Michigan Healthcare Financial Management Association

1. Michigan Healthcare Financial Management Association Paul Hula J8 Audit and Reimbursement Director March 22, 2012

2. Agenda WPS Overview Audit & Reimbursement Dept. Audit Topics Questions

3. WPS Overview • A not-for-profit insurer headquartered in Madison, Wisconsin • Our mission is to provide service and value considered by our customers to be the very best. • Three principal lines of business • Medicare – holding contracts since the program’s inception in 1966 • TRICARE – a military health care benefit program where we serve the entire U.S., territories and all foreign countries; holding contracts since program’s inception in 1956 • Commercial – holding contracts since 1946; individual, Medicare PDP, and group health insurance products • Emphasizes uncompromising business ethics and innovative solutions to today’s health care environment • Ranked as one of World’s Most Ethical companies for three consecutive years

4. WPS Medicare Fast Facts • Is one of the largest contractors for CMS • Serves more than 175,000 providers and 10 million Medicare beneficiaries • Processes more than 160 million claims with benefit payments of $50 billion annually • Earned the CMS 2011 Provider Customer Service Program of the Year award • Ranked first in overall provider satisfaction for MAC Part B, Legacy Part A, and Legacy Part B; and highly ranked for MAC Part A • Holds the first contractor Authority to Operate (ATO) from CMS • Employs more than 1,200 people, including corporate staff • Averages more than 24 years of Medicare experience in our top management staff

5. WPS Medicare Current Contracts • MAC J8 – Part A/B administration for Indiana and Michigan • MAC J5 – Part A/B administration for Iowa, Kansas, Missouri, and Nebraska • Legacy Contracts • Part A administration in all states except Delaware, Hawaii, and New York • Part B administration in Wisconsin, Illinois, and Minnesota • Part D Coverage Gap Payments – health care reform initiative providing $1 billion in benefits to four million beneficiaries who reached the “doughnut hole”

6. Communication During Implementation • WPS Fact Sheet • Provide introductory, implementation, and contact information • J8 Web Page • Publish general information and implementation news • POE Advisory Group Meetings • Assure information is reaching provider community • Meet with Societies and Associations • Open Houses • Meet key staff and demonstrate self-service tools

7. Self-Service Technologies Following Implementation • Providing the right information, at the right time, and in the right way…at your convenience – not ours

8. Key Contact Information for HFMA • Paul Hula – J8 Audit and Reimbursement Director • 402-995-0382; paul.hula@wpsic.com • Diane Pierce –J8 Provider Customer Service Program Manager • 402-995-0328; diane.pierce@wpsic.com

9. And Now, On with the Show (or why you really came)!

10. Medicare Audit & Reimbursement Omaha Audit staff functions: Accept cost reports Perform tentative settlements Conduct limited and full desk reviews Perform all interim rate reviews, including PIP and LP reviews Conduct wage index desk reviews Process cost report reopenings and appeals

11. Medicare Audit & Reimbursement Omaha Audit staff functions: Perform annual reviews of IRF and LTC hospitals, to determine ALOS requirements Review and make recommendations to CMS for provider-based attestations Audit Advisement team researches complex reimbursement issues, provides training, performs IQCs, and provides direction on the implementation of new system changes

12. Medicare Audit & Reimbursement Field Audit staff functions: Perform limited and full desk reviews and conduct in-house and field audits WPS currently has two field offices in Missouri (St. Louis and Kansas City); one in Chicago, IL and one in Clearwater, FL

13. Medicare Audit & Reimbursement Cost Report Appeals and Reopenings: Processes all PRRB and Intermediary cost report appeals Reopening team works with the Omaha and field audit staff to resolve reopening requests. Processes most cost report repenings

14. Medicare Audit & Reimbursement Reimbursement Process Team: Requests provider cost reports and follows up on un-filed costs reports Processes FOI requests related to cost reports Prepares NPR packages Processes PS&R requests Processes CHOWs, terms, new providers, and other tie-in notices from CMS

15. Medicare Audit & Reimbursement Medicare Finance: Primary responsibility includes the preparation and submission of CMS required financial reports and the identification and recovery of provider debts. Part A Provider Reimbursement team is located in Omaha

16. Medicare Audit & Reimbursement Part A Reimbursement functions: Issue notification and demand letters regarding cost report settlement determinations, claims accounts receivable, etc. Collect all overpayments and pay all underpayments Assess interest on delinquent A/R Refer eligible debt to the Treasury Dept.

17. Medicare Audit & Reimbursement • Part A Reimbursement functions: • Coordinate bankruptcy cases with CMS Regional Offices • Review and approve provider requests for Extended Repayment Plans • Review and approve provider requests for CRNA reasonable cost payments • Recover debt relating to civil monetary penalties

18. Contractor Reform • CMS designed the new MAC jurisdictions to balance the allocation of workloads, promote competition, account for integration of claims processing activities, and mitigate the risk to the Medicare program during the transition to the new contractors. These jurisdictions will be substantially more alike in size than the existing fiscal intermediary and carrier jurisdictions. • CMS awarded the first A/B MAC contract in July 2006.

