Practice Management Alert

Question: What are some areas my office can perform a self-audit on or otherwise focus on to make sure we’re pursuing the correct reimbursement for Medicare fee for service (FFS)?

Delaware Subscriber

Answer: You could look at the 2020 fiscal year report for improper payment rate from the Department of Health and Human Services (HHS), which was released in November 2020, to get some ideas on areas where other providers are messing up.

For FY 2020, there were several “primary causes” that affected the estimated Medicare FFS improper payment rate. Take a look at the percentages from Figure 7 in the report:

• Insufficient documentation: The agency highlights the perennial problems that insufficient documentation creates each year. Billing snafus arise when the documentation doesn’t support a higher-level code, the medical necessity of the higher code, or even the condition for the payment of the code. The overall impact of insufficient documentation was significant at a whopping 56.62 percent.
• Medical necessity: At 8.37 percent, medical necessity ranked as the second biggest factor adding to this year’s estimated FFS improper payment rate. “These errors occur when submitted medical records contain adequate documentation to make an informed decision that services billed were not medically necessary based upon Medicare coverage and payment policies,” explains the agency.
• Noncompliance: According to the estimates, 6.4 percent of the total improper payments are attributed to noncompliance problems. “If the documentation noncompliance errors were corrected, the government would have made the payment in the assigned amount,” the report says. “Therefore, it represents a ‘non-monetary loss’ to the government.”
• Incorrect coding: Annually on CMS’ naughty list, incorrect coding remains a major contributor with a 5.25 percent FFS error rate. When claims are submitted with the wrong code or list a provider who didn’t perform the service, this ratchets up the incorrect coding rates. In addition, unbundling services, putting the wrong site for a code, downcoding to a lower-level code, and upcoding to a higher-level code also increase this category’s numbers.
• No documentation: When Medicare providers ignore medical records requests or lack the necessary documentation to back up claims, this rate goes up. Approximately 4.42 percent of the estimated FFS improper payment rate was impacted by this issue.

Other: Some claims quandaries blur the lines between groups and accounted for 16.17 percent of the estimated Medicare FFS numbers. “These errors do not fit into the previous categories (e.g., duplicate payment error, non-covered or unallowable service, ineligible Medicare beneficiary, etc.),” the report maintains.

Remember, due to the public health emergency (PHE), some of the reporting mechanisms were temporarily paused.

Read the report here www.hhs.gov/sites/default/files/fy-2020-hhs-agency-financial-report.pdf and find out more information about the improper payment rate here www.cms.gov/newsroom/fact-sheets/2020-estimated-improper-payment-rates-centers-medicare-medicaid-services-cms-programs.