Medicare Claims Audits Focus on OASIS Submissions: A Guide to Responding to Denials
June 27, 2014 09:01 AM
The Medicare Supplemental Medical Review Contractor, SHS, has initiated audits of home health agencies in New England states with a focus on OASIS submissions in 2010. The audits were triggered by a recent OIG study that found a high incidence of Medicare paid claims where the home health agency did not have an accepted OASIS prior to the date of billing. Beginning in 2010, OASIS submission became a condition of payment for home health services under federal regulations at 42 CFR 484.55. While the rule references OASIS submissions, CMS has applied the rule to require the acceptance of an OASIS prior to billing as a payment requirement.
Until recently, the OASIS submission/acceptance condition of payment has not been audited or enforced. An OIG report highlighted this as a risk area for HHAs. Generally, an HHA will submit a batch of OASIS shortly after the start of episodes of care. The OASIS validation report then provides the HHA with a HIPPS code for billing purposes. In most circumstances, that OASIS report will be received prior to billing of the final claim on the episode. In the event that the OASIS submission is rejected, the HHA will be so informed and a corrected OASIS submission will occur. However, in some instances the HHA bills Medicare prior to the submission and acceptance of a compliant OASIS. In these circumstances, the HHA runs the risk of a claim denial based on the untimely (premature) billing.
CMS has planned to establish systems to reject premature billings automatically. Such would take a coordination of the OASIS database maintained by the state survey agencies with the claims database maintained by the MACs. That system does not yet exist. In the meantime, HHAs must maintain internal systems that ensure that no claims are billed until there I s a validated receipt of the OASIS submission. Further, HHAs must ensure that the claim HIPPS code is consistent with the OASIS validated HIPPS code.
NAHC contacted CMS officials to discuss the validity and appropriateness of these audits. CMS officials were unaware of the actions of SHS and have initiated an investigation. A CMS official explained that SHS has a "scope of work" with CMS that allows SHS to conduct claims reviews whenever the review target issue has been considered a program integrity weakness or vulnerability by the OIG without requiring specific project approval by CMS.
NAHC informed CMS of concerns that the audit included the re opening of claims that were 3-4 years past payment and that HHAs are not required to retain OASIS validation reports. CMS itself does not retain the validation reports beyond one year. In the audits, HHAs are experiencing retroactive claims denials because they cannot produce the evidence necessary to demonstrate compliance.
NAHC further explained that the extended delay in claim re opening prevents HHAs from correcting any non compliant billings even though CMS intended to allow providers the opportunity to do such where the OASIS submission was flawed and corrected submissions were made.
CMS officials will be providing NAHC with a progress report on their investigation by the end of the week.
What should audited HHAs do at this point?
HHAs subject to this OASIS audit should consider the following steps:
1. During the audit, the HHA should demand that SHS produce the evidence to prove that the submitted OASIS was not accepted on or before the date that the HHA billed Medicare. With the state of the availability of the validation reports, the burden to prove noncompliance should rest with the auditor. Requiring an HHA to produce a validation report that CMS did not retain itself nor require the HHA to retain should shift the burden of proff to the auditor.
2. The HHA should protest that the audit is an illegal and invalid re opening of claims in violation of 42 CFR 405.980. Under that rule, claims can be reopened after payment only if "good cause" is established when the reopening is more than 1 year and less than 4 years since payment. After 4 years, the rule requires Medicare to demonstrate that there is "fraud or similar fault" to justify an extended authority to reopen.
With the OASIS audits, the "good cause" and "fraud or similar fault" standards cannot be met. CMS was fully capable of identifying noncompliant claims on or about the day the claims were filed. CMS had full control of OASIS data submissions as well as the claims. The reopening limitations are intended to protect providers from unnecessary retroactive claim denials and to prevent CMS from administration of claims reviews in a manner that encourages or rewards procrastination. The reopening restrictions are the equivalent of a statute of limitations, providing HHAs with the security of knowing when they are safe from arbitrary reviews.
3. The purpose of the OASIS submission requirement as a condition of payment is to provide a means to ensure that the HIPPs code used for billing is consistent with the OASIS submitted HIPPS coding. The requirement is not intended to be a technical trap for providers. As such, NAHC recommends that HHAs compare the billing and OASIS HIPPs codes. If these codes match or if the billing code is the correct final code for the claim, the audits should not trigger retroactive claim denials. This argument is based on the 2009 rulemaking by CMS where the underlying purpose of making OASIS a condition of payment is clearly stated in 74 F.R. 58109-5811 (November 10, 2009). The purpose is to have the correct HIPPS code billed on the final claim.
This rulemaking sets out that CMS expected that the HHA would get a warning that an OASIS submission was noncompliant at a point that permitted the HHA to correct any deficiency. That would include a RAP or final claim cancellation and re-billing. With the reopening of claims nearly four years back, an HHA is denied the opportunity to correct the billings since the billing window is limited to 12 months.
In summary, the HHAs should protest any claim denial where the HIPPs code is correct.
4. Medicare law under 42 USC 1395gg prohibits any collection of an overpayment from a provider where the provider is "without fault" in receiving any overpayment. With the OASIS audits, an HHA should demand that SHS evaluate the application of the "without fault" provision. NAHC believes that HHAs have a reasonable basis for arguing that they are without fault as the rule was a new standard in 2010 and CMS did not extend the effective date as request in the rulemaking process in order for HHAs and their software vendors to have time to implement necessary systems changes. Instead, CMS implemented the proposed effective date of January 1, 2010 because it concluded that the review of the OASIS and claims submissions would allow HHAs time to correct any deficiencies, as set out in the Federal Register referenced above.
5. HHAs that do not succeed in deflecting or reversing claims denials in the OASIS audits should pursue formal administrative appeals using the arguments set out in 1-4 above.
NAHC's goal in its advocacy with CMS on this issue is to stop the audits and reverse all claim denials issued to date. However, while this advocacy is ongoing, it is strongly recommended that HHAs protect their individual rights following the recommendations in 1-5 above.