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12 Protection of Medicare Beneficiaries and Program Integrity CHAPTER SUMMARY This chapter discusses the case review activities that were under- taken by Quality Improvement Organizations (QIOs) during the 7th scope of work (SOW), including the categories and the types of reviews, the review process, and use of mediation, as well as the activities of the related QIO Support Centers (QIOSCs). Next, the chapter outlines the evaluation methodologies used for case review activities during the 7th SOW and the general case review activities of the 8th SOW, followed by an extensive discussion of the Hospi- tal Payment Monitoring System in both the 7th and the 8th SOWs. Finally, the chapter describes the impacts of the case review activi- ties in the 7th SOW. During the 7th SOW, Quality Improvement Organizations (QIOs) per- formed tasks to protect both the beneficiaries of the Medicare program and the Medicare Trust Fund (CMS, 2002, 2004a,b). Beneficiary protection involved the review of all complaints about the quality of care or appeals of noncoverage decisions filed by Medicare beneficiaries or their representa- tives. These complaints and appeals could be submitted in writing or by telephone. Each complaint had to be reviewed for quality-of-care concerns, including the appropriateness of services and the appropriateness of the setting. The QIO program introduced mediation during the 7th scope of work (SOW) to replace the traditional case review process for certain ben- eficiary complaints. Until recently, the complainants received no informa- tion about the outcomes of their complaints. Today, the complainants re- ceive answers concerning the confirmation of a presence or an absence of quality concerns but are not informed about the specific actions taken, if any are taken. If mediation is involved, the complainant may be aware of or involved in any subsequent actions. 297
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298 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM QIOs helped maintain the integrity of the Medicare program by per- forming specific reviews related to utilization concerns, including hospital admissions and coding, to ensure that the reimbursed services were neces- sary and appropriate. Earlier cycles of the QIO program focused on case review, but this was primarily carried out only in the hospital inpatient setting and for fewer categories of cases. The numbers of review categories have continued to increase over the life of the QIO program, including through the 7th and the 8th SOWs. CASE REVIEW ACTIVITIES IN THE 7TH SOW In the 7th SOW, cases for review were generally brought to the atten- tion of QIOs from outside sources, such as Medicare beneficiaries, interme- diaries, carriers, or subcontractors; the Centers for Medicare and Medicaid Services (CMS) or the Clinical Data Abstraction Centers (CDACs) (dis- cussed later in this chapter and in Chapter 13); and the Office of the Inspec- tor General of the U.S. Department of Health and Human Services (DHHS) (CMS, 2002, 2004b). The Project Officer submitted each case referred by an outside agency to CMS's Central Office for approval before the QIO could conduct the review. In the 7th SOW, the QIOs performed case re- views under Tasks 3a and 3c. Task 3a--Beneficiary Complaint Response Program--required the investigation of all beneficiary complaints related to quality of care and allowed QIOs to offer mediation when appropriate. During this contract period, the QIO program adopted a new approach to the complaints process, in which a single case manager worked with the complainant throughout the entire process. In Task 3c--Other Beneficiary Protection Activities--QIOs performed all other case reviews (aside from those stemming from beneficiary complaints). Several different categories of reviews and types of review processes exist, and CMS has mandated specific requirements for each category and type of review in great detail in the Quality Improvement Organization Manual (CMS, 2002, 2004b). Ac- tivities related to Medicare Trust Funds protection also included the Hospi- tal Payment Monitoring Program (HPMP) (Task 3b), in which QIOs worked to monitor and reduce the number of payments made in error in the hospital setting (HPMP is also discussed later in this chapter). The type of review that a QIO conducted was based on the triggering event or category of review, as discussed below. Table 12.1 lists some of the most common types of reviews and the categories for which they were con- ducted. These include reviews related to beneficiary protection as well as protection of the Medicare Trust Fund.
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 299 TABLE 12.1 Types of Reviews for Each Mandated Category of Review Category of Review Type of Review Provider Setting Beneficiary complaints Quality review All settings except nursing homes (which are addressed by the state survey agency) Potential EMTALA Quality review Hospitals violations (patient dumping) Assistants at cataract surgery Utilization review (medical Any setting, but not for necessity of a physician's Medicare managed care assistant at cataract cases surgery) Hospital-issued notices of Utilization review (medical Hospitals noncoverage (HINNs) necessity of admission, length-of-stay review, and appropriateness of noncoverage notice) Notice of discharge and Utilization review (medical Hospitals Medicare appeal rights necessity of admission, (NODMARs) length-of-stay review, and appropriateness of noncoverage notice) Fast-track appeals Utilization review (medical Skilled nursing facilities, necessity of admission, home health agencies, and length-of-stay review, and comprehensive outpatient appropriateness of rehabilitation facilities noncoverage notice) Hospital-requested higher- DRG validation and Prospective payment system weighted DRG adjustments utilization review (medical hospitals necessity of admission) Potential instances of gross Quality review All settings or flagrant violations of professionally recognized standards of care Referrals from CDACs as DRG validation and Acute care hospitals part of HPMP utilization review (medical necessity of admission and any procedure performed) NOTE: EMTALA = Emergency Medical Treatment and Labor Act; DRG = diagnosis- related group SOURCES: CMS (2004b) and Northeast Health Care Quality Foundation (2005).
