Pathology/Lab Coding Alert

Emphasize 4 areas to beat the odds.

The HHS Office of Inspector General (OIG) recently put the spotlight on CMS’s audit-recovery success, so you can expect more stringent collection efforts to impact your lab in the future.

Read on to learn what audit challenges you might be facing – and how you can prepare to meet the task.

Understand the Problem

“CMS did not always resolve audit recommendations in a timely manner” in the fiscal years studied, 2015 and 2016, the OIG says in its new report on resolving audit recommendations.

“Specifically, CMS resolved 1,231 of the 1,371 recommendations that were outstanding during FYs 2015 and 2016. However, it did not resolve 405 of the 1,231 recommendations (32.9 percent) within the required 6-month resolution period.”

The OIG did give CMS credit for improving its timely audit resolution rate from previous years – up by a “48 percentage point increase in the number of recommendations resolved within the required six month window,” pointed out CMS Administrator Seema Verma in CMS’s response to the OIG’s report. CMS also reduced the total dollar amounts associated with unresolved recommendations from 1.17 billion to 139 million dollars,” Verma said.

The solution: The OIG urges CMS to follow and enhance its current policies and procedures on audit resolutions “to ensure that all management decisions are issued within the required 6-month resolution period,” according to the report. CMS agrees to do so. That means you can expect increased scrutiny and enforcement for your claims.

Expect Review of Key Areas

CMS has developed tools to audit Medicare claims, such as the Fraud Prevention System that uses predictive algorithms to identify high-risk providers, according to Frank D. Cohen, director of analytics and business intelligence with Doctors Management, LLC.

Focus on the following areas to boost your chances of avoiding audit problems:

1. Frequency: Audits may focus on frequency of improperly paid claims because they can generate, under the False Claims Act, penalties of up to $11,000 per claim.
2. Procedure Code Utilization by RVU: Recovery audit contractors (RACs) may focus on the relative value units (RVUs) reported. “They’re looking at the magnitude of RVUs being reported. RVUs can easily be converted to cost, such as the Comparative Billing Reports that come out,” Cohen says. If reviewers discover that your costs for providing services are higher than your peers’, they may investigate further, he adds.
3. Modifier Utilization: In 2018, the variety of modifier audits increased dramatically, involving other modifiers in addition to modifier 59, which has been a frequent target of audits.
4. Time: The Harvard RUC time study assigned a certain number of minutes to every procedure code that has a work RVU. As Cohen explains, “The analysis is used to determine whether the number of assessed hours a provider reports is reasonable and believable. The government has something called the ‘medically impossible day,’ which is when the physician’s assessed hours exceed 5,000 hours per year — the government says, ‘we don’t think that is possible,’ and the OIG considers this a big issue that they look at.”