Today we’ll take a look at the issue of Prepayment Reviews, Suspension Actions and Postpayment Audits and how it has unfolded. CMS continues to move away from “pay and chase” strategies and are taking a more proactive approach to enforcement, as seen with the Pre-Claim Review demonstration begun in Illinois in August. CMS contractor suspensions are definitely increasing, but CMS contractors may be emphasizing “preventative” enforcement efforts, even as postpayment audits are still taking place.
Pre-Payment Reviews
From the government’s point of view, prepayment review is a reasonable option. However, prepayment review is a symptom of an underlying compliance problem, which could most likely be detected and corrected with an active compliance plan and utilization of a robust EMR that helps agencies to maintain compliance. Data mining and complaints are key elements when it comes to “targeting” providers for placement on prepayment review. This is where your HHCAHPS vendor can help you most with patient satisfaction. Patient interviews and interviews with former employees are now commonplace.
Suspensions
Under the Health Care Reform Act, CMS is authorized to suspend Medicare/Medicaid payments to a provider or a supplier “pending an investigation of a credible allegation of fraud.” Allegations are considered to be credible when they have signs, indications or circumstances which point to the existence of a given fact as probably true, but not certain. HHS has no administrative appeal process to lift a provider suspension, and suspensions typically last at least 6-12 months. Emergency/contingency funds are necessary for survival and many home health agencies and hospices keep only enough funds in their accounts to cover their overhead for one to two months—which makes them vulnerable. A contingency fund can help carry you through an unanticipated delay in payments or survive the more lengthy periods it takes if you have to appeal a postpayment audit overpayment determination.
Postpayment Audits
CMS contractors (ZPICs) are continuing to conduct postpayment audits of provider claims. Statistically relevant samples of a provider’s claims are then ultimately extrapolated to the universe of claims at issue. Extrapolation can make a contractor’s review of $10,000 in claims result in a alleged overpayment of more than $500,000. Appeals may take as long as one year each for Redetermination and Reconsideration. It currently takes another three years to reach an Administrative Law Judge (ALJ). Can your agency or hospice survive a five-year delay and severely reduced cash flow while the government simultaneously recoups the alleged overpayment from you? If possible, diversify your payer mix. Add Medicaid, private pay and self-pay to build up a “rainy day fund” in preparation for a possible audit. Private payers are “riding in the wake” of government contractors with their own Special Investigative Units (SIUs) to police contractual compliance terms, but take these SIUs seriously. They can also refer suspicious noncompliance to the Department of Justice (DOJ) for further investigation.
In Part 5, we will take a look at the changes to the Administrative Appeals Process.
