Life Science Compliance Update

December 07, 2016

Tips for Avoiding Claim Denials Related to ICD-10


On October 1, 2016, the ICD-10 coding grace period came to an end and physicians are no longer able to submit unspecified codes on certain Medicare claims. With the end of the grace period just behind us, it is too soon to tell whether it has led to an increase in post-payment audits or quality reporting errors, but it has been predicted that one or both of those will happen.

ICD-10 Coding Changes

The organized medical community protested the ICD-10 codes that are more numerous, longer and more exact than the ICD-9 code set they are replacing. The new codes extend to seven characters, with a category code of for the basic condition, followed by four more characters to indicate its etiology, location, and laterality, just to name a few.

CMS has claimed that the new codes will modernize patient care and research and work to prevent billing fraud.

Since October 1, 2015, providers have been given quite a bit of leeway from Centers for Medicare and Medicaid Services (CMS) on their ICD-10 claims. During the grace period, CMS did not reject claims solely on the basis of specificity, but did require claims to include a valid code from the correct ICD-10 family. For example, a claim for chronic gout would have been paid if the physician or coder at least gets the M1A part of the code right, but misses on the cause, body location, or tophus.

Slavitt’s Take

CMS Acting Administrator Andy Slavitt wrote a blog post on February 24, 2016, about the early results from the ICD-10 changeover. He noted that “the ICD-10 implementation had all the hallmarks of how CMS could drive a successful implementation and aim for excellence. The approach we took, which has become our doctrine for getting things done, had four major elements.” Those four elements were: (1) be customer focused; (2) be highly collaborative; (3) be responsive and accountable; and (4) be driven by metrics.

He included a chart showing the Final 2015 ICD-10 Claims Dashboard Medicare Fee-for-Service Metrics, as proof of how serious CMS is taking metrics.


Tips to Avoid Claim Denials

The following are some tips for physician practices to prepare and avoid claim denials:

  1. Be specific. Documentation is used for more than just billing. According to Ann Bina, vice president of compliance fulfillment at West Salem, Wisconsin’s Compliance Specialists, noted that “from a continuity of care and a risk management standpoint, documenting to the highest specificity is in the best interest of all providers.”
  2. Pay attention to trends in denials. Once we start seeing denial trends, they can be red flags and practices must make sure to keep an eye out for accounts receivable unpaid charges and denials to flag potential issues.
  3. Emphasize ICD-10 codes that focus on quality initiatives. Rhonda Buckholtz, vice president of strategic development at Salt Lake City’s AAPC, believes that it is particularly vital for practices to discuss and understand how to use codes to the highest level of specificity reporting co-morbid conditions when necessary for patients with complex care needs.

December 01, 2016

Price, Verma Picked for Top Trump Cabinet Slots


Ever since the election, there has been much hubbub about who President-Elect Donald Trump will choose to fill important cabinet positions in his administration. Step by step, we are slowly seeing the Cabinet be put together. Recently, Mr. Trump announced his picks for the head of Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS).

Health and Human Services

Georgia Representative Tom Price, an orthopedic surgeon, has been tapped by Mr. Trump to take the helm as Secretary of Health and Human Services. One of the main refrains we heard from Mr. Trump throughout the campaign was that he would “repeal and replace” the Affordable Care Act (ACA). While many have made similar calls, not many have actually drafted, let alone introduced, alternatives with which to “replace” the ACA.

Dr. Price has introduced bills that have offered detailed, comprehensive replacement plans in every Congress since 2009, when Democrats started their work on the ACA. During a 2009 debate, Dr. Price discussed a “stifling and oppressive federal government,” and his concerns that the ACA and other laws interferes with the ability of patients and doctors to make medical decisions.

The Empowering Patients First Act, legislation introduced by Dr. Price, would repeal the Affordable Care Act and offer age-adjusted tax credits for the purchase of individual and family health insurance policies. The bill would also create incentives for people to contribute to health savings accounts; offer grants to states to subsidize insurance for high-risk populations; allow insurers licensed in one state to sell policies to residents of others; and authorize business and professional groups to provide coverage to members through association health plans.

