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Welcome to the Journey to Revenue Integrity blog.

The Revenue Integrity blog is the place to go for discussions related to the many facets of preventing revenue leakage. Here, Craneware experts share their thoughts and report on industry trends… and encourage you join the conversation with your own unique experiences and opinions. Craneware client or not, there's something for everyone to learn and discuss.

CMS 68% Settlement Offer Scorecard Worksheet

by Craneware1. October 2014 13:10

As covered in an earlier post, CMS has set the deadline for hospitals to decide whether to take the 68% settlement offer on claims held up in appeal as Oct 31, 2014.

In a similar vein, Craneware has created a 68% Settlement Scorecard which covers the major factors we believe hospital financial staff should consider before deciding to settle.

Download Craneware’s 68% Settlement Scorecard

Before taking the settlement, we recommend hospitals ask and answer the following questions:

Does your hospital have significant dollars at risk or a high volume of outstanding appeals?

Hospitals with a large number of appeals and/or a significant amount of revenue tied up in the appeals process may benefit from seeing the appeals through the ALJ process. Interest payments alone could outweigh any reason to settle.

Factors to Consider

Score

Volume of Outstanding Appeals

Low

0

Moderate

5

High

10

InSight Audit: Audit Activity Dashboard Report, Risk of Loss Report

Dollars at Risk

Low

0

Moderate

5

High

10

InSight Audit: Audit Activity Dashboard Report, Risk of Loss Report

 

Was your hospital’s appeal strategy based on an internal review process that appealed only strong cases, writing-off weaker cases?

Hospitals that had a denial review strategy and chose to appeal only those cases with a reasonable likelihood of success may not want to agree to a 32% reduction in payment and forfeit the Limitation on Recoupment 935 interest.  On the other hand, hospitals that appealed cases indiscriminately are promised 68% of the net payable amount.  In the end, this may result in a higher payment for these facilities.

Provider Appeal Strategy

Appealed all claims

0

Appealed most claims

5

Appealed only strong cases

10

InSight Audit: Risk of Loss Report

 

What was your recoupment strategy? Is your expected interest on a successful appeal financially substantive, or marginal?

If your facility allowed immediate recoupment of overpayments following receipt of Demand Letters, then your claims are not subject to 935 interest. Conversely, 935 interest is owed when claims were involuntarily recouped and you prevail at the ALJ level. For claims that wait years for an ALJ Hearing, this payment could be substantial. See Andrew Wachler’s post on interest at RACmonitor for more details.

Recoupment / Interest strategy

Proactively repaid overpayments or allowed recoupments day 41

0

Met some hold recoupment dates

5

Met all hold recoupment dates

10

InSight Audit: Audit Activity Dashboard Report (compare hold recoupment dates to appeal sent dates)

 

How badly do you need your money?

Strong appeals and long wait times will likely result in payments with greater than 100% value but it may be a very long time before you see that money.  But can you afford to wait? Hospitals that accept the settlement can expect reimbursement within 60 days of a fully executed agreement.

Immediacy

I need the money now

0

I’d like the money now, but I think I can do better than 68%

5

I am willing to wait and maximize my revenue

10

 

What is the cost associated with pursuing your appeals?

Hospitals with high cost associated with the pursuit of appeals may want to consider the settlement.  Those costs might include consultants, attorneys and expert witnesses. The cost of internal personnel time and resources should also be considered. 

Appeal Expenses

Very high cost to continue appeal. I plan on using attorneys for future appeals or will have additional costs

0

Moderate cost to appeal, I will have to pay contingency fees to attorneys if I take the settlement

5

Very low cost to continue appeal, my costs are prepaid

10

 

What was your prior ALJ success rate, and do you expect it to continue?

Hospitals with strong cases and a prior history of success at the ALJ level may not want to accept the settlement but; all organizations need to evaluate their past experience against what we know currently. According to AHA’s RACTrac, the average appeal success rate has dropped from 72% (Q1 2013) to 66% (Q1 2014).  In our experience representing clients we have seen the ALJs becoming increasingly savvy in relation to level of care determination and the success of cases vary depending on the judge assigned. In the future, the RACs may also be presenting to the ALJ more often.

Prior ALJ Success Rate

Low

0

Moderate

5

High

10

InSight Audit:Audit Activity Dashboard Report, Appeal Outcome Report

 

 Is time a factor?

The average processing time for appeals decided at the ALJ in fiscal year 2014 is 407 days.  Can your facility afford to wait that long for an outcome on your appeals?

Time Value

I need this off my plate; I don’t want to deal with it any more.

0

I’ve got limited time

5

I’m willing to wait for my ALJ hearings

10

 

Is there significant value in part B payments, with a high level of surgical implants?

The value of surgical implant claims rebilled to Part B is likely higher than 68% of the net value of the DRG.  Hospitals with a high volume of surgical implant claims may not want to settle. 

Value of Part B Payments

Low on average, (e.g., few implants)

0

Moderate

5

High on average, (e.g., many surgical implants)

10

InSight Audit:Audit Rebill Summary Report, Audit Activity Dashboard Report

 

What is your hospital’s volume of Medicare inpatient-only denials in appeal?

It is still hard to imagine that the RACs have denied claims for procedures on the Medicare inpatient-only list, but they have. It is even harder to imagine that the claims have remained in a denied status after appeal. Inpatient-only claims presented to ALJs have been overturned, typically with a reference that the procedure is “on the inpatient-only list." Hospitals with a large number of these denials may not want to accept the settlement.

