Tag: Office of Inspector General (OIG)

HHS OIG Issues Proposed AKS Safe Harbor Rule

On Thursday, October 17, 2019, the HHS Office of the Inspector General (OIG) issued a proposed rule titled “Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalties Regarding Beneficiary Inducements.”  The proposed rule would amend the existing safe harbors to the Federal Anti-Kickback Statute (AKS) and the civil monetary penalty rules (CMPs).  These changes are part of HHS’ Regulatory Sprint to Coordinated Care.  The stated purpose of these changes is to reduce the regulatory barriers and accelerate the transformation of the healthcare system away from the traditional fee-for-service payment model, and towards a value-based system that rewards healthcare providers for better outcomes.  The proposed rule can be viewed in its entirety at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22027.pdf.

The proposed rule makes nearly a dozen major changes to the safe harbors under the AKS and the rules related to CMPs.  Among these are revisions to the recently created safe harbor for local transportation.  The proposed change to the safe harbor for free or discounted local transportation is discussed in greater detail below.

The OIG is soliciting comments on a wide range of topics raised in the proposed rule. The AAA is not taking any formal position with respect to the proposed changes or the requests for additional information set forth in this proposed rule.  However, we encourage any member that wishes to comment to do so. 

To be considered, comments must be submitted no later than 5 p.m. on December 31, 2019.  Comments may be submitted electronically by going to: http://www.regulations.gov. Commenters would then need to click the link for “Submit a comment” and follow the instructions from there.  Comments may also be submitted by courier or by regular, express, or overnight mail to the following address: Office of Inspector General, Department of Health and Human Services, Attention: OIG-0936-AA10-P, Room 5521, Cohen Building, 330 Independence Avenue SW, Washington, DC 20201.

Revisions to Safe Harbor for Free or Local Transportation

In 2014, the OIG created a new safe harbor for free or discounted local transportation provided to Federal health care program beneficiaries. This safe harbor applied to non-ambulance transportation (e.g., wheelchair van, bus and shuttle services, taxis, etc.) provided under the following conditions:

  1. The free or discounted transportation was provided by an “Eligible Entity.” For these purposes, an “Eligible Entity” is any individual or entity, other than individuals or entities (or family members or others acting on their behalf) that primarily supply health care items;
  2. The free or discounted transportation was provided pursuant to an existing policy of the Eligible Entity, and which is applied in a uniform and consistent manner;
  3. The transportation services are not air, luxury, or ambulance transportation;
  4. The Eligible Entity does not publicly market or advertise the free or discounted local transportation services, and no cross-marketing of other health care services occurs during the course of transportation, or at any time by the drivers providing such transportation. In addition, the drivers and anyone arranging the transportation cannot be paid on a per-beneficiary-transported basis;
  5. The transportation services are limited only to “established patients” of the Eligible Entity; and
  6. The transportation is limited to 25 miles in urban areas, or 50 miles in rural areas.

 The safe harbor also permitted the use of “shuttle services” (i.e., a vehicle that runs on a set route, on a set schedule) if the following conditions are met:

  1. The shuttle service is not air, luxury, or ambulance-level transportation;
  2. The shuttle service is not marketed or advertised, and no cross-marketing occurs during the transportation, or at any time by the driver providing such transportation. In addition, the driver and anyone else arranging the transportation cannot be paid on a per-beneficiary-transported basis;
  3. The shuttle services has no stop that is more than 25 miles from any stop on the route where health care items or services are provided, except that this mileage restriction is expanded to 50 miles in rural areas.

In either situation, the safe harbor also requires the Eligible Entity to bear all costs of furnishing such transportation, i.e., they cannot shift that cost onto any Federal health care program, any other payer, or the individual.

In the current proposed rule, the OIG indicated that it received numerous comments from stakeholders that suggested that the 50-mile limit for residents of rural areas was insufficient, as many rural residents might need to routinely travel more than 50 miles to obtain certain medical services.  As a result, the OIG is proposing to expand this limit to 75 miles.

The OIG is also soliciting comments on whether the proposed 75-mile is sufficient, or whether an even larger expansion is warranted.  To the extent you intend to submit comments arguing for a greater mileage limit, the OIG is asking that you submit data or other evidence to support a more appropriate mileage limitation for the safe harbor.  The OIG is also specifically requesting information on how an Eligible Entity would provide transportation over distances in excess of 50 miles (e.g., shuttle services, bus or taxi fare, ride-sharing programs, mileage reimbursement programs, etc.).

Expansion of Safe Harbor for Transportation of Patients Being Discharged After an Inpatient Stay

The OIG is also proposing to eliminate any mileage restriction on transportation of patients back to their residence after being discharged from a facility where that patient had been admitted as an inpatient, regardless of whether the patient resides in an urban or rural area.  The OIG is also proposing to eliminate the mileage restrictions on discharges to another residence of the patient’s choice (such as a friend or relative who will care for the patient post-discharge).

The OIG further indicated that it is considering protecting transportation to other locations of the patient’s choice, including another health care facility.  The OIG is soliciting comments on the potential fraud and abuse risks associated with permitting free or discounted transportation to other health care facilities, and whether transportation should be protected (and, if so, under what circumstances) when the patient has not previously been admitted to an inpatient facility (e.g., where the patient had been seen as an outpatient in a hospital emergency department).  Finally, the OIG is soliciting comments on whether the transportation of patients being discharged beyond the applicable safe harbor mileage limitations should be limited to patients with demonstrated financial or transportation needs, and, if so, what standards should apply to such demonstration of need.

Possible Expansion to Include Transportation to Non-Medical Services

In the 2014 final rule creating the new safe harbor for local transportation, the OIG declined to extend the safe harbor protections to transportation for purposes other than obtaining medically necessary services or items (although they permitted a qualifying shuttle service to make stops at locations that do not relate to a particular patient’s medical needs).  The OIG has since received numerous comments suggesting that the safe harbor should protect transportation for non-medical purposes that may nevertheless improve or maintain health, e.g., transportation to food banks, social services, exercise facilities, support groups, etc.  The OIG indicated that it considering a further expansion of the safe harbor to include such non-medical needs, and is therefore seeking comments on how the safe harbor could be expanded to such needs without creating an unacceptable risk of fraud and abuse. 

 Clarification of Policy Regarding the Use of Ride-Sharing Services

 Finally, the OIG is clarifying its interpretation of the applicability of the existing safe harbor to the use of ride-sharing services.  In the preamble to the 2014 final rule, the OIG discussed the possibility that patient transportation might be provided via taxi.  In the proposed rule, the OIG indicates that, while it did not explicitly reference ride-sharing services, it views these services are being similar to taxi services for the purposes of the safe harbor.  Specifically, the OIG noted that nothing in the language of the safe harbor expressly precludes their use (or the use of self-driving cars or other similar technology that may become available at some point in the future).  The OIG is inviting anyone that disagrees with this approach to explain the possible basis for exclusion of ride-sharing services.

The OIG did reiterate that the prohibition of the marketing of such free or discounted transportation would still apply.  The OIG indicated that it would be permissible for ride-sharing services to advertise that they provide transportation to medical appointments, and to recommend that patients contact their medical providers to determine if they qualified for free or discounted transportation.  By contrast, the OIG indicated that it would not be appropriate for the ride-sharing service to advertise that it provided free or discounted transportation to particular health care providers.

Other Changes in the Proposed Rule

 In addition to the revisions to the existing safe harbor for free or discounted transportation, the OIG is proposing:

  1. The creation of three new safe harbors for participants in value-based arrangements that promote better coordinated and managed patient care. These include: (i) a safe harbor for Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency, (ii) Value-Based Arrangements with Substantial Downside Financial Risk, and (iii) Value-Based Arrangements with Full Financial Risk.
  2. The creation of a new safe harbor for certain tools and support furnished to patients to improve quality, health outcomes, and efficiency.
  3. The creation of a new safe harbor for remuneration provided in connection with CMS-sponsored models. The purpose of this new safe harbor is to eliminate the need for the OIG and CMS to issue model-specific waivers.
  4. The creation of a new safe harbor for donations of cybersecurity technology and services.
  5. Proposed modifications to the existing safe harbor for electronic health records items and services.
  6. Proposed modifications to the existing safe harbor for personal services and management contractors, in order to add flexibility with respect to outcomes-based payments and part-time arrangements.
  7. Proposed modifications to the existing safe harbor for warranties, to better address bundled warranties covering multiple health care items or services.
  8. The codification of the existing statutory exception for ACO Beneficiary Incentive Programs under the Medicare Shared Savings Program.
  9. A proposed amendment to the definition of “remuneration” under the CMP rules for certain telehealth technologies furnished to in-home dialysis patients.

New SNF Consolidated Billing Edits: FAQs

On April 1, 2019, CMS implemented a new series of Common Working File (CWF) edits that it stated would better identify ground ambulance transports that were furnished in connection with an outpatient hospital service that would be bundled to the skilled nursing facility (SNF) under the SNF Consolidated Billing regime.

Unfortunately, the implementation of these new edits has been anything but seamless. Over the past few weeks, I have received numerous phone calls, texts, and emails from AAA members reporting an increase in the number of Medicare claims being denied for SNF Consolidated Billing.

This FAQ will try to explain why you may be seeing these denials.  I will also try to provide some practical solutions that can: (1) reduce the number of claims denied by the edits and (2) help you collect from the SNFs, when necessary.

Please note that, at the present time, there is no perfect solution to this issue, i.e., there is nothing that you can do to completely eliminate these claim denials.  The solutions discussed herein are intended only to minimize the disruption to your operations caused by these denials.  

I am new to Medicare ambulance billing. Can you explain what the SNF Consolidated Billing regime is, and how it operates?

Under the SNF Consolidated Billing regime, SNFs are paid a per diem, case-mix-adjusted amount that is intended to cover all costs incurred on behalf of their residents.  Federal regulations further provide that the SNF’s per diem payment generally the cost of all health care provided during the beneficiary’s Part A stay, whether provided by the SNF directly, or by a third-party.  This also includes the majority of medically necessary ambulance transportation provided during that period.  For these purposes, the “Part A Period” refers to the first 100 days of a qualified SNF stay.

However, medically necessary ambulance transportation is exempted from SNF Consolidated Billing (referred to hereafter as “SNF PPS”) in certain situations.  This includes medically necessary ambulance transportation to and from a Medicare-enrolled dialysis provider (whether free-standing or hospital-based).  Also excluded are ambulance transportations:

  • To an SNF for an initial admission;
  • From the SNF to the patient’s residence for a final discharge (assuming the patient does not return to that SNF on the same day);
  • To and from a hospital for an inpatient admission;
  • To and from a hospital for certain outpatient procedures, including, without limitation, emergency room visits, cardiac catheterizations, CT scans, MRIs, certain types of ambulatory surgery, angiographies (including PEG tube procedures), lymphatic and venous procedures, and radiation therapy.

For a fuller description of the SNF Consolidated Billing Regime, including a discussion of when ambulance services may be separately payable by Medicare Part B, I encourage members to consult the AAA Medicare Reference Manual.

Purchase the 2019 Medicare Reference Manual

Can you explain what prompted CMS to implement these new edits? 

In 2017, the HHS Office of the Inspector General conducted an investigation of ground ambulance claims that were furnished to Medicare beneficiaries during the first 100 days of a skilled nursing home (SNF) stay. The OIG’s investigation consisted of a review of all SNF beneficiary days from July 1, 2014 through June 30, 2016 to determine whether the beneficiary day contained a ground ambulance claim line. The OIG excluded beneficiary days where the only ambulance claim line related to: (1) certain emergency or intensive outpatient hospital services or (2) dialysis services, as such ambulance transportation would be excluded from SNF Consolidated Billing.

The OIG determined that there were 58,006 qualifying beneficiary days during this period, corresponding to $25.3 million in Medicare payments to ambulance suppliers. The OIG then selected a random sample of 100 beneficiary days for review.  The OIG determined that 78 of these 100 beneficiary days contained an overpayment for the associated ambulance claims, as the services the beneficiary received did not suspend or end their SNF resident status, nor was the transport for dialysis. The OIG determined that ambulance providers were overpaid a total of $41,456 for these ambulance transports.  The OIG further determined that beneficiaries (or their secondary insurances) incurred an additional $10,723 in incorrect coinsurance and deductibles. Based on the results of its review, the OIG estimates that Medicare made a total of $19.9 million in Part B overpayments to ambulance suppliers for transports that should have been bundled to the SNFs under SNF Consolidated Billing regime.  The OIG estimated that beneficiaries (and their secondary insurances) incurred an additional $5.2 million in coinsurance and deductibles related to these incorrect payments.

