1. Derry, Nolan & Associates, LLC - Physician Practice Compliance Program Presented by Barbara Derry, BSN, CMPE Melania “Lani” Antonio, CPC

2. Derry, Nolan & Associates, LLC Physician Practice Compliance Program

3. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Overview Common Compliance Risk Areas Compliance Program Development Barbara Derry

4. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Common Risk Areas None or irregular risk assessment Physician employment/partnership agreements Governing board, physicians & staff lack awareness Physicians not holding each other accountable for coding & documentation accuracy Disregarding employees’ concerns Compliance policies, procedures & documents not updated –

5. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Common Risk Areas Physician business agreements – anti-kickback statutes Coding & claims submission & reconciliation inaccuracies lead to claim denials & decreased revenue –demographic & insurance not correct –coding & documentation don’t link –Medical necessity rules not followed

6. Derry, Nolan & Associates, LLC Physician Practice Compliance Program A collaborative cooperative voluntary compliance program, led by physician leadership, promotes early detection, prevention & correction to minimize risks of healthcare fraud and abuse.

7. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Foundation for an Effective Compliance & Ethics Program (OIG’s 7 Elements) 1.Standard Policies & Procedures 2.Oversight & Documentation Responsibility 3.Education & Training 4.Lines of Communication 5.Audit & Monitoring 6.Enforcement & Discipline 7.Response & Prevention

8. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Getting Started ↓Physician’s agree on commitment to the compliance program “culture” OIG’s 7 elements ↓Assign physician board oversight responsibility ↓Physician board designates compliance officer for program oversight ↓Assign a compliance committee (C.C.) selected from major departments ↓Conduct a risk assessment internal vs. external

9. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Self - Risk Assessment Each organization will have different risk areas Sets a compass for the organization to follow Identifies:  policies, procedures and forms  education & training  audit & monitoring  resources

10. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Compliance Committee Recommends Annual Goals 1. Develop a compliance program with physician leadership driving the process that promotes effectiveness & follows new sentencing guidelines:

11. Derry, Nolan & Associates, LLC Physician Practice Compliance Program New Federal Sentencing Guidelines Encourages organizations to partner with Federal government in crime control Provides strong incentives for organizations to self-police, self-report & cooperative in investigations of its own wrong doing Requires board and senior leadership to be knowledgeable about the content and operation of the program to prevent and detect violations – eliminate knowing & doing gap

12. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Compliance Committee Goals 2. Develop an effective communication system for communicating, reporting, correcting possible compliance violations Board Knowledgeable & Accountable Compliance Officer Oversight Documentation Maintenance Monitoring & Auditing Reporting Compliance Committee Development & Implementation Physicians & Staff Confidential Alert or Hot Line Available 24 hrs Allows for Anonymity Timely feedback Document Action

13. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Development Effectiveness A practical/simple approach to policies, procedures and forms – communication tools Resource tools:  OIG 2000 physician practice guidelines  OIG work plans  Federal Sentencing Guidelines  Medicare Part B News  CCI edits,

14. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Development Effectiveness Provide education & training to board, providers and staff to promote early detection, prevention & correction Substantiate & document awareness Accurate outpatient billing – NO DENIALS Audit activities focus on risk areas Audit results & recommendations to board & senior management Follow through with corrective/disciplinary action

15. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Choose Subcommittees who become the working arm of the Compliance Committee Typical Representation: Education & Training Claims Submission & Reimbursement Audit & Monitoring Others, as identified

16. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Major Duties of Subcommittees Research, develop, write, present & amend policies and procedures for compliance committee Document progress of outstanding issues Investigate risk areas via quality improvement efforts Responsible for education & training (staff & physician) Responsible for auditing processes to determine effectiveness Make recommendations for enhancement Measure effectiveness

17. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Education & Training Subcommittee Define organizational structure, governance & organizational chart Define “Core” policies most relevant to your organization – focused on “operationalizing” the compliance program Based on risk assessment results

18. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Policies May Include 1. Standard of Conduct 2. Confidentiality (Includes HIPAA) 3. Internal & External Communications 4. Conflict of Interest 5. Documentation Retention

19. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Policies May Include Cont’d 6.Self-Reporting of violations of laws/regulations – legal review 7.Physician contracting, Employment Agreements – legal review 8.Organizational contracting (vendors & payers) – legal review 9.Human Resources – awareness & consequences of non-compliance 10.Solicitation: Vendors/Gifts & Gratuities

20. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Policies May Include Cont’d 11. Marketing 12. Coding & Claims Submission 13. Claims Reimbursement & Reconciliation 14. Education and Training 15. Audit & Monitoring 16. Other policies as identified

21. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Example of Core Policy: Education & Training Board, physicians, manager & staff review pertinent policies & procedures Sign appropriate policy acknowledgement forms Take appropriate tests: providers, billing, non-billing staff Determine physician & employee knowledge level by achieving 95% accuracy rates Additional training and testing for those with less than 95% score Document training and scores Provide annual education

22. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Provider Education Accurate coding & documentation drives reimbursement & prevents violations Common Problems –under & over coding –default coding –lack of diagnosis specificity –lack of knowledge of Medicare’s national medical review policies –inappropriate use of modifiers & unbundling services deemed not medically necessary

23. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Optimal Physician Education & Training Establish a physician leader to drive education process Conduct annual chart audit for each physician to establish baseline of knowledge Structure education based on those results Avoid too generalized coding sessions

24. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Optimal Physician Education & Training Be specialty-specific Standardize fee-tickets & documentation templates Re-audit in 2-3 months to determine effectiveness of training No improvement--document & report corrective/disciplinary action – 100% chart review, expense charged to provider or department

25. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Example of Partial Fee-Ticket for Ophthalmology with Diagnoses Linked to NCDs & LMRPs

26. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Example of a Standard Documentation Template

27. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Audit & Monitoring Subcommittee Fostering an atmosphere of continuous process improvement Follow CMS’s quality integrity program’s 4 elements –risk assessment and problem identification –solution planning –solution implementation and –monitoring the success of the process Audit the highest risk areas Profile physicians to identify outliers Investigate all concerns, report findings, make recommendations (e.g., education)

28. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Claims Submission & Reimbursement Subcommittee Claims Submission Sub-Policies OIG’s Work Plan –accurate codes: CPT, HCPCS, ICD-9 –use of modifiers: 25, 26, 51 & 59 –care plan oversight –incident to

29. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Claims Submission & Reimbursement Subcommittee –medical necessity and ABN (GA modifier) –duplicate claims –disputed claims –unbundling –physician services at SNFs

30. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Claims Submission & Reimbursement Subcommittee Claims Reimbursement Sub-Policies OIG’s Work Plan –deductibles, co-payments & coinsurance –Bad debt & small balance write-offs –discounting of services –refunds

31. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Claims Submission & Reimbursement Subcommittee –charity care/financial aid application –Professional discounts/designated services –Third party billing payments –Denials, bundled and appealed charges

32. Derry, Nolan & Associates, LLC Physician Practice Compliance Program To Summarize Physician Practices that implement a culture that promotes and embraces compliance are more likely to have effective compliance programs & are better able to prevent, detect & correct problems

33. Derry, Nolan & Associates, LLC Physician Practice Compliance Program Auditing & Monitoring Melania “Lani” Antonio, CPC Group Health Cooperative Manager, Billing Guidelines Development

34. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Follow CMS’s quality integrity program’s 4 elements –risk assessment and problem identification –solution planning –solution implementation and –monitoring the success of the process Audit the highest risk areas Profile physicians to identify outliers Investigate all concerns, report findings, make recommendations (e.g., education)

35. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification –Review Office of Inspector General (OIG) work plan and investigate current practice. –Review coding activities throughout the organization and identify risk areas. –Investigate all concerns and identify risk.

36. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Billing Service Companies – “We will identify and review the relationships among billing companies and the physicians and other Medicare providers who use their services. We will also identify the various types of arrangements physicians and other Medicare providers have with billing services and determine the impact of these arrangements on the physicians’ billings.”

37. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Medicare Payments to VA Physicians – “We will assess the validity of Medicare reimbursement for services billed by physicians who receive remuneration from the Department of Veterans Affairs (VA) for the time the physicians reported as being on duty at a VA hospital. Physicians employed by VA may not bill Medicare for services rendered at other hospitals during the times they were on duty at a VA hospital. Our preliminary work has identified a number of VA physicians who received Medicare reimbursements totaling approximately $105 million for services rendered between January 1, 2001 and June 30, 2003. Using time reporting and payroll documentation from the VA, we will identify the services rendered while the physicians were reported as on duty at the VA hospitals and remunerated for such duty.”

38. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Care Plan Oversight – “We will evaluate the efficacy of controls over Medicare payments for care plan oversight claims submitted by physicians. Under the Medicare home health and hospice benefits, care plan oversight is physician supervision of beneficiaries who need complex or multidisciplinary care requiring ongoing physician involvement. Reimbursement for care plan oversight increased from $15 million in 2000 to $41 million in 2001. We will assess whether these services were provided in accordance with Medicare regulations.”

39. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Ordering Physicians Excluded from Medicare – “This review will quantify the extent of services, if any, ordered by physicians excluded from Federal health care programs and the amount paid by Medicare Part B. Under Federal regulation, physicians who are excluded from Federal health care programs generally are precluded from ordering or performing services for Medicare beneficiaries. During a current review, we identified a significant number of services that had been ordered by excluded physicians.”

40. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Physician Services at Skilled Nursing Facilities – “We will examine Medicare Part A and Part B claims with overlapping services for skilled nursing facility patients and determine whether duplicate payments were made to either the physicians or the nursing homes for the same patient services. Physicians may bill Medicare only for the professional component of a service on behalf of skilled nursing facility patients. The technical component of physicians’ services is covered under the patient’s Medicare Part B stay in the skilled nursing facilities and should not be billed separately by the nursing home. Under an exception to this rule, nursing homes may receive Part B payments for both the professional and technical components of physicians’ services if both parties have an agreement under which only the nursing home may bill and receive these Part B payments.”

41. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Physician Pathology Services – “Our review will focus on pathology services performed in physicians’ offices. Pathology services include the examination of cells or tissue samples by a physician who prepares a report of his findings. Medicare pays over $1 billion annually to physicians for pathology services. We will identify and review the relationships between physicians who furnish pathology services in their offices and outside pathology companies.”

42. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Cardiography and Echocardiography Services –“We will review Medicare payments for cardiography and echocardiography services to determine whether physicians billed appropriately for the professional and the technical components of the services. Like many physician services, cardiography and echocardiography include both technical and professional components. When a physician performs the interpretation separately, the modifier 26 should be used to bill Medicare for professional services.”

43. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Physical and Occupational Therapy Services –“We will review Medicare claims for therapy services provided by physical and occupational therapists to determine whether the services were reasonable and medically necessary, adequately documented, and certified by physician certification statements. Physical and occupational therapies are medically prescribed treatments concerned with improving or restoring functions, preventing further disability, and relieving symptoms.”

44. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Part B Mental Health Services –“We will determine whether Medicare Part B mental health services provided in physicians’ offices were medically necessary and billed in accordance with Medicare requirements. Payments for mental health services provided in the physician’s office setting accounted for approximately 55 percent of the $1.3 billion in Medicare payments for Part B mental health services in 2002. In a prior report, we found that Medicare allowed $185 million for inappropriate mental health services in the outpatient setting. We will also determine the financial impact of claims that do not meet Medicare requirements. ”

45. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Wound Care Services –“We will determine whether claims for wound care services were medically necessary and billed in accordance with Medicare requirements. Medicare- allowed amounts for certain wound care services billed by physicians increased from approximately $98 million in 1998 to $147 million in 2002. We will also examine the adequacy of controls to prevent inappropriate payments for wound care services.”

46. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Coding of Evaluation and Management Services –“We will examine patterns of physician coding of evaluation and management services and determine whether these services were coded accurately. In 2003, Medicare allowed over $29 billion for evaluation and management services. In prior work, we found that a significant portion of certain categories of these services is billed with incorrect codes resulting in large overpayments. We will also assess the adequacy of controls to identify physicians with aberrant coding patterns.”

47. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Use of Modifier -25 –“We will determine whether providers used modifier –25 appropriately. In general, a provider should not bill evaluation and management codes on the same day as a procedure or other service unless the evaluation and management service is a significant, separately identifiable service from such procedure or service. A provider reports such a circumstance by using modifier –25. In 2001, Medicare allowed over $23 billion for evaluation and management services. Of that amount, approximately $1.7 billion was for evaluation and management services billed with modifier –25. We will determine whether these claims were billed and reimbursed appropriately.”

48. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Use of Modifiers With National Correct Coding Initiative Edits –“We will determine whether claims were paid appropriately when modifiers were used to bypass National Correct Coding Initiative edits. The initiative, one of CMS’s tools for detecting and correcting improper billing, is designed to provide Medicare Part B carriers with code pair edits for use in reviewing claims. A provider may include a modifier to allow payment for both services within the code pair under certain circumstances. In 2001, Medicare paid $565 million to providers who included the modifier with code pairs within the National Correct Coding Initiative. We will determine whether modifiers were used appropriately.”

49. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals “Long Distance” Physician Claims –“We will review Medicare claims for face-to-face physician encounters where the practice setting and the beneficiary’s location were separated by a significant distance. While all beneficiaries may seek professional services for specialized consultation during leisure travel, those with ongoing illnesses requiring skilled care would be unlikely to travel long distances from home. We will examine these claims to confirm that services were provided and accurately reported. If warranted, we will recommend enhancements to existing program integrity controls.”

50. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d OIG 2005 Work Plan –Medicare Physicians and Other Health Professionals Provider-Based Entities –“We will determine the extent to which health care entities that have been designated as “provider based” are in compliance with requirements for receiving this designation. In prior work, we found that hospital ownership of physician practices is widespread and that fiscal intermediaries are frequently unaware whether these hospitals are being treated as provider based or freestanding. Medicare and its beneficiaries may be paying excessive amounts for services inappropriately billed as provider based. We will also determine the impact on Medicare reimbursements of entities billing as provider based instead of freestanding.”

51. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d DOCUMENTATION Handwritten or dictated Charges are manually entered Charges are interfaced BILLING SYSTEM CHARG E MASTE R INS COMPANY Claims Processing $$$ Charge Slip DOCUMENTATION Electronic Medical Record (EMR) Provider assigns codes on the charge slip Typically Non-provider staff maintains code set up in the Charge Master. Provider assigns codes in EMR Claim Reject In some cases, Non-provider staff reviews coding and makes appropriate changes prior to manual entry. Typically Non-provider staff reviews coding and makes appropriate changes prior to claim submission Codes are referenced on the charge slip. Codes are set up in EMR. Non-provider staff may change coding in order for claim to be reprocess. CODINGACTIVITIESCODINGACTIVITIES Coders should review coding set ups for accuracy. Coders should review & update codes. Develop policies & procedures on appropriate coding changes Coders should review coding set ups for accuracy. Develop policies & procedures on appropriate coding changes Develop policies & procedures on appropriate coding changes

52. Derry, Nolan & Associates, LLC Risk Assessment and Problem Identification Cont’d Investigate all concerns –Example: A pattern of increased denials. During an exit interview, a staff member provided concerns on a potential compliance issue.

53. Derry, Nolan & Associates, LLC Integrity Cycle Report Report #: 1Date Initiated: __/__/__Initiated By: {Staff Name } Source: Compliance Line Employee interview or report Audit result X Reimbursement or denial pattern Other (specify): Problem Identification (research conducted): A pattern of increased Medicare denial on XXXX services. Solution Planning and Implementation : Solution planning needs to encompass two areas: 1) resolution of the billing issue for XXX services; and 2) provide education and training ActionResponsibl e Person Date Completed Comments {Date} Review documentationCoder {Date} Provider coding trainingCoder {Date} Corrected claimsBilling Staff {Date} Compliance Subcommittee recommend a 2 nd audit Coder Monitoring Plan: Coder will continue to audit XXXX services prior to claim submission until 80%-100% accuracy is achieved. Claims will not be re-submitted until coding and documentation match.

54. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Auditing Effectiveness Based on 4 Key Elements –Standardization –Communication –Quality –Tracking

55. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Standardization –Develop an auditing manual for coders/auditors to use as a reference. Manual may include the following: Standard policy –Follow policy for provider E&M coding and documentation –Select number of charts (10) reviewed for each provider –Determine acceptable accuracy percentage –Determine number of failed chart audit sessions (3) prior to disciplinary action of 100% chart review –Provide report to Compliance leadership team with recommendations. Guidelines –Audit E&M by following 1995 OR 1997 guideline. –Should we follow only Medicare guidelines? How about providers that do not see Medicare patients? Auditing process

56. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Communication –Auditor/Coder to Auditor/Coder –Non-provider staff members (i.e. billing staff, patient account, etc.) to Auditor/Coder –Auditor/Coder to Provider staff members (i.e. physicians)

57. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Communication –Auditor/Coder to Auditor/Coder Eliminate opportunities for misinterpretations on processes and/or guidelines. Communicate new processes and/or guidelines. Communicate opportunities for improvement.

58. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Communication –Non-provider staff members (i.e. billing staff, patient account, etc.) to Auditor/Coder Eliminate opportunities for misinterpretations in coding/billing (i.e. usage of modifiers). Provide feedback on coding/billing (i.e. claim reject) that may need to be further reviewed and/or investigated (i.e. non-covered diagnosis). Provide feedback on coding/billing (i.e. claim reject) that may require provider education (i.e. usage of modifiers).

59. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Communication –Auditor/Coder to Provider staff members (i.e. physicians) Provide coding education in a group setting and/or one-on- one upon completion of an audit. –Potential problem: Physician may not agree with auditor/coder. »May request a second review by another auditor/coder. »If provider still disagrees it is bumped up to the physician compliance leader to resolve and document action taken OR may have a policy that it is sent out according to the auditors recommendations. Provide follow-up coding education. Provide open communication where the provider request assistance in coding as needed basis.

60. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Quality –Audit the auditor/coder Identify coding errors –Provide additional training –Develop policy on how to address job performance –Audit revenue cycle Identify inaccurate coding changes Improve operational processes Provide additional training to new process Re-audit to determine if changes were effective

61. Derry, Nolan & Associates, LLC Physician Practice Auditing & Monitoring Tracking –Track all audits in a centralized location Excel Access Database –Report back to compliance officer the results and recommendations for improvement.

62. Derry, Nolan & Associates, LLC Key To Success Is TEAMWORK