While few, if any, businesses escaped 2020 unscathed, among the hardest hit were long-term post-acute care (LTPAC) providers. While struggling to care for vulnerable senior patients and protect the health of their essential employees, LTPAC providers still had to maintain operations, so many leveraged any and all available assistance.

The suspension of audits and the various Department of Health and Human Services (HHS) waivers may have provided some desperately needed relief during the country’s public health emergency. Yet, these audits are returning in 2021—and many facilities may not be adequately prepared.

Understanding Audits for LTPAC Providers

LTPAC providers have long been subject to audits under the direction of the Centers for Medicare and Medicaid Services (CMS). Although a routine occurrence pre-COVID-19, audits were suspended in March 2020 in response to the pandemic—specifically as a result of the declaration of a public health emergency. Those that are resuming typically are of the following types:

• RAC. The purpose of audits performed by Recovery Audit Contractors (RACs) is to identify and correct errors in the billing and payment of past claims. RACs are mainly concerned with recovering overpayments, but some cases may be referred to federal agencies for civil or even criminal legal action.
• ZPIC. Audits conducted by Zone Program Integrity Contractors (ZPICs) are serious and invasive in nature and are performed when Medicare fraud is suspected. Consequences of fraud, waste or abuse can include suspension or denial of payments, collection of overpayments or referral to federal agencies. Referral could result in administrative sanctions, heavy fines and civil or criminal prosecution.
• UPIC. Unified Program Integrity Contractor (UPIC) audits are similar in nature to ZPIC audits, but differ in that they consolidate work being done by various integrity contractors and include both Medicare and Medicaid investigations.
• TPE. The prime objective of Targeted Probe and Educate (TPE) audits is to provide training in identifying and correcting billing errors in order to reduce claims suspensions and denials. They are targeted to organizations that have high claim denial rates for a particular service and only result in disciplinary action after three rounds of audits.
• CERT: The goal of Comprehensive Error Rate Testing (CERT) contractors is to identify and correct errors made by carriers in the payment of claims. A CERT review generally requires a small number of medical records from a provider. SMRC: Supplemental Medical Review Contractors (SMRCs) review medical claims in order to lessen the occurrence of billing, coding and payment errors. SMRCs request additional documentation from providers for selected claims in order to conduct their reviews.
• SMRC: The Supplemental Medical Review Contractor (SMRC), conducts nationwide medical reviews of Medicaid, Medicare Part A/B, and DMEPOS claims to determine whether claims follow coverage, coding, payment, and billing requirements. The focus of the medical reviews may include vulnerabilities identified by CMS data analysis, the Comprehensive Error Rate Testing (CERT) program, professional organizations, and Federal oversight agencies.

2021 is 2021 – Not 2020

The COVID-19 pandemic was overwhelming for LTPAC providers. With their resources drained, it’s likely that many providers became lax in keeping proper documentation during 2020’s audit moratorium. Also, the Medicare three-day prior hospitalization waiver may have been used when a resident did not meet skilled criteria.

Furthermore, Medicare’s new system for reimbursing providers, the Patient-Driven Payment Model (PDPM), was rolled out in late 2019, just prior to the pandemic. A lack of careful record-keeping, combined with the fact that your facility may have yet to experience an audit under PDPM, could create an undesirable mix of consequences.

Related Article: Infection Prevention in Skilled Nursing Facilities: Strategies for Mitigating Survey Citations

How to Minimize or Eliminate Red Flags and Mitigate Impacts of LTPAC Provider Audits

Unlike the Trump administration, during which investigations to uncover fraud generally were less prioritized, the Biden administration is expected to renew a push for identifying and taking action against fraudulent activity throughout the healthcare industry, including the LTPAC realm.

Now as before, LTPAC providers can prepare for a potential audit by implementing four established best practices:

1. Self-audit. You should review your Minimum Data Set (MDS) Assessments to help ensure proper and thorough documentation. This data is used under PDPM to determine Medicare reimbursement, which is based on a patient’s clinical needs. Focus should be given to documentation that includes three days of care and three different disciplines (e.g., therapy, dietary, social services) or sources for assessment of a patient. This helps to accurately determine a patient’s clinical needs and functional score, which is crucial to showing adequate support for billed claims.
2. Contract an independent compliance audit through legal counsel. The results of such an audit would be protected under client privilege. You can formulate a plan for making corrections, self-disclose to CMS or take whatever action is advised by legal counsel.
3. Educate and train staff. CMS has zero tolerance when it comes to improper documentation or coding errors because the rules are available to all LTPAC staff. Providing adequate training to your staff can increase awareness of the rules, make errors less likely and create effective care plans.
4. Institute effective policies and procedures. Providing adequate guidelines and expectations for staff will increase the likelihood that they’ll act in accordance with regulations. Having proper policies and procedures in place will also show auditors that you’ve already identified and addressed problems.

The Bottom Line

Billions of dollars already have been recovered by the federal government in cases of fraud, waste and abuse. If fraudulent activity is discovered, governing agencies are quick to take action, and, because providers have easy and immediate access to regulations, unlikely to show leniency regardless of whether there was an intent to defraud.

Providers are advised to audit themselves, and, if errors are found, seek guidance from legal counsel regarding how to make corrections and whether or not to self-disclose. Self-disclosure may not help you completely avoid punishment, but the punishment may be less punitive and the consequences less dire.

Contact Richter’s Skilled Nursing Facility Consultants

Do you have questions about CMS audits, or other LTPAC operational challenges? Call Richter’s skilled nursing facility consultants at 866-806-0799 or click here to request a free consultation.