The OIG concluded that the existing edits were inadequate to identify ambulance claims for services associated with hospital outpatient services that did not suspend or end the beneficiary’s SNF resident status, and which were not related to dialysis. The OIG recommended that CMS implement additional edits to identify such ambulance claims.

The OIG’s report prompted CMS to issue Transmittal 2176 in November 2018.  This transmittal instructed the CWF Maintainer and the Medicare Administrative Contractors (MACs) to implement a new series of edits, effective April 1, 2019.

Can you provide a simple overview of how these new CWF edits operate?

Before we turn to the new edits, I think it is important to understand that CMS has had long-standing edits to identify outpatient hospital services that should be bundled to the SNF under SNF PPS.  These edits work by comparing the Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) codes on the outpatient hospital claim to applicable lists of excluded codes.  To the extent the HCPCS or CPT code appears on the applicable list of excluded codes, the outpatient hospital claim will bypass the edit for SNF PPS, and be separately payable by the MAC.  To the extent the HCPCS or CPT code on the outpatient hospital claim does not appear on the applicable list of excluded codes, the claim will be denied as the responsibility of the SNF.  The new CWF edits for ambulance claims simply extend the existing process one step further, i.e., they compare the ambulance claim to the associated hospital claim.

Conceptually, the new edits “staple” the ambulance claim to the outpatient hospital claim, with our coverage piggybacked on whether the outpatient hospital claim is determined to be bundled or unbundled.

How would I identify a claim that is denied for SNF Consolidated Billing?

Typically, the denial will be evidenced by a Claim Adjustment Reason Code on the Medicare Remittance Advice.  The denial will typically appear as an “OA-190” code, with the following additional explanation: “Payment is included in the allowance for a Skilled Nursing Facility (SNF) qualified stay.  The “OA” stands for “Other Adjustment,” and is intended to notify you that the SNF is the correct payer.  Note: in some instances, the denial may appear as “CO-190” on the remittance advice.  However, the effect of the denial is the same, i.e., they are indicating that the SNF is financially responsible for payment.

Frequently, the denial will be accompanied by Remittance Advice Remark Code “N106,” which indicates “Payment for services furnished to Skilled Nursing Facility (SNF) inpatients (except for excluded services) can only be made to the SNF.  You must request payment from the SNF rather than the patient for this service.”

I have heard you refer to the new CWF edits as over-inclusive.  What do you mean by that?

When CMS elects to implement a new edit to the CWF, it has to make some decisions on how to structure the edit.  Two typical decisions that must be made are:

  1. Will the edit be conditional based on the submission of other Medicare claims? And
  2. Is the edit designed to be under- or over-inclusive?

For these purposes, a conditional edit is one where the coverage or lack of coverage depends, in part, on the claims submitted by other health care providers that furnished services to the same beneficiary (typically on the same date).  As you are probably aware, the Medicare rules for all Part B payments prohibit payment whenever the service has been paid for, directly or indirectly, under Medicare Part A.  Thus, all edits for hospital and SNF bundling are conditioned, in part, on the patient’s Part A inpatient status at the time of transport.

By contrast, an unconditional edit is one that operates the same regardless of other types of claims for the same patient.  For example, with respect to ambulance claims, the MACs medical necessity edits are unconditional, i.e., they apply to all ambulance claims, regardless of the patient’s inpatient status at a Part A facility.  The edits for origin/destination modifiers are another example of an edit that is typically unconditional.

In addition, CMS has to decide whether to make an edit under- or over-inclusive.  This is because no edit can be perfectly tailored to be applied to all qualifying claims, but no non-qualifying claims.  An “underinclusive” edit is one that is designed to identify the majority – – but not all – – of the claims that should be denied based on the edit criteria.  By contrast, an “overinclusive” edit is one that would deny not only all of the qualifying claims, but also some non-qualifying claims.

In many instances related to EMS coverage, the underlying facts and circumstances of the transport are ultimately what determines the coverage.  It is frequently difficult – – if not impossible – – to fully describe these circumstances with enough specificity on the electronic claim for CMS to perfectly apply its edits.  For that reason, CMS has historically elected to design its ambulance edits to be underinclusive.

Unfortunately, the new SNF edits are both conditional AND overinclusive.  To further complicate matters, they are not only conditioned on the claim of a single Part A provider, but two separate Part A providers, i.e., in order for the new edits to work properly, CMS is reliant upon information from both the SNF and the hospital to properly apply its new edits.

I recently received a denial for an emergency transport from an SNF to the hospital for an emergency room visit.  I thought emergency ambulance transports were excluded from SNF PPS?

They are. The denial was likely the result of your claim being submitted prior to Medicare’s receipt of the associated outpatient hospital claim.

As noted above, the new edits are both conditional and overinclusive.  In this context, they are designed to deny the ambulance claim UNLESS there is a hospital outpatient claim for that same patient with the same date of service.  If there is no hospital outpatient claim on file when your ambulance claim hits the system, the edit indicates that the MAC should deny your claim for SNF PPS.

OK, that makes some sense.  Does that mean I have to appeal the denial?

In theory, no.  The instructions in Transmittal 2176 make clear that the CWF should “adjust” the ambulance claim upon receipt of the associated hospital claim.  For these purposes, that adjustment should take the form of re-processing the ambulance claim through the edits to compare it to the associated hospital claim, and to bypass the new CWF edits if the hospital claim contains an excluded code.

However, there is no timeframe for how quickly these adjustments should take place.  Most ambulance providers are reporting that they are seeing few, if any claims, being reprocessed.

I submitted several claims without knowing the patient was in the Part A Period of an SNF stay.  These claims were initially paid, but a few days later, I received a recoupment request from the MAC indicating that the claim was the responsibility of the SNF under SNF PPS. 

As noted above, the edits were designed to deny claims to the extent CMS was unable to determine whether they should be bundled to the SNF, i.e., to deny if the associated hospital claim was not already in the system.  Therefore, in theory, it should be impossible for the ambulance provider to receive a payment and then a recoupment for SNF PPS.

I suspect the situation described above is one where the ambulance claim is submitted prior to CMS’ receipt of the associated SNF claim for the patient.  As noted above, in order for the edits to work properly, both the associated hospital and SNF claims must be in the system.  While CMS clearly contemplated the possibility that the ambulance claim might be submitted prior to the associated hospital claim, they do not appear to have considered the possibility that the ambulance claim might beat the associated SNF claim into the system.

When that happens, there is nothing in the CWF to indicate that the patient was in a Part A SNF Stay.  As a result, the claim bypasses these new edits entirely, and frequently ends up being paid by the MAC.  I suspect what happens next is that the SNF claim hits the system, and triggers CMS to automatically recoup the payment for the ambulance claim.

What should happen at that point is the ambulance claim should then be run through the new edits.  If the hospital claim is already in the system, the ambulance claim gets “stapled” to that claim, and then either passes the edit or gets denied based on the information on the hospital claim.  If the hospital claim is not in the system, the ambulance provider gets the “interim” denial discussed above, and the claim should be further adjusted if and when the hospital claim is submitted.

However, at this point, it is entirely possible that these claims are not being put through the edit.  The AAA has asked CMS to look into whether the new edits are working as intended in these situations.

This sounds like a complete mess:  

Not really a question, but you are not wrong.

This sounds extremely complicated.  Is there anything I can do to reduce the possibility that my claims get denied?

I think it is important to distinguish between: (1) denials that are correct based on the HCPCS or CPT codes on the associated hospital claim and (2) denials that are based solely on the timing of your claim, i.e., denials based on your claim being submitted prior to the submission of the associated hospital claim.  For these purposes, I will refer to the latter category as “interim denials.”

At the onset, I think all members should recognize that there is nothing you can do to eliminate denials for claims that are properly bundled to the SNF based on the HCPCS or CPT codes on the associated hospital claim.

For numerous reasons, I think the proper focus should be on reducing the interim denials.  First and foremost, the difficulty with an interim denial is that you don’t know whether that denial will ultimately prove to be correct, or whether the claim will ultimately be reprocessed and paid by the MAC.  Second, even if the claim will be reprocessed, there currently appears to be a significant delay in “when” that reprocessing takes place.  Finally, without knowing whether the claim will be reprocessed (and whether that reprocessing will result in a payment), you can’t know whether you should be billing the SNF.

What information would be helpful in reducing these interim denials?

You would need to know the following data points prior to the submission of your claim:

  1. Whether the patient was in a Part A SNF Stay on the date of transport?
  2. What was the specific procedure/service the patient received at the hospital?

If you knew with certainty that the patient was not in the Part A Period of their SNF stay, you would know that the new edits would be inapplicable to your claim, and you could submit it to Medicare as part of your normal billing workflow.

If you also knew the specific procedure/service the patient received at the hospital, you would also be in a position to know whether the service was the financial responsibility of the SNF, assuming the patient was in the Part A Period.  When you know the claim is the financial responsibility of the SNF, you could then immediately invoice the claim to the SNF.  If your arrangement with the SNF requires you to first obtain a Medicare denial, you would also have the option of submitting the claim and getting the proper OA-190 denial, and then invoicing the SNF. Note: in these situations, you would receive the oA-190 denial regardless of whether your claim was submitted prior to the hospital claim.

By contrast, when you know the patient is in the Part A Period AND the procedure/service is one that would be excluded from SNF PPS, you can avoid the interim denial by ensuring that your claim is not submitted until after the associated hospital claim. In other words, this is a situation where holding your claim for a reasonable period of time might be beneficial.

We currently ask the SNF to provide information on the patient’s Part A status.  However, they frequently tell us that they don’t know, or that we are not entitled to this information.  What can we do?

First, they are absolutely permitted to share this information with you.  Both you and the SNF are “covered entities” under the HIPAA Privacy Rule.  In this instance, information on the patient’s Part A status would be helpful to you in managing your payment practices.  The regulations at 45 C.F.R. 164.506(c)(3) permit one covered entity to share protected health information with another covered entity for the payment activities of that entity.

However, it is important to note that, while the SNF may share that information with you, the Privacy Rule does not require them to provide you with this information absent a written authorization from the patient.

This information is critical to navigating the new edits.  If you haven’t been asking for it up until this point, I would strongly encourage you to consider having a discussion with the local SNFs to explain why you will be asking for this information in the future.  You may also want to consider developing a specific form that they must complete (similar to the PCS form) that would provide this information.

We have asked for this information in the past, and are typically told that if we continue to ask, the SNF will consider using our competitor, who doesn’t ask too many questions. 

I understand.  I would try to explain to the SNF that the reason you are asking for this information is to be able to make an intelligent determination on whether the transport is likely to the be financial responsibility of the SNF.  This information allows you to avoid denials in certain instances where they would otherwise not be responsible.  If they don’t provide you with this information, the foreseeable consequence is that you will end up getting interim denials from Medicare, which may leave you no choice but to bill the SNF for the transport.

I feel bad for the person that asked the previous question.  Fortunately for me, we are the only ambulance provider in the area, so the threat of going to a competitor rings a bit hollow.  Do I have any additional options to get this information?

You do.  I would try to insert language into your agreements with the SNFs that obligate them to provide you with this information.  You could also try to insert language that makes them financially responsible whenever they fail to provide this information.

We don’t have agreements with the local SNFs.  Do we need an agreement?

One of the foreseeable consequences of this new edit is that it will increase the frequency with which you bill the SNFs.  One of the most common complaints I hear is that SNFs refuse to pay their bills.  In most instances, the problem is that the ambulance service lacks a written agreement with the SNF, and, as a result, they frequently end up in disputes about when the SNF is responsible.  A written agreement that clearly spells out when the SNF is responsible can not only minimize the potential for misunderstandings, but also afford you greater remedies when the SNF refuses to pay.

With respect to the new edits, what should that agreement say?

You should consult with your local attorney regarding the applicable language.  However, conceptually, you want to include language that indicates that a Medicare denial is conclusive evidence that the SNF is financially responsible.  This provision could then go on to provide that, in the event Medicare should reprocess and pay a particular claim, then you would refund the SNF’s payment.

What can I do to help the AAA in minimizing the administrative burden associated with these new edits?

The AAA is currently conducting a survey of members to help get a sense of the magnitude of the issues created by these new edits. If you would like to participate in the survey, you can click here.