20. Contractor Reform/MAC • CMS believes the efficiency and effectiveness of its claims operations can be further increased by consolidating some of the smaller A/B MAC workloads to form large A/B MAC jurisdictions, further reducing the size range among the A/B MACs. • As a result, over the next several years CMS will consolidate the following 10 A/B MAC workloads, comprising 5 pairings, to form 5 consolidated A/B MAC contracts.

21. Consolidated A/B MAC Jurisdictions - Future Landscape

22. Audit Topics-ARRA • American Recovery & Reinvestment Act of 2009 (ARRA) – also known as the “Stimulus Package” or “HITECH Act”. • As much as $27 Billion may be expended over 10 years for investment in Electronic Health Information Technology Systems. • Requires that CMS provide incentive payments under Medicare and Medicaid to “meaningful users” of Electronic Health Records (EHR).

23. Audit Topics-ARRA • Incentive Payments will be made to: • Eligible Professionals (EPs) – doctors, • Subsection (d) Hospitals – all IPPS acute care hospitals, excluding IRF, IPF, Children, Cancer, etc. (approx. 3,500 hospitals), • Critical Access Hospitals – about 1,300 total, • That properly attest they have met the criteria for “meaningful use” of “certified EHR technology” in the applicable stage that corresponds to their payment year.

24. Audit Topics-ARRA • Meaningful use of EHR technology is discussed at length in the CMS Final Rule for EHR payments dated July 28, 2010 (see pages 44321-44380) • Medicare contractors will not be involved in the determination of meaningful use but will instead rely on the provider’s attestation they have met the meaningful use criteria (http://www.cms.gov/EHR Incentive Programs/Registration and Attestation)

25. Audit Topics-ARRA • Although the FI/MAC will be responsible for reviewing and calculating incentive payments, the actual payment will be made by a single contractor, known as the Payment File Development Contractor (PFDC). • This separation is needed as the incentive payments must be kept separate from the normal Medicare trust fund.

26. Audit Topics-ARRA Overview of Payment Process - Subsection (d) Hospitals: • Hospital registers • Hospital attests as a Meaningful User • Monthly “trigger file” sent from NLR to obtain FISS/MCS information for those who attested that month. • Payment information sent to Payment File Development Contractor (PFDC)

27. Audit Topics-ARRA Overview of Payment Process (continued): • PDFC prepares the file • Payments are distributed to providers by EFT or check • Adjustments will be made at final settlement through the cost report desk review/audit/final settlement process

28. Audit Topics-ARRA Overview of Payment Process - CAH: • CAH registers • CAH attests as a Meaningful User • CAH supplies documentation to their FI/MAC • FI/MAC enters allowable amount and Medicare Share into FISS. • Monthly “trigger file” sent to obtain FISS/MCS information for those who attested that month

29. Audit Topics-ARRA Overview of Payment Process - CAH (continued): • Payment information sent to PFDC • PFDC prepares the file • Payments are distributed to providers by EFT or check • Adjustments will be made at final settlement through the cost report desk review/audit/final settlement process

30. Audit Topics-ARRA Website and email information: • http://www.wpsmedicare.com/j5macparta/departments/audit_reimbursement/cah-incentive-documentation.shtml (CAH EHR Info) • http://www.wpsmedicare.com/j5macparta/departments/audit_reimbursement/_files/cah-incentive-sample.xls (CAH EHR Template to submit)

31. Audit Topics-ARRA WPS contact for EHR: • chris.severson@wpsic.com

32. Audit Topics-ARRA • FAQ document has been added to the CMS website: • http://www.cms.gov/EHRIncentivePrograms/ • FAQ link on the left margin • This website is extremely helpful and you are highly encouraged to review this for further detail and information regarding EHR

34. Cost Report Life Cycle • Almost all Medicare Part A providers are required to submit a cost report to their Medicare Administrative Contractor (MAC) or Fiscal Intermediary (FI). • The particular report is dependent upon the provider type • The cost report is due 5 months from the end of the provider’s fiscal year end (must be postmarked by that date). Providers are always welcome to file early.

35. Cost Report Life Cycle • The MAC will send a cost report reminder letter to the provider prior to the cost report due date. WPS sends this letter approximately two months before the due date. • CMS requirement – upon receipt of the cost report, the MAC has 30 days to accept/reject the cost report. WPS performs their acceptability process sooner than 30 days.

36. Cost Report Life Cycle • Next step – Tentative Settlement • The MAC must make an initial/tentative retroactive adjustment as quickly as possible to the provider after the receipt of the cost report. • CMS requirement – the MAC has 60 days from the accept date to complete a tentative settlement. In conjunction with the tentative settlement, WPS performs interim rate reviews based on the latest cost report for the provider and sub-providers.