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300 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM Categories of Case Reviews The following are the required categories of case review that QIOs per- formed (CMS, 2002, 2004b): 1. Beneficiary complaints. Beneficiary complaints underwent either a traditional review process or the new option of mediation. Both processes are discussed later in this chapter. 2. Alleged antidumping violations of the Emergency Medical Treatment and Labor Act (EMTALA).1 The QIOs did not determine or resolve EMTALA violations. Instead, the QIOs functioned to answer specific ques- tions about screening, stabilization, and transfer. The QIOs performed ei- ther 5-day or 60-day reviews. The ultimate decision about EMTALA viola- tions rested with the CMS Regional Office or the Office of the Inspector General of DHHS. 3. Requests for assistants at cataract surgery for fee-for-service benefi- ciaries. Ophthalmologists had to obtain preapprovals from the QIO for specific procedure codes that allow the use of and billing for assistants dur- ing cataract surgery. 4. Hospital-issued notices of noncoverage (HINNs). HINNs apply to services determined by the hospital to be medically unnecessary, custodial in nature, or provided in an inappropriate setting. Hospitals issue HINNs to beneficiaries or their representatives if the hospital determines that the current or future care of the beneficiary will not be covered by Medicare. The hospital is not required to acquire concurrence from the attending physician. QIO review of HINNs was performed upon the request of the beneficiary or his or her representative who wanted to appeal the notice and receive the services identified by the hospital as unnecessary or in- appropriate. 5. Notices of discharge and Medicare appeal rights (NODMARs). NODMARs are delivered to Medicare managed care beneficiaries by a managed care organization or by a hospital on behalf of the managed care organization. NODMARs notify beneficiaries that their current hospital services will be terminated. Unlike HINNs, NODMARs can be issued only with the agreement of the beneficiary's treating physician. QIOs reviewed NODMARs immediately upon request of the beneficiary or his or her rep- resentative. 6. Medicare+Choice fast-track appeals. Medicare+Choice fast-track appeals were conducted at the beneficiary's request when the beneficiary 1Passed in 1986 as section 9121 of the Consolidated Omnibus Reconciliation Act (COBRA) of 1985 (P.L. 99-272).
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 301 received notice from the managed care organization that the services pro- vided by a skilled nursing facility, a home health agency, or a comprehen- sive outpatient rehabilitation facility were being terminated. The managed care organization must issue a notice of Medicare noncoverage (also re- ferred to as an advanced notice) at least 2 days or two visits before the services are to end. Upon receipt of the medical records, QIOs determined within 48 hours whether the services would be continued or terminated. These reviews, which were new in the 7th SOW, are also known as "Grijalva reviews," based on Grijalva v. Shalala, a class action lawsuit that chal- lenged the managed care appeals process (CMS, 2005a). 7. Hospital requests for adjustments to a higher-weighted diagnosis- related group (DRG).2 The QIOs performed these reviews to ensure that the diagnosis, the related clinical procedures performed, discharge status, and medical record all matched. An exemption existed for hospitals waived from the prospective payment system, in excluded geographic areas, or in the case of a beneficiary in managed care. 8. Cases of potential gross and flagrant violations or substantial viola- tions in many cases. 9. HPMP is a specialized category of case review that is discussed in detail later in this chapter. If a new quality concern arose during the review of a case in any one of these categories, then the QIO had to perform a separate quality review, in addition to the original review (CMS, 2002, 2004a,b). For example, from October 2002 to June 2005, the QIOs reviewed 1,950 records for EMTALA 5-day reviews and 1,196 records for EMTALA 60-day reviews (personal communication, J. Kelly, CMS, August 30, 2005). As a result, the QIOs conducted 34 reviews of the quality of care for concerns that arose during EMTALA reviews. Types of Reviews QIOs evaluated cases using three general types of review: quality re- views, utilization reviews, and DRG validation reviews (CMS, 2004b). In general, the QIOs performed quality reviews for cases related to beneficiary protection and performed utilization reviews or DRG validation reviews for cases related to program integrity. 2Diagnosis-related groups are codes that link diagnoses and procedures to a level of reim- bursement.