According to Michael C. Burgess, a Representative from Texas, believes Mr. Trump made a good choice, noting that, “the practicing physician and the patient could not have a better friend in that office than Tom Price.”  

Centers for Medicare and Medicaid Services

Reuters announced Mr. Trump’s selection for the administrator of CMS, Seema Verma, an Indiana health policy consultant. Ms. Verma would bring with her experience in implementing the ACA, working across the aisle, and working with Vice President-elect Mike Pence. She was the architect of the Healthy Indiana Plan, Indiana’s coverage expansion for low-income individuals.

The Healthy Indiana Plan is an interesting plan, as it was designed to appeal to both political parties. HIP 2.0 asks covered patients to make a small monthly payment in order to access their health insurance. If they miss a payment, it can result in a six-month lockout from insurance coverage. While those provisions are not allowed under traditional Medicaid, Indiana received a federal waiver to implement them. Now, other Republican-led states have contacted Verma’s consulting firm to help submit their own Medicaid expansion proposals to the federal government, to include more conservative provisions.

If confirmed by the senate, Ms. Verma would likely grant even more latitude to states in crafting their Medicaid programs, similar to the latitude she worked to get for Indiana.

Dr. Price and Ms. Verma still have to be confirmed by the Senate before officially taking office, but one can make some assumptions about priorities of each individual, as well as the administration overall, given their history.  

November 16, 2016

Congressional Leaders Question CMS Handling of Medicare Fraud


Leaders of three congressional committees have raised concerns about how the Centers for Medicare and Medicaid Services investigates Medicare fraud. Senator Orrin Hatch (chairman of the Senate Finance Committee), along with Representatives Kevin Brady, Fred Upton, Peter Roskam, Tim Murphy, Pet Tiberi, and Joseph Pitts (leaders on the Energy and Commerce and Ways and Means Committees) sent a letter to CMS Acting Administrator Andy Slavitt, taking issue with the way the agency investigates fraud claims.

The letter notes that the lawmakers support CMS’ efforts to implement the FPS, but that CMS may rely too heavily on an outdated “pay and chase” concept, despite efforts to move to a more preventative model. The congressmen note that it isn’t until the payments have already been made that CMS investigates claims – they would like to see the agency do more to prevent fraudulent payments from being made in the first place. “We remain concerned that in spite of the steps taken, CMS still relies too heavily on investigating claims after the payments have been made rather than preventing them in the first place.” Lawmakers noted that the top Medicare services affected by fraud include home health and hospice care.

Under the Small Business Jobs Act of 2010, CMS began to deploy a Fraud Prevention System [FPS], which the lawmakers note “uses predictive analytics to identify claims and providers that present a high fraud risk to the Medicare program." Even still, “improper payments remain an enormous problem” for Medicare. In the letter, the lawmakers cite data showing that in 2015, the Medicare Fee-for-Service Program had an error rate of 12.1 percent, or $43.3 billion in lost dollars. “Each dollar lost to fraud is a dollar that is not used to benefit patients,” the lawmakers noted. “This represents a significant burden on the program and taxpayers.”

During a hearing held by the House Ways and Means Oversight Subcommittee in late September, Chairman Peter Roskam noted, “[I]f we use better data analysis and predictive analytics – complex data can be used to identify fraud and improper payments faster. And that’s important not only to save taxpayer dollars, but to save patients who are being harmed by these criminals.” He took issue with the fact that not only may taxpayers be “footing the bill for unnecessary narcotics,” but also that “this also contributes to the country’s growing opioid and painkiller epidemic.”

In an effort to understand the work of CMS to implement the FPS, the lawmakers requested information about the types of schemes and impacted Medicare programs that have been identified for referrals for Zone Program Integrity Contractors (ZPICs), which were created to protect the Medicare program; the number of investigations that were conducted by ZPICs over the past three years; what types of edits and/or filters have been put into place as a result of the Fraud Prevention System in the past three years; the adjusted savings for FPS based on CMS-developed adjustment factors to identify amounts saved or returned to the Medicare trust fund; the total amount obligated over the past three years for FPS and the ZPICs; and a description of the process currently in place to monitor the effectiveness of the FPS models and how CMS verifies that the models are working as intended.


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