(Medicare Program Integrity Manual)

Medicare Program Integrity Manual  Chapter 3 - Verifying Potential Errors and Taking Corrective Actions  Table of Contents   (Rev. 1 2056; Issued: 0 5-25-23)    Transmittals for Chapter 3   3.1 - Introduction  3.2 - Overview of Prepayment and Postpayment Reviews  3.2.1 - Setting Priorities and Targeting Reviews  3.2.2 - Provider Notice  3.2.2.1 - Maintaining Provider Information 3.2.3 - Requesting Additional Documentation During Prepayment and Postpayment Review  3.2.3.1 - Additional Documentation Requests (ADR) . 3.2.3.2 - Time Frames for Submission  3.2.3.3 - Third -Party Additional Documentation Request  3.2.3.4 - Additional Documentation Request Required and Optional Elements  3.2.3.5 - Acceptable Submission Methods  for Responses to ADRs 3.2.3.6 - Reimbursing Providers and HIHs for Additional Document ation  3.2.3.7 - Special Provisions for Lab Additional Documentation Requests  3.2.3.8 - No Response or Insufficient Response to Additional Documentation Requests  3.2.3.9 - Reopening Claims with Additional Information or Denied Due to Late or No Submission of Requested Information  3.2.3.10 - Record Retention and Storage  3.2.4 - Use of Claims History Information in Claim Payment Determinations  3.2.5 - Targeted Probe and Educate (TPE ) 3.3 - Policies and Guidelines Applied During Review  3.3.1 - Types of Review: Medical Record Review, Non- Medical Record Review and Automated Review   3.3.1.1 - Medical Record Review  3.3.1.2 - Non -Medical Record Review  3.3.1.3  Automated Reviews  3.3.2 -  Medical Review Guidance  3.3.2.1 -  Documents on Which to Base a Determination  3.3.2.1.1 -  Progress Notes and Templates  3.3.2.1.2 DMEPOS Orders  3.3.2.2 -  Absolute Words and Prerequisite Therapies  3.3.2.3 -  Mandatory Policy Provisions  3.3.2.4 -  Signature Requirements  3.3.2.5  Amendments, Corrections and Delayed Entries in Medical Documentation  3.3.2.6 -  Psychotherapy Notes  3.3.2.7 -  Review Guideli nes for Therapy Services  3.3.2.8 -  MAC Articles  3.3.3 -  Reviewing Claims in the Absence of Policies and Guidelines  3.4 - Prepayment Review of Claims  3.4.1 -  Electronic and Paper Claims  3.4.1.1 -  Linking LCD and NCD ID Numbers to Edits  3.4.1.2 -  Not Otherwise Classified (NOC) Codes  3.4.1.3 -  Diagnosis Code Requirements  3.4.1.4 -  Prepayment Review of Claims Involving Utilization Parameters  3.4.1.5 -  Prepayment Review Edits  3.4.2 -  Prepayment Medical Record Review  Edits  3.5 - Postpayment Medical Record Review of Claims  3.5.1 -  Re-opening Claims  3.5.2 -  Case Selection  3.5.3 -  CMS Mandated Edits  3.5.4 -  Tracking Medicare Contractors  Prepayment and  Postpayment Reviews  3.6 - Determinatio ns Made During Review  3.6.1 -  Determining Overpayments and Underpayments  3.6.2 -  Verifying Errors  3.6.2.1 -  Coverage Determinations  3.6.2.2 -  Reas onable and Necessary Criteria  3.6.2.3 -  Limitation of Liability Determinations  3.6.2.4 -  Coding Determinations  3.6.2.5 -  Denial Types  3.6.3 -  Beneficiary Notification  3.6.4 -  Notifying the Provider  3.6.5 -  Provider Financial Rebuttal of Findings  3.6.6 -  Review Determination Documentation Requirements  3.7 - Corrective Actions  3.7.1 -  Progressive Corrective Action (PCA)  3.7.1.1 -  Provider Error Rate  3.7.1.2 -  Vignettes  3.7.1.3 -  Provider Notification and Feedback  3.7.2 -  Comparative Billing Reports (CBRs)  3.7.3 -  Evaluating the Effectiveness of Corrective Actions  3.7.3.1 -  Evaluation of Prepayment Edits  3.7.3.2 -  Evaluating Effectiveness of Established Automated Edits  3.7.3.3 -  Evaluation of Postpayment Review Effectiveness  3.7.4 -  Tracking Appeals  3.7.5 -  Corrective Action Reporting Requirements  3.8 - Administrative Relief from MR During a Disaster  3.9 - Defending Medical Review Decisions at Administrative Law Judge (ALJ) Hearings  3.9.1  Election of  Status  3.9.2 -  Coordination of  the ALJ Hearing  3.10  Prior Authorization 3.10.1 -   Prior Authorization Program for Certain DMEPOS  3.10.1.1 Voluntary Prior Authorization (PA) for DMEPOS Accessories  3.10.2 -  Prior Authorization Process for Certain Hospital Outpatient Department   (OPD) Services   3.1  Introduction  (Rev. 10365; Issued: 10- 02-20; Effective: 08 -27-20; Implementation: 08 -27-20)  All references to Medicare Administrative Contractors (MACs) include Affiliated Contractors (ACs). Affiliated Contractors are FIs and Carriers.   A. Goals   This section applies to Medicare Administrative Contractors (MACs), Comprehensive Error Rate Testing (CERT), and Recovery A uditors, as indicated.   The Medicare Administrative Contractors (MACs) shall analyze claims to determine provider compliance with Medicare coverage, coding, and billing rules and take appropriate corrective action when providers are found to be non- compliant. The goal of MAC administrative actions is to correct the behavior in need of change and prevent future inappropriate billing. The priority for MACs is to minimize potential future losses to the Medicare Trust Funds through targeted claims re view while using resources efficiently and treating providers and beneficiaries fairly.   For repeated infractions, MACs have the discretion to initiate progressively more severe administrative action, commensurate with the seriousness of the identified problem. (Refer to PIM chapter 3, 3.7.1). MACs shall deal with serious problems using the most substantial administrative actions available, such as 100 percent prepayment review of claims. Minor or isolated inappropriate billing shall be remediated through provider notification or feedback with reevaluation after notification. When medical review (MR) notification and feedback letters are issued, the MAC MR staff shall ensure that Provider Outreach and Education (POE) staff has access to copies of the letter s in case a provider requests further education or POE determines that future education is needed. While program savings are realized through denials of payment for inappropriate provider billing, the optimal result occurs when compliance is achieved and p roviders no longer incorrectly code or bill for non- covered services.   