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302 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM Quality Reviews Quality reviews assess whether the health care delivered to beneficiaries met professionally recognized standards, was provided economically, was medically necessary, and was supported by adequate documentation. QIOs performed quality reviews for cases of both fee-for-service and managed care beneficiaries, but managed care cases were assessed only on the basis of the appropriateness of the services provided and the setting in which they were provided and not on the basis of medical necessity. Quality review cases apply to services provided by many different types of providers, such as hospitals, home health agencies, and skilled nursing facilities (CMS, 2002, 2004b). Utilization Reviews Utilization reviews cover the medical necessity and the reasonableness of services provided, as well as the appropriateness of the care setting. QIOs did not conduct utilization reviews for services provided to beneficiaries in managed care. Any of the four reviews listed below might be conducted under the umbrella of utilization review (CMS, 2002, 2004b): · Admission or discharge reviews, · Invasive procedure reviews, · Length-of-stay reviews, and · Coverage reviews. DRG Validation Review The QIOs performed DRG validation reviews for prospective payment system hospital cases, including hospital-requested higher-weighted DRG assignments and cases in the HPMP (Task 3b of both the 7th and the 8th SOWs). The QIO did this type of review to ensure that the claims codes matched the information in the medical record. The reviewers examined diagnoses, the clinical procedures performed, and discharge status to vali- date the claim (CMS, 2002, 2004b). Other Types of Reviews In addition to quality, utilization, and DRG validation reviews, QIOs conducted additional specific case reviews on a more limited basis, as the need required. The following types of reviews were conducted only in con- junction with one of the types of reviews mentioned above (CMS, 2002, 2004b):
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 303 · Outlier reviews, · Limitation on liability determinations, · Readmission reviews, · Transfer reviews, · Circumvention of prospective payment system reviews, and · On-site reviews. Review Process QIOs conducted the reviews described above with the assistance of con- tracted reviewers who met specified requirements (CMS, 2004b). At the initial level of review, nonphysician reviewers could be used if they had the necessary clinical education and the relevant experience to screen medical records. At least one registered records administrator or accredited records technician had to oversee the process. After the initial review, only physi- cians could be used for the remainder of the review process and generally had to meet the following requirements: · Have authorization to practice medicine, surgery, osteopathy, den- tistry, podiatry, or optometry; · Be in active practice; · Have the same medical license (as well as be in the same specialty) as the physician under review; and · Be practicing in the same setting and state as the physician under review (if possible). In general, the case reviews followed the structure outlined below, except for cases of potential gross and flagrant violations, for which a different, expedited process was used because of possible concerns of immediate dan- ger. Similarly, HINNs and NODMARs had shorter processes because of time constraints (Figure 12.1). Nonphysician Review The nonphysician reviewer performs a first screening review, based on screening tools and professional expertise, to determine if: · There is adequate documentation in the medical record; · The case should be referred to a physician reviewer; and · The medical services and items were provided economically and only when medically necessary, were provided up to professionally recognized standards, and were supported by evidence and documentation.
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304 Judge. Law on on QIO logs logs reviews case notifies and decision End SDPS SDPS QIO QIO ALJ ALJ of decision decision CMS Days*- - Administrative C re 30 for = provider/ Days**- makes reviews- C decision re case receives review 30 practitioner ALJ QIO Notify ALJ QIO QIO request prepares for notifies file QIO QIO Review provider/practitioner intermediary/beneficiary System; Openings- for Days*- Re Days**- C prepares Letter Days*- W 30 receives C End 30 60 QIO request Acknowledgment QIO reconsideration reconsideration on Provider/practitioner beneficiary/request Processing logs Yes Yes Yes SDPS QIO decision - on re on Data ALJ logs No ogsl SDPS Accept review No QIO Provider/ QIO case SDPS decision Decision? practitioner request Hearing? Reverse QIO Request Decision? decision reconsiders Standard No Days*- Days*- = C notifies W 60 30 QIO provider/ End provider/practitioner intermediary/beneficiary practitioner Notify notifies SDPS QIO provider/practitioner intermediary/beneficiary process. of case End action End Denial refers No necessary appropriate agency Payment Quality (Quality) (Utilization) on QIO to Initial Determination logs review End SDPS days QIO decision case working = Yes logs in Review medical Days*- requires closes and Days- C information SDPS No notifies 15 QIO QIO decision **W case Concern provider/ Confirmed? practitioner additional record QIO Retrospective mandatory No r daysr to review records records provider Days*- Days*- receives for sends requests (2004b). C reviews Yes C reviews calenda e 30 Concern? provider/ Provider/ responds 20 response = Standard QIO concern practitione practitioner QIO cas QIO from QIO QIO medical medical Days *C- CMS 12.1 FIGURE SOURCE:
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 305 A second screening review is performed after any missing documentation is provided. First Physician Review In the first physician review, a physician reviewer determines whether the concerns of the nonphysician reviewer are valid and if other concerns not previously identified exist. If the physician reviewer determines there are valid concerns, the QIO sends a preliminary notice to the provider and offers the opportunity to discuss the case. If there is a potential gross and flagrant violation, the case follows a separate path. Opportunity for Discussion If the provider responds to the QIO's offer to discuss the case, the case is referred to a second physician reviewer. If there is no response, the first reviewer may make a final determination and notify the parties, or the re- viewer may refer the case to a second physician if he or she is still unable to identify the source of the concern. Second Physician Review The second physician reviews the medical records, discusses the case with the parties involved, and makes the final decision. Third Physician Review When the provider under review requests reconsideration for initial uti- lization denials or rereview for confirmed DRG or quality concerns, a phy- sician reviewer other than the ones from the first and second reviews exam- ines the case. Provider Response to Concerns If a simple corrective action is needed (such as a DRG adjustment), the QIO can give the provider a chance to address the concern. For other issues, the provider must establish and complete a quality improvement plan (or a corrective action plan when associated with sanction activity), with assis- tance from the QIO as needed. Exceptions include flagrant violations and dangers to beneficiaries. No plan is needed when: · The case is referred to a state or federal enforcement agency, · There is a satisfactory explanation for the pattern,
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306 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM · No reason for the pattern is found, · The provider has already found the problem and taken action, · The pattern for the case is the same as a pattern already identified and acted upon, or · The physician is no longer in practice. Other options are used when the provider is unwilling to formulate a plan or fails to complete the plan satisfactorily. The QIO must use the least intrusive option from among the following: · Impose a QIO-directed plan (see Box 12.1), · Negotiate a plan with the provider, · Refer the case to the CMS Regional Office (or state survey agency), · Refer the case to the state licensing board, · Refer the case to the Medicare carrier, or BOX 12.1 Example of Recommendation for a Quality Improvement Plan "Issue: A 68-year old man underwent a total hip replacement. Post- operatively, the patient developed a deep vein thrombosis (DVT). The patient is concerned that the DVT was the result of the care he received. Per the record, the patient did not receive pharmacological anticoagulant therapy after his surgery. During the opportunity for discussion, the phy- sician stated that he never uses pharmacological anticoagulant therapy, only mechanical. "Recommendation/Action: Recommend that both the provider and the practitioner develop and implement a QIP, and also recommend ini- tiation of intensified review activity. "This situation warrants a QIP as there is published clinical evidence which shows that the standard of practice is to use a combination of anticoagulant medication and mechanical treatment after this type of pro- cedure, and the physician states that he routinely chooses not to use pharmacological options. This is both the provider and physician's re- sponsibility, since the hospital is expected to have their Chief of Staff work with a physician when accepted practice is not being followed. In- tensified review of similar cases after QIP implementation can then be done to ensure the updated approach is being carried out." SOURCE: Lumetra (2004).
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 307 · Refer the case to the Office of the Inspector General of DHHS for sanctions. Sanctions can include a period of exclusion from the Medicare program (for a minimum of 1 year) and a monetary penalty (up to $10,000 for each instance). The provider may have the right to a preexclusion hearing, an administrative review, or a judicial review. QIO Monitoring The QIO monitors the provider during implementation of the quality improvement plan and must develop criteria that can be used to judge suc- cess, which may include a process or outcome assessment. Provider Profiling Activities On the basis of all of its review activities, each QIO was required to conduct certain profiling activities (CMS, 2002), including: · Construction of a database consisting of data collected from all re- view activities for use in HPMP; · Identification of possible interventions; · Generation of provider profiles, when needed; · Production of reports upon request by providers or CMS; and · Determination of whether patterns indicative of a systemic prob- lem exist. If the QIO suspected a systemic problem, it could ask the provider to sub- mit written guidelines of standard operating procedures. For example, if a communications problem between two specific departments of a hospital existed, the QIO may have asked the hospital to provide its internal guide- lines on how the departments are supposed to communicate. For all review types, CMS required QIOs to maintain the Case Review Information Sys- tem (CRIS), a tool used to report on activities to CMS (see Chapter 13). Through this application, the QIOs entered data related to the case review process to monitor a case's progress and ultimately produce reports on the timeliness of case review completion (CMS, 2002, 2004a,b). MEDIATION IN THE 7TH SOW QIOs reviewed all quality-of-care complaints filed by Medicare benefi- ciaries or their representatives. In any quality review, the QIO first deter- mined whether no substantial improvement opportunities are identified or