Take the Survey

Have an issue you would like to see discussed in a future Talking Medicare blog?  Please write to me at bwerfel@aol.com.

HHS OIG Issues Advisory Opinion on Community Paramedicine

HHS OIG Issues Advisory Opinion Permitting Community Paramedicine Program Designed to Limit Hospital Readmissions

On March 6, 2019, the HHS Office of the Inspector General (OIG) posted OIG Advisory Opinion 19-03. The opinion related to free, in-home follow-up care offered by a hospital to eligible patients for the purpose of reducing hospital admissions or readmissions.

The Requestor was a nonprofit medical center that provides a range of inpatient and outpatient hospital services. The Requestor and an affiliated health care clinic are both part of an integrated health system that operates in three states. The Requestor had previously developed a program to provide free, in-home follow-up care to certain patients with congestive heart failure (CHF) that it has certified to be at higher risk of admission or readmission to a hospital. The Requestor was proposing to expand the program to also include certain patients with chronic obstructive pulmonary disease (COPD). According to the Requestor, the purpose of both its existing program and its proposed expansion was to increase patient compliance with discharge plans, improve patient health, and reduce hospital inpatient admissions and readmissions.

Under the existing program, clinical nurses screen patients to determine if they meet certain eligibility criteria. These include the requirement that the patient have CHF and either: (1) be currently admitted as an inpatient at Requestor’s hospital or (2) be a patient of Requestor’s outpatient cardiology department, and who had been admitted as an inpatient at Requestor’s hospital within the previously 30 days. The clinical nurses would identify those patients at higher risk of hospital admission based on a widely used risk assessment tool. The clinical nurses would also determine whether the patient had arranged to receive follow-up care with Requestor’s outpatient CHF center. Patients that do not intend to seek follow-up care with the CHF center, or who have indicated that they intend to seek follow-up care with another health care provider, would not be informed of the current program. Eligible patients would be informed of the current program, and offered the opportunity to participate. The eligibility criteria for the expanded program for COPD patients would operate in a similar manner.

Eligible patients that elect to participate in the current program or the expanded program would receive in-home follow up care for a thirty (30) day period following enrollment. This follow up care would consist of two visits every week from a community paramedic employed by the Requestor. As part of this in-home care, the community paramedic would provide some or all of the following services:

  • A review of the patient’s medications;
  • An assessment of the patient’s need for follow-up appointments;
  • The monitoring of the patient’s compliance with their discharge plan of care and/or disease management;
  • A home safety inspection; and/or
  • A physical assessment, which could include checking the patient’s pulse and blood pressure, listening to the patient’s lungs and heart, checking the patient’s cardiac function using an electrocardiogram, checking wounds, drawing blood and running blood tests, and/or administering medications.

The community paramedic would use a clinical protocol to deliver interventions and to assess whether a referral for follow-up care is necessary. To the extent the patient requires care that falls outside the community paramedic’s scope of practice, the community paramedic would direct the patient to follow up with his or her physician. For urgent, but non-life threatening conditions, the community paramedic would initiate contact with the patient’s physician.

The Requestor certified that the community paramedics would be employed by the Requestor on either full-time or part-time basis, and that all costs associated with the community paramedic would be borne by the Requestor or its affiliates.  The Requestor further certified that no one involved in the operation of the program would be compensated based on the number of patient’s that enroll in the programs. While one of the states in which the Requestor operates does reimburse for community paramedicine services, Requestor certified that it does not bill Medicaid for services provided under the program.

The question posed to the OIG was whether any aspect of the program violated either the federal anti-kickback statute or the prohibition against the offering of unlawful inducements to beneficiaries.

In analyzing the program, the OIG first determined that the services being offered under the program offer significant benefit to enrolled patients. The OIG specifically cited the fact that one state’s Medicaid program reimbursed for similar services as evidence of this value proposition. For this reason, the OIG concluded that the services constitute “remuneration” to patients. The OIG further concluded that this remuneration could potentially influence a patient’s decision on whether to select Requestor or its affiliates for the provision of federally reimbursable items and services.  Therefore, the OIG concluded that the program implicated both the anti-kickback statute and the beneficiary inducement prohibition.

The OIG then analyzed whether the program would qualify for an exception under the so-called “Promoting Access to Care Exception.” This exception applies to remuneration that improves a beneficiary’s ability to access items and services covered by federal health care programs and which otherwise pose a low risk of harm. The OIG determined that while some aspects of the program would likely fall within this exception, other aspects would not. Specifically, the OIG cited the home safety assessment as not materially improving a beneficiary’s access to care.

Having concluded that there was no specific exception that would permit the arrangement, the OIG then analyzed the arrangement under its discretionary authority, ultimately concluding that the program posed little risk of fraud or abuse. In reaching this conclusion, the OIG cited several factors:

  1. The OIG felt that the potential benefits of the program outweighed the potential risks of an improper inducement to beneficiaries. The OIG cited the fact that beneficiaries must have already selected Requestor or its associated clinic as their provider of services before learning about the program. As the OIG indicated “the risk that the remuneration will induce patients to choose Requestor or the Clinic for CHF- or COPD-related services is negligible because patients already have made this selection.” The OIG also noted that the community paramedic will inform beneficiaries of their right to choose a different provider prior to referring the beneficiary to the Requestor or its clinic for services outside the scope of the program.
  2. The OIG noted that, to the extent the program works as intended, it would be unlikely to lead to increased costs to federal health care programs. As noted above, Requestor had certified that it would not bill federal health care programs for the services of the community paramedic.
  3. The program was designed in a way as to minimize the potential for interference with clinical decision-making.
  4. The Requestor certified that it would not advertise or market the program to the public, thereby minimizing the chances of beneficiaries learning about the program prior to selecting Requestor for their CHF- or COPD-related care.
  5. The OIG noted that the program appeared to be reasonably tailored to accomplish the goal of reducing future hospital admissions. For example, the OIG cited the fact that the Requestor limited inclusion in the program to patients deemed to be at a higher-than-normal risk of hospital admission or readmission, and that it made these determinations using a widely used risk assessment tool.  The OIG noted that these patients would likely benefit from the continuity of care offered under the program. In addition, the OIG noted that the community paramedics would be in a position to keep the patients’ physicians appraised of their health by documenting all of their activities.

Potential Impact on Mobile Integrated Health and/or Community Paramedicine Programs

OIG advisory opinions are issued directly to the requestor of the opinion. The OIG makes a point of noting that these opinions cannot be relied upon by any other entity or individual. Legal technicalities aside, the OIG’s opinion is extremely helpful to the industry, as it lays out the factors the OIG would consider in analyzing similar arrangements. Thus, the opinion is extremely valuable to ambulance providers and suppliers that current operate, or are considering the operation of, similar mobile integrated health and/or community paramedicine programs. 

CMS SNF Edits Go Into Effect – April 1, 2019

CMS Set to Implement New Common Working File Edits to Identify Ambulance Services Provided in Connection with Outpatient Hospital Services that should be bundled to the SNF under Consolidated Billing

On November 2, 2018, the Centers for Medicare and Medicaid Services (CMS) issued Transmittal 2176 (Change Request 10955), which would establish a new series of Common Working File (CWF) edits intended to identify ambulance transports furnished in connection with outpatient hospital services that are properly bundled to the skilled nursing facility under the SNF Consolidated Billing regime. These new edits are set to go into effect on April 1, 2019. 

Why these edits are necessary?

In 2017, the HHS Office of the Inspector General conducted an investigation of ground ambulance claims that were furnished to Medicare beneficiaries during the first 100 days of a skilled nursing home (SNF) stay. Under the SNF Consolidated Billing regime, SNFs are paid a per diem, case-mix-adjusted amount that is intended to cover all costs incurred on behalf of their residents.  Federal regulations further provide that, with limited exceptions, the SNF’s per diem payment includes medically necessary ambulance transportation provided during the beneficiary’s Part A stay. The OIG’s report was issued in February 2019.

The OIG conducted a review of all SNF beneficiary days from July 1, 2014 through June 30, 2016 to determine whether the beneficiary day contained a ground ambulance claim line. The OIG excluded beneficiary days where the only ambulance claim line related to: (1) certain emergency or intensive outpatient hospital services or (2) dialysis services, as such ambulance transportation would be excluded from SNF Consolidated Billing. The OIG determined that there were 58,006 qualifying beneficiary days during this period, corresponding to $25.3 million in Medicare payments to ambulance suppliers.

The OIG then selected a random sample of 100 beneficiary days for review. The OIG determined that 78 of these 100 beneficiary days contained an overpayment for the associated ambulance claims, as the services the beneficiary received did not suspend or end their SNF resident status, nor was the transport for dialysis. The OIG determined that ambulance providers were overpaid a total of $41,456 for these ambulance transports. The OIG further determined that beneficiaries (or their secondary insurances) incurred an additional $10,723 in incorrect coinsurance and deductibles.

Based on the results of its review, the OIG estimates that Medicare made a total of $19.9 million in Part B overpayments to ambulance suppliers for transports that should have been bundled to the SNFs under SNF Consolidated Billing regime. The OIG estimated that beneficiaries (and their secondary insurances) incurred an additional $5.2 million in coinsurance and deductibles related to these incorrect payments.

The OIG concluded that the existing edits were inadequate to identify ambulance claims for services associated with hospital outpatient services that did not suspend or end the beneficiary’s SNF resident status, and which were not related to dialysis. The OIG recommended that CMS implement additional edits to identify such ambulance claims.

Overview of new claims processing edits

In response to the OIG’s report, CMS issued Transmittal 2176, which implements a new series of claims processing edits to identify ambulance claims associated with outpatient hospital services that should be bundled to the SNF. As noted above, these edits will go into effect on April 1, 2019.

These new claims processing edits are somewhat complicated. In order to properly understand how these claims edits will work, it is helpful to understand that CMS already has claims processing edits in place to identify hospital outpatient claims that should be bundled to the SNF. These CWF edits operate by referencing a list of Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) codes that correspond to outpatient hospital services that are expressly excluded from SNF Consolidated Billing. Hospital claims for outpatient services that are submitted with one of these excluded codes bypass the existing CWF edits, and are then sent to the appropriate Medicare Administrative Contractor for further editing and payment. Hospital claims submitted without one of these codes are denied for SNF Consolidated Billing. For convenience, the list of HCPCS and CPT codes excluded from SNF Consolidated Billing is hereinafter referred to as the “Exempted Codes.”

The new edits for ambulance claims will compare Part B ambulance claims to the associated outpatient hospital claim to see whether or not that hospital claim is excluded from SNF Consolidated Billing.

Specifics related to new claims processing edits

Under these new edits, the CWF will reject an incoming ambulance claim whenever the beneficiary is determined to be in an SNF Part A stay if either:

  1. There is no associated outpatient hospital claims for the same date of service on file; or
  2. There is an associated outpatient hospital claim for the same date of service on file (paid or denied), but where that outpatient hospital claim does not contain at least one Exempted Code.

When an incoming ambulance claim is rejected by the CWF, it will be sent to the applicable Medicare Administrative Contractor and rejected (Part A Ambulance Providers) or denied (Part B Ambulance Suppliers) using the applicable Claim Adjustment Reason Code/Remittance Advice Remark Code for SNF Consolidated Billing.  In other words, the ambulance claim will be denied with an indication that youshould bill the SNF.

The Transmittal contains further instructions that the CWF be updated to identify previously rejected ambulance claims upon receipt of an associated hospital claim for the same date of service that contains an Exempted Code. Once identified, the Shared System Maintainer (SSM) is supposed to adjust the previously rejected or denied ambulance claim. At this point, the nature of that “adjustment” is unclear, i.e., it is unknown whether the SSM will automatically reprocess the ambulance claim for payment. The AAA is seeking additional clarification from CMS on this important point.

Potential concerns for ambulance providers and suppliers

Based on the current experience of hospital providers, the AAA is cautiously optimistic that the new edits can be implemented in a way that proper identifies ambulance transports associated with hospital outpatient claims that should be bundled to the SNF vs. those that correctly remain separately payable by Medicare Part B.

However, the AAA has some concerns with the manner in which CMS intends to apply these edits.  Ambulance providers and suppliers are typically in a position to submit their claims earlier than the corresponding hospital, many of which submit claims on a biweekly or monthly cycle.  This creates a potential timing issue. This timing issue arises because the edits will reject any ambulance claim that is submitted without an associated hospital claim on file.  In other words, even if the hospital outpatient service is properly excluded from SNF Consolidated Billing, the ambulance claim will still be rejected if it beats the hospital claim into the system. The hope is that CMS will subsequently reprocess the ambulance claim once the hospital claim hits the system. However, at this point in time, it is unclear whether these claims will be automatically reprocessed, or whether ambulance providers and suppliers will be forced to appeal these claims for payment.

