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Hospice Providers – Step Up to the “MIC”

Hospice Providers – Step Up to the “MIC”

After a period of relative calm on the audit front, many signs point to an increase in audit activity. According to the Program Integrity Section of the Division of Medical Assistance, a Medicaid Integrity Contractor (MIC) will begin audits of North Carolina Medicaid hospice providers soon.  Is your agency ready for this increased audit environment?

What is a Medicaid Integrity Contractor?
The Deficit Reduction Act of 2005 established the Medicaid Integrity Program under Section 1936 of the Social Security Act. It required the Centers for Medicare and Medicaid Services (CMS) to contract with entities to: conduct reviews of Medicaid provider actions; audit claims; identify overpayments; and educate providers and others on payment integrity and quality of care. A Medicaid Integrity Contractor (MIC) is the name for the private entity that contracts with CMS to perform these functions. There are three types of MICs: Review MICs; Audit MICs; and Education MICs. Review MICs conduct data mining analysis and risk assessments of Medicaid claims data. Audit MICs conduct post-payment audits of Medicaid providers and identify overpayments. The audit ensures that claims are paid in compliance with Medicaid rules and regulations and that claims paid are medically necessary. Education MICs educate providers and others on matters regarding payment integrity and quality of care issues.

What is the likely MIC audit process?
A provider can be selected for a MIC audit based on either data analysis performed by a Review MIC or by referral from a state agency. After a provider is selected, the Audit MIC will send a Notification Letter. Audit MICs conduct both desk audits and field audits. During a desk audit, the provider sends its documentation to the Audit MIC who reviews the records at its office. A field audit occurs when the audit is performed at the provider’s location. For a field audit, there will most likely be an entrance conference for the MIC to explain the objectives of the audit and to also attempt to answer questions from the provider. At the conclusion of the on-site field audit work, the MIC may conduct an exit conference with the provider to offer general observations about any audit findings. The most recent version of the CMS Medicaid Program Integrity Manual provides for a five year look back period which begins from the start of the audit, which is the date the engagement letter is sent. If after a review of the records, the MIC finds a potential overpayment, it will prepare a draft report shared with both the State Medicaid Agency and the provider for comment. After the report is finalized, the Audit MIC will send it to the State Medicaid Agency which will pursue the collection of any overpayment and adjudicate any appeals based on state law.

What will be the focus of the audit?
The specific areas of focus for the hospice audits have not yet been disclosed. However, hospice audit topics in other states have recently included length of stay and compliance with state and federal Medicaid policy and regulations. Here in North Carolina, the Medicaid hospice benefit is governed by Clinical Coverage Policy No.: 3D which incorporates many of the federal regulations that govern the Medicare hospice benefit (42 C.F.R. Part 418). We would be more specific with potential topics if we could, however, that is the information available at this time.

Besides the potential audit topics already mentioned, a recent CMS publication from the Hospice Toolkit, Program Integrity-An Overview for Medicaid Hospice Providers, addressed several overpayment trends from various state and federal audits. These include a lack of documentation to support a terminal illness with a life expectancy of six months or less, failing to certify in a timely manner, hospice employees not properly vetted or licensed, documentation that supported long-term or custodial care rather than hospice care, and issues with the principal hospice diagnoses on claims.

Increased awareness and understanding of previous audit topics can help to prepare for an upcoming audit, and conducting your agency’s own internal compliance program.

Can the results be appealed?
An appeal of an overpayment from a MIC audit is governed by state law. In North Carolina, a provider that receives a notice of overpayment should have the opportunity to request a reconsideration review with DMA and file an appeal with the Office of Administrative Hearings.  Even though DMA will not have conducted the MIC audit, it will be responsible for defending the audits during an appeal.

Are you ready?
So, what does this mean for North Carolina hospice providers? The Audit MIC for North Carolina is Health Integrity, LLC. According to DMA, the MIC audits will commence in the next four to six weeks. If you are contacted regarding an audit, review the letter carefully. If you have questions, contact the auditor to clarify.

If the letter instructs you to provide or produce records, review the request closely. Identify all relevant records being requested for the beneficiary and the date of service. Before providing documents to the auditor, either by mail or on-site, verify the records are complete and are organized so the auditor can easily locate the information. Don’t forget to make copies of any records you send to the auditor. Documentation is crucial for a post-payment audit, and a MIC audit is no different.

Also, make sure that you know and monitor the applicable timeframes for the production of records and for an appeal. A missed deadline can lead to adverse audit findings, create additional issues, and cause your agency to spend more time and effort than is necessary while distracting from patient care.

The impending MIC audits and recent updates to the CMS Program Integrity website regarding the hospice program are clear signs audit activity will increase. Providers should be on notice and plan ahead.

By Iain M Stauffer of Poyner Spruill

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