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314 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM TABLE 12.3 Texas 1-Day-Stay and Other Statewide Statistics for All DRGs Number of Total Percent DRG Discharges after Number of 1-Day Code DRG Description 1-Day Stay Discharges Stays 005 Extracranial vascular procedures 2,231 6,971 32.00 006 Carpal tunnel release 13 25 52.00 066 Epistaxis 91 369 24.66 134 Hypertension 942 4,368 21.57 NOTE: The 1-day-stay count excludes deaths, transfers, and patients leaving against medical advice. Data are for all prospective payment system inpatient hospitals (n = 340), FY 2003 (October 1, 2002, through September 30, 2003). SOURCE: Texas Medical Foundation (2005b). Box 12.3 gives an example of how the Texas Medical Foundation (Texas's QIO) used data to identify a problem area (1-day stays for specific DRG codes) and then implemented a project to address the issue, including the use of a collaborative (see Chapter 8). HPMP QIOSC The Texas Medical Foundation acted as the QIOSC for the HPMP during the 7th SOW to: · Develop and implement projects related to payment errors; · Identify trends in payment errors; · Advise the QIOs, hospitals, and others on the implementation of HPMP; · Work with CDACs to produce PEPPER; and · Develop tools, flowcharts, templates, etc., to help providers make decisions related to coding and the documentation of services (CMS, 2004a). The Texas Medical Foundation continues as the HPMP QIOSC in the 8th SOW. QIO Performance Evaluation QIOs documented achievement in HPMP by comparing the statewide payment error rate at the baseline with the rate calculated at the end of the
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 315 7th SOW (CMS, 2002). The Project Officer and Government Task Leader determined the success of each QIO on the basis of the following criteria: · The timeliness of reviews (the QIOs must meet the timelines at least 90 percent of the time), · The completion of a reliability assessment, and · Reporting of processes and findings to CRIS (CMS, 2002). Additionally, the QIOs had to meet one of the following two criteria: (1) the follow-up payment error rate could not be more than 1.5 standard er- rors above the baseline error rate or (2) the QIO made effort and progress on all improvement plans (CMS, 2002). Deliverables included the develop- ment of a project related to problematic utilization or billing patterns and the determination of inter-rated reliability for review decisions (CMS, 2002). HPMP IN THE 8TH SOW In the 8th SOW, HPMP continues as Task 3b (CMS, 2005b). Again, the purpose of HPMP is to monitor and reduce payment error rates for fee- for-service beneficiary services in the hospital setting by looking at the accu- racies of DRG codes, the medical necessity of services, and the appropriate- ness of the care setting. The QIOs continue with their hospital profiling activities as well as monitoring of admission and billing patterns. CMS con- tinues to provide hospital-level reports, and subsequently, the QIOs must submit a project proposal to work on an inappropriate or incorrect utiliza- tion pattern or billing or coding pattern in either the short-term or the long- term acute care setting. Again, all projects are subject to the approval of the Project Officer and Government Task Leader and are funded as special projects under Task 4 of the 8th SOW (CMS, 2005b). QIO success on the HPMP task in the 8th SOW is based on the following: · Absolute and net payment error rates (no more than 1.5 standard errors above the baseline error rate) (1 point for each rate), · The timeliness of reviews (2 points), · Approval of the project (or justification for exclusion) and project implementation (3 points), and · Documentation of monitoring activities (1 point) (CMS, 2005b). If the QIO has an article about an HPMP project accepted for publication in peer-reviewed journals, it earns 1 extra-credit point. If the QIO does not publish its results anywhere (including the QIO's newsletter), 1 point is deducted. If no project is approved and no justification has been submitted,
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316 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM BOX 12.3 Texas Medical Foundation One-Day-Stay Project "Details According to analysis performed by the Texas Medical Foundation (TMF), there was a 51 percent increase in one-day stay discharges be- tween fiscal year (FY) 1999 and FY 2001, with a 164 percent increase in TMF-issued admission denials for one-day stay claims during the same period. In FY 2002, one-day stay discharges comprised 10.5 percent of total Medicare discharges in Texas; of these discharges, 17 percent were associated with diagnosis related groups (DRGs) 127 (heart failure & shock), 143 (chest pain), 182/183 (esophagitis, gastroenteritis and mis- cellaneous digestive disorders age >17 with/without CC [complication and comorbidity]) and 296/297 (nutritional and metabolic disorders age >17 with/without CC). Because one-day stays are known to be associ- ated with medically unnecessary admissions, TMF chose to develop a Hospital Payment Monitoring Program (HPMP) project in this area. The goal of the One-Day Stay Project is to reduce inappropriate admissions for the following target DRGs: 127, 143, 182/183, and 296/297. "Primary criteria for hospital inclusion in the project: · At least 500 total one-day stay claims in FY 2002 and · At least a 20 percent increase in one-day stay claims from FY 2000 to FY 2002. "Secondary criteria for hospital inclusion in the project: · Three or more target DRGs with at least 25 one-day stay claims each or · A proportion of one-day stay claims to total claims greater than or equal to 12.8 percent (the 75th percentile for the proportion of one-day stay claims to total claims) and one target DRG with at least 25 one- day stay claims. Of the 341 Texas PPS hospitals included in the claims data in FY 2002, 20 hospitals met the criteria for inclusion in the project. These 20 hospitals combined had 20,262 one-day stays, which represented 24.7 percent of the total one-day stays in Texas for FY 2002. The 20 hospitals had 2,969 one-day stays billed to the target DRGs, which rep- resented 18.1 percent of the total one-day stays for the 20 hospitals.