One option available to ambulance providers and suppliers would be to hold these claims for a period of time, in order to allow the hospitals to submit their claims. By waiting for the hospital to submit its claim, you can ensure that your claims will not be denied solely due to the timing issue. This should eliminate the disruption associated with separately payable claims being rejected and then subsequently reprocessed and/or appealed. It would also give you a degree of certainty when billing the SNF for claims that are denied for SNF Consolidated Billing. However, holding claims carries an obvious downside, i.e., it will disrupt your normal cash flow.

To summarize, the implementation of these new edits will force ambulance providers and suppliers to rethink their current claims submission processes for SNF residents. Ambulance providers and suppliers will need to make a decision on whether to hold claims to minimize the potential for problems, or to continue their existing submission practices and deal with any issues as they arise.

AAA webinar on new SNF Consolidated Billing edits

March 27, 2019 | 2:00 PM Eastern
Speakers: Brian Werfel, Esq.
$99 for Members | $198 for Non-Members

Join AAA Medicare Consultant Brian Werfel, Esq., to go over the new SNF Consolidated Billing edits that go into effect April 1, 2019. These edits are being implemented by CMS in response to 2017 investigation by the HHS Office of the Inspector General that determined that CMS lacked the appropriate claims processing edits to properly identify ambulance transports provided in connection with hospital outpatient services that are not expressly excluded from SNF PPS. The implementation of these new edits will force ambulance providers and suppliers to rethink their current claims submission processes for SNF residents. Ambulance providers and suppliers will need to make a decision on what to do with these claims moving forward. Sign up today to make sure your service is ready!

Register for the Webinar

Update on HHS OIG Reports on Ambulance Services

Update on HHS Office of the Inspector General Reports on Ambulance Services

The HHS Office of the Inspector General (OIG) released an update to the Work Plan as the year comes to a close.  There are no new projects specific to ambulance services, but the update does provide a summary of three projects that have been completed or are in progress.

  • Medicare Part B Payments for Ambulance Services Subject to Part A Skilled Nursing Facility Consolidated Billing Requirements (expected release 2019). In this work, the OIG  seeking to determine whether ambulance services paid by Medicare Part B were subject to Part A SNF consolidated billing requirements. The OIG will also assess the effectiveness of edits in CMS’s Common Working File to prevent and detect Part B overpayments for ambulance transportation subject to consolidated billing. Prior OIG reports have identified high error rates and significant overpayments for services subject to SNF consolidated billing.
  • Ambulance Services – Supplier Compliance with Payment Requirements (partially completed; remainder expected release 2019). Prior OIG work has found that Medicare made inappropriate payments for advanced life support emergency transports. The OIG seeks to determine whether Medicare payments for ambulance services were made in accordance with Medicare requirements. 

The first report of this project found that Medicare made improper payments of $8.7 million to providers for nonemergency ambulance transports to destinations not covered by Medicare, including the identified ground mileage associated with the transports.  The report identified that the majority of the improperly billed claim lines (59 percent) were for transports to diagnostic or therapeutic sites, other than a physician’s office or a hospital, that did not originate from SNFs.

In this report, the OIG recommended that the CMS: (1) direct the Medicare contractors to recover the portion of the $8.7 million in improper payments made to providers for claim lines that are within the claim-reopening period; (2) for the remaining portion of the $8.7 million, which is outside of the Medicare reopening and recovery periods, instruct the Medicare contractors to notify providers of potential improper payments so that those providers can exercise reasonable diligence to investigate and return any identified similar improper payments, and identify and track any returned improper payments; (3) direct the Medicare contractors to review claim lines for nonemergency ambulance transports to destinations not covered by Medicare after the audit period and recover any improper payments identified; and (4) require the Medicare contractors to implement nation-wide prepayment edits to ensure that payments to providers for nonemergency ambulance transports comply with Federal requirements.

  • The third report is linked to a case study of the closure of the Rosebud Hospital Emergency Department. Rosebud is an Indian Health Service (IHS) hospital that discontinued emergency services. The closure of the Rosebud emergency department (ED) followed a notice of intent by the CMS to terminate Rosebud Hospital from the Medicare program. Representatives of the Rosebud Sioux Tribe raised concerns to OIG about the Rosebud ED closure and linked that closure to several patient deaths that occurred during ambulance transports to other facilities when emergency care was unavailable locally. In response to these concerns, the OIG seeks to examine factors considered and procedures involved in IHS’s decisions to close and later reopen the Rosebud ED. The OIG will also assess IHS’s management, coordination, and communication related to the closure and will identify lessons learned that IHS could apply to similar situations in the future.  The report was expected to be published in 2018, but has not as of this date. 

The AAA continues to monitor the OIG work plan and engage as appropriate with key officials.  Our goal is to provide educational background to address any misunderstandings or incorrect assumptions that may exist. 

Talking Medicare: DOJ Settlement Highlights Importance of Exclusion Testing

Talking Medicare: Recent DOJ Settlement Highlights Importance of Exclusion Testing

On July 17, 2018, the U.S. Attorney for the District of Maine issued a press release on a settlement that had been reached with an ambulance service in Maine. As a result of this settlement, the ambulance service agreed to pay $16,776.74 to resolve allegations that it had submitted false claims to the Medicare and Maine Medicare Programs.

While the Department of Justice’s press release referred to the matter as a civil health care fraud, that headline is somewhat misleading. The ambulance service was not alleged to “up-coded” its claims or to have billed for patients that did not require ambulance transportation. Rather, the ambulance service was accused of using monies paid to it by these federal health care programs to pay the salary and benefits of a woman hired to assist the company’s billing manager. The woman, who was not identified in news reports, had previously been excluded from participation in federal health care programs after surrendering her license as a pharmacy technician after being found to have inappropriately diverted certain controlled substances. The ambulance service apparently failed to conduct an exclusion test on this individual prior to placing her on its payroll. The ambulance service’s side of the story is discussed in greater detail in this article from the local newspaper.

This settlement provides a reminder of the potential liabilities associated with the employment excluded individuals. As the HHS Office of the Inspector General (OIG) noted in its May 2013 Special Advisory Bulletin, the effect of exclusion goes beyond direct patient care. The OIG noted that excluded individuals are prohibited from providing transportation services paid by a federal health care program, using the example of ambulance drivers and ambulance dispatchers. The OIG further indicated that excluded individuals cannot provide administrative and/or management services that are payable by federal health care programs, even if these administrative or management services are not separately billable. In the above-referenced case, the prohibition was applied to the wages and benefits payable to the excluded employee.

Do we need to conduct exclusion testing, and, if so, how frequently?

The OIG recommends that all health care providers conduct exclusion testing prior to an individual’s employment, and then periodically thereafter. However, the OIG takes no formal position on how frequently these periodic exclusion checks should be conducted. The OIG does note, however, that it updates its List of Excluded Individuals and Entities (LEIE) on a monthly basis.

Given the potential risks involved, I think monthly testing of all employees should definitely be considered a best practice. The hope is that this case serves as a cautionary tale for other ambulance providers.

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

OIG Report on Overpayments For Non-Emergency Transports

OIG Report – Overpayments For Non-Emergency Ambulance Transports To Non-Covered Destinations

The Office of the Inspector General released its report Medicare Improperly Paid Providers for Non Emergency Ambulance Transports to Destinations Not Covered by Medicare“.

In sum, the OIG reviewed claims that Medicare paid for 2014 – 2016 non-emergency ambulance transports. The review focused on transports to non-covered destinations. OIG found that $8,633,940 was paid by Medicare for non-emergency ambulance transports under codes A0425 (ground mileage), A0426 (ALS non-emergency) and A0428 (BLS non-emergency) during this period of time.

The review was based solely on the claims and not based on a medical review or interviews of providers.

The claims that should not have been paid were to the following destinations:

  • 59% – to diagnostic or therapeutic sites other than a hospital or physician’s office, that did not originate at a SNF.
  • 31% – to a residence or assisted living facility (and not meeting the origin/destination requirement).
  •  6% – to the scene of an acute event.
  •  4% – to a destination code not used for ambulance claims or where no destination modifier was used.
  • <1% – to a physician’s office.

OIG recommended (and CMS agreed) that CMS:

  1. Notify the Medicare Administrative Contractors to recover that portion of the overpayment that is within the 4-year period in which claims can be re-opened.
  2. For the balance of the overpayment that is outside the 4-year period, CMS should provide the information needed for the MACs to notify the providers of the overpayments and have the providers exercise reasonable diligence to investigate and refund improper payments.
  3. Direct the MACs to review the origin/destination requirements for any overpayments following the audit period.
  4. Require the MACs implement edits to ensure they only pay for non-emergency transports that meet the Medicare requirements.

There is a chart in the report that indicates the improper payments for each jurisdiction. It is interesting to note that the overpayments range from a low of $515 (First Coast) to a high of $5,006,696 (Cahaba).

The report can be obtained at: https://go.usa.gov/xU5vf

Navigating a Post-Prior Authorization World

Talking Medicare: Navigating a Post-Prior Authorization World

Novitas Solutions, Inc. recently announced that it will no longer issue prior authorizations for scheduled, repetitive non-emergency transports, effective December 1, 2017. This announcement was based on Novitas’ expectation that the demonstration project will expire at the end of this calendar year. For ambulance suppliers in the states that currently operate under prior authorization, the focus invariably turns to what that means for their repetitive patient populations?

First a little background. In May 2014, CMS announced the implementation of a three-year prior authorization demonstration project for repetitive scheduled non-emergency ambulance transports. This demonstration project was initially limited to the states of New Jersey, Pennsylvania, and South Carolina. These states were selected based on higher-than-average utilization rates and high rates of improper payment for these services. In particular, the Medicare Payment Advisory Commission (MedPAC) had singled out these states as having higher-than-average utilization of dialysis transports in a June 2013 report to Congress. As initially conceived, the prior authorization demonstration project first went into effect on December 15, 2014.

Congress subsequently elected to expand this demonstration project to additional states as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Specifically, Congress mandated that the program be expanded to six additional states (Delaware, Maryland, North Carolina, Virginia, and West Virginia) and the District of Columbia by January 1, 2016, and then potentially to the rest of the nation by January 1, 2017. However, CMS never issued the required report; as a result, the contemplated national expansion never occurred.

Where Do We Go From Here?

If you operate in a state that is not currently operating under prior authorization, the answer to this question is relatively straightforward, i.e., nothing will change.

If, however, operate in a state that is currently subject to prior authorization, this question is a bit trickier. What we do know is that the actual mechanics of submitting claims will revert to the same process you experienced prior to the implementation of prior authorization. You will submit claims for repetitive patients directly to the Medicare Administrative Contractor (MAC), who will likely process them in same manner they process other Medicare claims. In other words, 14 days after the submission of the claim, you will likely receive a remittance notice indicating that the claim has either been paid or denied.

We also know that you will no longer benefit from the protections against post-payment review of these claims. Under the prior authorization model, CMS made clear that it would not audit claims paid based on a valid authorization, except in instances where it could demonstrate that the prior authorization was fraudulently procured.

What We Can Expect from Medicare and its Contractors

What we don’t know is whether the MACs will implement any temporary measures to guard against ongoing over-utilization and/or fraud. To better understand what I mean, put yourself in the position of the MAC. You have empirical evidence (see the chart to the right) that prior authorization has resulted in dramatic reductions in the amount of Medicare dollars paid for dialysis transports. You have further seen little evidence that this reduction in payments has resulted in any serious access to care issues.

The logical conclusion you would draw is that the amounts paid for dialysis prior to the implementation of prior authorization were likely excessive. If so, you might consider some proactive steps to prevent dialysis utilization from increasing back to the levels seen prior to the implementation of prior authorization.
So, it is possible (perhaps even likely) that ambulance suppliers in some of these states may see their MAC elect to implement prepayment reviews for dialysis patients. This could be similar to the process Novitas used for the initial three round trip transports to dialysis.

I also think it is reasonable to expect that the MACs, the Zone Program Integrity Contractors, and the OIG will monitor utilization trends, with an eye towards conducting post-payment reviews on ambulance suppliers that see their dialysis volume increase sharply next year.

