The Coming Audit Storm

  Those of us on the Gulf Coast know that even on an otherwise beautiful, sunny day, complacency about the weather can be dangerous. With that, anyone who runs a business or owns a home near the coast is encouraged to have a “disaster-preparedness plan” in place in the event of an emergency. In developing such a plan, people are instructed to identify potential hazards, assess possible vulnerabilities that exist, and analyze the potential impacts of an emergency and the state of one’s business and/or home. Specific preparations are then expected to be enacted. This article intends to apply these concepts to the wound care clinician’s responsibility to have a preparedness plan in place in the event of an audit to safeguard against any financial and/or legal “disasters.”

Prepaing for ‘Disaster’

  We often speak figuratively of “storm clouds gathering” when we see problems developing within an industry. The various recoupment programs currently underway by Medicare through the Affordable Care Act (ACA) are an example of such a storm for the wound care industry. It will be very big, very protracted, and potentially very devastating for those who are unprepared. So, how do you get prepared for the impending storm of audits on the horizon? When a hurricane develops, some of the most valuable information is obtained from satellite images that allow us to track the trajectory of a storm in order to predict where it will make landfall. That “30,000-foot view” is critical to disaster preparedness. But how do you use that information to get your wound center, your private practice, or your hospital prepared for an audit?   As a compliance auditor, I am often asked to evaluate wound centers and physician’s practices to assess their risk for recoupment, should they be audited. Given the fact that the recoupment programs put into place by the ACA are vital to Medicare’s solvency, the question is not “If?” but “When?” will a wound center’s program be audited. Hospital and physician practices simply cannot afford to be unprepared. Most hospitals have formed Recovery Audit Contractor (RAC) committees to proactively seek out the areas in which they are at most risk for loss. Understandably, hospitals tend to focus attention on the services that have the highest collection ratio, and since many hospital administrators believe wound centers generate little revenue, they incorrectly perceive the risk of an audit occurring within these programs as “low.” Many wound centers do have unrealized revenue potential. However, the pitfalls that make billing wound care services properly so challenging are the very issues that could make a RAC audit more likely.   Remember, when you create a RAC audit plan, you are asking not just how you get paid but how you stay paid. This may be a shift in mindset for some clinicians who believe (for example) that if “Mr. Jones” needed his dressing changed twice per week, there was no reason not to see Mr. Jones twice per week as long as the services were coded properly and the claim was paid. However, the payer’s perspective is not the same as the clinician’s. Unless the documentation in Mr. Jones’ chart justifies the medical necessity of his frequent visits, those charges may not stand up to a RAC audit.

“Necessity & Staying Paid

  Failure to document medical necessity is likely to deal a serious blow to wound and hyperbaric oxygen therapy (HBOT) programs around the country as more complex reviews unfold. Hospitals performing internal audits often review documentation only to ensure that the correct billing codes are reported on a claim. Administrators often overlook the lack of supporting information that is equally necessary to justify medical necessity. Hospital auditing practices should mirror payers’ auditing practices when it comes to establishing medical necessity.   As an industry, wound care and HBOT medicine are made more vulnerable by the lack of well-written, nationally recognized standards of practice. We are thus more often at the mercy of regional Medicare intermediaries or private payer policy guidelines that are subject to frequent and seemingly random changes. The absence of clear national standards gives individual auditors even more discretion in how they interpret medical necessity. This is particularly true in HBOT. Electronic health records (EHRs) can help in establishing medical necessity because they can standardize certain documentation. Some physicians believe that “pasting” excerpts from practice guidelines (for example) will completely satisfy medical necessity requirements (eg, statements such as “hyperbaric oxygen therapy is beneficial in the management of failing flaps because of its ability to mitigate ischemic reperfusion injury”). However, what an auditor is looking for is why an intervention such as HBOT is warranted for the patient at that particular point in time. Pasting “cookie cutter” phrases into your EHR from practice guidelines may be a very useful tool, but will not provide sufficient substantiation unless the comments are linked to the details of this particular patient. As you evaluate potential vulnerabilities within your wound care center, ask yourself whether or not your HBOT charts sufficiently make the case for the medical necessity of the HBOT treatments that have been provided to each patient. Do your charts contain the supporting documentation that is needed (eg, bone scan results, operative reports, laboratory studies) and reflect the clinician has reviewed them?   Another area of potential vulnerability is debridement.   We know debridement services are on the RAC work plan because the Department of Justice published a report in 2007 detailing specific problems with these services. The unique rules that apply to hospital-based outpatient departments (HBODs) hold that hospital staffs provide services “incident to” the care of the advanced practitioner (eg, a physician). Although this is a shared encounter, the physician is responsible medically and legally for the care provided by all other clinicians, even though those caregivers are not always employed by the physician. (In this case the “incident to” rules apply only to the care provided by the physician and do not apply to the payment rules that operate in a physician’s private practice.) When the physician signs the chart in the outpatient wound center, he or she is also acknowledging the documentation of all the individuals in the chart and is attesting: 1) that he/she has read the chart and is familiar with its contents, and 2) he/she knows of the treatments performed and is responsible for the care provided by all staff. The EHR should not allow more than one chart to be signed at a time, and once the chart is signed by the advanced practitioner, it must be permanently saved in a manner that forbids subsequent alteration.   My audits of wound centers have shown the following areas of vulnerability with regard to debridement documentation: 1) nursing notes that aren’t in agreement with physician documentation, 2) numbers of debridement per wound/patient in excess of the limit set by the Medicare fiscal intermediary without medical documentation to support the medical necessity of these services, and 3) documentation that fails to support the level of debridement performed. Here is an example of this point: A nurse’s assessment states “75 percent of the wound has healthy granulation tissue” and a photo shows a clean wound. Then, the physician enters a debridement note documenting “debridement of 100 percent of the wound surface area to the level of muscle.” Clearly, there is a conflict with these statements. Rest assured that RAC auditors will look closely at whether the level of debridement described is logical based on all the assessments in the chart. Internal “disagreement” between staff member documentation, failure to provide documentation of medical necessity for debridement services, and incomplete documentation are the perfect storm for recoupment of debridement charges for both the hospital and the physician. It is likely that RAC audits will substantially impact wound centers and wound care physicians in this area. In other words, you can expect the storm to make landfall squarely in the area of debridement charges.

