How to Survive a Medicare Outpatient Audit for Wound Care Services

  Since August 2000, the Centers for Medicare & Medicaid Services (CMS) have remained steadfast to their commitment to create and implement a multitude of regulatory requirements within the outpatient revenue cycle. Layers of complexity and rapid changes have come to characterize all outpatient reimbursement mechanisms to include Outpatient Code Edits (OCE), National Correct Coding Initiative edits (NCCI), and Local Coverage Determinations (LCDs).

  In addition, Medicare Administrative Contractors (MACs), Certified Error Rate Testing (CERT), Recovery Audit Contractors (RAC) and the Office of Inspector General (OIG) have set their sights to recoup overpayments based on contractor and facility billing and claim submission errors.

  In order to elevate revenue integrity for the submission of wound care claims, it is critical that all stakeholders understand the multiple levels of complexity involved. Begin with a process of either internal or external auditing functions to assess your current operational process and benchmark accuracy of claims submission.

Why Do I Need an Audit?

  Well, based on all the federal entities listed above, do you really need to ask! It is critical to perform a root cause analysis moving to an action plan for improvement within the revenue cycle. By starting with an audit, you will identify outpatient revenue dollars that may be weak and easily retrieved by federal entities.

Who Should Be Involved?

  Another good question! You certainly do not want to conduct audits in a vacuum or silo as this affects stakeholders throughout the entire revenue cycle process. A group of stakeholders may be involved with choosing the individual auditor or auditing firm based on qualifications and credentials to perform this project. This same group of stakeholders may decide the sample of outpatient wound care claims that should be audited. The same stakeholders may prepare the final results communiqué to include compliance, financial impact and coding accuracy. Examples of stakeholder involvement include, but are not limited to:
    1. Compliance Officer
    2. Internal and/or External Counsel
    3. Department Director/Management
    4.Health Information Management (HIM)
    5. Revenue Cycle Committee and Director
    6. Finance and Billing
    7. Physician Director
    8. Nursing Director

What Pieces of Information Do I Need for an Audit?

  A thorough audit will consist of a random sample of outpatient services (based on frequency or utilization) performed by the department. Some examples include hospital outpatient wound care department clinic visit levels, surgical debridement, biological and skin substitutes, active wound care and multi-layer compression system application. To complete the cycle from coding to claims submission, the following information is required for each date of service:

    1. Complete medical record documentation for date of service (DOS) – this includes physician orders, plan of care, and other ancillary tests;
    2. Charge tickets, encounter forms, superbills, if applicable;
    3. HIM coding summary, if applicable;
    4.Itemized Statement of Charges – the statement details facility services provided to the patient by outlining charges for procedures and tests; and
    5. Remittance Advice - Medicare Fee For Service (FFS) Contractors use notices called the remittance advice (RA) as a means to communicate claim-processing decisions such as payments, adjustments, and denials.

Are References Important During an Audit?

  In order for an audit to be successful for both the auditor and facility, utilizing a comprehensive set of reference tools is imperative. It is important to understand the DOS within the audit because references utilized must be pertinent to that time frame. Below is a sample list of relevant and compliant references you should have when undertaking an audit project:

    1. Coding manuals to include ICD-9-CM, CPT® and HCPCS;
    2. ICD-9-CM Official Guidelines for Coding and Reporting;
    3. Outpatient Prospective Payment System (OPPS) final rules;
    4. CPT® Assistant issues pertinent to the audit;
    5. Federal Register regulations;
    6. National Correct Coding Initiatives (NCCI) manual and edits;
    7. Outpatient Coding Edits (OCE);
    8. Medicare’s Internet-Only Manuals (IOM);
    9. Local Coverage Determinations (LCDs);
    10. National Coverage Determinations (NCDs); and
    11. Current and past CMS Program Transmittals and Medicare Learning Network articles

What Wound Care Areas Should be Audited?

  The focused audit can consist of high volume services performed in the department coupled with issues that federal entities deem problematic based on errors uncovered during a probe audit. For example, a list of possible areas of concern to audit is listed below:

  Facility Clinic Visit Criteria Reporting (CPT® codes 99201 – 99205, 99211 – 99215)
    1. Can the facility clinic visit level mapping system, along with a policy and procedure for the mapping system, be presented for the DOS audited?
    2. Is the clinic visit level mapping criteria consistently applied?
    3. Is documentation available and present in the medical record to support the reported clinic visit level?
    4. Is the hospital outpatient wound care department definition of new and established patients’ utilized and applied compliantly?
    5. How is modifier 25 applied and does supportive documentation exists within the medical record?

Surgical Debridement Reporting (CPT codes 11042 – 11047)

  1. Have the new 2011 CPT® code sets, along with documentation requirements, been appropriately implemented and mapped to charges?
  2. Does the medical record documentation support the LCD requirements as outlined by the current MAC? For example -
    A. Medical necessity of services
    B. Type of tissue removed along with wound size by width and length
    C. Instruments used
    D. Bleeding controlled
  3. Are modifier(s) appropriately applied?
  4. Can reported unit(s) be tied back to the medical record documentation?
  5. Are all services being charged accurately and consistently?
  6. If the service is denied, is the reason for the denial communicated back to the department?

ICD-9-CM Diagnosis Reporting

  1. Does the specificity of the diagnosis code assignment match the documentation within the medical record for DOS audited?
  2. Does the medical record documentation support the medical necessity LCD requirements as outlined by the current MAC?
  3. What type of documentation is utilized to assign ICD-9-CM diagnosis(es)?
  4. Are the patient’s chronic conditions assigned to assist with medical necessity justification and to predict the patient’s ability to heal?
  5. Who is providing the ICD-9-CM code selection function in your facility and is it the optimal approach?

Skin Substitutes

  1. Since LCDs dictate the circumstances in which payment for services are covered, is there a clear understanding of the medical necessity of such services by physicians, nurses and HIM professionals?
  2. Is waste documentation captured appropriately in the medical record?
  3. Can reported unit(s) be tied back to the medical record documentation?
  4. Does the medical record documentation support the LCD requirements as outlined by the current MAC?
  5. Did the MAC deny or pay the claim?
  6. Are modifiers (JC, JD, JW, KX) being appended appropriately based on the requirements of the LCD?

Conclusion

  The legal and financial ramifications caused by erroneous CPT® and ICD-9-CM coding, insufficient documentation, disconnects with charging, and unreliable claims submission for wound care services are the responsibility of everyone involved in your revenue cycle. Thwart the RAC, CERT, MAC or OIG by conducting your first or subsequent audits to assess your department’s outpatient revenue cycle function. Audits will help ensure the department’s entitled and legitimate revenue is based on accurate coding, reliable transfer of data, complete documentation and compliant claims submission.

  Hospital-based outpatient wound care departments may consider beginning with a “SWOT” (Strengths, Weaknesses, Opportunities and Threats) team approach to tackle this type of extensive project. Developing a SWOT list with the appropriate team members will ensure that you have designed a formidable execution plan. The plan should include: implementation schedule; project management; financial analysis; and resource allocation.

  Following a dedicated audit and the SWOT approach, hospital-based outpatient wound care departments will be able to plot out strategies for coping with the positive and negative financial impact and operational challenges posed by the result of the audit.

Andrea Clark, RHIA, CCS, CPCH is President and AHIMA Certified ICD-10-CM/PCS Trainer at Health Revenue Assurance Associates, Inc. in Plantation, FL. For more information she can be reached at aclark@healthrevenue.com.

Reference

1. CPT is a registered trademark of the American Medical Association.