Home Care Heroes Blog

Home Care Alert! Surviving An Audit

When faced with an audit, documentation and technology can save the day

Health care providers of all types face increasing scrutiny from public and private payers alike to operate in a totally above-board, compliant fashion. Simply doing things the right way is no longer enough, you have to prove that you are compliant, and have systems and processes in place to assure that you will continue to operate that way with every patient, every day.   

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This helpful piece, written by Wayne van Halem, CFE, AHFI, President of The van Halem Group, LLC, originally ran in Home Care Magazine and is intended to help HME providers to better prepare for and respond to Medicare audits. The lessons are applicable to many of Ankota's customers and are definitely not limited to just HME companies (or CMS), so we decided to share it here on the Ankota blog. Whether you are an HME, a home health agency, a physical therapy providerer, infusion nursing, or even non-medical private duty home care -- read on!

If you are a hospital or Accountable Care Organization (ACO), or involved in Care Transitions Initiatives, then you should also read on. You should anticipate that your organization will become increasingly responsible for the care and services that take place outside of the hospital--whether by your organization or one to which you refer or subcontract services. As more care is delivered outside of hospital settings, hospitals and ACOs need to take steps to assure that 3rd party providers follow the rules. 

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From Surviving an Audit, Home Care Magazine
Insufficient Documentation

The biggest problem concerning audits, without question, is physician documentation being deemed insufficient. Recent changes to the Medicare Program Integrity Manual, which guides audit contractors, have reflected what we are noticing in these audits. The Centers for Medicare & Medicaid Services (CMS) wants to see that the physician documentation specifically addresses the criteria listed in the Indications and Limitations of Coverage section of the Local Coverage Determinations, and that it is documented in their notes as well as in the normal format that they document their own services. This seems reasonable, in theory, except for the fact that CMS does not fund the DME MACs to educate physicians and the Part B MACs are not funded to educate physicians on DME policies. So physicians do not know what they are supposed to document—it’s up to you to educate them.

While it may not be feasible to request documentation up front in all instances, CMS and its contractors seem to believe it is. I’m not sure what to do to resolve that issue, but what I can recommend are some ways to encourage cooperation from physicians by touting the term “compliance.” It’s not an option for physicians to comply, it’s the law. Unfortunately, CMS has put the responsibility on you to educate the physicians, and there has been little—if any—liability placed on physicians who do not comply.

Recently, however, we have seen an increase in additional documentation requests (ADRs) because contractors are auditing the physicians, so perhaps they will be more aware and willing to cooperate. We must come together and hold physicians accountable, so begin educating your physicians of their legal obligation. It’s not your requirement that you provide documentation, it’s Medicare’s requirement, and in order for you to be in compliance with federal regulations you need the documentation. As a result, the physicians may become the target of an audit because their documentation is not being deemed sufficient, so why not work with a company that is taking the extra effort to be compliant? It’s a great marketing tool in an environment of intense regulatory oversight that is now affecting other health-care providers, including physicians.

Patient Accountability

Another important topic to address is holding your patients more accountable. If you get the patients involved in their treatment and care, and educate them under what circumstances Medicare will cover the equipment that was ordered for them, it helps them understand what is needed to get their claim reimbursed accordingly so they are not liable. If you explain to patients that their physician has failed to comply with the request for documentation, and as a result they may be responsible for payment of the services, they will naturally be motivated to contact their physician.

While most physicians may not be concerned over your claims getting paid, they would likely be concerned if the patients call to complain. A successful practice must keep their patients content. While I advocate for the use of Advance Beneficiary Notices (ABNs), I also think it is extremely important that you fully explain the document to the patients so they understand what they are signing. The form should be specific and unique to that patient’s situation. It’s a fine line the provider must walk between alienating referral sources and patients, but both of these groups must take an active role in the care you provide. 

In my opinion, I think suppliers should develop a process to request documentation for each patient knowing that you won’t always get a response. However, it’s an opportunity to educate your physicians on what the coverage policies are. We recommend drafting cover letters to use when faxing orders to be signed by physicians that explain under what circumstances the items are reimbursed by Medicare, as well as the documentation requirements. Explain that the patients’ progress notes must support that the criteria are met or coverage can be denied and the patient may be held liable for payment. Ask them to review, sign and date the attached order and return it with the most recent progress note which supports that your patient meets the criteria for coverage. While they may not send the progress note in return, they may take notice of what needs to be documented. By asking for the most recent progress note, you are alerting them to the fact that you’re not asking for hundreds of pages of records and they may be more willing to comply. The more often they get the letter, the more quickly it may sink in. It certainly increases your chances above not requesting anything at all, and it’s worth the minor extra effort if they do comply. Of course, following up if they don’t respond is highly recommended, as well.