Devising Wound Center Plan

  A disaster preparedness plan focusing on establishing the medical necessity for wound center services might look like this:     • Potential vulnerability: Ask yourself whether your charts sufficiently make the case for the medical necessity of treatments like HBOT that have been provided to each patient. Ask yourself whether the frequency and type of your debridement charges exceed limits that might have been set by your Medicare fiscal intermediary and whether the documentation in your charts is internally consistent and defendable when examined in light of the depth of tissue exposed or the photos in the chart.     • Potential impact: Repayment of all services for which you cannot demonstrate medical necessity, which, in the case of HBOT or debridement services, could be significant for both the hospital and the physician.     • Specific preparation: Start now to determine how medical necessity for the most financially significant wound center services should be documented. Create reports that help evaluate the appropriateness of procedures such as debridement (eg, number of debridements per patient, depth in relation to wound stage). If you are using a wound care specific EHR, harness the EHR to create these reports for you and use them. Ensure your EHR does not allow staff members to alter documentation after the physician has signed off and that the charting of all staff members is in agreement.

How Payers See You

  In 1999, when HBODs were created, the Centers for Medicare and Medicaid Services (CMS) repurposed the physician Evaluation and Management (E/M) Codes for facility billing. CMS instructed all HBODs, including wound centers, to “develop a system for mapping the provided services furnished to the different levels of effort represented by the E/M codes.” CMS continues to allow each facility leeway to develop its own method of facility billing, but it has been very clear that it expects to see a “normal” (bell-shaped) distribution of charges across the five levels of service. (It is this distribution of charges that CMS is auditing.) Ask yourself, “What sort of activity would cause my program to come to the attention of an auditor?” The answer is: statistical anomalies in the distribution of charges over many visits. Nevertheless, hours of effort are expended by hospital auditors worrying about whether or not an individual encounter has been tabulated correctly, rather than the 30,000-foot view of whether the distribution of all E/M charges over the past year has created a pattern that would attract the notice of an auditor. At this point, RAC auditors haven’t been authorized by CMS to evaluate E/M codes at the individual-encounter level, only the facility’s distribution over all five.   It is, in fact, very difficult to develop a tool that can accurately represent the use of hospital resources, fit a unique clinical activity like a wound center, and produce a normal distribution across five different levels of service. That’s why CMS allows each hospital to develop its own system rather than mandating one. (In fact, in 2005 CMS decided to mandate facility billing by wound size, but retracted this proposal when it was demonstrated that such a system could not accurately represent staff resources.¹)   A wound center is vulnerable to a RAC audit over facility E/M visits if: 1) there’s no system for determining facility E/M visits, 2) it uses the physician E/M level of service to select the facility E/M level of service (amazingly, some clinics still do this, despite Federal Register instructions to develop a system to represent “hospital staff” work), 3) a paper audit tool is in use but there’s no compliance audit to ensure that what was “checked off” is actually documented in the chart, or 4) the “point spread” of the audit tool is manipulated in order to lower total point scores and allow for billing a higher level of service (thus destroying the normal distribution and skewing charges to higher levels of service). A disaster preparedness plan for your wound center facility E/M revenue might be as follows:     • Potential vulnerability: Ask yourself whether your facility E/M services during the past year (there is no reason to look at smaller periods of time) create a pattern that would raise a red flag for an audit.     • Potential impact: Repayment of all services in question, penalties, and possibly sanctions.     • Specific preparation: Allow the tool to fit the clinical operation. It will not be possible for a hospital to have a universal tool that works in all outpatient clinics.   If you want to survive the coming storm, you will need to know your business better than auditors do. Remember, the goal of disaster preparedness is to identify potential hazards, assess vulnerabilities, analyze potential impacts, and make specific preparations based on those assessments. After that, you can enjoy the good weather and not worry about those clouds on the horizon. Toni Turner is executive director at InRICH Advisors - Outpatient Auditing Group, The Woodlands, TX.

Reference

1. Fife CE, Walker D, Farrow W, Otto G. Wound center facility billing: a retrospective analysis of time, wound size, and acuity scoring for determining facility level of service. Ostomy Wound Manage. 53(1):34-44, 2007.