The Age of Audits. The Age of Audits Optometry has never been targeted has that changed? What would you do??? The Age of Audits DISCLAIMER

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1 Is this the Golden Age of audits? Joe W DeLoach, OD, FAAO CEO, Optometric Business Solutions Optometry has never been targeted has that changed? If you are filing claims, you are a target! DISCLAIMER I am CEO of Optometric Business Solutions. I have no financial interest in the company but this lecture does reference training products available from OBS. What Has Changed? First and foremost if you hadn t heard, the government IS broke and looking for money! Health care reform major emphasis on ABUSE and especialy FRAUD Change in False Claim Statute language from knows or has reason to know to knows or should know Qui Tam The Whistleblower Act CMS new audit program Predictive Analysis The governments point of view Imagine you re broke, you need money, your system is under scrutiny because it loses more and more money And then you are presented with an investment opportunity with a historical 50:1 return on investment. What would you do??? Remeber the RACs? Ooooh they were mean. How did they do? July 2014 RACs announce they recouped $2 BILLION in 2013 WOO-HOO!! And the OIG said 1

2 And why??? $64 BILLION 96% Left on the table Per CERT 2013 Results Improper Payment Rates Projected amount overpaid to optometry (examination services only) $57,875,452 THINK THEY MAY WANT IT BACK??? HERE is the problem What We Have All Done Wrong Too much CE on making money Too much CE on turning medical Too much CE on making sure you have an allowable diagnosis Not enough CE on medical necessity, reason for the visit, record documentation and coding ethics OUCH but true! Per CERT 2013 Results Improper Payment Rates Projected amount overpaid to optometrists for diagnostic testing $114,388,586 THINK THEY MAY WANT IT BACK??? HERE is the problem And the result of our mis-guidance has been Estimated 2012 audit repayments from optometry $28.5 MILLION Whether you know it or not, believe it or not most of you in this room are next in line over the next three years! Per CERT 2013 Results Improper Payment Rates Projected amount overpaid to optometry for DME $3,491,580 THINK THEY MAY WANT IT BACK??? HERE is the problem 2

3 That s $175 MILLION DOLLARS Medicare alone thinks they overpaid you! And you don t think they are looking at your stuff?? Still not worried? STILL??? 2104 Office of Inspector General Work Plan Investigate questionable billing practices by ophthalmologists Increase activities involving predictive analysis for reducing improper payments to physicians (more later!) Increase protection of fraud and abuse Whistleblowers Significant increase in resources to support the Health Care Fraud Prevention and Enforcement Action Team of 2009 And CERT tells us why! #1 Insufficient documentation (65.5%) #2 Incorrect coding (25.7%) #3 NO documentation (4.3%) #4 Lack of medical necessity (3.6%) 70% Of denials are based on medical record documentation issues Reasons for Overpayment 2015 Plan Just Released 77 count them 77 health care items Fraud and abuse cited by the OIG as THE number one concern in health care today Listening? Not the uninsured, not the ACA, not Medicaid expansion IT IS DOCTORS, INCLUDING OPTOMETRISTS, ABUSING HEALTH CARE REIMBURSEMENT! Still not worried??? 2104 Office of Inspector Work Plan Investigate inappropriate payment / abuse in the use of Evaluation and Management (99200) codes Investigate effective measures to evaluate and recoup Medicare overpayments Investigate methods to better evaluate physician medical records due to significant evidence that providers are not documenting adequate medical necessity Excessive nursing home care services Non-compliance with CLIA Contractor performance issues Reducing costs for DME Recovering Medicaid overpayments Increasing Medicaid Fraud Control Units Increase Senior Medicare Patrol projects 2015 OIG Plan 3

4 Increase investigation of ophthalmologists for inappropriate and questionable billing practices AND. Auditing is VERY good business! Auditing has become one of our most profitable lines of business Medical Director, Aetna 2012 Take home message 1. Medicare 2. Aetna 3. VSP 4. BCBS 5. EyeMed One of the biggest optometric stings in Auditing (term used loosely) medically necessary contact lens billings In order the culprits Why are our colleagues getting violated by vision and medical audits? What Did OBS Training Audits in 2013 Reveal After evaluating THOUSANDS of patient encounters: Average payback on mini audit (25 records) - $1, Average 5-year recoupment penalty - $397, THE HISTORICAL PROBLEM WITH CODING AND DOCUMENTATION INFORMATION TRUTH!! (BLURRED TRUTH) 4

5 Too much opinion Too much someone else said so To little information based on regional payment policies Experts don t do it Experts don t audit Biggest problems. How Payers Conduct Audits The breadth of this topic is far too big for this course. WITHOUT A DOUBT, almost every payer has stepped up their audit/recovery game The bottom line is you need to familiarize yourself with the records documentation requirements and the audit procedures of every payer you do business with. What Triggers an Audit Specialization Success (The Ladder Principle ) Repetition High utilization of single codes Billing codes not commonly used by the majority of your colleagues Billing codes at a higher percentage rate than the majority of your colleagues None inherently wrong, but In General Two Types of Audits Pre-Payment ( Guilty until proven innocent ) RAC (Recovery Audit Contractor) contracted agent reviews claim based on statistical analysis of billing patterns ( predictive analysis ) Post-Payment ( Pay and chase ) Medical Review review of medical record to evaluate if documentation justifies medical necessity Important point Number 1 reason you will be audited BILLING AND CODING PRACTICES Number 1 reason you will LOSE an audit POOR MEDICAL RECORDS DOCUMENTATION Circa 2014 and Forward The Pre-Payment Audit ( Predictive Analysis ) will rule the recapture reimbursement market Your money will be withheld and your only way to get it will be presenting a medical record that justifies what you did 5

6 Prepayment payor review Prepayment RAC review A Bit More Complex In Medicare Doctor provides service to patient Doctor files claim to Medicare Claim Denied Post -payment payor review Post-payment RAC review 80% of pretty lousy fee paid to doctor Payor focused audit CERT, ZPIC audit What OBS has now 1. Extensive, mean, ugly, leave no stone unturned training audits 2. Comprehensive billing services 3. Comprehensive program to train your staff to become experts Audit Defense The best defense is always a great offense! Keep exquisite medical records Know your payor rules and policies (remember they are REGIONAL!!) Keep updated by signing up for payer website listserves and newsletters Thank you Sleep Well Audit Defense - Two New Tools Training audits (now Federal mandate under Fraud and Abuse Compliance) If you do not have exquisite expertise in billing, coding and payer rules, consider Outsourcing billing services to professionals or Find someone to train your staff how to do this correctly 6