Commonwealth of Virginia Department of Medical Assistance Services Division of Program Integrity DRG Audit Project

1. February 19, 2009 Commonwealth of Virginia Department of MedicalAssistance Services Division of Program Integrity DRG Audit Project VHIMA CODING ROUNDTABLE 

2. 1 AGENDA HMS Team Virginia Implements Enhanced Retro Review of DRG Claims Review of DRG Review Process Summary of SFY 06 Audit Project Overview of Medical Record Review Overview of Overpayments Identified Category of Errors Trending � DRG Coding Errors Additional Review Summary Provider Practices Provider Educational Outreach SFY 07 Audit Project Claim Review Feedback from Providers

3. 2 DRG Audit Project � HMS Team HMS Leading healthcare cost containment firm serving 40 Medicaid agencies 23 Years serving the Medicaid community, Staff of 750 in 23 offices nationwide with strong policy and operational expertise Virginia experience Worked closely with Virginia providers since 1994 PERMEDION Healthcare quality review and improvement corporation specializing in healthcare quality measurement and improvement, data analysis and management, and independent medical review Accredited by URAC for both Utilization Management and Independent Review Provides credible, well-supported decisions using a staff of registered nurses, certified coding specialists, and a panel of over 400 physicians, representing all recognized specialties and located across the country HCRS National presence with nearly 300 certified coders, healthcare and clinical professionals across 26 states Federally certified 8(a), SDB, woman-owned, Virginia and Maryland MBE

4. 3 Virginia Implements Enhanced Retro Review of DRG Claims In 2007 HMS was awarded a contract to perform review of DRG claims for the Department of Medical Assistance Services. CMS has instructed states to select Target Areas based on historical knowledge, experience, and analysis of payment errors related to inappropriate re-admissions and Diagnosis related Groups (DRG) upcoding Key requirements of RFP: Apply data mining techniques and analysis to review inpatient hospital claims to assess accuracy of DRG assignment and detect errors and improperly paid claims Review medical records for claims requiring detailed evaluation Maintain DMAS�s positive relationship with providers Identify error trends requiring a broader educational effort Educate providers on methods to avoid consistent errors

5. 4 Review of DRG Process Review of State Benefit Plans and Policy Data Mining to Select Cases Medical Record Request Clinical Coding Review Physician Review Exit Conference /Preliminary Findings Review of Additional Documentation Submitted Final Findings Identification of Trends Provider Education

6. 5 Review of DRG Process 1. Review Benefit Plans and Policy Reimbursement Coding Guidelines Audit Regulations 2. Data Mining to Target Cases DRG Targets Billing/Coding Errors Trend/Pattern Analysis

7. 6 Review of DRG Process 3. Provider Medical Record Request All letters sent to specific individual and CEO/HIM Clear concise instructions Courtesy calls if records not produced Granting of time extensions if needed Attempt to accommodate provider workload issues Electronic record intake option Willing to work with providers on these requests

8. 7 Review of DRG Process 4. Clinical/Coding Review Medical record abstraction by Registered Nurse (RN) and Certified Coding Specialist Accurate documentation of findings Coders use Coding Clinics and ICD-9-CM Coding Guidelines DMAS Hospital Provider Billing Manual Referral to a physician for determination 5. Physician Review Required for DRG reassignment 400 physicians on panel All specialties represented on panel

9. 8 Review of DRG Process 6. Exit Conference/ Preliminary Findings Letter Exit Conference � HMS will hold an exit conference with each audited facility at the end of audit as requested; discuss findings and proposed adjustments Preliminary Findings Letter Identifies errors and provides a detailed clinical review of the cases included with the letter Offers the facility the opportunity to submit additional documentation Opportunity to educate providers on error(s) and how to avoid them

10. 9 Review of DRG Process 7. Review of Additional Documentation 30 days to submit additional documentation 8. Final Findings 30 days to file appeal 9. Identification of Trends Aggregation of individual claim findings based on errors, review of cases Data mining to confirm trend, metrics

11. 10 Review of DRG Process 10. Provider Education Specific education through preliminary and final findings letters Individualized phone calls to providers Facility/Provider Level Education Detailed provider reports to include case accuracy and errors Relationship building Education on rules and process Focus on individual and global trends Communicate pervasive trends and issues through Medicaid Newsletter distribution options, provider association meetings

12. 11 SFY 2006 DRG Audit ProjectOverview of Medical Record Review Summary of Medical Record Review Released 8 batches of requests for medical records A total of 3,317 medical records requested from 89 providers 10% random sample (332 records) Received 3,295 records 22 technical denials initially issued 10 additional charts submitted on reconsideration for a total of 3,305 medical records received Granted 2 week extensions to 16 providers 22 providers were given courtesy calls regarding missing or incomplete medical records

13. 12 Overview of Overpayments Identified There are currently 414 denials comprising $1,943,766.00 in overpayments 12.5% of all claims reviewed had errors

14. 13 Category of Errors

15. 14 Trending�DRG Coding Errors

16. 15 Additional Review Summary Additional reviews requested to date 97 (23.4%) requests for further review from 28 providers Reason for requests for additional reviews Providers submitted additional documentation and/or rationale for review determinations that they disagreed with Outcome of reviews to date 31 claims overturned (8% overturned rate) No appeals received to date

17. 16 Summary of Practices Observed There were eleven (11) providers with no errors identified There were several providers with the following: All records had well organized, legible records All records had clear documentation All records had medical certification in charts There were four (4) large providers with the following: Greater that 15% error rate Poor coding accuracy There was one (1) large provider with the following: Poor coding accuracy No medical records had medical certification in charts 17% Error rate � 25 errors identified out of 144

18. 17 Provider Educational Outreach Education for providers Newsletters Project manager spoke directly with at least 62 of the providers during the review process to inquire regarding missing or incomplete charts, or to answer questions regarding the review process Working with VHHA

19. 18 SFY 2007 DRG Audit ProjectClaim Review Move from 5% to 7% Audit schedule finalized Provider audits spaced out in accordance with the date providers received letters for SFY 06 claims First Batch released October 28, 2008 Last Batch expected to be released in March, 2009 Change in process Provider letters will have minor changes

20. 19 Feedback from Providers Concerns from providers Recommendations Comments on Newsletter Ongoing Concerns

21. 20 Additional Questions Kelly Dickson Project Manager KDickson@hms.com VADRG@hms.com (614) 839-3390 Kathy Lippman Regional Director KLippman@hms.com (703) 938-6604