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HME BUSINESS: WHAT ARE THE AUDIT PROGRAMS THAT ARE FOCUSING ON RESPIRATORY PROVIDERS RIGHT NOW?
Van Halem: Right now, there are numerous contractors who have identified a focus on respiratory providers. The DME MACs continue to audit oxygen, CPAP, and BiPAPs claims as part of their widespread prepayment review efforts. The Supplemental Medical Review Contractor, or SMRC, is just final- izing a project that included an audit of 106,000 respiratory claims including oxygen, PAP, nebulizers and inhalation medications. The new national Recovery Audit Contractor also identified an automated review related to nebulizers billed without an appropriate diagnosis code as well as complex reviews of High Frequency Chest Wall Oscillation devices.
Some of these contractors focused efforts could be related to issues identified in the 2017 Office of Inspector General (OIG) Workplan. Specifically, the OIG noted a focus on nebulizer machines and the related drugs indicating that for calendar year 2014, Medicare paid approximately $632.8 million for inhalation drugs. With an improper payment rate of 42 percent, inhalation drugs were sixth on a list of the top 20 DMEPOS services with the highest improper payments in the 2014 CERT report. They also identified PAP supplies as well based on volume, indicating that Medicare payments for CPAP and BiPAP supplies in 2014 and 2015 was approximately $953 million and prior OIG work found that suppliers auto-shipped supplies when refills were not requested by the beneficiary and also that the physi- cian orders were incomplete in regards to the types of supplies needed and frequency of use.
Stark: Well certainly the DME MACs are the preponderance of the audit volume that we see right now in the respiratory market. Virtually all of the DME MACs are auditing oxygen and CPAP equipment. And, that extends beyond just the DME MACs that are auditing those major product catego- ries. You also have the RACs that just came online, and, they have seven new audits, and two are semi-respiratory related.
One is an automated review of the nebulizers. Automated reviews mean they have “if, then” logic. They are not going to ask you to refute it. They’re just going to go ahead and recoup if you don’t meet the criteria. And, that’s really based on the diagnosis code: Did you file with the covered diagnosis code? If you didn’t, then you can certainly appeal it and get medical records that prove that the code is there, but it doesn’t meet the criteria for your claim.
The other one is more broad and it’s a complex audit, where they’re asking for medical records, proof of delivery, and all the supporting elements that go with that on tracheostomy supply, suction catheter, suction pumps, and those types of products. That hasn’t been as big of a focus area for the DME MACs, but again the RACs believe that there’s a vulnerability there, so they’re digging in.
Van Halem: The new RACs will likely be adding more respiratory products to their list of approved issues, which could be as often as monthly. Another development is the decrease in audits of ventilators, which was definitely
a significant focus in 2016. The previous RAC has ventilators listed as an approved issue already, so the new RAC could potentially also request approval for that, but that remains to be seen.
Stark: Suppliers are periodically inundated with SMRC audits. Pretty much all of the DME-related audits on that contractor’s side have been respiratory related. Focusing again, it’s nothing really new, but back in the Fall of 2015 they ran a couple of series of these audits where they develop 40 records at a time for CPAC, others on oxygen. And, the third audit is nebulizers.
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So the SMRC is exclusively focused on respiratory products right now. They don’t have any other DME that they’re really looking at, at this time. And, they’ve kind of gone quiet. The last new audits that they posted were back in August 2016. They’re probably overdue for starting a new audit, but they really just ratcheted up some of the CPAP audits recently, and issued results on that.
In jurisdiction C, the ZPIC recently deployed an automated edit in December that was placed on jurisdiction C suppliers. It had a fatal flaw in it — a calculation error — that caused a lot of claims to partially pay. But, that erroneous edit has been fixed and all of the claims have been reprocessed that have been denied for that. But, we do know that the ZPIC hunts and pecks for vulnerable areas.
We saw the OIG issuing reports just last year on ventilators, and the vulnerabilities and spike in utilization. So, we know that’s on their radar; and the DME MACs actually backed off on some of the audits that they were doing, because the guidance on ventilators is very minimal. The technology has advanced so much that we’re really overdue for an expansion and direction and clinical guidance. Because there are a lot of inconsistencies even with the clinical community. Also, there is confusing terminology with equipment since he clinical terminology is often different from Medicare terminology. There’s mixing and matching that goes on there that contrib- utes to this gray area.
I think that the MACs have at least acknowledged that there is some additional guidance that they need and support to be able to take a more aggressive stand on ventilators. But, I think that the CMS actually received a reconsideration request to revisit ventilators and draft a local coverage deter- mination policy with new guidelines with input from the clinical community.
That’s really riding in the background. I know that it has CMS’s attention, but there are no deliverables there. But, respiratory is just going to account for a fair amount of the volume of claims that are submitted to Medicare, simply because the nature of the population.
“Right now, there are numerous contractors who have identified a focus on respiratory providers.”
— Wayne van Halem, CFE, AHFI, The van Halem Group
Audit Webinar: Learn More
The RAC is back! Are you ready? CMS has given Performant Recovery, the new national Home Health, Hospice and DMEPOS RAC, the green- light to start auditing. Are you prepared? You need to be. The first round of RAC audits targeted many types of claims for review and the ensuing audits resulted in millions of dollars of recoupments — many of which are still winding their way through the backlogged appeal system. In this webinar, presenter Kelly Grahovac, senior consultant for The van Halem Group, will provide participants with keen insight into what you can expect from this audit contractor; the specific issues that face your business in the months ahead; and how you should be preparing to re- spond to those audits. Sign up at hme-business.com/webinars
hme-business.com | April 2017 | HMEBusiness 23