1. Minnesota Department of Human Services Recovery Audit Contract (RAC) Provider Outreach & Education Presentation April 18, 2013

2. 2 Agenda Introduction HMS Overview Minnesota’s Medicaid RAC Program Complex and Credit Balance Reviews: Methodology Approach & Overview Review Process Provider Portal Answer Common Questions

3.  Health Management Systems Presenters Lonnette Chilefone, Director, Minnesota Programs Joleen Bond-Livingston, Vice President, Recovery Audit Glenda Lloyd, Manager, DRG Coding Validation - RAC Mary Leigh Covington, Divisional Vice President Credit Balance Jeffrey Norman, Sr. Program Integrity Provider Services Supervisor 3

4. HMS OVERVIEW JOLEEN BOND-LIVINGSTON VICE PRESIDENT, RECOVERY AUDIT

5. About HMS We provide cost containment services for healthcare payers We help ensure that claims are paid correctly (program integrity) and by the appropriate responsible party (coordination of benefits) As a result, our clients spend more of their healthcare dollars on the patients themselves 5

6. Background Recovery Audit Contractor Medicare Modernization Act of 2003 created a demonstration project to identify Medicare overpayments –The program was operational from 2005 through 2007 –Following success of the demonstration project, the program was made permanent in 2008 Section 6411(a) of the Affordable Care Act expanded RAC to Medicaid and required each State to begin implementation by January 1, 2012 –Identification of overpayments and underpayments –States & RAC vendor must coordinate recovery audit efforts –RAC vendors reimbursed through contingency model 6

7. HMS- Medicaid RAC Standards Reduce provider abrasion, provide education, customer service and limit administrative costs. Possess in depth knowledge of Minnesota Medicaid policies, regulations and MMIS processes. Maintain an understanding of the state’s operating environment – political, provider associations, agency goals. Experienced in coordinating with other state audit entities. Have established processes for: a) Receiving and Formatting Medicaid Data, b) Proven provider relations and c) Seamless recovery function. 7

8. RAC Process: Flow Minnesota Policy Review Pilot Data Mining (Based on Policy Guidelines) Recovery Improper Payment Scenarios Design Approval from Minnesota Automated & Complex Review Trend Analysis & Provider Education System Remediation 8 Transparency & Collaboration with Minnesota

9. Key RAC Considerations Diverse focus on multiple provider and claim types Minnesota approval on all initiatives Supplement and wrap around existing Minnesota efforts Pilot approach to confirm issue/scenario Comprehensive provider education Same appeal rights as other DHS post-payment reviews 360 degree claim review –Clinical –Regulatory –Billing Comprehensive panel of experts –Physicians, Nurses, Coders –Data analysts –Financial auditors 9

10. Overview of Review Process 10 Analysis And Identification Education, Process Improvement Review/Audit Program Analysis Data Mining/Scenario Design State Approval Record Request Provider Contact Record Request/Receipt Tracking/follow up RN/Coder Review Physician Referral QA and Client Review/Approval Notification and Recovery Notification Letter Reconsideration/Appeal Recovery Support Provider Association Meetings Program Recommendations Newsletter/Website

11. HMS RAC Support Staff Experienced staff performing reviews according to provider types included in contract: –Certified Coders –Registered nurses –Specialized Therapy Professionals –Review panel of over 1,000 physicians HMS has in-depth knowledge of –Minnesota Medicaid billing & reimbursement practices –Claims adjudication process –Medicaid data processed by Minnesota MMIS 11

12. HMS Audit Support 12 HMS Provider Services’ staff are practiced at establishing and maintaining effective communication with providers and strive to resolve provider issues on the first call

13. MINNESOTA MEDICAID RAC LONNETTE CHILEFONE DIRECTOR, MINNESOTA PROGRAMS

14. Minnesota Audit Areas Complex Reviews – Clinical based on DRG – Three year look back from paid date Credit Balance Reviews – Financial – Five year look back from paid date 14

15. Complex Reviews When analysis identifies a potential improper payment that cannot be automatically validated Claims flagged for further review Additional documentation is requested Audit to determine if improper payment Findings communicated with provider Look back period is three years from paid date 15

16. Credit Balance Reviews Not clinical reviews Financial reviews Payments and adjustments exceed the claim cost Can occur as a result of many variables Provides for identification of Root Cause Look back period is five years from bill date 16

17. Minnesot a Medicaid RAC Program Audit Areas 17 Financial AuditsClinical Complex Reviews Current Clinical Complex Review DRG Validation Audit Credit Balance Provider Types Approved to Date Acute Care Hospitals Medical Record Limits Not applicable- Financial Audit only 150 records per month not to exceed 450 per quarter * Note: DHS may authorize exception on a case-by-case basis. Provider Type : In-patient Hospital 150 records per month Audit Frequency TBD Type of Audit On-site or desk reviewsDesk reviewsDesk reviews; few could become on-site Audit Notification HMS letterhead Accompanied by the DHS authorization letter on DHS letterhead HMS letterhead Accompanied by the DHS authorization letter on DHS letterhead letterhead HMS letterhead Accompanied by the DHS authorization letter on DHS letterhead Types of Records In patient and outpatient hospitalization Medical records Varies by audit Medical records For example: Discharge summary Physician orders Labs, x-rays Medication Records