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 317 "TMF is requesting that all hospitals: · Analyze comparative data related to the project indicator provided by TMF as well as one-day stay data provided periodically by TMF in the Program for Evaluating Payment Patterns Electronic Report (PEPPER) to determine if problems might exist. · Provide feedback to the medical staff on concerns related to inap- propriate admission/discharge/quality of care and provide education on alternatives to inpatient admission when appropriate. · Review TMF's educational information and distribute educational materials and tools provided by TMF to medical staff and other staff as appropriate. "TMF is requesting that project hospitals: · Perform an audit of randomly selected one-day stay cases identi- fied by TMF in order to determine if a problem related to one-day stays exists. · Develop an improvement plan if the internal audit identifies prob- lems. · Notify TMF of audit findings and any improvement plan initiated. · Participate in TMF's One-Day Stay Collaborative (see below). "TMF will: · Perform case review of project hospital medical records to collect initial baseline data and later remeasurement data. · Evaluate project hospital action taken regarding improvement plans and the quality of hospital-developed improvement plans and pro- vide feedback as needed. · Perform on-site hospital visits to project hospitals as needed to provide education. · Provide one-day stay data and improvement tools to hospitals statewide. · Conduct a One-Day Stay Collaborative over a one-year period based on the Institute for Healthcare Improvement's Breakthrough se- ries. First face-to-face session will be held October 16, 2003. · Conduct teleconferences on coding of DRGs associated with Medi- care coding payment errors and other relevant topics. · Disseminate educational newsletters." SOURCE: Texas Medical Foundation (2005c).
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318 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM the QIO loses 2 points. The QIO will receive an excellent pass for attaining 7 or more points, a full pass for 6 points, a conditional pass for 5 points, and a not pass for a score of 4 points or less (CMS, 2005b). Deliverables for the HPMP task include a project proposal (or justifica- tion for exclusion) and monitoring reports via the Program Activity Report- ing Tool (CMS, 2005b). IMPACT OF PROTECTIVE ACTIVITIES IN THE 7TH SOW Interaction with Providers On the IOM committee's site visits to 11 QIOs, 3 QIOs mentioned that they have lingering difficulties in terms of their reputations as punitive or- ganizations stemming from the history of the QIO program as one of pure utilization review. Additionally, during the IOM committee telephone in- terviews with the chief executive officers (CEOs) of the QIOs, 7 of 19 QIO CEOs noted that the QIOs were perceived as punitive enforcers. These 7 CEOs believed that that perception is currently more of an issue among nursing homes and home health agencies but that there is some residual feeling that the QIOs are punitive enforcers in the physician community in some states. One CEO indicated, "Perception as a punitive regulator is a problem. We are not generally viewed that way by hospitals, but it has taken a long time to convince nursing homes that we are not a Survey and Certification entity. Home health agencies are similarly concerned. Physi- cians don't care because they won't see any value or incentive until pay for performance." Another CEO commented, "Some older physicians still have the historical PSRO [Professional Standards Review Organization] mindset. We have a huge educational push to educate on quality assurance." However, general consensus exists among QIOs (as exhibited during multiple site visits, interviews, and other personal interactions by the IOM committee) that this reputation has improved. Conversations with hospital CEOs confirm this perception (NORC, 2004; Bradley et al., 2005). Case Review and Quality Improvement In the telephone interviews, 19 QIO CEOs were asked whether the QIOs should continue the case review function and whether the perfor- mance of the case review function added to quality improvement. Only one CEO was not sure that the QIOs need to be the entity performing Medicare case reviews and appeals, but even he was not sure who else would do it well and believed that there is a need for the function to be continued by a qualified entity. The remaining 18 CEOs believed that case review was an integral part of the QIOs' overall quality improvement efforts because of its
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 319 ability to protect beneficiaries and identify systemic quality problems. They strongly expressed their feelings about the need to keep case review as part of their repertoire and about the direct connections to quality improve- ment work: · "Quality improvement is often predicated on the [basis of the] find- ings of case review. The connections between these functions should be strengthened if anything--not separated. Separation would be a disaster. We would no longer have a system." · "Case review identifies problems that often reflect a systemic prob- lem. It is essential to have a feedback component from case review to QI [quality improvement]." · "Case reviews give us an opportunity for more oversight, and if it is not done, then poor practices will creep back up. Someone has to watch." · "Performing case review gives us an opportunity to observe trends. This was a good change in the 7th SOW because it allows us to do some- thing constructive rather than be a whistleblower. We actually educate pro- viders, and this is positive in changing patterns." Three of the 18 CEOs supporting case review additionally emphasized the important role of case review in knowledge transfer. For example, one CEO stated, "Certainly, case review is not a population-based exercise but it brings us closer to the daily practice of patient care, obstacles to delivering care, and problems with education level of both provider and patient. While the focus is on changing individual physicians, we incorporate lessons to a broader audience as part of knowledge transfer." Case Review Activities From October 2002 through September 2004, the QIOs received 5,921 separate complaints (i.e., complaints only and not appeals) by telephone or letter from beneficiaries (personal communications, S. Blackstock, April 29, 2005, and February 11, 2005). These complaints required the examination of 11,372 sets of medical records because of many complaints involving treatment by more than one provider during the episode of care. From Sep- tember 2003 through July 2004, of the 2,321 completed examinations of beneficiary complaints, 357 were deemed appropriate for the mediation process. Of those, detailed data were available for 172. The data revealed that 79 cases had reached agreement, whereas the remaining 93 were still in progress or were withdrawn from the process or the provider had refused mediation. Thirty-one QIOs have handled at least one case deemed appro- priate for mediation, and 15 QIOs have completed at least one mediation case (Rollow, 2005).
