The Difference Between Medical Necessity and Meaningful Use

There has been a great deal of focus by the Centers for Medicare and Medicaid (CMS) surrounding medical necessity and meaningful use. (https://www.cms.gov). Both are important for providers to know from a compliance standpoint. In order to assist providers, these are the nuances of the respective terms.

Medical Necessity – The Social Security Act states, “no Medicare payment shall be made for items or services that are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” The problem arises in trying to define what “reasonable and necessary” means. In order to assist with this ambiguity, CMS set for National Coverage Determinations (NCDs). (www.cms.hhs.gov/mcd.search.asp). For physicians, who provide services based on their clinical judgment, just because a course of treatment falls within professional standards, does not mean it will be covered. Furthermore, physicians and hospitals will need to substantiate a claim by providing an accurate and comprehensive medical record.

Meaningful Use – The American Recovery and Reinvestment Act of 2009 expressed three main components: (1) the use of a certified EHR in a meaningful manner; (2) the use of certified EHR technology for electronic exchange of health information to improve quality of health care; and (3) the use of certified EHR technology to submit clinical quality and other measures. “Simply put, “meaningful use” means providers need to show they’re using certified EHR technology in ways that can be measured significantly in quality and in quantity.” (See CMS EHR Meaningful Use Overview). Eligible hospitals, including critical access hospitals, must report on all 15 of their clinical quality measures in order to demonstrate meaningful use.

In either instance, it is imperative that the medical record is complete and comprehensive.

Posted on: 25 Sep, 2011          under: Uncategorized

Recovery Audit Contractors Role Expands to Include Medicaid

Beginning January 2, 2012, states will be required to create and sustain a relationship with a “Recovery Audit Contractor” (RAC) to identify improper payments and fraud within state administered Medicaid programs.  Section 6411 of the Patient Protection Affordable Care Act was implemented on September 14, 2011, when The Department of Health and Human Services released a final rule. (42 CFR Part 455).

The Medicaid RAC program’s final regulations include:

• Payment system between states and Medicaid RACs;
• State discretion in determining whether or not to exclude Medicaid managed care claims from Medicaid RAC review;
• Coordination between RAC and other audit entities;
• States establish limits on the number and frequency of medical records to be reviewed by Medicaid RACs, but RACs may request exceptions;
• Three-year look back period on reviewing claims UNLESS the state approves; and
• States need to establish an adequate appeal process for providers to dispute adverse determinations. (Rani Singh, HHS Releases Final Medicaid Recovery Audit Contractor Rule (Sept. 16, 2011).

The expected recovery estimated by HHS is $2.1 billion over five years. A significant portion is projected to be returned to the states.

In light of this new rule, it is important for providers to assess their current clinical documentation improvement and compliance programs.

Posted on: 18 Sep, 2011          under: Uncategorized

The Payment Sunshine Act Casts a Cloud and Raises the Compliance Umbrella

The Sunshine Law, or Section 6002 of the Affordable Care Act, requires pharmaceutical, biological, medical device and durable medical supply companies, whose items are paid for by Medicare and Medicaid to report payments made to physicians and teaching hospitals. Payments must be reported for a variety of purposes: consulting, speaking engagements, advisory board service, travel, food, royalty payments and clinical research. (Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119, amended by Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, 124 Stat. 1029, §6002). This public information creates a powerful new tool for prosecutors and opens providers up questioning on medical necessity, data mining, Anti-kickback and Stark Laws, and reputation risks. (Tracy Miller, The Payment Sunshine Act: Assessing the Compliance Risks for Healthcare Providers, AHLA Connections, p. 24 (Aug. 2011)).

January 2012 is not far away for HHS to begin collecting the required information to be disclosed. By March 31, 2013, and on the 90th day of each subsequent calendar year, “covered manufacturers must submit to the HHS Secretary information about Payments made to physicians and teaching hospitals throughout the preceding year.” (Ibid.)

Although several states already have “Sunshine Laws” in place and major pharmaceutical and orthopaedic companies already disclose physician payments on websites, this national provision has gathered much attention. The increased transparency and scrutiny potentially subjects all healthcare providers that affiliate with physicians either as direct employees or contractors. Therefore, compliance departments should consider the new risks imposed by the transparency and create guidelines to address the disclosure requirements of the Sunshine Law.

Posted on: 9 Sep, 2011          under: Uncategorized

Uncertain About Predicting Medicare’s Recovery Audit Contractors Financial Impact? You Are Not Alone.

Bearing in mind the overall goal of reducing improper payments, coupled with uncertainty among providers about the extent of programmatic operations and audits, certain processes should be implemented now to protect both finances and rights.

According to the recent Government Accounting Office (GAO) Report, total Medicare Integrity Program funding increased from $832 million in FY 2006 to $1 billion in FY 2010. Because of its size and complexity, Medicare has been designated as a high-risk program since 1990. The impetus behind this increase is the President’s Accountable Government Initiative, which aims to reduce overall improper payments by $50 billion by the end of 2012. (GAO, Medicare Integrity Program: CMS Used Increased Funding for New Activities but Could Improve Measurement of Program Effectiveness, p. 1 (July 2011)).

One area related to Recovery Audit Contractor (RAC) audits that is cause for concern is RAC extrapolation. Extrapolation is the calculation of total overpayment demand by taking overpayment findings from a sample of a provider’s claims and applying it to all of a provider’s claims. Therefore, transforming an overpayment of a few thousand dollars into several hundred-thousand dollars and beyond. ‣ Read more…

Posted on: 3 Sep, 2011          under: Uncategorized