1. Home Town Health RAC and Case Management Update August 10, 2016

2. Agenda RAC Update – Review of Claims Affected by Temporary Suspension of QIO Short Stay Reviews Case Management – Why Case Management and RAC Today? 2

3. RAC Update

4. Review of Claims Affected by Temporary Suspension of QIO Short Stay Reviews On May 4, 2016, the CMS temporarily paused the QIOs performance of initial patient status reviews to determine the appropriateness of Part A payment for short stay inpatient hospital claims CMS took this action in an effort to: Promote consistent application of the medical review of patient status for short hospital stays To allow time to improve standardization QIOs’ review process. 4

5. Review of Claims Affected by Temporary Suspension of QIO Short Stay Reviews On June 6, 2016, CMS required the QIOs to re-review all short stay patient status claims that were denied under the QIO medical review process since the QIOs began conducting these reviews on October 1, 2015 5

6. Review of Claims Affected by Temporary Suspension of QIO Short Stay Reviews The temporary suspension remains effective, and the QIO short stay claim reviews will resume after the QIOs have Completed retraining on the inpatient admission policy Completed the re-review of previously denied claims Performed any needed provider outreach and education CMS validates the accuracy of the QIOs’ performance of these activities These improvement steps have begun and are nearly complete CMS will advise stakeholders when the suspension is lifted 6

7. Review of Claims Affected by Temporary Suspension of QIO Short Stay Reviews CMS has clarified the instructions for medical review of claims affected by the temporary suspension of the QIOs performance of initial patient status reviews of acute care inpatient hospitals, long-term care hospitals, and inpatient psychiatric facilities to determine the appropriateness of Part A payment for short stay inpatient hospital claims 7

8. Review of Claims Affected by Temporary Suspension of QIO Short Stay Reviews Specifically, CMS is announcing that these reviews will be limited to a six-month look-back period from the date of admission and announcing that Medicare Fee-For-Service (FFS) claims that: Are outside the six-month look-back period and were formally denied are being removed from the provider sample for re-review and will be paid under Part A Are outside the six-month look-back period and were not formally denied are being removed from the provider sample for re-review and will be paid under Part A Are within the six-month look-back period and were not formally denied will be reviewed when we resume QIO reviews as per CMS sub-regulatory guidance Are within the six-month look-back period and were formally denied are being re-reviewed by the QIO to determine whether the initial review decision was consistent with the two-midnight policy in effect at the time of the hospital admission 8

9. Review of Claims Affected by Temporary Suspension of QIO Short Stay Reviews For purposes of these instructions, “formally denied” is defined as meeting the following three criteria: The provider was sent an initial results letter by the QIO; and The QIO conducted and completed provider-specific education on claims in question; and The QIO sent the provider a final results letter and the denial was sent to the MAC for effectuation 9

10. Case Management

11. Why Case Management and RAC Today? The majority of dollars that are taken back or denied from hospitals are due to medical necessity issues Medical necessity has not been clearly defined by CMS for Medicare Fee for Service patients Medicare Advantage plans generally include language in the contracts that reference medical necessity 11

12. Why Case Management and RAC Today? In most hospitals today, Case Managers assist the physicians in documenting the patient’s acuity and ensure the patient is in the correct billing status For example, when the physician documents that the patient is going to be kept overnight for observation due to symptoms of which no definitive diagnosis has been identified an inpatient order would rarely be appropriate The Case Managers are responsible for working with the physicians to obtain additional documentation to support an inpatient admission or should complete the required actions and documentation for a Condition Code 44 12

13. Case Management Are your case managers well prepared to assist your physicians in the documentation and appropriate orders? Here are a few tips: Ensure your UR plan is up-to-date and references the screening criteria that your organization will use Be sure your Case Managers fully understand how to apply the screening criteria and that it is only a first level screening Ensure your facility has Physician Advisors that will complete a second level review Remember that InterQual and Milliman are only screening criteria that ultimately medical necessity is defined by a Physician Consider implementing a second level review for your short stays inpatient accounts. This is especially important if you do not have seven day a week Case Management coverage 13

14. MedPerformance Case Management Education MedPerformance has a team of certified Case Managers who are available to provide onsite or offsite education and support MedPerformance also has experienced Physician Advisors to provide telephonic support to your Case Management Team Contact Becky for details 14

15. MedPerformance iMAD MedPerformance has a powerful and easy to use Denial Management System “iMAD” that can help you reduce your denials MedPerformance can help you with manage your denials with experienced staff Free Denial Assessment still available 15

16. Thank You Questions? Comments? Thank You! 16

17. iMAD Contact Information For more information, please contact: MedPerformance LLC Rebecca Corzine Tarr Owner (813) 786-8974 Becky@MedPerformance.com www.medperformance.com 17