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PERM !

THERE ARE AUDITS. PERM !. & THEN THERE IS. Presented at the 2011 Age and Disabilities Odyssey Conference June 20, 2011 Rochester , MN. Presented By:. Christina Baltes, RN, BSN, PHN, MA. Manager, Program Compliance and Audits Internal Audits-Office of Compliance

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PERM !

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  1. THERE ARE AUDITS PERM ! & THEN THERE IS 2011 Odyssey 6/20/11

  2. Presented at the 2011 Age and Disabilities Odyssey ConferenceJune 20, 2011Rochester , MN 2011 Odyssey 6/20/11

  3. Presented By: Christina Baltes, RN, BSN, PHN, MA. Manager, Program Compliance and Audits Internal Audits-Office of Compliance MN Department of Human Services Email: christina.baltes@state.mn.us Direct Line: 651-431-4279 2011 Odyssey 6/20/11

  4. TODAY’s OBJECTIVES • Understand the current types of audits conducted by the Centers of Medicare and Medicaid (CMS) • Have an understanding on how to prepare for these audits • Gain an understanding on how to avoid errors with fiscal penalties 2011 Odyssey 6/20/11

  5. Acronyms • CDCS-Consumer Directed Community Supports • CHIP- Children's Health Insurance Program • CHIPRA-Children's Health Insurance Program Reauthorization Program • CMS – Centers for Medicare and Medicaid Services • DDC-Documentation/Database Contractor • DP- Data Processing [Claims Processing] • DRG – Diagnostic Related Group • DRA-Deficit Reduction Act of 2005 • DT&H-Day Training and Habilitation • FFS-Fee for Service • FFY-Federal Fiscal Year • FQHC-Federally Qualified Health Centers • FFP-Federal Financial Participation 2011 Odyssey 6/20/11

  6. Acronyms • HHA-Home Health Agency/Home Health Aide • HCPCS-Healthcare Common Procedure Coding System • HHS-The Department of Health and Human Services • ICF- Intermediate Care Facilities (ICF/MR-per Federal Regulation 42 CFR 483 Subpart I) • IEP-Individual Education Plans • IPERA-Improper payments Elimination And Recovery Act of 2010 • IPIA – Improper Payments Information Act of 2002 • IPP-Individual Program Plan • ISP-Individual Service Plans • IHP-Individual Habilitation Plans • LON-Level of Need • LTC-Long Term Care 2011 Odyssey 6/20/11

  7. Acronyms • MAXIS- DHS recipient eligibility system • MDS-Minimum Data Set • MEQC-Medicaid Eligibility Quality Control • MIC-Medicaid Integrity Contractor • MIP-Medicaid Integrity Program • MMIS – Medicaid Management Information System • MSIS - Medicaid Statistical Information System • MR-Medical Review • NH-Nursing Home • NPRM-Notice of Proposed Rule Making • OASIS- Outcome and Assessment Information Set • OMB-Office of Management and Budget 2011 Odyssey 6/20/11

  8. Acronyms • OIG: Office of Inspector General • PA-Prior Authorization or Physician’s Assistant • PAM – Payment Accuracy Measurement • PAR-Performance and Accountability Report • PERM – Payment Error Rate Measurement • PEPPER-Program for Evaluating Payment Patterns Electronic Report • SCHIP – State Children’s Health Insurance Program • SMERF – State Medicaid Error Rate Findings • SSA-Social Security Act • SSI-Supplemental Security Income • SSDI-Social Security Disability Insurance • WIC-Western Integrity Center (similar to RAC) • ZPICs: Zone Program Integrity Contractors 2011 Odyssey 6/20/11

  9. Hot Topic-Payment Accuracy • “Improper payments” occur when funds go to the wrong recipient, the recipient receives the incorrect amount of funds (including overpayments and underpayments), documentation is not available to support a payment, or the recipient uses funds in an improper manner. • Fiscal Reporting Year 2009-HHS $66.4 Billion “Improper Payments.” • Website: http://www.paymentaccuracy.gov/ 2011 Odyssey 6/20/11

  10. Today’s Objective #1 Understand the current types of audits conducted by the Centers of Medicare and Medicaid (CMS) 2011 Odyssey 6/20/11

