A few months ago the United States Government Accountability Office (GAO) released a report examining audit programs employed by the Centers for Medicare and Medicaid Services (CMS) and the contractors employed by the agency.
The study was commissioned by the Senate Finance Committee to…
- Examine the differences between prepayment and post payment reviews
- Study the focus of these reviews on particular types of claims
- Tally the Return on Investment comparing the cost of the review programs and the dollars those programs recoup
The findings, while not surprising, were nonetheless interesting. In our opinion, the findings also serve as a stark warning of what’s to come in the days ahead for all of us that bill to Medicare for ambulance transportation.
One dollar spent, $14 recovered
Forever, CMS has largely employed a model that we refer to as “Pay and Chase” when conducting claim audits.
This essentially means that Medicare in the form of the Medicare Administrative Contractors (MACs) paid ambulance claims submitted by EMS agencies and then later, after the check has been cashed, selectively and randomly reviewed representative samples of claims to determine if payments were properly allowed on those claims.
The inherent problem for CMS and the MACs is the release of the dollars to pay the claim even when potentially some claims should never have been paid. We talk in our EMS billing business about claim payment error rates and compliance statistics. Gradually, it all became a cumbersome and somewhat broken system where fraud and abuse of the Medicare system ratcheted up at an alarming pace.
In light of this fact, Congress urged CMS to gradually transition to the Pre-Payment Review model which requires the EMS agency selected for audit to justify the medical necessity and reasonableness of the ambulance transportation scenario before being paid.
A few years ago the government crowed that for every dollar spent on audit activities, the result was $8 recovered in incorrect payment recovery. That figure has now ratcheted up to $14 in improper payments recovered for every dollar paid.
The shift is a winner for CMS and Congress.
What’s it mean for EMS?
EMS billing typically works like this.
EMS crews daily respond to transport patients either in an emergency or non-emergency/routine setting. Following the incident, the EMS providers who make up the crew compile the events of the run and complete a Patient Care Report (PCR).
The PCR is reviewed and then released to the EMS billing office where the PCR is reviewed and a claim for payment to the most appropriate payer source is generated and delivered to the payer- be it Medicare, Medicaid, Commercial health or liability insurer or to the Patient direct.
Where Medicare is concerned, unless the transport is a special case scenario, only a digital data element including in large a procedure code and an ICD-10 diagnosis code is forwarded to the Medicare Administrative Contractor. It is implied that when that claim is submitted that the EMS billing office and the EMS agency represented has sufficient supporting documentation to back up the claim and prove without doubt that the patient required ambulance transportation such that transportation by any other means would endanger the patient.
The claim then is adjudicated and payment and/or denial, or request for additional information, is issued within a 14-day window.
Only when asked for, specifically by request, is the actual documentation reviewed by the MAC.
In a Pre-Payment audit scenario, the actual PCR documentation and any and all supporting pieces of information is required to be reviewed up-front before any payment is made. Now, instead of a nice, neat 14-day processing window the pre-pay audit can drag the initial claim adjudication out to 30-days and depending on further requests for information could even be longer.
For most EMS agencies, widening the 14-day window to even just a 30-day window puts a strain on operating balances and margins that literally could threaten the financial viability of many EMS agencies, especially small, rural entities. Plus, many of these audits can range across 90 days until either lifted or extended, depending on the audit findings.
In light of this growing shift toward the pre-payment audit climate, it is more important than ever that we all plan now!
EMS providers, sharpen your pencils and concentrate on writing the most definitive, detailed and precise PCRs you have ever written. It’s all about the detail and the goal is for the claim to be reviewed quickly and without creating further questions about the medical necessity and reasonableness of the trip.
EMS administrators, make a plan now. Increase your Quality Assurance and Compliance reviews. Hold education sessions to school your staff on documentation techniques that will meet the demand.
While there is no way to halt the government’s mandates, there certainly is a way to effectively prepare to be as compliant with the new mandates as we possibly can be to minimize the reach, scope and sheer numbers of these pre-payment mandates.
*This blog contains background information from “Understanding the GAO’s Recent Report on Medicare Prepayment and Postpayment Reviews” by Brian Werfel, 2016-06-01 the-aaa.org
The Ambulance Billing Services blog is brought to you as an educational tool by Enhanced Management Services, Inc. Enhanced Management Services, Inc. is an all-EMS third-party billing contractor serving Fire/EMS agencies across the United States. To learn more about who we are and what we do, please visit our website at www.enhancedms.com and click on the “Get Started” button on any landing page.