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320 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM In all complaint cases, regardless of the use of mediation, the QIOs surveyed beneficiaries on their satisfaction with the complaint review pro- cess. This survey was implemented nationally in April 2003. From April 2003 through July 2004, there were 3,378 beneficiary complaint cases (per- sonal communication, S. Blackstock, February 11, 2005). Of those, 357 entered the mediation process. The QIOs administered 1,964 satisfaction surveys for completed cases. For the traditional process, 93.4 percent of respondents expressed that they were satisfied or very satisfied overall. The rate of satisfaction with the case manager was 92 percent and, the rate of satisfaction with the QIO response was 93 percent., However, only 39 per- cent of respondents were satisfied with the review outcome. The QIOs used the survey results to alter their review processes. After they made adjust- ments to the process, a comparison of the levels of satisfaction levels for the period from April to June 2003 with the levels of satisfaction from April to June 2004 showed improvements in the satisfaction levels for both the pro- cess (from 93 to 95 percent) and the outcomes (39 to 60 percent). During FY 2004 (October 2003 to September 2004), the QIOs con- ducted 8,168 reviews of appeals (HINNs, NODMARs, and Grijalva re- views), plus retrospective reviews of an additional 3,084 cases of HINNs (Rollow, 2005). All other review types (such as EMTALA, CMS referrals, and higher-weighted DRGs) accounted for an additional 46,062 case re- views during this time period. Comparatively, only 14 reviews for assistants at cataract surgery were performed during the same time period, and all cases were approved (personal communication, S. Blackstock, April 29, 2005). HPMP In the 7th SOW, opportunities to save costs by preventing payment errors were generally the result of the prevention of unnecessary admis- sions, as underpayment and upcoding of cases tended to cancel each other out (Rollow, 2005). The baseline absolute payment error rates for indi- vidual states at the beginning of the 7th SOW ranged from 1.19 to 8.00 per- cent, with a mean payment error rate of 4.33 percent and a median pay- ment error rate of 4.24 percent (QIONet Dashboard, accessed November 11, 2005). The exact time frame for each QIO's baseline differed, depend- ing on what round of the SOW in which it started. For the second quarter of FY 2004, the state error rates ranged from 0.32 to 10.84 percent, with a mean error rate of 4.24 percent and a median error rate of 4.25 percent. However, the states with the highest and lowest rates of error in 2004 were not necessarily the same as those at the baseline (QIONet Dashboard, ac- cessed November 11, 2005).
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 321 TABLE 12.4 Trends for National Weighted Payment Error Rates Period Error Rate (percent) FY 2001 4.7 FY 2002 4.82 FY 2003 (overall) 4.64 FY 2003 Q2 4.06 FY 2003 Q3 4.37 FY 2003 Q4 4.64 FY 2004 Q1 4.97 FY 2004 Q2 4.81 FY 2003 Q3 through FY 2004 Q2 (overall) 4.70 NOTE: Q = quarter. SOURCE: QIONet Dashboard (accessed April 13, 2005, and November 11, 2005). For FY 2001, the national weighted rate (the total amount of money paid in error divided by the total reimbursements) was 4.7 percent (QIONet Dashboard, accessed November 11, 2005). The most recent data cover the period from the third quarter of FY 2003 through the second quarter of FY 2004. For this time period, the national weighted rate was again 4.7 per- cent. Table 12.4 lists the national weighted payment error rates for FY 2001 to FY 2003, with the rates for individual quarters for FY 2003 to FY 2004 provided when the data were available. Although individual quarters show minor variations, the overall national rate since the baseline in FY 2001 has remained steady. Telephone Interviews In the telephone interviews, when 16 QIO CEOs were asked whether the QIOs should continue their payment error review function, only 1 CEO responded with a definitive negative: "It is not essential; we have found in the past as many payment errors to the good as to the bad." The remaining 15 said that the function is compatible with their mission; however, 6 of those 15 expressed less passion for QIOs' need to continue the payment error review function than their passion for their need to continue the case review function; for example, one CEO stated, "Payment error is an impor- tant part of the care program. The functions go hand in hand, but I could live without this one if forced to." Another CEO commented, "I don't have as strong a feeling about payment error as case review. Our payment error rates are pretty low."
