Aggressive Tactics by Third Party Auditors Should Make Providers Vigilant

The goal was to avert fraud, waste, and abuse.

We all support that – we collectively pay for Medicare, and who likes throwing their money away?

Let’s review the ideal: the patient receives excellent medical care, the provider does a good job documenting that care, the coder translates the documentation into codes that are submitted for accurate quality metrics, and appropriate reimbursement from payers is received for resources utilized. Auditors review medical records and eliminate fraud, waste, and abuse, addressing over- and underpayments.

However, the system has become corrupted. But before we figure out how to get out of this mess, we have to understand how we got into it.

The implementation of the electronic medical record (EMR) slowed down the healthcare provider (HCP) counter to the objective of continuously increasing productivity. It is completely unrealistic to expect the provider to explicitly document all data and clinical criteria on which he is basing his diagnoses and his plans (unless he is Dr. Gregory House and cares for a single patient per week).

In fact, since medicine is an art and not a science, and many assessments are based on pattern recognition, the clinician may not even be aware of all the factors that are subconsciously factoring into him or her making those astute diagnoses.

In the past, HCPs tended to minimize severity of illness (SOI) to protect themselves from medicolegal repercussions; they now interpret their administrators to be encouraging the maximization of SOI to boost their quality scores and rankings.

On the flip side, auditors have turned their sights on clinical validation. There are numerous issues with this. The first is that “clinical validation is performed by a clinician (RN, CMD, or therapist). As a board-certified emergency physician, I take umbrage at the insinuation that a nurse or therapist (what type of therapist the Centers for Medicare & Medicaid Services, or CMS is alluding to does not seem to be defined in the statement of work) might be able to second-guess my diagnoses when I actually cared for the patient.

As an ex-administrator, I also recognize that Monday-morning quarterbacking providers who were making clinical decisions and diagnoses in real-time is also problematic, even if it is a physician holding the “retrospectoscope,” a word we physicians have coined.

Additionally, it is impossible to be held to standards when the standards being used are obsolete, nebulous, secretive, or faulty. When I was fighting denials as a physician advisor from 2013 to 2016, I frequently had to address the use of antiquated reference materials and criteria like the World Health Organization’s Management of Severe Malnutrition: A Manual for Physicians and Other Senior Health Workers,from 1999, which was misapplied to adult malnutrition, and AKIN (Acute Kidney Injury Network) criteria from 2004.

We are no longer even up against human beings performing the preliminary review. Auditing companies use analytics and algorithms aimed at unearthing promising diagnoses or DRGs to generate extensive lists, spawning huge volumes of denials. Coupled with what seems to be a knee-jerk automatic upholding of any denial an institution appeals, the hospitals are overwhelmed, and in many cases unable to keep up.

What happened? Aren’t we all just supposed to be trying to take care of the patient? The short answer to this is “no.” The provider may be taking care of a specific patient, but CMS and other third-party payers are really taking care of populations, and their own bottom lines. So somewhere along the line, the auditors lost sight of the fact that while we were trying to keep the healthcare system honest and fiscally functional, they began greedily phishing for their own profit.

This is an epidemic.

At the current time, Mount Sinai Health System in New York City is handling 2,000 audits, and the number of Medicare audits nationally has grown by 936 percent.

There is no inoculation. Having the most scrupulous clinical documentation integrity specialists and coders working around the clock to ensure that the documentation is pristine and fully supportive of the codes and the DRGs selected is futile when the reviewer can just make stuff up.

If you have a single CC or MCC, especially if it is malnutrition, AKI, respiratory failure, or encephalopathy, you are susceptible. If a consultant promises to make you bulletproof against audits, be very, very wary.

It is also time to batten down the hatches, because the year-long grace period on unspecified codes comes to an end on Oct. 1. Many people misunderstood this, thinking that the moratorium gave providers an extra 12 months of respite. Not so. Providers have always been intended to use maximal specificity; contractors were mandated to not deny claims “based solely on the specificity of the ICD-10 diagnosis code as long as the physician/practitioner used a valid code from the right family.”

Will the 2017 edit of the ICD-10-CM Official Guidelines for Coding and Reporting, Convention 19 be able to address this? It states:

“The assignment of a diagnosis code is based on the provider’s diagnostic statement that the condition exists. The provider’s statement that the patient has a particular condition is sufficient. Code assignment is not based on clinical criteria used by the provider to establish the diagnosis.