Quality, Not Quantity

Many providers think that the more records they send in, the higher the likelihood the claim will be approved. There is just no truth to that, and it’s really quite the contrary. Patients’ conditions may worsen, but the physician may not adequately document it in their records. Therefore, sending in additional records may raise concerns with the reviewer that the patient does not qualify for coverage, when they do indeed.

Additionally, the reviewers at Medicare have strict timelines and performance standards related to their workload that must be met. They could be reviewing thousands of pages of records each day. The more records that you send in, the harder it is for the reviewer to find the necessary elements in order to approve the claims. Be precise and simple in your documentation requests, and try to automate the process as much as possible to manage the workload associated with doing so. If your system allows you to export intake data to Excel, it could be as simple as performing a mail merge to complete cover letters.

Some providers have created forms to document medical necessity, or have added this information to their orders. However, if you have this information on your order, Medicare is clear that the order is not part of the “clinical record” for purposes of an audit. Therefore, under no circumstances would a claim in which this is the only supporting documentation get approved upon initial review. There is a similar issue with forms. Unless it is a CMS-approved form required by policy—such as a Certificate of Medical Necessity or a Statement of Certifying Physician—an auditor would not consider it as part of their review. The supporting documentation must be present in the clinical record and in the normal format that the practitioner uses in documenting their notes. If you are relying solely on forms, then the physician completes the form and assumes that their work is done. This actually makes it less likely that the physician will document the need for the equipment in the notes.

The Meaning of Modifiers

The last—but probably most important—item that I want to discuss is the KX modifier. I believe the government is building this up as a tool to implement false claim violations. Recently, and often, the “meaning” of these modifiers has been revised and changed in various policies. In some instances the KX modifier added to a claim indicates that the supplier has clinical notes in their possession supporting that criteria for coverage has been met. Yes, some policies now have a mandatory documentation requirement. If you add the modifier indicating this and you get audited, and if they determine you don’t have it, you’ve potentially submitted a false claim, which carries significant monetary penalties. I cannot stress enough the importance of knowing and understanding the specific meaning of this modifier for all the products you bill that require it.

Too many times I’ve asked billing staff why they added the KX modifier when conducting our compliance assessments, and the response was that it will not be paid without it. While this is true, that is not why it is added to the claim, and there is a significant amount of risk associated with this modifier for our industry. I’m afraid that in the future, auditors and investigators will target suppliers using this modifier. In fact, for the second year in a row the improper use of modifiers has been identified as an issue in the Office of Inspector General Workplan. Suppliers should take heed of this advice in order to avoid future issues. 

Good Business

As I’ve previously stated, documentation is your only defense in an audit. You must come up with innovative and streamlined processes to obtain as much documentation as possible, and review it before putting it in your files. Conduct risk assessments with your referral sources to determine which physicians are not cooperating, which need more education, and which ones seem to understand. You can then decide which ones you no longer want to do business with, and which you may feel comfortable can provide you with the necessary documentation if you choose to not request it every time for every claim.

Don’t accept liability without holding those other interested parties more accountable. Stated simply, it’s just a sound business decision.

Physician, Heal Thyself!

Lack of physician documentation complicates audits. Here are some points you should make to the physicians in your referral network:

  • CMS doesn’t fund physician education, so it’s up to you to educate them. Help physicians understand the challenges you face and ask for their help.
  • Encourage cooperation from physicians by touting the term “compliance.” It’s not an option for physicians to comply, it’s the law.
  • Emphasize that it’s not your requirement to provide documentation, but Medicare’s, and in order for you to be in compliance you need the documentation.
  • Physicians may become the target of an audit when their documentation isn’t deemed sufficient, so market yourself as a company that will help them to comply.
  • Point out that the current environment of intense regulatory oversight is affecting a wide variety of health-care providers, including physicians.
About the author:

Wayne H. van Halem, CFE, AHFI, is president of The van Halem Group, LLC, which is based in Atlanta. He can be reached at 404-343-1815 or wayne@vanhalemgroup.com. Visit online at www.vanhalemgroup.com.

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