Other Potential Impacts

In the previous section, I touched on the steps Medicare and its contractors might take to prevent a return to pre-prior authorization levels of dialysis utilization. In this section, I want to talk about some of the knock-on effects ambulance providers are likely to see.

One of the more interesting changes we saw in the prior authorization regime was a re-balancing of the power dynamic between ambulance suppliers and facilities, i.e., assisted living facilities and skilled nursing homes. Prior to the implementation of prior authorization, that power dynamic was slanted heavily in favor of the facility. By that I mean they could exert tremendous pressure on ambulance suppliers to take marginal patients by ambulance. If you were involved in the industry prior to 2015, you undoubtedly heard an SNF administrator tell you something to the effect of “if your company won’t take the patient by ambulance, I can easily find another company that will.” In competitive markets, that statement was usually accurate.

Under the demonstration project, prior authorization or lack thereof traveled with the patient. What that meant is that if your ambulance company submitted a prior authorization request that was denied, that denial would apply to any other ambulance company that might be interested in taking the patient. As a result, the nursing home could no longer hold the threat of going elsewhere with their business over your head.

Prior authorization also affected the standing policies of dialysis centers. Many free-standing dialysis centers have standing policies that they will not assist in transferring the patient to and from the dialysis treatment chair. This meant that patients that could be transported in a wheelchair van, but who required assistance to transfer out of their wheelchair presented a conundrum. There wouldn’t be medical necessity for the ambulance, but there would be no easy way for you to transfer them into the treatment chair without a second crew member (something most wheelchair van services don’t offer). Under prior authorization, it was easier for the ambulance company to push back, since they knew they wouldn’t be paid for the ambulance. As a result, I have heard that dialysis employees in these states had started to assist patients in transferring.

No really, it’s true…

One potential consequence of the prior authorization going away is that it may shift this power dynamic back to the facilities, with all of the negative consequences that are likely to result.

“Okay, I get what you are saying, but what I really want to know is whether I should loosen our standards for accepting a dialysis patient or not?”

Good question. Unfortunately, not one that permits an easy answer. The implementation of prior authorization shifted the cost-benefit analysis associated with transporting dialysis patients. It was likely that you were going to have a smaller number of patients approved and paid, but you could rest easy that you wouldn’t be at risk of having to return that money years later as the result of a Medicare audit.

The expiration of prior authorization shifts the cost-benefit analysis yet again. It is likely that you have tightened up your criteria for who you accept for dialysis transportation as a result of prior authorization. Loosening those criteria would almost certainly result in an increase in your short-term revenues. However, that would be offset, to some degree, by the increased risk of a Medicare audit.

For that reason, the course of action I have been recommending to people is not to dramatically loosen your standards. Instead, I typically ask whether they currently have patients that they believe do require an ambulance, but who were rejected for prior authorization by the MAC. Most providers respond that they do. Put another way, we are trying to identify the patients that you would feel comfortable defending in an audit. That is the additional population I would target for transportation next year.

Have an issue you would like to see discussed in a future Talking Medicare Blog? Please write to me at bwerfel@aol.com.

OIG Releases SemiAnnual Report to Congress

The Office of the Inspector General of the Department of Health and Human Services (HHS-OIG) recently issued the “Measuring Compliance Program Effectiveness: A Resource Guide“. The Guide was developed by a group of HHS-OIG professionals who wanted to provide a set of metrics by which health care providers can measure the elements of their compliance program. The authors recognize that not all the metrics are applicable to all health care providers but intended to be used as a guide. The Guide was released on March 27.

You can also read the full “Semiannual Report to Congress (October 1, 2016 – March 31, 2017)“.

House Holds Hearing on Veterans Choice Program

The House VA Committee hearing started at 7:30 p.m., but it was well-attended and lasted until 10 p.m. The witnesses included Senator John McCain (R-AZ), VA Secretary David Shulkin, and representatives of the VA Office of Inspector General and the Government Accountability Office. Senator McCain and Secretary Shulkin were both warmly welcomed by Members of the Committee on a bipartisan basis.

Chairman Roe (R-TN) emphasized the need to act quickly to extend the authorization for the Veterans Choice Program, which expires on August 7. To that end, the House VA Committee is voting today on a bill to eliminate the sunset of the program’s authorization. In addition, the Committee will consider broader legislation later this year to make comprehensive reforms to the Choice Program. He noted that the VA has additional funds available but will not be able to spend them once the authorization expires. A copy of Chairman Roe’s opening statement is available here.

Secretary Shulkin testified in support of extending the Choice Program, and he clarified that the VA was not seeking additional funding – just the authority to spend funds already obligated. He noted that the VA already is being forced to deny Choice Program coverage to veterans whose episodes of care would extend beyond the August 7 expiration date (e.g., pregnancy).

Secretary Shulkin also urged Congress to support the VA’s efforts to bring appointment scheduling in-house for care coordination purposes. However, the VA OIG witness noted challenges in records going out to community-based providers and coming back to the VA. The GAO witness also underscored the need for the VA to have better systems in place in order to effectively coordinate care, which will take time to procure and implement. Rep. Brownley (D-CA) echoed that point, calling the VA’s information technology systems a “Model T in a Tesla world.” Rep. Esty (D-CT) also urged improvements in the VA’s information systems and expressed concern that veterans are being improperly billed.

Other Members, including Rep. Wenstrup (R-OH) and Rep. Poliquin (R-ME), raised concerns about continuing delays in the processing of claims and payments to providers. Secretary Shulkin agreed that providers deserve to be paid for their services, noting his own experience as a physician in the private sector. He acknowledged that the VA is not processing enough claims electronically today, and he advised that he plans to pursue options outside the VA for systems procurement going forward.

Many Members also raised serious concerns about treatment of PTSD and mental health conditions for veterans, including Rep. Wenstrup (R-OH), Rep. O’Rourke (D-TX), Rep. Sablan (D-MP), Rep. Banks (R-IN), Rep. Rutherford (R-FL) and Rep. Takano (D-CA). Rep. O’Rourke emphasized that suicide among veterans is the most serious crisis, and Secretary Shulkin agreed that it is his number one priority. The Secretary announced that the VA will begin providing urgent mental health care that also will include individuals other than those service members who were honorably discharged. He added that the VA needs 1,000 more mental health providers, as well as telemental health services, and is looking to expand community partnerships to address suicide.

Rep. Banks noted interest among Indiana veterans in greater access to alternative treatments for PTSD and traumatic brain injury. Secretary Shulkin underscored that he is “most concerned about areas like PTSD, where we do not have effective treatments.” He also advised that the VA has established an “Office of Compassionate Innovation” (separate from the VA’s Center for Innovation), which will focus on finding new approaches to health and physical wellness and explore alternative treatment options for veterans when traditional methods fall short.

Rep. Wenstrup inquired about the VA’s GME and residency programs, as well as its associations with academic institutions. Secretary Shulkin responded that the VA is “doubling down” on partnerships with academic medical institutions.

Chairman Roe concluded his remarks by emphasizing the need to extend the Choice Program authorization soon and to consolidate the VA’s community-based care programs. He also expressed support for the VA’s decision to stop developing its own information technology internally.

The Return of the Supplemental Medical Review Contractor

In a November 2016 member advisory, we discussed StrategicHealthSolutions, LLC (Strategic), the CMS Supplemental Medical Review Contractor (SMRC). The SMRC is tasked by CMS to perform a variety of tasks aimed at lowering the improper payment rates and increasing the efficiencies of the medical review functions of the Medicare and Medicaid programs. In other words, the Strategic is yet another audit contractor.

In our earlier member advisory, we indicated that the Strategic had sent letters to a number of ambulance suppliers requesting medical records for certain ambulance transports. Those letters indicated that the Strategic was tasked with performing postpayment reviews of “Part B therapy claims for providers with a high percentage of patients receiving therapy beyond the threshold as compared to their peers.”

At this point, you are probably asking what the physical therapy cap threshold has to do with claims for ambulance services. If so, you are not alone.

On behalf of the AAA, our firm contacted Strategic to request further clarification. Specifically, we asked whether the intent was to limit its review to physical therapy providers, or whether the intent was to audit ambulance suppliers. Strategic responded by indicating that it intended to limit its review to physical therapy services, and that these letters were sent to ambulance suppliers in error. To its credit, Strategic did contact the affected ambulance suppliers by telephone to notify them of its error. Strategic also sent letters to the affected ambulance suppliers formally rescinding the record request.

Score one for the good guys, right? Think again.

Over the past few days, we have been notified by numerous AAA members that they have received a letter from Strategic requesting records for certain ambulance transports. These letters indicate that these postpayment reviews are being directed by CMS, and are based on an analysis of national claims data.

The audit notification letters cite the HHS Office of the Inspector General’s 2015 report on question billing practices as the establishing “good cause” for reopening the claims being audited. That report identified 7 billing practices that the OIG considered “questionable.”  Among the OIG findings being cited by Strategic are: (1) that CMS paid $17 million during the first half of 2012 for ambulance transports to and from a physician’s office and (2) that CMS paid $30 million over that same period for transports where there existed no record of the patient receiving covered Medicare services at either the pickup or drop-off locations on that date of service.

So, having cited two examples of improper payments from the industry as a whole as the basis to audit specific ambulance providers, one would naturally expect that the claims being audited would be limited to those instances, right? Unfortunately, when CMS and its contractors are involved, it is rarely that that simple.

Instead, Strategic appears to be consistently asking for samples of 40 or so claims. While it is difficult to discern a pattern from the handful of audit letters I have seen, one point of emphasis does appear to be ALS emergency claims, which typically represent more than half the sample being requested. However, in each case, the remaining claims come from each of the various base rates. In other words, it is possible that the claims being selected are truly random.

It is premature to speculate on how these audits turn out. However, the initial misstep by Strategic does not inspire confidence.

If you receive a letter from Strategic, it is important that you respond within the time frames set forth in your letter. If you are unable to meet that deadline, I would strongly recommend that you contact Strategic to ask for an extension. Typically, the contractor will grant an extension of 30 days as a courtesy. I would also use that time to obtain supporting documentation from the hospitals and SNFs. Given the scrutiny currently being paid to the patient signature requirement, I would review each claim to ensure that the requirement has been met. To the extent you are relying upon a facility signature, I would verify that the signature is legible (or accompanied by the signer’s printed name). If it is not, I would suggest obtaining a signature attestation from the individual that signed.

Please keep in mind that the best way to avoid a potential recoupment is to convince the contractor that the claim was properly paid in the first place. Maximum effort prior to your initial response is likely to pay big dividends down the road.


Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

OIG Releases Final Rule Revising Safe Harbor

Office of the Inspector General – Final Rule – Revisions to the Safe Harbors for Waiving Coinsurance, et.al

On December 7, 2016, the Office of the Inspector General published a Final Rule (81 Federal Register 88368) and will be effective January 6, 2017.

The Final Rule includes technical corrections to the existing Safe Harbor for referral services, a new Safe Harbor for waiver of patient cost-sharing for emergency ambulance services, a new Safe Harbor for free or discounted local transportation services, and an amendment to the definition of “remuneration” for purposes of the Civil Monetary penalties for beneficiary inducements.  Since the Final Rule covers many issues that pertain to other providers and suppliers, such as pharmacies, outpatient hospital, Federally Qualified Health Centers, Medicare Advantage Plans, etc., this Member Advisory will focus on the two issues that impact ambulance services and transportation.

Safe Harbor – Cost Sharing Reductions for Emergency Ambulance Services

In recent years, we have seen a number of OIG Advisory Opinions that permitted public EMS entities to waive the cost-sharing obligations of Medicare beneficiaries in specified circumstances. The OIG is now adding these as a “Safe Harbor”. The regulation, at 42 C.F.R 1001.952, will protect certain reductions or waivers of beneficiary cost-sharing for emergency ambulance services provided by public entities, which are paid by Federal health care programs under a fee-for-service basis. However, to qualify, all of the following must be met:

  • The provider or supplier must be owned and operated by a State, political division of a state or a tribal health program. NOTE: While this protects government entities that own and operate their ambulance service, it does not protect a supplier who contracts with that government entity even when that government entity pays the supplier for patient cost-sharing obligations through tax funded revenues.  It also does not protect hospitals providing the emergency ambulance services.
  • The emergency ambulance services must be provided by a Part B provider or supplier. The definition of “Emergency” is the same one listed in 42 C.F.R. 414.605, which you use to determine whether to bill for an emergency base rate or a non-emergency base rate.
  • The reduction or waiver is not considered furnishing free services paid directly or indirectly by a government entity. It is not considered a free service if the government entity bills to the extent of insurance.
  • The reduction or waiver of cost-sharing is offered uniformly without considering patient- specific factors. NOTE:  The OIG allows residency to be considered. Thus, a city may choose to waive or reduce cost-sharing for residents but not for non-residents.
  • The provider does not later claim the amount waived as a bad debt, or shift the burden to a government program.

