Practice Management Alert

New You Can Use:

Find Out What CMS Thinks About 2020-2021 Claims Payments

Surprise: CMS says the improper payment rate was 7.46 percent.

If your Medicare claims don’t support the higher-level code for established evaluation and management (E/M) visits, be warned. The annual Comprehensive Error Rate Testing (CERT) report shows incorrect coding of these bread-and-butter office visits remain a thorny problem for Part B providers. Read on for the details.

Context: On Dec. 8, 2022, the Centers for Medicare & Medicaid Services (CMS) published its “2022 Medicare Fee-for-Service Supplemental Improper Payment Data” as part of its CERT program. CMS uses CERT data to estimate improper payments and fix Medicare claims issues across the various programs.

Background: Under the CERT program, CMS pulls random claims samples and checks to see if they were paid in accordance with Medicare coverage, coding, and billing requirements. Moreover, CERT auditors review whether the claim “was paid when it should have been denied or paid at another amount (including both overpayments and underpayments),” a CMS fact sheet reminds. Additionally, the reviewers scrutinize claims with insufficient documentation, determining whether the data shows if the claims were properly or improperly paid, CMS adds.

The CERT report for FY 2022 lists the improper payment rate at 7.46 percent for claims submitted during the 12-month period from July 1, 2020, through June 30, 2021. That translates to $31.46 billion in improper payments. Though the overall rate has been under 10 percent for the past six years, the numbers went up from 2021 to 2022. Last year, the improper payment rate was at 6.26 percent and improper payments registered at $25.03 billion.

But CMS remains optimistic, maintains CMS Administrator Chiquita Brooks- LaSure. “Protecting our programs’ sustainability is one of CMS’ core strategic pillars. We are focused on program integrity so that people today — and in the future — continue to benefit from access to quality care,” says Brooks-LaSure in a release. “We are committed to strengthening and maintaining these efforts to bring down improper payment rates across the board.”

Statistics: There are success stories, however, despite the rise in the overall error rate. Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers’ improper payment rate declined from 28.64 percent to 25.2 percent, with improper payments going from $2.38 billion in 2021 to $2.2 billion in 2022, Table A1 of the CERT report notes. “CMS has seen continued success in its efforts to combat improper payments in durable medical equipment claims,” the agency says in a release. “Because of CMS’ corrective actions, durable medical equipment claims saw a $193 million reduction in estimated improper payments since 2021.”

Here’s how the other parts of Medicare factored into the 2022 FFS improper payment rate:

  • Medicare Part A (excluding IPPS) claims had an improper payment rate of 8.9 percent, and $17.1 billion in improper payments — a whopping increase from the 2021 numbers of 6.31 percent error rate and $11.58 billion in improper payments.
  • Medicare Part A (with IPPS) had a slight error rate adjustment from 2.39 percent in 2021 to 3.0 in 2022. Improper payments jumped from $2.58 billion to $3.4 billion.
  • Medicare Part B’s improper payment rate went down from 8.49 percent in 2021 to 8.2 in 2022, but interestingly the improper payment numbers went up from $8.5 billion last year to $8.8 billion currently.

Heads up: COVID-19 had caused CMS to pause CERT program activities, but the agency resumed audits in August 2020, which did affect the FY 2022 reporting period, a fact sheet notes. “As a result, the FY 2022 rate reflects CERT program processes that had a two-month delay in contacting providers and suppliers for documentation, and an adjusted sample size. In addition, the waivers and flexibilities provided by CMS for providers and suppliers during the COVID-19 public health emergency apply to all claims in the FY 2022 report period,” CMS cautions.

Boost Your Documentation Efforts

According to the CERT report, insufficient documentation ranked as the chief cause leading to improper payments across the Medicare spectrum. Insufficient documentation accounted for 63.6 percent of improper payments while medical necessity came in second at 13.8 percent and incorrect coding was third at 10.5 percent, as illustrated in Figure 2 of the report.

Though “root causes” for the various Medicare parts’ improper payment rates highlighted lackluster documentation as the prime culprit, there were some surprises this year. For example:

Home health: The sample claims for home health uncovered that agencies top root cause was proving medical necessity for skilled services in the medical record, Table 4 notes. “The projected improper payment amount for home health services during the 2022 report period was $1.8 billion, resulting in an improper payment rate of 10.2 percent,” the report says.

E/M office visits: In FY 2022, incorrect coding was the major root cause for Part B providers in the area of established office visits. The sampled claims pointed to an upcoding problem with providers submitting documentation that supported lower-level E/M services than the higher-level codes the clinicians billed Medicare, Table 6 notes.

CERT Data Impacts Your Practice Like This

Even the most seasoned coders make mistakes, and that’s where the CERT data comes into play. Whether your notes, coding, and compliance policies are spot-on or your Medicare claims could use a little help, reviewing the annual CERT report can help with audit planning, rectifying outlier tendencies, and problem solving.

Why? CMS uses the information garnered from the CERT program in three different ways. First, it utilizes providers’ data to “protect the Medicare Trust Fund by identifying errors and assessing error rates, at both the national and regional levels,” indicates Part B Medicare Administrative Contractor (MAC) CGS Medicare in its CERT guidance.

Second, the government tracks error trends amongst certain provider types, codes, and services through the CERT program. These findings help CMS pinpoint problem areas that are perennially an issue and ratchet up the improper payment rate, costing taxpayers billions. The agency then uses this valuable information to rein in outliers, rectify issues, and promote program integrity, CGS suggests.

Lastly, CMS uses the information garnered from the report to measure how MACs are doing. “The CERT program is designed to determine if Medicare contractors are processing and paying claims correctly,” notes Part B MAC NGS Medicare in online guidance. Furthermore, the CERT data helps to determine regional programming and education, including tools like the Targeted Probe & Educate (TPE) program and Comparative Billing Reports (CBRs) in a jurisdiction.

“CERT is an excellent program that provides extremely helpful information for physicians,” explains Christina Neighbors, MA, CPC, CCC, coding quality auditor for Conifer Health Solutions, Coding Quality & Education Department. “It’s really important for physicians to keep an eye out because there is a lot of overcharging and unnecessary billing for services that lack the proper medical necessity.”

Resources: Review the FY 2022 CERT report at www.cms. gov/files/document/2022-medicare-fee-service-supplemental-improper-payment-data.pdf`and the CMS fact sheet at www. cms.gov/newsroom/fact-sheets/fiscal-year-2022-improper-payments-fact-sheet.