Medical Device Daily Washington Editor

The Centers for Medicare & Medicaid Services (CMS) recently notified healthcare providers that it has resolved some conflicts over the recovery audit contractor (RAC) program and that the program will commence once again. According to the Feb. 6 statement, "The parties involved in the protest of the award of the recovery audit contractor contracts settled the protests" on Feb. 4, hence allowing the program to move forward in 18 states, including Florida and New York.

The program has not been popular among providers or among some on Capitol Hill. Rep. Lois Capps (D-California) drafted a bill dubbed the Medicare Recovery Audit Contractor Program Moratorium Act of 2007, but the bill never got out of committee in the 110th Congress despite an attempt to revive the bill last year (Medical Device Daily, March 4, 2008).

Despite the negative reactions, the numbers generated by the three-year demonstration program, which looked for underpayment as well as overpayment, were fairly compelling. According to CMS, the program's auditors found more than $990 million in overpayments, but led to reimbursement to hospitals for only $38 million in underpayments.

Much of the controversy stems from what hospitals say are overly aggressive tactics by RACs, which are paid a contingency fee. However, CMS officials point out that the contractors are also paid to find cases of underpayment, and are not paid for any claims of overpayment that are overturned (MDD, July 14, 2008).

Providers also would like to see the window for review shortened to the 12 months preceding the audit, but the program as it stands allows for reviews dating back to three years, with October 2007 serving as a stop date for review.

In a prepared statement e-mailed to Medical Device Daily, Capps stated that while she is "uneasy about contracts and subcontracts being awarded to contractors who have a history with high error rates, I am hopeful that under new leadership CMS will follow through on its promise to conduct rigorous oversight in the permanent project that was severely lacking in the pilot program." However, she warned that "Congress will be following the rollout closely and we will not hesitate to get involved if we again witness the type of problems that plagued the pilot program."

At press time, the American Hospital Association (Chicago) and the Federation of American Hospitals (Washington) were unable to respond to calls for comment.

Payments to Medicare and Medicaid

The war on medical waste and fraud continues with a report from the Office of Inspector General (OIG) at the Department of Health and Human Services that details dual payments under Medicare and Medicaid for services provided by skilled nursing facilities and home health aides. The report does not detail a huge amount of abuse – not by the standards of federally funded healthcare, anyway – but does point to an area that might grow as both programs grow, Medicaid by law and Medicare by demography.

According to the report, dated Feb. 5 but posted Feb. 9, OIG reviewed records from five states for care delivered in 2005 and "identified Medicaid payments amounting to $3.3 million" for more than 68,000 services claims "that may have been coverable by Medicare." OIG states in the report that problems with care coordination and ambiguity "in the Medicare coverage policy regarding billing for unskilled and skilled nursing services" both helped to leave the systems vulnerable to double-payment.

As might be expected, the state of Florida was among the five surveyed, and led the five in the amount of claims that were vulnerable to duplicate payment. Of the almost 49,000 Medicaid claims paid for skilled nursing and home health services provided in Florida in 2005, a total of more than 47,000 (or 98%), could have been double paid, which would have come to almost $1.3 million. OIG also notes that three home health agencies ended up returning monies to state Medicaid programs.

The report closes by noting that CMS could address the situation by means of "better methods to better integrate Medicare and Medicaid claims" in such a way that would not require medical review, but offered no specific options to that end. However, the report also states that it is in final form "because it contains no recommendations."

HHS publishes HAI action plan

Hospital-acquired infections, or HAIs, are among the no-nos that payers are struggling to refuse payment for, and the largest payer is taking action to cut down on such events. The Department of Health and Human Services recently published an action plan toward this objective in a document that takes up 113 pages.

The summary published along with the report notes that guidelines for prevention of catheter-associated urinary tract infections serve as the template, calling for the use of indwelling catheters "only for appropriate indications" and to avoid use in them in "nursing home residents for management of incontinence." The guidelines also suggest that "only properly trained persons," a group that could include family members or even the patient, "who know the correct technique of aseptic catheter insertion and maintenance" should do the job.

Other recommendations include those for sterile gauze and sterile dressings to cover catheter sites and pneumonia associated with the use of ventilators.