I doubt it. Nor do I think it should. I believe that documentation by providers is first and foremost for clinical communication. You want other clinicians to understand how you drew your conclusions. This is best accomplished by offering clinical support of your diagnoses. You can’t just assert, “I am the best doctor, so when I make a diagnosis, believe me, it is right. All the other doctors think so too.” Not all patients “read the textbook,” so the provider might have to connect the dots between his clinical criteria and his diagnostic impression. It doesn’t need to be in every note, every day, but it must be identifiable and discoverable.

I offer sepsis as the archetypal condition. As the medical community sought the perfect clinical indicators for sepsis (SIRS, qSOFA), someone forgot that the quintessence of sepsis is this: “is the patient sick?” Merely having a fever and a corresponding tachycardia does not constitute sepsis, even if it triggers two of the four SIRS criteria, as any kid with streptococcal pharyngitis could tell you. Whereas the under-diagnosing of sepsis led to patients dying, the inappropriate overutilization of the diagnosis has led to spurious inflation of quality metrics, and scrutiny from the auditing bodies.

There are some steps we can take to try to prevent or combat audits. Performing concurrent clinical documentation improvement (CDI) reviews and pre-bill audits is wise. The American Health Information Management Association’s (AHIMA’s) most up-to-date practice brief on compliant queries states:

“When a practitioner documents a diagnosis that does not appear to be supported by the clinical indicators in the health record, it is currently advised that a query be generated to address the conflict or that the conflict be addressed through the facility’s escalation policy.”

The difference between this and the auditor’s effrontery is twofold. First, hopefully the CDI specialist (CDIS) has indoctrinated the providers to recognize that he or she is an ally and not an adversary, and is just trying to instill clarity into the record. Secondly, I try to remind physicians that a query is exactly what it says – the CDIS is sincerely asking you a question. If the condition is truly present, the HCP should substantiate it in the EMR. Remind the HCP that best practice is to have a condition documented at least three times in the record: upon initial diagnosis, when being treated or on resolution, and then recapped in the discharge summary.

The next step is to set up a unified system to address denials. Institutions should have a single pathway to channel denials, likely entailing some type of audit response team, which would include coders, CDI personnel, compliance, utilization/case management, and physician representation. There should be a mechanism to deal with medical necessity, DRG validation, and clinical validation denials.

Since this is not solely a CMS issue, you may need assistance from the contract management folks. One of our third-party payers overturned 25 denials in a batch when I complained to our contract managers and got them involved.

A physician advisor (PA) is the reasonable choice to respond to clinical validation denials. They have the credentials and the credibility. If they handle these enough, they will get more adept and efficient at it. If you do not have a PA, you may need the involved practitioner to assist you in authoring a denial response.

Let me share my experience on clinical validation denials. There are three categories of cases you will be able to separate out after reviewing the medical record.

The first type: you agree with the payer or auditor that the condition was not present. Don’t waste time authoring a denial. Give the money back. Consider it a loan – it really wasn’t money you were entitled to in the first place.

The next subset will be the cases for which it looks like the condition was probably present, but the documentation was subpar. I would try an appeal, but might let it die after the first rejection.

The last group of denials are ones for which the condition was clearly present, the documentation was adequate or good, and you are incredulous as to how anyone would have the audacity to deny it. You must make the time to fight these tooth and nail.

My experience is that it takes one to two hours to compose a good rebuttal. Can you use a template? Probably, because I am dubious that anyone actually reads your responses anyway. However, I preferred reading the denial and refuting it point by point. Evaluate the validity of the clinical criteria they are using. If the auditor is using outdated references, point that out, and provide the most current medical literature, showing how your provider was meeting current standard medical practice.

