Addressing audit challenges
Experts offer advice on dealing with audits and staying in compliance
Editor’s note: Following is an edited excerpt of the transcript for Modern Healthcare’s Dec. 18 editorial webcast, “Avoiding the RAC Trap.” The panelists were Audrey Andrews, senior vice president and chief compliance officer at Tenet Healthcare Corp.; Dr. Harry Feliciano, senior medical director at Palmetto GBA, a Medicare administrative contractor; and Lewis Morris, former chief counsel of HHS’ inspector general’s office and now senior counsel at Adelman, Sheff & Smith. In a discussion moderated by Modern Healthcare legal reporter Joe Carlson, the panelists discussed strategies to help healthcare providers deal with overpayment challenges from the federal government. The full webcast is available at modern healthcare.com/webcasts. Joe Carlson:
The reform law included a rule that would apply or potentially could apply False Claims Act penalties to claims that are held on to by providers for more than 60 days after the overpayment is discovered. Mr. Morris, do you think that this rule is frankly workable given shifting definitions of when providers could be said to be discovering an overpayment? Lewis Morris:
I guess the answer right now is we’re not sure. Everyone is struggling with what it means to identify an overpayment, and like so much stuff it’s sort of in the eye of the beholder. Clearly, I think any reasonable person in the government would say that a mere hot line complaint that a claim is bad doesn’t trigger the clock. At the other end of the spectrum, when a comprehensive audit has been performed and validated and an overpayment has been identified, I think most reasonable people would say the clock has started. So somewhere between that range of information is where providers face the challenge.
I’ve talked to government folks about this, prosecutors and others, and I think the view they’re bringing to this is that no one is looking to write the proverbial ticket because you’re going 61 in a 60-mph zone. Two days after the 60-day period, I don’t think any reasonable government person is going to say that you’re now in False Claims Act land. But if you’re running the stoplights, if you’re flagrantly disregarding your internal controls, if you’ve got internal audits that identify overpayments and someone says, “Well, we just don’t have the money right now to pay them back so we’re going to sweep it under the carpet,” I think those providers face exposure. Carlson:
Ms. Andrews, I imagine as the chief compliance officer for several dozen hospitals it must be interesting to find out that you might have False Claims liability going back 10 years for overpayments that you may or may not know about today. Do you have to do something differently to adapt to this new rule? Audrey Andrews:
What we focus on at Tenet is we actually talk about the overpayment issue in the context of our ethics program. … What we try and do is we make it simple. And what we talk about in our ethics training is that if we identify a potential overpayment, it’s not our money, and we have an obligation working as a leader and a participant in an honor system to return those funds … The approach we take is just to ask, if an outsider were looking at how we were following up on this concern, would they feel like we were acting diligently, that we were acting quickly and that we had not only our own interest but the interest of the participant in the Medicare program at heart and that we ultimately took the right action? Carlson:
Dr. Feliciano, I wonder as a Medicare administrative contractor, does this rule put you in an interesting spot? As a Medicare administrative contractor, your role would be to essentially process the claim, is that right, sort of take back the overpayment? Dr. Harry Feliciano:
That’s correct. And what we do is essentially work with the business requirements that CMS would put out to us in a change request. I do want to add though that in order to mitigate the risk, whenever you have a timeline involved, I would suggest that organizations use Gantt charts; and specifically, once the process has been described sufficiently, use process flow mapping to ensure that your organization has both effective and efficient processes for meeting the standards. I mean those standards could be clinical, could be financial, could be operational. And just to be clear, process flow diagrams describe steps in the process whenever process is being studied. Process flow maps, however, add the responsible unit or department to the process flow diagram information. And what that allows you to do is to identify potential ineffective or inefficient exchanges. So, if you are both identifying and efficiently implementing the instructions that CMS has put out, as Audrey pointed out, you’ll be fine. Carlson:
Why do short acute-care stays attract so much attention? Morris:
I think there are probably a couple of answers. One, because when auditors went in and looked, they found a lack of documentation and a lack of medical necessity to justify it, so they start digging deeper, and the error rates are very high. I suspect it may also be in part— and, Harry, please respond to this—if a recovery audit contractor or recovery auditor does a review of a short stay … and determines that the service is not adequately documented or lacks medical justification, the entire stay is denied, which means that since the recovery auditors operate on a contingency fee, they get a percentage of that entire service back to them as part of their contingency. So there’s both an economic incentive and then I think the evidence supports this being a hot spot. Carlson:
Ms. Andrews, in terms of this focus on one-day stays, I wonder what’s your perspective on this, and what can be done by a healthcare provider since a one-day hospital stay is going to
be scrutinized. If you have a case where this is going to be necessary, how do you keep yourself out of trouble? Andrews:
I think there are a lot of things that providers can do in that regard. Obviously … you have got to have an order, and so we’ve got a clear policy at Tenet on what level of specificity needs to be laid out in the orders that we act on. And then, one of the things that many providers are doing, not just Tenet, but taking that order and running it through some evidence-based set of criteria to make sure that objective evidence-based standards are included in the physician’s decisionmaking process. And the fact of running it through those standards does not in and of itself give you an answer, but it does help you improve your documentation.
It helps make sure … that if a physician is thinking through a series of reasons why a patient might need to be admitted as an inpatient, that those reasons are laid out clearly in the medical record. And if you look at the admission standards in the Medicare program manuals, the basic standard is that it’s expected that the patient is going to stay overnight, and there’s a little more detail that goes into it than that; but it tends to be an area where physicians in the past would just say the word admit and that would be enough and the claims would be paid. Carlson:
What can providers do today to make sure that electronic health records are not causing errors? How can you make sure that your EHRs are not causing erroneous payments? Andrews:
This is a real challenge for me personally because going through school my exit mantra was, “Don’t go into clinical systems.” This is not my skill set. … What compliance officers are now faced with is that you’ve got to get into these systems and really look and see how they work. And so, whereas 10 years ago I wouldn’t spend hardly any time on an issue like that, I probably spend a significant portion of my time today with our clinical IT team looking at systems, working with vendors, understanding the architecture behind the front screens, what our caregivers see on the front screens, how those screens help drive evidence-based care but not overutilization. You’ve got to strike a balance between those two things. And our view is that clinical IT can be an incredibly powerful tool to improve patient care and outcomes if it’s used in the right way, and you’ve got to be able to strike that balance. Carlson:
But how can a computer system drive overuse? Andrews:
The theory behind the core measures is that you want to see certain things being done for patients every time. You want to see that consistency. And if the things that are being done every time are the right things and they are supported by medical literature, that improves care, and that’s really in our view the imperative behind clinical IT systems. They can create better outcomes for patients.
But if something works its way into that system that is not supported by medical evidence, peer-reviewed literature, that might ... consist of fraud, waste and abuse or cause overutilization ... lab tests that might not be needed for every patient every time, then those have the ability to create compliance problems and quality problems for your patients in your hospital.