37. Cost Report Life Cycle • The cost report is then part of the “open inventory” of cost reports and will eventually be final settled by WPS. • CMS requirement – for non-audited cost reports, the FI/MAC must complete a Notice of Program Reimbursement (NPR) within 365 days from cost report acceptance. (NPR = final settlement). This is referred to as the currency requirement. WPS is current for J5 and Legacy providers. • If a cost report is selected for audit, there is no such currency requirement.

38. Cost Report Life Cycle • Currency of Cost Report Settlements – CMS has instructed FIs/MACs not to final settle cost reports that use the 2007 and subsequent years’ SSI ratio until further notice. (2007 = Cost reports beginning on or after October 1, 2006 and before October 1, 2007. 2008 = Cost reports beginning on or after October 1, 2007 and before October 1, 2008 ). • This impacts PPS and IRF hospitals (those that receive DSH and LIP payments). • Still uncertain when FIs/MACs will be able to final settle these cost reports.

39. Cost Report Life Cycle • Audits can either be Field Audits (i.e. on-site) or In-House Audits, where no travel is involved. Requirements are the same for both with the exception of travel. The field office team will make the determination which type of audit will be completed. • The St. Louis field office will be the audit office conducting audits on Michigan and Indiana providers.

40. Cost Report Life Cycle • Engagement Letter - the field office will contact the provider to determine the date of the audit. An engagement letter is issued between four and six weeks prior to the start of the audit, which will identify information needed at the start of the audit and the major areas reviewed.

41. Cost Report Life Cycle • Entrance Conference - at the start of the audit an entrance conference will be held. This sets the tone for the entire audit. It serves to enhance communication between the MAC and provider by covering a wide variety of issues. Items discussed include timelines of the audit, areas reviewed, proposed desk review adjustments, and administrative issues.

42. Cost Report Life Cycle • Pre-Exit Conference – on the last day of field work, a pre-exit conference is held. The provider will receive all the tentative audit adjustments and working papers (where requested). A written list of outstanding items will be given to the provider. Additional documentation must be submitted within four weeks. An exit conference date will be established, and we will discuss the audit adjustment process. Providers have four weeks to provide any documentation after the pre-exit conference.

43. Cost Report Life Cycle • Final Exit Conference – each provider is entitled to an exit conference. The final audit adjustment report is given to the provider. If additional information is received, this information does not have to be considered in the initial NPR since it was not submitted within the established timeframes. If a reopening is granted or a timely appeal made, it may be considered at that time. A provider may waive the final exit if they desire (usually when no outstanding issues are left).

44. Cost Report Life Cycle • Finalization of Audit Adjustments – the time period between the pre-exit and final exit conference is used to review additional documentation supplied by the provider. If additional or new adjustments are made, the provider must notify the MAC in writing within two weeks of any concerns with the new or modified adjustments.

45. Cost Report Life Cycle • CMS requirement – the MAC has twelve weeks from the date of the pre-exit conference to date of the final exit conference. • After the final exit conference is held, the cost report is sent to the Omaha home office for processing the NPR. • CMS requirement – a NPR must be issued within 60 days from the final exit conference.

46. Cost Report Life Cycle • Provider has 180 days from the date of the NPR to file a formal cost report appeal. • An appeal may be administratively resolved at any time prior to a PRRB hearing. WPS has a cost report appeals area that handles all appeals. • The WPS Cost Report Appeals Manager is Bill Lange. His number is (402)995-0597.

47. Cost Report Life Cycle • A cost report can be reopened within three years of the date of the NPR. It may be initiated by the MAC/FI, provider, CMS, or OIG. No timelines for fraud (can be reopened after three year period has expired). • WPS has a cost report reopening area that handles almost all reopenings. The manager of the Cost Report Reopening area is Bill Lange.

48. Cost Report Life Cycle • To meet the three year requirement, the provider’s request must be received within three years after the original NPR. Sufficient documentation that will allow us to determine if a reopening is necessary should accompany the request. • CMS requirement – revised cost report settlements must be issued within 180 days after receiving the final information necessary for the resolution of the reopening.

49. Wage Index Reviews • Wage Index Desk Reviews are conducted annually by our home office audit teams. These are completed on acute IPPS hospitals. CMS desk review programs are utilized to conduct these reviews. • Wage Index Desk Reviews are completed from December to February of each year. Specific timelines are set by CMS which guides the entire Wage Index process. The wage indexes published in the August Federal Register are the end product of the FI/MAC Wage Index Desk Review process.

50. Interim Rate Reviews • Interim Rate Reviews – perform two interim rate reviews annually for providers receiving level payments or cost reimbursement. The rate reviews are conducted by our home office staff and usually coincide with receipt of the latest filed cost report or submission of updated provider data. They can also be MAC initiated.