Volume of Medicare Inpatient-Only Denials

Low

0

Moderate

5

High

10

InSight Audit: CPT Summary Report

 

Will taking the settlement have a substantial impact on your hospital’s Medicare Cost Report (DSH/IME/GME Payments)?

Accepting the 68% settlement leaves all of the claims in a denied status. The claims will not appear as Medicare paid inpatient claims in a provider’s Provider Statistical & Reimbursement (PS&R) report. Leaving the claims in a denied status will impact graduate medical education (GME), indirect medical education (IME), and disproportionate share (DSH) payments.   

Impact on Cost Report  (DSH/IME/GME Payments)

Minimal

0

Moderate

5

High

10

 

Are you able to meet the 10/31/14 deadline for settlement?

You need to decide quickly. If you’ve answered the previous questions and have decided that the short-term of benefits of knowing you will receive the 68% is in your hospital’s best interest, you’ll need to get working to meet the CMS requirements to file. Visit the most recent CMS page on the 68% settlement, download the Eligible Claim spreadsheet and the Administrative agreement.

Ability to Meet 10/31/14 Deadline

Definitely can do it

0

Probably can do it

5

Can’t do it

10

As you can tell, whether or not this settlement is in your hospital's best interests depends on many factors, and hospitals may weigh the importance of these factors differently. All of us at Craneware hope that if you do take the settlement, it is from a position of financial strength and a strategic choice, rather than a short-term stopgap out of necessity. 

Audit Déjà vu? It’s not just you…

by Craneware26. September 2014 11:23

CMS points out many audits being performed are duplicative, “… reviews of the same claims that are not permitted by the agency—but CMS neither has reliable data nor provides sufficient oversight and guidance to measure and fully prevent duplication.” Source: http://www.gao.gov/assets/670/664880.pdf

So, duplicative audits can only be identified by hospital organizations that can identify when an audit has previously been performed on the same claim.  Those without such defenses must respond to the same audits over and over again, spending costly operational resources to keep up.

If you are having a feeling of déjà vu…don’t worry…it’s not just you! In fact, only 21 percent of execs felt they were in a strong position for appealing RAC and other audits in a recent survey sample.

Can you imagine if other servants of the public’s well-being had to repeatedly bill and defend their weekly wages from multiple computer databases without consistent oversight?

In response to concerns, CMS has implemented a database to track recovery auditor (RA) activities.

As the diverse types of audits extend across an expanding range of commercial payor plans, and as these audits ramp up to the maximum allowable limits on each type of audit, it is vital to be prepared.

Do you know what your organization is doing while, CMS takes actions to improve its coordination across the range of its audit contractors? Being efficient in managing these audits is vital as deficiencies in this area can cost you in terms of reimbursement and compliance penalties.

Key takeaways for health system leaders:

  • Be aware that duplicative audits are happening,
  • Work to identify when and where these duplications exist, and
  • Shore up your defense and offense to manage audits. 

The central control point for identifying opportunities to improve your position is in your chargemaster (CDM). The CDM holds keys for both offense in preventing audits and efficiently obtaining reimbursement and defense against audits.

Keys to your offense in preventing audits and obtaining reimbursement are:

  • Ensure correct coding,
  • Be current with ongoing changes to compliance regulations and rules,
  • Understand modifier do’s and don’ts in the CDM, and have multiple eyes with necessary expertise and current reference materials review data in the CDM.

Keys to your defense include close review of RAC edits and RAC Team findings, and comparing your audit history records with your CDM data – preferably using automation as recovery auditors use tools.

Have you seen duplicative audits coming simultaneously from diverse audit contractors? Your ideas about identifying duplicates and your experiences in communicating about duplicates are of interest.

Deal or No Deal? The CMS 68% Offer

by Craneware12. September 2014 16:24

Four Hospitals have Accepted So Far – Will Yours Be Next?

To help break the log jam of appeals hung up across the country with Administrative Law Judges taking 24 months or longer to rule on them, CMS offers to make a deal with hospitals (excluded from the offer are cancer hospitals, children’s hospitals, inpatient rehabilitation facilities, psychiatric inpatient facilities).

If eligible hospitals file a settlement agreement request by Oct. 31, 2014, then CMS will provide those hospitals with a partial payment of 68% of the net allowable amount for those inpatient claims CMS announced Tuesday, September 9, 2014.

Hospitals may not file for the settlement of some claims and continue to appeal others.

CMS updated its FAQ on Sept. 9 to make the following key points:

  • No settlements are in the works for appeals of coding denials.
  • Providers not filing a settlement request will remain in the normal appeals process.
  • This is a one-time settlement offer. Participating in the settlement offer is completely voluntary.  
  • Claims that have already been reviewed are always excluded from future review by a MAC and Recovery Auditor. Because CERT chooses claims randomly, it is possible that a handful of these claims will be selected for CERT review. This settlement does not impact reviews being conducted under the false claims act, so ZPIC or OIG reviews of potentially fraudulent claims will continue. 

As of September 9, four providers had submitted settlement requests. CMS said, “All passed the "eligible hospital" test and have been forwarded to the appropriate Medicare contractor for validation.”

What are your feelings about this offer? Fair or unfair?

Will it really help resolve healthcare costs for the nation, or hurt the fiscal ability of hospitals to maintain the best facilities, physicians, staff and newest technologies to provide emergency and care service lines to their communities?

We’d love to hear from you.

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