pwc and medical necessity issues and concerns emerging oig scrutiny on medical necessity; nearly 500...

PwC and Medical Necessity Issues and Concerns • Emerging OIG scrutiny on medical necessity; nearly 500 hospitals on national target list for Medicare compliance review • Significant RAC activity on medical necessity denials nationwide, with some regions more active than others • Increase in allowable medical record requests by RACs in each round • Increasing MAC pre- payment denials and sharing of info with RACs • Increasing commercial denials for medical necessity Who is PwC? Physicians Case managers Clinical documentation Coders, billers IT / IS support • Assess policies , procedures, process and practices • Evaluate limited sample of charts to confirm findings • Perform data analysis to identify areas of risk and potential financial impact Assess • Support compliance and investigation activities • UR and case management process redesign • UR and clinical documentation training • Observation billing training and redesign • Observation unit throughput redesign • Self-disclosure or other regulatory support Design and Implement • Periodic monitoring of KPI after baseline assessment • KPI and trend monitoring using SMART ® • IRO for corporate integrity agreements Monitor Why perform an assessment now? Validate that your process is working and your risk is minimal Compare yourself against leading practices and uncover potential risk Remediate risk that’s already been identified Uncover and remediate any issues before regulators ask the tough questions

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PwC and Medical NecessityIssues and Concerns

• Emerging OIG scrutiny on medical necessity; nearly 500 hospitals on national target list for Medicare compliance review

• Significant RAC activity on medical necessity denials nationwide, with some regions more active than others

• Increase in allowable medical record requests by RACs in each round

• Increasing MAC pre- payment denials and sharing of info with RACs

• Increasing commercial denials for medical necessity

Who is PwC? Physicians Case managers Clinical documentation Coders, billers IT / IS support

•Assess policies , procedures, process and practices

•Evaluate limited sample of charts to confirm findings

•Perform data analysis to identify areas of risk and potential financial impact

Assess

•Support compliance and investigation activities

•UR and case management process redesign

•UR and clinical documentation training

•Observation billing training and redesign

•Observation unit throughput redesign

•Self-disclosure or other regulatory support

Design and Implement

•Periodic monitoring of KPI after baseline assessment

•KPI and trend monitoring using SMART®

•IRO for corporate integrity agreements

Monitor

Why perform an assessment

now?

Validate that your process is

working and your risk is minimal

Compare yourself against leading practices and

uncover potential risk

Remediate risk that’s already been identified

Uncover and remediate any issues before

regulators ask the tough questions

Page 2: PwC and Medical Necessity Issues and Concerns Emerging OIG scrutiny on medical necessity; nearly 500 hospitals on national target list for Medicare compliance

• Inappropriate use of condition code 44

- Over use - after patient leaves or defaulting to admission

- Under use - not using condition code 44

- Failure to document MD consensus on status change

• Calculation of observation hours:

- Begins: when observation services start

- Ends: with physician discharge order

• Stays greater than 48 hours

• Coding errors

• Systems interfaces: generating a clean OBS bill, particularly after using condition code 44

• Inactive or underutilized utilization review function

• Policy to admit when in doubt and determine retrospectively

• Confusing or missing physician orders

• Lack of standard admissions criteria and tools

• No customization of tools

• Misuse of tools used to assess medical necessity

• Over-ride of screening tools, without supporting documentation

• Lack of consistent admission practices and processes

• No ability to admit outpatients to units

• Missing or incomplete documentation of real factors used to make patient status decision

• Missing or incomplete documentation of actual observation activities during stay

• Determination of patient status made in billing (e.g., was in bed, so it’s inpatient)

• Lack of controls or monitoring in place; no update process

• Case management coverage at points of entry or vacation/weekend backup plan

Advisory Proposal •

Common Pitfalls

Decision to admit Billing

For more information, please contact:

Ann Filiault, director, (518) 427-4501Laurie Smaldon, manager, (860) 241-7011

Ann Edwards, managing director, (617) 530-7634Sandy Fortney, RN, manager, (267) 330-2592

Deedie Root, RN, managing director, (713) 356-8532

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