If all of the above items are met, the government entity providing the emergency ambulance service can reduce or waive the patient’s cost-sharing obligation.

Please note, there is no change here with respect to membership programs by a public or private ambulance service, nor is there any change in policy or the law concerning a government entity paying a private ambulance company for copayments of its residents.

Safe Harbor for Free or Discounted Local Transportation

A new Safe Harbor has been created at 42 C.F.R. 1001.952(bb) to protect free or discounted local transportation made available by an “eligible entity” for beneficiaries of Federal health care programs.  The key elements to this Safe Harbor are:

  • The transportation must be local. That is defined as up to 25 miles if urban and up to 50 miles if rural.
  • It can be provided to or from a provider of service.
  • It can be provided to the patient as well as to a person that assists the patient.
  • The transportation does not have to be scheduled ahead of time.
  • The entity can use a voucher program, if they want.
  • The transport cannot be provided by an air, luxury or ambulance level service.
  • An eligible entity cannot require an ambulance company to provide free or discounted transportation to its patients.
  • An eligible entity is defined as an individual or entity.
  • An “established” patient means a person who has selected and initiated contact with a provider or supplier to schedule an appointment or who has given consent to someone to do it for them.
  • The transportation cannot be advertised.
  • The transportation cannot be used to recruit patients.
  • The transportation must be for medically necessary services.
  • Eligible entities must have an established policy regarding the availability of transportation assistance and must apply it uniformly.
  • The eligible entity is not required to maintain documentation for each patient transported, but it would be a “best practice” to have such documentation.
  • Drivers cannot be paid on a per patient basis.
  • The eligible entity cannot have a sign saying “Donated by ___”, as that is marketing.
  • The eligible entity cannot shift the cost of the transportation to any government health care program.
  • Shuttles are permitted but the rules are slightly less stringent. The vehicle must be used for a set route or schedule, does not have to be for established patients, must be for local use (25 miles urban; 50 miles rural), it can make multiple stops and, while the entity cannot advertise, they can post a schedule.

Read the entire Final Rule is 42 (Federal Register).

When a Capitated Payment Arrangement Makes Sense

Question

We operate a mid-sized ambulance services in the Midwest. Recently, one of our local hospitals entered into an agreement to become part of a large health system. We are increasingly being asked to transport patients from this local hospital to an affiliated facility in the neighboring city. These patients are being transported for consultations, medical tests, etc., and then being transported back to the local hospital. These transports become the financial responsibility of the health system, which has resulted in our monthly invoices to the hospital increasing nearly ten-fold over the past year. Recently, the hospital approached us with a proposal to move to a capitated payment arrangement. Are these arrangements permissible? And, if so, are there any “dos” and “don’ts” we should know about?

Answer

As the AAA’s Medicare Consultant, I am probably asked this question, or some variation of this question, several times a month. To me, these questions are a natural reaction by our industry to one of the larger tectonic shifts in health care over the past decade, namely the increasing footprint of national and regional hospital health care systems. According to the American Hospital Association, approximately 65% of hospitals nationwide were part of a larger health system in 2016. This is up from 51% in 1995. As these health systems have grown larger, ambulance providers are increasingly looking for alternatives to the traditional fee-for-service payment models.

Broadly defined, a “capitated payment” arrangement is any arrangement where the facility pays the ambulance provider a set amount to cover all or a portion of the transportation costs it incurs during a period of time, without regard to the specific volume of transports. A simple example would be a flat monthly fee for all transportation costs.

There is nothing in federal law that prohibits the use of capitated payment arrangements. The HHS Office of the Inspector General has signed off on capitated payment arrangements in numerous contexts, including the compensation paid to insurers under the Medicare Advantage Program (Medicare Part C). In fact, it could be argued that the Medicare Ambulance Fee Schedule includes some principles of capitation, e.g., it does not reimburse ambulance providers separately for certain ancillary services.

Therefore, capitated payment arrangements are something ambulance services can consider offering to their facility counterparties. However, you should aware that the normal prohibitions under the federal anti-kickback statute continue to apply. To the extent the OIG has a concern related to capitated payment arrangements, that concern would be that the capitated payment amount is used as a means of disguising an otherwise impermissible discount being offered to a potential referral source. In other words, the capitated payment must be structured in a way that avoids any improper remuneration to a potential referral source.

The arrangements do offer several advantages to both the ambulance provider and the facility. For the ambulance provider, the primary advantage is a stable, steady source of cash. However, there are other advantages, including the administrative benefits associated with submitting a simple monthly invoice, rather than a detailed invoice listing numerous transports. Many providers also find that a flat rate reduces tensions with the facilities, as they don’t have to engage in negotiations over why a particular transport is being billed to the facility. For the facility, the primary benefit is that it fixes their costs for transport during each measuring period. An ancillary benefit is that it offers a measure of insurance against unforeseen events (e.g., an MRI machine at hospital breaks down for an extended period of time, and as a result, the hospital is forced to incur the costs of sending patients to an affiliated facility for testing). Generally speaking, as the total volume of services rises, the benefits to moving away from a fee-for-service model also increases.

As noted above, capitated payment arrangements come in many forms, ranging from relatively simple to mind-numbingly complex. However, all arrangements share certain common features. The first is an estimate of the volume of services the facility would be purchasing from the ambulance service during any particular measuring period (hereinafter referred to as the “volume benchmark”). To the extent you are currently the facility’s vendor, this could be calculated based on past volume. This is then multiplied by the “price” of each service to arrive at the amount of the capitated payment. For example, if past history indicates that a facility pays for an average of 100 ambulance transports per month, and the parties agree to a rate of $200 per trip, then the monthly payment would be $20,000 per month. This monthly rate would stay the same regardless of whether the facility ends up responsible for 20 trips in the next month, or 200.

This brings us to one of the key features to a properly structured capitation agreement, i.e., both parties should have some degree of “risk” under the arrangement. In the example listed above, the facility runs the risk that the actual volume of services it would have otherwise been responsible for is less than the estimated 100. If so, it would have essentially paid more than $200 per transport. The ambulance provider bears the opposite risk, i.e., if the number of transports the facility would have paid for ends up being more than 100, it ends up receiving less than $200 per transport. As long as both parties bear risk, the arrangement is permissible.

If, however, one party bears no actual risk under the arrangement (e.g., because the monthly payment is based on an unreasonably low volume benchmark), the OIG could see the arrangement as a disguised way of rewarding the facility for other referrals. Thus, the key to any capitated arrangement is a good-faith estimate of the number of services involved. Please note that there is nothing wrong within incorporating language to adjust the monthly payment if the actual volume over any period of time is radically different than the volume benchmark. For example, I frequently include language that calls for the monthly payment to be recalculated if the actual volume is 20% more or less than the volume benchmark over any calendar quarter. These adjustments can be made prospectively (i.e., they only apply to future monthly payments) or they can be paid retroactively. To the extent you want to include an adjustment mechanism, the guiding principle is that any adjustment should be for the purpose of better estimating the volume benchmark.

Capitated payment arrangements may not be appropriate for all ambulance providers. However, as fee-for-service becomes an increasingly smaller portion of your facility partners’ operations, it may make sense to consider these arrangements.


Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

HHS OIG Report Discussion Added to Annual Conference

Late breaking AAA Conference update:

In order to address a Medicare reimbursement issue we feel is critical, AAA has decided to modify the Tuesday afternoon conference session being led by Brian S. Werfel, Esq.

Instead of covering medicare audits in this session, Mr. Werfel will now be leading an in depth discussion about a recent OIG Report on Questionable Billing Practices. The originally schedule session on preparing for medicare audits will be offered as a webinar. Further information about this new conference session is provided below.

Understanding the Recent OIG Report on Questionable Billing Practices

On September 29, 2015, the Department of Health and Human Services Office of the Inspector General released a report on “Inappropriate Payments and Question Billing for Part B Ambulance Transports”.  The report concluded that Medicare paid $24.2 million during the first half of 2012 for ambulance transports that did not meet Medicare program requirements.
In this special session, AAA Medicare Consultant Brian S. Werfel, Esq. will breakdown the OIG’s report, with special attention being paid to each of the 7 billing practices the OIG identified as “questionable”.  The session will include strategies that companies can implement to avoid these practices.  Brian will also discuss ongoing OIG enforcement activities related to the issues identified in this report.  The session will conclude with a Question & Answer period.

Continue reading

Member Advisory: Follow Up Regarding Recent OIG Report on Questionable Billing Practices for Ambulance Suppliers

HHS OIG Analysis Part 2 of 2 – Read Part One of the Analysis


October 1, 2015

Yesterday, the American Ambulance Association summarized a report from the Department of Health and Human Services Office of the Inspector General (OIG) on certain questionable billing practices by ambulance suppliers.

In this report, the OIG indicated that 1 in 5 ambulance providers had engaged in one or more of the following “questionable billing” practices”:

  • Billing for a transport without a Medicare service being provided at either the origin
  • Billing for excessive mileage for urban transports
  • Billing for a high number of transports per beneficiary
  • Billing using compromised beneficiary ID numbers
  • Billing for an inappropriate or unlikely transport level
  • Billing for a beneficiary that is being shared among multiple ambulance suppliers
  • Billing for transports to/from a partial hospitalization program

In this member advisory, I want to devote additional attention to the questionable billing practice the OIG referred to as “inappropriate or unlikely transport levels”.

The OIG identified 268 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of claims submitted with inappropriate or unlikely combinations of transport levels and destinations.  The OIG summarized its findings as follows:

“We identified two types of transports billed with inappropriate combinations of destinations and transport levels. First, we identified emergency transports that suppliers indicated were to a destination other than a hospital or the site of a transfer between ground and air transports. We also identified specialty care transports that suppliers indicated were to or from destinations other than hospitals, SNFs, or transfer sites.”

The OIG went on to state that a high percentage of an ambulance supplier’s transports with inappropriate or unlikely transport levels (given the destination) could be indicative of “upcoding”.  The OIG identified 268 ambulance suppliers that had particularly high numbers of claims submitted with unlikely or inappropriate transport levels/destinations combinations.  These ambulance suppliers submitted 3% or more of their claims with these suspect combinations, compared to less than 1% for most ambulance suppliers.  The OIG identified 19 companies that used a suspect combination on more than 25% of their claims.

Since the publication of the OIG’s report, the AAA has received numerous inquiries from members asking for guidance on how they can identify whether their company is at risk for submitting claims with these suspect combinations.  Unfortunately, there is no easy answer to that question.  However, based on my experience, I can offer the following general guidelines:

  1. Define the types of claims that would potentially be problematic. The OIG identified two distinct categories of suspect combinations.  The first involves emergency transports.  The OIG indicated that a claim would presumably not qualify for payment of an emergency base rate to the extent the patient was being transported to somewhere other than a hospital or an intercept site (i.e., the “I” modifier).  In other words, the OIG is looking at claims billed for an emergency base rate (HCPCS Codes A0427 or A0429) with a destination modifier that is either an “R” (Residence), “N” (Skilled Nursing Facility), “E” (Other Custodial Facility), “J” (Free-Standing Dialysis Facility).  The second category involved specialty care transports (SCT).  To qualify as SCT, a transport must be “interfacility”, which CMS has defined to be transports between hospitals (including hospital-based dialysis facilities), skilled nursing facilities, or any combination thereof.  Therefore, the OIG would consider a claim to be suspect if the origin or destination modifier was an “R”, “N”, “E”, or “J”.
  2. Investigate the claim submission edits within your billing system. Having defined the types of claims that the OIG would consider suspect, I suggest that you investigate the claims submission edits within your billing system.  Specifically, you want to see whether there is anything currently in place that would make it impossible for you to submit a claim with any of these suspect combinations.  For example, would your billing system prevent you from submitting the following claim:  A0427 HR?  This may require you to attempt to submit test claims with each possible combination to see whether your billing software would reject any or all of these combinations.
  3. To the extent these claim submission edits are not already in place, you should investigate whether your billing software permits you to create them. Assuming your billing system does not currently have edits in place to prevent the submission of claims with these suspect combinations, you want to investigate whether these types of edits can be added.  Many billing software products have optional submission edits that you can enable for certain payers.  Other products may permit you to create specialized edits for these purposes.  You may want to contact your billing vendor to ask whether there is any way to put these edits in place for your Medicare claims.  Assuming your software has the capability of putting these edits in place, it almost certainly makes sense to do so, in order to eliminate the possibility of submitting claims with these suspect combinations going forward.