Quote the supporting elements from the record. Even though one can’t code from a physical therapist or dietitian’s consult, it is still part of the medical record and can support a diagnosis. I once supplied a wound nurse’s photos of decubiti, which showed a patient’s back and backside, and suggested politely that they scrub the PHI and ask their cleaning person if they thought this patient had severe protein-calorie malnutrition. I even went as far as to quote them their own fraud, waste, and abuse policy:

“I am certain that you are not suggesting that we subject patients to excessive and sometimes invasive diagnostic procedures to document the presence or absence of structural damage when the diagnosis of AKI is, indeed, a laboratory diagnosis (see p. 27 of the appendices attachment). This is not consistent with our clinical practice here, as would it be counter to your own fraud, waste, and abuse policy on ethical medical practice. On both admissions, the urine electrolytes were checked and the serum Cr was followed, supportive of the consumption of resources for a legitimate secondary diagnosis.”

Don’t assume that the auditor had all the materials – maybe he didn’t see the concurrent query response, or the discharge summary may not have been produced and might sway them.

Who am I trying to kid? Nothing is going to sway them. They are going to uphold their denial, almost 100 percent of the time. It is their job to throw the entire bowl of spaghetti at the wall and see what sticks. They are counting on you not being able to find the personnel to scrape it all off. The fact is that by the time denials are taken to the administrative law judge (ALJ) level, 72 percent are overturned, which really brings into question the accuracy of their findings. The problem is that the volume has become prohibitive and the ALJ has almost a two-year backlog of appeals.

One of your options is to request to discuss appeals with the contractor medical director (CMD). I found a nurse review of my logic asymmetrical, and would go up the food chain for a peer-to-peer review. It is often quite challenging to get the right contact information and access the CMD, but it is worth a try.

Before I start fomenting revolt, I want to promote closing the loop. I think it is crucial to provide the HCPs with feedback. It is very labor-intensive and time-consuming, but if this process is invisible to the HCP, he or she is destined to make the same substandard documentation mistakes over and over again and to keep creating future denials. In fact, by the time a denial comes to fruition, the involved HCP might have moved on.

The reality is that multiple HCPs touched the patient, and in many cases more than any one given provider could have averted the denial had they been more expansive in their documentation – so they all need feedback, not just the attending physician of record. Redact the feedback and disseminate it to entire service lines and departments. Make it into a CDI tip. CDI tips for the entire medical staff. Use specific examples in your presentations. Education is imperative. To paraphrase George Santayana, those who cannot learn from history are doomed to repeat it.

I would like to advocate for expending the time, effort, and money fighting these denials, however. In fact, I think the time may have come for hospitals and institutions to share their stories and pitch in together to complain, like Verizon customers who noted mysterious unwarranted overage charges on their bills. As John Lennon would say, I think we should start a revolution.

In May 2015, the American Hospital Association (AHA) announced its support for the Medicare Audit Improvement Act of 2015, H.R. 2156, which “would reform the RAC (Recovery Audit Contractor) program by realigning the financial incentives that drive RACs to inappropriately deny claims.” This bill proposes to eliminate the contingency fee structure, reduce payments to RACs that are inaccurate and have high overturn rates, extend the hospital rebilling window, and require RACs to make claims decisions based on the same information available to the HCP at the time of treatment. It seems as though the legislation was referred to the congressional Subcommittee on Health on May 18, 2015, and as far as I can tell, it is still awaiting a vote. Perhaps we should contact our representatives and urge them to support this bill.

In the meantime, CMS has tried to institute RAC program improvements through efforts including reducing provider burden, enhancing CMS oversight, and increasing program transparency. CMS appointed Latesha Walker to a newly created position called the provider relations coordinator, using the following language:

“For example, if a physician believes that a Recovery Auditor is failing to comply with the documentation request limits or has a pattern of not issuing review results letters in a timely manner, CMS would encourage the physician to contact the Provider Relations Coordinator … Physicians may contact Latesha by sending an email to (for Recovery Auditor review process concerns/suggestions) or (for MAC review process concerns/suggestions).

Perhaps it is time to inundate Ms. Walker with our concerns and complaints. And if the RACs get back to doing their intended job of combating fraud, waste, and abuse, we in the healthcare community can go back to our primary job: providing excellent care to our patients.


Photo courtesy of: ICD10 Monitor

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One Response to Aggressive Tactics by Third Party Auditors Should Make Providers Vigilant

  1. Keri Burke September 27, 2016 at 9:25 am #

    just read aggressive tactics…., and really it was a phenomenal article. Coders really need to read this because we are given the impression way too often that the hcp just doesn’t care, or refuses to become educated. Really opened my eyes to the nonsense going on in the world of denials.