  11. FEDERAL AUDITS How many federal audits are there for health care providers? 2011 Odyssey 6/20/11

  12. ANSWER 2011 Odyssey 6/20/11

  13. MEDICARE : Comprehensive Error Rate Testing • First error rate reported in November 2003 • Calculates a national paid claims error rate for the MC Fee-For-Service • Random selection of claims submitted for MC payment-records requested and reviewed • Overpayments are collected from Providers • FY 2009-Total Dollars paid $308B-7.8% error rate ($24.1 B) up from 3.6% in 2008-highest category DME 51.9% • http://www.cms.hhs.gov/CERT/ 2011 Odyssey 6/20/11

  14. CERT Top Three Error Reasons • Records from the treating physician not submitted or incomplete • Missing evidence of the treating physician's intent to order diagnostic tests • Missing or illegible signatures on medical record documentation • http://www.cms.gov/CERT/Downloads/CERT_Report.pdf 2011 Odyssey 6/20/11

  15. Medicare: Recovery Audit Contractor (RAC) • 3-year Demonstration project- 2005 to 2008 • States impacted: NY-MA-FL-SC-CA • $1.3 billion in errors found • Provider appeals as of 2008: 14% appeal • Overturned 4.6% • RAC Permanent-all states beginning 2011 -Section 302 of the Tax Relief and Health Care Act of 2006 • http://www.cms.hhs.gov/RAC 2011 Odyssey 6/20/11

  16. RAC Readiness • Know where previous improper payments have been found • Know if you are submitting claims with improper payments • Prepare to respond to RAC additional documentation requests • Do self audits! • http://www.cms.hhs.gov/RAC 2011 Odyssey 6/20/11

  17. Other Federal Audits for Medicare/Medicaid • Office of Inspector General (OIG): • Public Law 95-452:protect the integrity of HHS programs. http://oig.hhs.gov/organization.asp • Centers for Medicare and Medicaid (CMS) • CMS Strategic Action Plan Objectives: Accurate and Predictable Payments • http://www.cms.gov/MissionVisionGoals/ 2011 Odyssey 6/20/11

  18. Medicaid : Comprehensive Medicaid Integrity Program (CMIP) • CMIP is the result of the Deficit Reduction Act of 2005. • Medicaid Integrity Program (MIP)-developed with a goal to prevent Fraud, waste and abuse. • Section 1936 of the SSA-CMS procures 3 types of Medicaid Integrity Contractor (MICs) 2011 Odyssey 6/20/11

  19. Medicaid : Comprehensive Medicaid Integrity Program (CMIP) continued…. • Review MICs: Analyze MA Claims • Audit MICs: Conducts audits to identify overpayments-States collect $ from Providers • Education MICs: Educate Providers • Started in 2010 in Minnesota • MDHS-Surveillance and Integrity Review Unit-Ron Nail-ron.nail@state.mn.us (Do not include PHI) • https://www.cms.gov/ProviderAudits/ 2011 Odyssey 6/20/11

  20. Medicaid: Review Audit Contractor (RAC) • Created by the Affordable Care Act • Target implementation date 2011 (???) • Proposed Rule FR Vol. 75, No. 217 (11/10/10) • MDHS responsible for MA RAC in Minnesota-Surveillance and Integrity Review Unit-Ron Nail, Manager ron.nail@state.mn.us (Do not include PHI) • https://www.cms.gov/RAC/ 2011 Odyssey 6/20/11

  21. Other Auditing Entities for Medicaid • Office of Inspector general (OIG) • Centers for Medicare and Medicaid (CMS) • Office of the Legislative Auditor (OLA) • State Auditor’s Office (Single Audits) 2011 Odyssey 6/20/11

  22. WAIT!!! HOLD IT!! THERE IS ONE MORE!! 2011 Odyssey 6/20/11

  23. Did you hear that? Oh No! Another Audit! AHHHHHH! NOT A ANOTHER AUDIT! 2011 Odyssey 6/20/11

  24. Medicaid- PERM • PERM – Payment Error Rate Measurement • An audit for Medicaid and State Children’s Health Insurance Program 2011 Odyssey 6/20/11

