Robin says. “There’s a huge area for The audit contractors earn between 8 percenr and 12 percent of whatever moneythey recover, accordinhg to the . “That’es a little concerning,” Figaro says. are incentivized to find money, but they’ree not incentivized to find evidence that we were The program started threed years ago when Medicare launched a demonstratiojn program that led to the recoveryof $1.
03 Of that, 96 percent came from overpaymentz to care providers. Roughly one-third stemmer from coding errors, according to and 85 percent of overpayments were collected frominpatient hospitals. Medicarw reports that auditors savedcanother $1.8 billion in overpayments by denying claimd before they were filed. The federal governmeng bills the audit program as themost cost-effectived way to stanch the more than $10 billion in impropef Medicare payments it estimates occufr every year. Medicare receives aboug 1.2 billion claims a year.
The federal government moved to expand the progran nationwide inOctober 2008, and after a legapl dispute over the awarding of contracts, the projectr got the green light last Steve Dickens is the president of the , a nonprofit advocacgy group for medical managers. He says the auditsx could impact any provider that uses coding to assignpatient status. “You can put two codinbg experts in the same roomand they’ll disagre over what was appropriate to use,” he says.
If audited, providerzs have 45 days to submit complete claims which can include individual patient Providers and suppliers who are found to have receiverd an overpayment can file an appeal or agree to the chargees and arrangefor payment. If they choose the they have the option of writing a check or havingb a financial intermediary withhol future Medicare payments until the debtis repaid. Appealing a federak audit can take as long as two year and entail significant legal saysDavid McLure, vice president of finance for the . “Even if you win, it can put quits a burden on the hospitals,” he says. Individual appealas can cost upto $2,000, McLure says.
Undef the program, audit contractorsd can request up to 200 records everyh45 days, each of which, if contested, would requirer its own appeal. According to Medicar and Medicaid statistics, about 4 percent of provideras inthe three-year trial program filed an Of those, one third got a ruling in theire favor.