January 25, 2010

Our outside counsel, with whom we work on anesthesia compliance matters, among others, has brought the following development to our attention:

Pursuant to Section 302 of the Tax Relief and Health Care Act of 2006, CMS’ Recovery Audit Contractor (RAC) Program was made permanent and was expanded nationwide. At this point, the RAC contractors are in place for all 50 states. RACs are permitted to attempt to identify improper payments resulting from incorrect payments, non-covered services (including services denied as not medically necessary), incorrectly coded services, and duplicate services. RACs are prohibited from selecting claims at random to review. Instead, RACs are charged to use proprietary “data analysis techniques” to determine claims likely to contain overpayments, a process known as “targeted review.”

In an important development for the anesthesia community, the RAC for Region D, HealthDataInsights, recently posted an anesthesia focus area on its website as one of the CMS approved areas for RAC review. The RAC for Region D covers 17 States and 3 territories as follows: Alaska; Arizona, California, Hawaii; Iowa; Idaho; Kansas; Missouri; Montana; North Dakota; Nebraska; Nevada; Oregon; South Dakota; Utah; Washington; Wyoming; Guam; American Samoa; and Northern Marianas. The RAC Region D website can be accessed at https://racinfo.healthdatainsights.com/Public/NewIssues.aspx

Specifically, the RAC will be reviewing claims in connection with the “anesthesia care package” and evaluation and management services. In posting the issue for review, the RAC stated:

"Under NCCI Edit rules, the anesthesia care package consists of preoperative evaluation, standard preparation and monitoring services, administration of anesthesia, and post-anesthesia recovery care. Anesthesia CPT codes 00100 to 01999 (except 01996) include Evaluation & Management (E&M) services rendered on the day before anesthesia (pre-operative day), the day of the anesthesia and all post-operative days. CPT code 01996 includes E&M services on the same day as the 01996 service only. Physicians can indicate that E&M services rendered during the anesthesia period are unrelated to the anesthesia procedure by submitting modifiers 24, 25, 57 and/or 59, depending on claim specific circumstances, on the E&M service. Only critical care E&M services are payable during the anesthesia post-operative period. The post-operative period is defined as the day immediately following the anesthesia service and any subsequent days during the same inpatient hospital admission as for the anesthesia service."

Although HealthDataInsights is the only RAC to date to post this issue, other RACs may soon follow. For those practices that receive requests for records from a RAC, it is imperative that you timely respond to record requests and that you provide all relevant documentation to support the payment of the claim at issue. To the extent a RAC reviews your records and denies the claim, the traditional Medicare appeals process would apply requiring you to file a redetermination request within 120 days of receipt of a denial. The Medicare appeals process has several stages including: (1) Redetermination- 120 day deadline; (2) Qualified Independent Contract Review- 180 day deadline; (3) Administrative Law Judge hearing stage- 60 day deadline; (4) Medicare Appeals Council- 60 day deadline; and (5) Federal Court.

ABC continues to recommend that anesthesia practices establish a RAC point person to: (a) coordinate efforts; (b) monitor issues; (c) ensure record requests are timely acted upon; and (d) ensure appeal rights are preserved.

With best wishes,

Tony Mira
CEO and President

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