The suggestions listed in paragraphs #1 and #2 above address the issue of whether it was possible for your company to have inadvertently submitted claims with any of these suspect combinations.  Even if you determine that it was theoretically possible for you to have submitted claims with any of these suspect combinations, it does not necessarily follow that any such claims were actually submitted.  Most ambulance companies have numerous controls in place to guard against inadvertent mistakes in the coding/billing of claims.  For example, while many billing software products permit an ambulance coder to duplicate an earlier transport for the patient, many companies elect not to use this functionality, preferring instead to code each claim from scratch.  This removes one possible mechanism by which these types of inadvertent errors can occur.  Moreover, even if it a claim was submitted with a suspect combination, it does not necessarily follow that the claim was paid by Medicare.  Your Medicare contractor may have its own edits in place to deny claims submitted with these suspect combinations.  Finally, even if a claim was accidentally submitted with a suspect combination and paid by the Medicare contractor, it is possible that you may have caught the error at the time you posted Medicare’s payment.  Assuming that you properly refunded the incorrect payment at that time, there is no need for further concern.

Conclusion

Ambulance supplier should attempt to determine whether their billing software was designed in such a way as to prevent these suspect combinations from being submitted to Medicare.  To the extent you are confident that it is impossible for these claims to be submitted to Medicare, there is nothing further that needs to be done.

To the extent an ambulance supplier determines that their current billing software edits do not make it impossible for such claims to be submitted to Medicare, they should determine whether the necessary edits could be implemented on a go forward basis.  The ambulance supplier will also need to make an organizational determination on whether to investigate its past claims universe.  This determination should be made in consultation with the company’s legal advisers.  Your legal advisers will also guide you on the steps that should be taken if you discover that you remain paid for any claims with any of these suspect combinations.

Member Advisory: OIG Issues Report on Questionable Billing Practices for Ambulance Suppliers

HHS OIG Analysis Part 1 of 2 – Read Part Two of the Analysis


On September 29, 2015, the Department of Health and Human Services Office of the Inspector General (OIG) issued a report titled “Inappropriate Payments and Questionable Billing for Medicare Part B Ambulance Transports” (OEI-09-12-00351).  The report, conducted by the Office of Evaluation and Inspections (OEI), looked at claims data for 7.3 million ambulance transports furnished during the first half of 2012.  The OIG reviewed this claims data to determine whether claims were billed appropriately to the Medicare program.

Summary of the OIG’s Findings

The OIG determined that Medicare paid $24.2 million in the first half of 2012 for ambulance transports that did not meet certain program requirements for payment.  The OIG identified an additional $30.2 million paid for transports for which the beneficiary did not receive Medicare services at either the pick-up or drop-location, or anywhere else.  Finally, the OIG determined that 1 in 5 ambulance suppliers met certain criteria that indicated they may have engaged in questionable billing practices.  According to the OIG, more than half of all questionable transports were provided to beneficiaries residing in 4 metropolitan areas.

Detailed OIG Findings

Medicare paid $24.2 million for ambulance transports that did not meet certain Medicare requirements justifying payment.  This included transports to a non-covered destination, as well as transports to a covered destination but where the level of service was inappropriate. 

The OIG determined that Medicare paid $17.4 million for ambulance transports to non-covered destinations.  This amount also include return trips following treatment at the non-covered destination.  These transports represented 0.6% of all Medicare payments during the first half of 2012.

The OIG indicated that transports to a physician’s office were the most common type of non-covered destination.  Payments for transports to and from a physician’s office accounted for $8.7 million in improper payments.  Medicare also paid $5.8 million for transports of beneficiaries to and from community mental health centers or psychiatric facilities (other than duly-licensed psychiatric hospitals).  Other transports to non-covered destinations included independent laboratories, diagnostic or therapeutic sites (i.e., “D” modifiers), non-SNF nursing facilities, long-term care and hospice facilities.

The OIG determined that Medicare paid $7 million for transports with inappropriate combinations of the level of service billed and the type of destination.  This included $4.3 million in payments for specialty care transports (SCT) where either the origin or destination was something other than a hospital, SNF, or intercept site.  The majority of these inappropriate SCT transports involved transports between the patient’s SNF or residence and a free-standing dialysis facility.  The OIG also determined that Medicare paid $2.7 million for emergency transports where the destination was not a hospital.

Medicare paid $30.2 million for ambulance transports for which the beneficiary did not receive Medicare services at any origin or destination. 

The OIG identified $30.2 million in payments for ambulance transports where the beneficiary did not appear to receive any Medicare services at either the origin or destination within 1 day of the date of transport.  To account for the possibility that the ambulance supplier may have submitted a claim with the wrong origin or destination, the OIG only flagged a claim as questionable if its records determined that the beneficiary did not receive Medicare services at any other facility type within 1 day of the transport.  The OIG stated its belief that, since there was no record of the beneficiary receiving Medicare services at or close to the date of transport, the OIG believed that it was likely that Medicare inappropriately paid for the ambulance transports.  The OIG did note the possibility that these transports occurred during an inpatient hospital or SNF stay, and therefore may have been the responsibility of the inpatient facility.  These transports represented 1.1% of all Medicare payments during the first half of 2012.

The OIG determined that 1 in 5 ambulance suppliers had questionable billing

As part of the methodology used for this report, the OIG developed a set of 7 measure that it believed could be evidence of questionable billing practices.  These seven measures were:

  1. No Medicare service provided at either the origin or destination – The OIG believes that a high percentage of an ambulance supplier’s for which the beneficiary did not receive Medicare services at either the origin or destination could be indicative of either: (a) billing for transports to non-covered destinations or (b) billing for transports that were not provided.
  2. Excessive mileage for urban transports – The OIG believes that high average mileage for transports within an urban area could be indicative of either: (a) billing for more miles than the ambulance supplier actually drove or (b) billing for mileage beyond the nearest appropriate facility.
  3. High number of transports per beneficiary – The OIG believes that a high average of per-beneficiary transports could be indicative of billing for transports that were not medically necessary.
  4. Compromised Beneficiary Number – The OIG believes that a high percentage of an ambulance supplier’s transports provided to beneficiary with compromised beneficiary ID numbers could be indicative of billing for transports that were not medically necessary, or which were not provided.
  5. Inappropriate or unlikely transport level – The OIG believes that a high percentage of an ambulance supplier’s transports with inappropriate or unlikely transport levels (given the destination) could be indicative of “upcoding”.
  6. Beneficiary sharing – The OIG believes that when multiple ambulance suppliers all provide dialysis transports to the same beneficiary that it could be evidence of the misuse of a beneficiary’s ID number, or it could be evidence that the beneficiary is shopping his or her ID number for kickbacks.
  7. Transports to or from partial hospitalization programs – The OIG believes that transports to and from a partial hospitalization program (PHP) is unlikely to be medically necessary because beneficiary’s that meet Medicare’s coverage requirements for PHP services generally do not qualify for ambulance transportation.

The OIG indicated that 21% of ambulance suppliers met one of the seven measures it developed for identifying questionable billing practices.  17% of ambulance suppliers met only 1 of the 7 measures, while 4% met 2-4 of these measures.  No ambulance suppliers met more than 4 of these measures.

The OIG identified 2,038 out of the 15,614 ambulance suppliers reviewed (13%) that had questionable billing based on the percentage of their transports where the beneficiary did not receive Medicare services at either the origin or destination.  The OIG flagged an ambulance supplier’s billing as questionable if 3% or more of its transports involved situations where no Medicare service was billed at the destination.  46 ambulance suppliers had 95% or more of their transports involve situations where the beneficiary did not receive Medicare services at either the origin or destination.  By contrast, the median for all ambulance suppliers was zero transports where the beneficiary did not receive services at either the origin or destination.

The OIG identified 642 out of the 15,614 ambulance suppliers reviewed (4%) that had questionable billing based on the average mileage they billed for beneficiaries residing in urban areas.  The OIG indicated that the typical ambulance supplier average 10 miles for an urban transport.  By contrast, the average mileage for the 642 suppliers identified by the OIG was 34 miles.  The OIG identified 48 suppliers with an average urban mileage of more than 100 miles.

The OIG identified 533 out of the 15,614 ambulance suppliers reviewed (3%) that had questionable billing based on the average number of transports per beneficiary.  Beneficiaries transported by the typical ambulance supplier that provided dialysis transports received an average of 4 ambulance transports during the first 6 months of 2012.  Beneficiaries transported by the 533 suppliers identified by the OIG received an average of 21 transports during the first half of 2012.

The OIG identified 358 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of their transports that were associated with compromised beneficiary ID numbers.  In studying this measure, the OIG excluded ambulance suppliers that did not bill for any transports involving the use of compromised beneficiary ID numbers.  Among those suppliers that billed any transports that involved the use of a compromised ID number, only 1% of the typical supplier’s involved the compromised ID numbers.  The 358 suppliers identified by the OIG used a compromised ID number for at least 7% of their claims.  31 suppliers used a compromised ID number for more than 95% of their submitted claims.

The OIG identified 268 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of claims submitted with unlikely or inappropriate transport levels and destinations.  For the typical supplier that billed any claims with an inappropriate combination of transport level and destination, these claims accounted for less than 1% of all claims submitted in the first half of 2012.  For the 268 suppliers identified by the OIG, these claims accounted for more than 3% of all claims submitted in the first half of 2012.  The OIG identified 19 suppliers that used an inappropriate or unlikely combination on at least 25% of the claims they submitted during the first half of 2012.

Finally, the OIG noted that the ambulance suppliers that tested “positive” for any of the questionable billing practices it identified were disproportionately likely to provide BLS non-emergency transports (including dialysis).  The OIG noted that BLS non-emergency transports accounted for only 36% of transports billed by providers that did not meet any of its questionable billing measures, while BLS non-emergency transports accounted for 65% of all claims submitted by those suppliers it identified as having at least one questionable billing practice.

More than half of questionable ambulance transports were provided to beneficiaries residing in 4 metropolitan areas

The OIG determined that questionable billing was concentrated in the metropolitan areas of Houston, Los Angeles, New York, and Philadelphia.  These 4 areas accounted for 18% of all ambulance transports during the first half of 2012, but 52% of all questionable transports.  Collectively, these areas accounted for $104 million of the $207 million in Medicare payments for “questionable” ambulance transports during the first half of 2012.

The OIG also determined that, on average, ambulance suppliers that provided transports to beneficiaries in these 4 metropolitan areas transported more Medicare beneficiaries and received more in Medicare payments than suppliers in other metropolitan areas.  For example, the average ambulance supplier in Los Angeles received a total of $105,696 in Medicare payments, compared with an average of $16,137 in Medicare payments per supplier in other metropolitan areas.  The numbers in NY ($85,606), Philadelphia ($56,667), and Houston ($34,951) were also far in excess of the national average.

OIG’s Recommendations

In this report, the OIG makes a number of recommendations to CMS to reduce the number of inappropriate payments and questionable billing practices.  These recommendations include:

  1. Expanding the temporary moratoria on new enrollments to additional metropolitan area. The OIG is recommending that CMS consider whether the existing moratoria (in place in Houston and Philadelphia) should be expanded to NY and Los Angeles.CMS concurred with this recommendation, and stated that it will continue to monitor these geographic areas, and will impose additional temporary moratoria if warranted.
  2. Require ambulance suppliers to include the National Provider Identifier (NPI) of the certifying physician on non-emergency claims that require a certification. The OIG is recommending that when a physician certification is required (e.g., for dialysis transports), that the physician’s NPI be listed on the claim.  The OIG notes that the NPI of the ordering physician is already required for laboratory and DME claims.  The OIG also recommended that the physician’s NPI be listed on PCS forms.CMS concurred with the recommendation, and indicated that it will explore the best way to implement this recommendation.
  3. Implement new claims processing edits, or improve existing edits, to prevent inappropriate payments for ambulance transports. The OIG is recommending that CMS update its edits to prevent payment: (a) for transports to non-covered destinations and (b) for transports with inappropriate combinations of the destination and the level of service billed (e.g., emergency transports to a patient’s residence).CMS partially concurred with the recommendation, but indicated that it wanted to review the data on the claims identified by the OIG in the report before taking any actions.
  4. Increase CMS’ monitoring of ambulance billing. The OIG is recommending that CMS continue to monitor the billing of ambulance claims using the measures of questionable billing that the OIG developed.CMS appeared to concur with the recommendation, indicating that it would continue its current monitoring.  However, the OIG indicated that its recommendation was not to continue monitoring at the current levels, but rather to increase the monitoring of ambulance claims.
  5. Determine the appropriateness of the claims billed by the ambulance suppliers identified in this report and take appropriate action. The OIG indicated that it would be providing CMS with a separate memorandum that lists the claims it identified that did not meet Medicare billing requirements.  The OIG was suggesting that CMS or its contractors should take a closer look at these providers, for example by reviewing medical records or performing unannounced site visits to determine whether additional actions are appropriate.CMS partially concurred with the recommendation, but indicated that it wanted to review the data on the claims identified by the OIG in the report before taking any actions.