The Medicare Fee For Service Recovery Audit program is a legislatively mandated program (Tax Relief and Health Care Act of 2006) that utilizes Recovery Auditors to identify improper payments paid by Medicare to fee -for-service providers. The Recovery Auditors identify the improper payments, and the MACs adjust the claims, recoup identified overpayments and return underpayments.  MAC, CERT and Recovery Auditor staff shall not expend Medic are Integrity Program (MIP)/ MR resources analyzing provider compliance with Medicare rules that do not affect Medicare payment. Examples of such rules include violations of conditions of participation (COPs), or coverage or coding errors that do not change the Medicare payment amount.  The COPs define specific quality standards that providers shall meet to participate in the Medicare program. A providers compliance with the COPs is determined by the CMS Regional Office (RO) based on the State survey agenc y recommendation. If during a review, any contractor believes that a provider does not comply with conditions of participation, the reviewer shall not deny payment solely for this reason. Instead, the contractor shall notify the RO and the applicable State  survey agency.   When a potential underpayment or overpayment is identified, certain steps are normally followed to determine if a payment error exists. These steps are referred to as the claims development process. The reviewer generally does the following:    Investigates the claims and associated  documentation;   Performs appropriate research regarding liability, benefit categories, statutory requirements,  etc.;   Determines if a payment error exists and the nature of the error;   Notifies the beneficiary and provider/supplier;  and  Starts the payment reconciliation  process.   B. New Provider/New Benefit Monitoring   This section applies to the MACs.  The MACs shall analyze data to identify patterns of billing aberrancies of providers new to the Medicare program. The MACs have the option of performing prepayment or postpayment review of claims submitted by new providers as needed. The CMS encourages the MACs to perform these reviews on a prepayment basis to have the greatest chance of identifying and reducing the error rate of new providers. When MACs review the claims of a new provider, the MACs shall perform a limited review of generally 20- 40 claims in order to evaluate accurate billing.   The MACs shall also monitor for provider use of new statutory benefits and to ensure correct coverage, coding, and billing from the beginning. New benefit edits shall continue until the MAC is satisfied that the new b enefits are being used and billed appropriately or until the MAC determines that resources would best be spent on other types of review.   3.2  Overview of Prepayment and Postpayment Reviews (Rev. 10365; Issued: 10- 02-20; Effective: 08 -27-20; Implementatio n: 08 -27-20)  The term Medicare beneficiary identifier (Mbi) is a general term describing a beneficiary's Medicare identification number. For purposes of this manual, Medicare beneficiary identifier references both the Health Insurance Claim Number (HICN) and the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition period and after for certain business areas that will continue to use the HICN as part of their processes.   This section applies to MACs, CERT, RACs, SMRCs, and Unified P rogram Integrity Contractors (UPICs), as indicated.   A. Prepayment and Postpayment Review   Prepayment review occurs when a reviewer makes a claim determination before claim payment has been made. Prepayment review always results in an initial determination. Postpayment review occurs when a reviewer makes a claim determination after the claim has been paid. Postpayment review results in either no change to the initial determination or a revised determination indicating that an overpayment or underpayment has occurred.   B. Prepayment Edit  Capabilities   Prepayment edits shall be able to key on a be neficiary's Medicare beneficiary identifier (Mbi), National Provider Identifier (NPI) and specialty code, service dates, and diagnosis or procedure code(s) (i.e., Healthcare Common Procedure Coding System [HCPCS] and/or International Classification of Dise ases diagnoses codes), Type of Bill (TOB), revenue codes, occurrence codes, condition codes, and value codes.   The MAC systems shall be able to select claims for prepayment review using different types of comparisons. At a minimum, those comparisons shall include:    Procedure to Procedure - permits contractor systems to screen multiple  services at the claim level and in history.    Procedure to Provider -  permits selective screening of services that need review for a given  provider.    Frequency to Time - permits contractors to screen for a certain number of  services provided within a given time  period.   Diagnosis to Procedure - permits contractors to screen for services submitted with a specific diagnosis. For example, the need for a vitamin B12 injection is related to pernicious anemia, absent of the stomach, or distal ileum. Contractors must be able to establish edits where specific diagnosis/procedure relationships are considered in order to qualify the claim for  payment.    Procedure to Specialt y Code or TOB - permits contractors to screen  services provided by a certain specialty or  TOB.    Procedure to Place of Service-  permits selective screening of claims where the service was provided in a certain setting such as a comprehensive outpatient rehab ilitation  facility.   Additional MAC system comparisons shall include, but are not limited to the following:    Diagnoses alone or in combination with related factors.    Revenue linked to the health care common procedure coding system  (HCPCS).    Charges related  to utilization, especially when the service or procedure has  an established dollar or number  limit.    Length of stay or number of visits, especially when the service or  procedure violates time or number  limits.    Specific providers alone or in combination w ith other  parameters.