  25. Why was PERM developed? • IPIA (Improper Payment Information Act of 2002) & amended in July 2010 by Improper Payments Elimination and Recovery Act (IPERA). • IPERA amended IPIA to: • Improve agency efforts to reduce and recover improper payments • Assess program for risk of making improper payments; estimate and report these amounts annually; and take corrective actions. • Expanded the types of programs that are required to conduct payment recovery audits • Authorized agency heads to used recovered funds for additional uses • Defined actions to be in compliance and actions if not in compliance 2011 Odyssey 6/20/11

  26. Regulations • August 27, 2004 (Federal Register Vol. 69 No 166): PERM Proposed Rules • October 5, 2005 (Federal Register Vol.70 No 192 ): PERM Interim Rule • May 16 2006 (Federal Register Vol. 71 No 94): Proposed New System of Records-Privacy Act of 1974 • August 28, 2006 (Federal Register Vol. 71 No 166): PERM Interim Final Rule • August 31, 2007 (Federal Register Vol. 72 No 169): PERM Final Rule effective October 1, 2007 2011 Odyssey 6/20/11

  27. Regulations • July 25, 2008 (Federal Register Vol. 73 No 144): PERM Modification of Data Collection • CHIPRA 2009 signed 2/4/09 effective 4/1/09 (pub Law 111-3)-modifications of process • Final Regulations-August 11, 2010 Federal Register Vol. 75, No. 154 • Improper Payments Elimination And Recovery Act (IPERA) 7/22/2010 2011 Odyssey 6/20/11

  28. PERM Final Rule Changes Sample size - claims and eligibility – Maximum set at 1,000 Beginning in FY 2011, state-specific sample sizes will be calculated based on the prior year’s component-level error rates Review process – medical necessity reviews Providers must submit documentation within 75 days Difference resolution – claims and medical necessity States can now appeal errors below $100 Difference resolution – claims and medical necessity States now have 20 business days to request a difference resolution and 10 business days to request an appeal to CMS Provider Impact 2011 Odyssey 6/20/11

  29. Authority to establish regulations • Sections 1102 (a) of the SSA • Medicaid Statute Section 1902(a)(6) and CHIP statute Section 2107(b)(1) of the SSA-States Provide Information • SSA Section 1902 (a) (27) and 42CFR 457.950 –Providers to submit information for claims and payments 2011 Odyssey 6/20/11

  30. PERM Program Structure 2011 Odyssey 6/20/11

  31. PERM Program Structure • CMS • Contractors • Statistical • Documentation • Review • State Medicaid Staff • State Service Partners (e.g. Providers, Counties, etc.) 2011 Odyssey 6/20/11

  32. PERM AUDIT CYCLES 2011 Odyssey 6/20/11

  33. PERM CYCLE ONE FFY 2006/2009/2012: Pennsylvania, Ohio, Illinois, Michigan Missouri, Minnesota, Arkansas, New Mexico, Connecticut, Virginia, Wisconsin, Oklahoma, North Dakota, Wyoming, Kansas, Idaho, Delaware Note: From FFY 2009 PERM measures FFS, Managed Care, and Eligibility for MA and CHIP. • Everest Region Nepal 99 2011 Odyssey 6/20/11

  34. PERM CYCLE/YEAR TWO & THREE • FY 2007/2010/2013: North Carolina, Georgia, California, Massachusetts, New Jersey, Tennessee, West Virginia, Kentucky, Maryland, Alabama, South Carolina, Colorado, Utah, Vermont, Nebraska, New Hampshire, Rhode Island • FY 2008/2011/2014: New York, Florida, Texas, Louisiana, Indiana, Mississippi, Iowa, Maine, Oregon, Arizona, Washington, District of Columbia, Alaska, Hawaii, Montana, South Dakota, Nevada 2011 Odyssey 6/20/11

  35. How Does PERM Work? 2011 Odyssey 6/20/11

  36. Multiple Component Areas Three distinct components for each Fee for Service Program (MA & CHIP) = 6 audits • Claims Processing • Medical Necessity • Recipient Eligibility One distinct component for each Managed Care Program (MA & CHIP) = 2 audits • Claims Processing 2011 Odyssey 6/20/11