18. Audit Areas Continued 18 Credit Balance Audit Complex Reviews Current Complex Review DRG Validation Audit Who to Contact? HMS Provider services Source of Audits and Frequency All acute care hospitals: variable based on audit results Data mining and algorithms: variable based on audit results Claim Selection Claim-by-claimVaries per audit. May use sampling in the future. Claim-by-claim Entrance Conference Yes on-site or by conference call No, but provider may contact HMS Provider Services anytime Exit Conference Yes on-site or by conference call to review worksheets No, but provider may contact HMS Provider Services anytime

19. Review Process Providers will receive audit notifications HMS letterhead that will be accompanied by the DHS authorization letter on DHS letterhead. Audits will be conducted as desk reviews by experienced certified coders with access to a panel of physicians. During this period, HMS may be in contact with the provider to ask questions or to request additional information. The provider may contact HMS at any time to discuss their review. After the review process is completed, result letters are sent to providers to communicate: ˍDetailed description of final determinations ˍImproper payment amount ˍOption to appeal 19

20. Review Process Receipt of records is extremely important to accurately and effectively conduct the audits in a timely manner. Initial records request requires receipt of the records by HMS, no later than the end of the 30th business day from receipt of the letter documented by standard postal delivery tracking methods Failure to produce records will result in the determination that your agency was improperly paid for all services under review for the requested dates of service resulting in a refund request for these amounts Case reviews to be completed within 60 days from receipt of complete medical records 20

21. Review Process Extrapolation will NOT be applied for hospital DRG inpatient review overpayment amounts identified Current Minnesota appeal process will be utilized Concentrated effort made to assure that audit letters are detailed and specific, helping reduce the burden of appeal on all parties Providers are encouraged to call HMS’ Provider Services to discuss and resolve issues MN RAC toll free number: 855-394-8063 Call volumes are monitored to address potential issues which may be used in educational sessions Questions for DHS may be sent via email to DHS.RAC@state.mn.us 21

22. Review Process Responsibilities HMS Send Draft Audit Findings Letter with results of review. Work one-on-one with the provider to resolve any disputed cases, if provider requested reconsideration. Send Final Calculation of Overpayment letter to provider indicating remaining interest owed after claim adjustment requests have been processed. Support appeals process when applicable Providers Review Draft Audit Findings and respond within 30 calendar days of signed receipt of letter If in agreement with findings remit payment within 30 days If not in agreement with findings, submit a request for reconsideration within 30 days Review Final Calculation of Overpayment letter and: ● Agree and proceed with repayment, or ● File an appeal within 30 days 22

23. DIAGNOSIS RELATED GROUP (DRG) AUDITS Glenda Lloyd, MBA, BS, RHIA

24. Diagnosis Related-Group(DRG) Validation The purpose of DRG validation is to ensure that diagnostic and procedural information and the discharge status of the member, as coded and reported by the hospital on its claim, matches both the attending physician's description and the information contained in the member’s medical record.

25. Validation Sets 25 Target analysis identifies situations in which demographics, billing attributes, diagnosis codes, procedure codes, and/or factors affecting the DRG assignment appear to be inconsistent with other attributes of the claim or case documentation within the medical record, and in instances where providers have billed for a higher paying DRG in an outlier status.

26. CREDIT BALANCE OVERVIEW MARY LEIGH COVINGTONG DIVISIONAL VICE PRESIDENT, CREDIT BALANCE

27. 27 Currently serves 24 State Medicaid agencies, Medicaid Managed Care Organizations (MCO) and Commercial Insurance Plans 14 years of experience working with providers on credit balance audit projects Credit Balances Audits (CBAs) are focused on financial reimbursements to the provider Primarily the CBAs are focused on reviewing the Provider’s Accounts Receivables (AR), Remittance Advices (RA), Explanation of Benefits (EOB) and miscellaneous relevant financial documents. Experience determining and communicating with the provider the root cause of the identified overpayments or accounts resulting in credit balances HMS Credit Balance Audit (CBA) Overview

28. 28 A credit balance occurs when the sum of payments received plus adjustments exceed the total charges on a claim Just because an account is sitting in a credit balance does not mean money is due back to the payer Common causes of credit balance include: Payments from third party payors and from Medicaid Duplicate Medicaid payments Charge reversals/adjustments/transfers Duplicate adjustments made to an account What is a Credit Balance?

29. 29 Approach COB Retroactive payments Double payments Incorrect payments ROOT CAUSES 35% 65% MONETARY NON-MONETARY HMS provides a root cause analysis to prevent future credit balances. Inaccurate postings Charges written off in excess of amounts actually billed Provider A/R collection systems modeling net revenue at the time of billing Not all overpayments are credit balances; not all credit balances are overpayments

30. 30 1.Audit notice and Initial Contact 2.Entrance Conference 3.Review all active and inactive accounts in credit balance status as of the notice date –Remote/Desk Reviews –Provider Self Disclosure 4.Review and Finalize findings –Provider Attestation Process 5.Exit Conference 6.Recovery and Reporting Credit Balance Audits: Process Overview

31. 31 Open communication with providers throughout the audit process Root cause analysis assists providers in preventing future overpayments Insure providers are up to date on the latest billing and reimbursement methods utilized by MN DHS Credit Balance: Provider Education

32. 32 Minnesota Provider Portal Jeff Norman

33. Provider Portal The Provider Portal is a secure website that allows providers manage their RAC reviews. More than 15,000 providers currently use HMS’s Provider Portal. Contact information can be updated by providers. Contains HMS contacts. 33

34. Provider Portal 34 Secure website for each provider to manage reviews

35. Provider Portal 35

36. Provider Portal 36

37. Provider Portal 37

38. Provider Portal 38

39. Provider Portal 39

40. Provider Portal 40

41. 41 Questions