Member Advisory: OIG Issues Report on Questionable Billing Practices for Ambulance Suppliers

HHS OIG Analysis Part 1 of 2 – Read Part Two of the Analysis


On September 29, 2015, the Department of Health and Human Services Office of the Inspector General (OIG) issued a report titled “Inappropriate Payments and Questionable Billing for Medicare Part B Ambulance Transports” (OEI-09-12-00351).  The report, conducted by the Office of Evaluation and Inspections (OEI), looked at claims data for 7.3 million ambulance transports furnished during the first half of 2012.  The OIG reviewed this claims data to determine whether claims were billed appropriately to the Medicare program.

Summary of the OIG’s Findings

The OIG determined that Medicare paid $24.2 million in the first half of 2012 for ambulance transports that did not meet certain program requirements for payment.  The OIG identified an additional $30.2 million paid for transports for which the beneficiary did not receive Medicare services at either the pick-up or drop-location, or anywhere else.  Finally, the OIG determined that 1 in 5 ambulance suppliers met certain criteria that indicated they may have engaged in questionable billing practices.  According to the OIG, more than half of all questionable transports were provided to beneficiaries residing in 4 metropolitan areas.

Detailed OIG Findings

Medicare paid $24.2 million for ambulance transports that did not meet certain Medicare requirements justifying payment.  This included transports to a non-covered destination, as well as transports to a covered destination but where the level of service was inappropriate. 

The OIG determined that Medicare paid $17.4 million for ambulance transports to non-covered destinations.  This amount also include return trips following treatment at the non-covered destination.  These transports represented 0.6% of all Medicare payments during the first half of 2012.

The OIG indicated that transports to a physician’s office were the most common type of non-covered destination.  Payments for transports to and from a physician’s office accounted for $8.7 million in improper payments.  Medicare also paid $5.8 million for transports of beneficiaries to and from community mental health centers or psychiatric facilities (other than duly-licensed psychiatric hospitals).  Other transports to non-covered destinations included independent laboratories, diagnostic or therapeutic sites (i.e., “D” modifiers), non-SNF nursing facilities, long-term care and hospice facilities.

The OIG determined that Medicare paid $7 million for transports with inappropriate combinations of the level of service billed and the type of destination.  This included $4.3 million in payments for specialty care transports (SCT) where either the origin or destination was something other than a hospital, SNF, or intercept site.  The majority of these inappropriate SCT transports involved transports between the patient’s SNF or residence and a free-standing dialysis facility.  The OIG also determined that Medicare paid $2.7 million for emergency transports where the destination was not a hospital.

Medicare paid $30.2 million for ambulance transports for which the beneficiary did not receive Medicare services at any origin or destination. 

The OIG identified $30.2 million in payments for ambulance transports where the beneficiary did not appear to receive any Medicare services at either the origin or destination within 1 day of the date of transport.  To account for the possibility that the ambulance supplier may have submitted a claim with the wrong origin or destination, the OIG only flagged a claim as questionable if its records determined that the beneficiary did not receive Medicare services at any other facility type within 1 day of the transport.  The OIG stated its belief that, since there was no record of the beneficiary receiving Medicare services at or close to the date of transport, the OIG believed that it was likely that Medicare inappropriately paid for the ambulance transports.  The OIG did note the possibility that these transports occurred during an inpatient hospital or SNF stay, and therefore may have been the responsibility of the inpatient facility.  These transports represented 1.1% of all Medicare payments during the first half of 2012.

The OIG determined that 1 in 5 ambulance suppliers had questionable billing

As part of the methodology used for this report, the OIG developed a set of 7 measure that it believed could be evidence of questionable billing practices.  These seven measures were:

  1. No Medicare service provided at either the origin or destination – The OIG believes that a high percentage of an ambulance supplier’s for which the beneficiary did not receive Medicare services at either the origin or destination could be indicative of either: (a) billing for transports to non-covered destinations or (b) billing for transports that were not provided.
  2. Excessive mileage for urban transports – The OIG believes that high average mileage for transports within an urban area could be indicative of either: (a) billing for more miles than the ambulance supplier actually drove or (b) billing for mileage beyond the nearest appropriate facility.
  3. High number of transports per beneficiary – The OIG believes that a high average of per-beneficiary transports could be indicative of billing for transports that were not medically necessary.
  4. Compromised Beneficiary Number – The OIG believes that a high percentage of an ambulance supplier’s transports provided to beneficiary with compromised beneficiary ID numbers could be indicative of billing for transports that were not medically necessary, or which were not provided.
  5. Inappropriate or unlikely transport level – The OIG believes that a high percentage of an ambulance supplier’s transports with inappropriate or unlikely transport levels (given the destination) could be indicative of “upcoding”.
  6. Beneficiary sharing – The OIG believes that when multiple ambulance suppliers all provide dialysis transports to the same beneficiary that it could be evidence of the misuse of a beneficiary’s ID number, or it could be evidence that the beneficiary is shopping his or her ID number for kickbacks.
  7. Transports to or from partial hospitalization programs – The OIG believes that transports to and from a partial hospitalization program (PHP) is unlikely to be medically necessary because beneficiary’s that meet Medicare’s coverage requirements for PHP services generally do not qualify for ambulance transportation.

The OIG indicated that 21% of ambulance suppliers met one of the seven measures it developed for identifying questionable billing practices.  17% of ambulance suppliers met only 1 of the 7 measures, while 4% met 2-4 of these measures.  No ambulance suppliers met more than 4 of these measures.

The OIG identified 2,038 out of the 15,614 ambulance suppliers reviewed (13%) that had questionable billing based on the percentage of their transports where the beneficiary did not receive Medicare services at either the origin or destination.  The OIG flagged an ambulance supplier’s billing as questionable if 3% or more of its transports involved situations where no Medicare service was billed at the destination.  46 ambulance suppliers had 95% or more of their transports involve situations where the beneficiary did not receive Medicare services at either the origin or destination.  By contrast, the median for all ambulance suppliers was zero transports where the beneficiary did not receive services at either the origin or destination.

The OIG identified 642 out of the 15,614 ambulance suppliers reviewed (4%) that had questionable billing based on the average mileage they billed for beneficiaries residing in urban areas.  The OIG indicated that the typical ambulance supplier average 10 miles for an urban transport.  By contrast, the average mileage for the 642 suppliers identified by the OIG was 34 miles.  The OIG identified 48 suppliers with an average urban mileage of more than 100 miles.

The OIG identified 533 out of the 15,614 ambulance suppliers reviewed (3%) that had questionable billing based on the average number of transports per beneficiary.  Beneficiaries transported by the typical ambulance supplier that provided dialysis transports received an average of 4 ambulance transports during the first 6 months of 2012.  Beneficiaries transported by the 533 suppliers identified by the OIG received an average of 21 transports during the first half of 2012.

The OIG identified 358 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of their transports that were associated with compromised beneficiary ID numbers.  In studying this measure, the OIG excluded ambulance suppliers that did not bill for any transports involving the use of compromised beneficiary ID numbers.  Among those suppliers that billed any transports that involved the use of a compromised ID number, only 1% of the typical supplier’s involved the compromised ID numbers.  The 358 suppliers identified by the OIG used a compromised ID number for at least 7% of their claims.  31 suppliers used a compromised ID number for more than 95% of their submitted claims.

The OIG identified 268 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of claims submitted with unlikely or inappropriate transport levels and destinations.  For the typical supplier that billed any claims with an inappropriate combination of transport level and destination, these claims accounted for less than 1% of all claims submitted in the first half of 2012.  For the 268 suppliers identified by the OIG, these claims accounted for more than 3% of all claims submitted in the first half of 2012.  The OIG identified 19 suppliers that used an inappropriate or unlikely combination on at least 25% of the claims they submitted during the first half of 2012.

Finally, the OIG noted that the ambulance suppliers that tested “positive” for any of the questionable billing practices it identified were disproportionately likely to provide BLS non-emergency transports (including dialysis).  The OIG noted that BLS non-emergency transports accounted for only 36% of transports billed by providers that did not meet any of its questionable billing measures, while BLS non-emergency transports accounted for 65% of all claims submitted by those suppliers it identified as having at least one questionable billing practice.

More than half of questionable ambulance transports were provided to beneficiaries residing in 4 metropolitan areas

The OIG determined that questionable billing was concentrated in the metropolitan areas of Houston, Los Angeles, New York, and Philadelphia.  These 4 areas accounted for 18% of all ambulance transports during the first half of 2012, but 52% of all questionable transports.  Collectively, these areas accounted for $104 million of the $207 million in Medicare payments for “questionable” ambulance transports during the first half of 2012.

The OIG also determined that, on average, ambulance suppliers that provided transports to beneficiaries in these 4 metropolitan areas transported more Medicare beneficiaries and received more in Medicare payments than suppliers in other metropolitan areas.  For example, the average ambulance supplier in Los Angeles received a total of $105,696 in Medicare payments, compared with an average of $16,137 in Medicare payments per supplier in other metropolitan areas.  The numbers in NY ($85,606), Philadelphia ($56,667), and Houston ($34,951) were also far in excess of the national average.

OIG’s Recommendations

In this report, the OIG makes a number of recommendations to CMS to reduce the number of inappropriate payments and questionable billing practices.  These recommendations include:

  1. Expanding the temporary moratoria on new enrollments to additional metropolitan area. The OIG is recommending that CMS consider whether the existing moratoria (in place in Houston and Philadelphia) should be expanded to NY and Los Angeles.CMS concurred with this recommendation, and stated that it will continue to monitor these geographic areas, and will impose additional temporary moratoria if warranted.
  2. Require ambulance suppliers to include the National Provider Identifier (NPI) of the certifying physician on non-emergency claims that require a certification. The OIG is recommending that when a physician certification is required (e.g., for dialysis transports), that the physician’s NPI be listed on the claim.  The OIG notes that the NPI of the ordering physician is already required for laboratory and DME claims.  The OIG also recommended that the physician’s NPI be listed on PCS forms.CMS concurred with the recommendation, and indicated that it will explore the best way to implement this recommendation.
  3. Implement new claims processing edits, or improve existing edits, to prevent inappropriate payments for ambulance transports. The OIG is recommending that CMS update its edits to prevent payment: (a) for transports to non-covered destinations and (b) for transports with inappropriate combinations of the destination and the level of service billed (e.g., emergency transports to a patient’s residence).CMS partially concurred with the recommendation, but indicated that it wanted to review the data on the claims identified by the OIG in the report before taking any actions.
  4. Increase CMS’ monitoring of ambulance billing. The OIG is recommending that CMS continue to monitor the billing of ambulance claims using the measures of questionable billing that the OIG developed.CMS appeared to concur with the recommendation, indicating that it would continue its current monitoring.  However, the OIG indicated that its recommendation was not to continue monitoring at the current levels, but rather to increase the monitoring of ambulance claims.
  5. Determine the appropriateness of the claims billed by the ambulance suppliers identified in this report and take appropriate action. The OIG indicated that it would be providing CMS with a separate memorandum that lists the claims it identified that did not meet Medicare billing requirements.  The OIG was suggesting that CMS or its contractors should take a closer look at these providers, for example by reviewing medical records or performing unannounced site visits to determine whether additional actions are appropriate.CMS partially concurred with the recommendation, but indicated that it wanted to review the data on the claims identified by the OIG in the report before taking any actions.