  37. Perm Review Areas • Claim Processing Involves: Medicaid Fee For Service Medicaid Managed Care CHIP Fee For Service CHIP Managed Care Any services paid for by Title 19 and 21 funds-includes waiver services. 2011 Odyssey 6/20/11

  38. Perm Review Areas • Medical Necessity Involves: Medicaid Fee For Service CHIP Fee For Service Any services paid for by Title 19 and 21 funds-includes waiver services. 2011 Odyssey 6/20/11

  39. Perm Review Areas Recipient Eligibility Involves all new applicants, redeterminations, on-going, denied and closed/terminated recipients for all Title 19 (MA) and 21 (CHIP) for the audit Federal fiscal year. 2011 Odyssey 6/20/11

  40. Claim Processing And Medical Necessity First Steps 2011 Odyssey 6/20/11

  41. Documentation/Database Contractor collects policies from states and medical records from providers. Statistical Contractor conducts quality control on FFS and managed care universes submitted by states and selects random samples from universes for review. Review Contractor performs medical and data processing reviews and conducts difference resolution with states. PERM Claims and Medical Review Component Process 2 1 3 2011 Odyssey 6/20/11

  42. What is a Claim for PERM Purposes? • Depends on the program’s payment method • PERM sampling unit: smallest, individually priced unit paid for a single beneficiary • For example • State pays professional services by line item: The line item is the sampled unit • State pays inpatient hospital claims by DRG or per diem: The DRG or per diem rate (claim header) is the sampled unit 2011 Odyssey 6/20/11

  43. Anticipated Categories for MN 2012 20 Categories! • Category 1: Inpatient Hospital Services • Category 2: Psychiatric, Mental Health & Behavioral Health Services • Category 3: Nursing Home, Convalescent Centers, ICF, ICF/DD (Federal Terminology at 42 CFR 483 Subpart I ICF/MR) & Chronic Care Hospitals • Category 4: Outpatient Hospital Services, ER, Practitioners and Clinics • Category 5: Dental & Oral Surgery Services 2011 Odyssey 6/20/11

  44. More anticipated 2012 Categories • Category 6: Prescribed Drugs • Category 7: Home Health Services (HHA/ Supplies/ equipment/ appliances via HHA) • Category 8: Personal Support Category (PCA/Respite Care/Homemaker/TCM/Private Duty Nursing/Nurse Midwife/Meal Delivery) • Category 9: Hospice Services • Category 10: Therapies, Hearing and Rehabilitation Services • Category 11: Habilitation and Waiver Programs, Adult Day Care and Foster Care 2011 Odyssey 6/20/11

  45. Even more anticipated 2012 Categories • Category 12: Laboratory, X-Ray and Imaging Services • Category 13: Vision, Ophthalmology, Optometry and Optical Services • Category 14: Durable Medical Equipment (DME) and supplies Prosthetic / Orthopedic devices, and Environmental Modifications • Category15: Transportation and Accommodations 2011 Odyssey 6/20/11

  46. The rest of the anticipated 2012 Categories • Category 16: Denied Claims • Category 17: Cross-over Claims • Category 30: Capitated Care / Fixed Payments Capitated Payments to Primary Care Case Management (PCCM) Medicare Part A Premiums Medicare Part B premium Health Insurance Premium Payments (HIPP) • Category 50: Managed Care • Category 99: Unknown (Claim data individually reviewed to determine category) 2011 Odyssey 6/20/11

  47. 2012 Predicted Components & Sample Sizes Medicaid • •FFS: 500 line items • •Managed Care: 250 capitation payments • •Eligibility: 504 active cases, 500+ negative cases CHIP • FFS: 500 line items • Managed Care: 250 capitation payments • Eligibility: 504 active cases, 200 negative cases 2011 Odyssey 6/20/11

  48. PERMCLAIMSPROCESSING 2011 Odyssey 6/20/11

  49. FFS, Managed Care & CHIP Claims Processing Reviews • Done by CMS contractors • Onsite in MN • Onsite usually one week long per Quarter • Review sample to determine improper payments • Looks at all aspects of claims processing 2011 Odyssey 6/20/11

  50. PERM Medical Necessity Review 2011 Odyssey 6/20/11

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