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322 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM The remainder of the CEOs (9 of 15) said that that payment error reviews are definitely useful to quality improvement by providing leverage, enhanced access to provider staff for educational interventions, and mon- etary savings to Medicare. One CEO commented, "Payment error gives us one more reason to walk through the hospital doors, and as a result, we develop closer relationships by offering chances to educate. We have the opportunity to talk to different staff segments than we usually do." An- other CEO stated, "It is useful to maintain the payment error function be- cause it gives us better credibility. Appropriate utilization and appropriate quality go hand in hand. Also, having this function helps sell the QIO as a resource to facilities. Most of the payment errors are a result of bad report- ing that the QIO can help the facility to address." Financial Costs At the end of calendar year 2004, CMS expected the QIOs to spend $45.5 million on the beneficiary complaint response program in the 7th SOW (Task 3a). This represents approximately 5.8 percent of the QIO core contract budget. CMS estimated expenditures for HPMP (Task 3b) at $41.2 million, or approximately 5.2 percent of the core contract budget. The cost of all other protection activities (Task 3c) was estimated at $161.7 million on Task 3c, which represents approximately 20.5 percent of the QIO core contract budget (personal communication, C. Lazarus, March 17, 2005). SUMMARY This chapter has discussed issues related to the case review activities of the QIO program. The following are some of the main themes of this chapter, which are reflected in the findings and conclusions presented in Chapter 2: · The QIO program's origins are based on case review activities that focused on identifying utilization outliers in the hospital setting. The QIOs have significant experience with these activities. · The categories of review have increased over the life of the QIO program, but the focus of the program itself has shifted away from utiliza- tion review and toward collaboration to improve the quality of care. This is reflected in the development of a mediation process to address beneficiary complaints through better communication with the provider and the use of quality improvement plans by providers to address inadequate practice pat- terns found during review. · Although the QIO program has shifted toward performing a col- laborative role, some providers still have a lingering perception that QIOs
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 323 are punitive organizations. Despite this perception, many QIOs argue that the dual roles can be synergistic. · Some categories of review may have very low value, such as reviews for assistants at cataract surgery. Reviews for payment errors showed fairly equal numbers of over- and underpayments. In general, payment error rates are currently low (less than 5 percent) and remain steady. REFERENCES Bradley EH, Carlson MDA, Gallo WT, Scinto J, Campbell MK, Krumholz HM. 2005. From adversary to partner: Have quality improvement organizations made the transition? Health Services Research 40(2):459476. CMS (Centers for Medicare and Medicaid Services). 1999. 6th Statement of Work (SOW). [Online]. Available: http://www.cms.hhs.gov/qio [accessed April 9, 2005]. CMS. 2002. 7th Statement of Work (SOW). [Online]. Available: http://www.cms.hhs.gov/qio [accessed April 9, 2005]. CMS. 2004a. The Quality Improvement Organization Program: CMS Briefing for IOM Staff. [Online]. Available: http://www.medqic.org/dcs/ContentServer?cid=1105558772835& pagename=Medqic%2FMQGeneralPage%2FGeneralPageTemplate&c=MQGeneralPage [accessed December 26, 2005]. CMS. 2004b. Quality Improvement Organization Manual. September 16. [Online]. Available: http://www.cms.hhs.gov/manuals/110_qio/qio110index.asp [accessed May 11, 2005]. CMS. 2005a. Medicare Managed Care, Appeals and Grievances. [Online]. Available: http:// www.cms.hhs.gov/healthplans/appeals [accessed May 31, 2005]. CMS. 2005b. 8th Statement of Work (SOW), Version #080105-1. [Online]. Available: http:// www.cms.hhs.gov/qio [accessed November 4, 2005]. Lumetra. 2004. Lumetra QIOSC Background Materials. Unpublished. San Francisco, CA: Lumetra. Lumetra. 2005. Fast Track Appeals Process. [Online]. Available: http://www.lumetra.com/ appeals/process/index.asp [accessed April 26, 2005]. MassPRO. 2004. PEPPER: Program for Evaluating Payment Patterns Electronic Report. Un- published. Waltham, MA: MassPRO. NORC (A National Organization for Research at the University of Chicago). 2004. Final Report: Physician Meetings on Take-Up of Electronic Health Records. Unpublished. Washington, DC: NORC. Northeast Health Care Quality Foundation. 2005. Required Review Activities. [Online]. Avail- able: http://www.nhcqf.org/Review/QIO/11_RequiredReviewActivities.html [accessed April 27, 2005]. OIG (Office of the Inspector General, U.S. Department of Health and Human Services). 2003. Improper Fiscal Year 2002 Medicare Fee-for-Service Payments. Washington, DC: Office of the Inspector General, U.S. Department of Health and Human Services. Rollow WC. 2005. The Medicare Quality Improvement (QIO) Program 7th SOW and Re- sults. PowerPoint Presentation to the Committee on Redesigning Health Insurance, June 13, Washington, DC. Stratis Health. 2005. Comparison of Termination of Service Appeal Process: Grijalva versus BIPA. [Online]. Available: http://www.stratishealth.org/health-care/documents/Appeal ProcessComparison_000.pdf [accessed July 25, 2005]. Texas Medical Foundation. 2005a. Hospital Payment Monitoring Program (HPMP). [Online]. Available: http://www.tmf.org/hpmp [accessed April 13, 2005].
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324 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM Texas Medical Foundation. 2005b. Texas One-Day Stay and Other Statewide Statistics for All DRGs, All PPS Hospitals (340 Hospitals) FY2003 (October 1, 2002 through September 30, 2003). [Online]. Available: http://www.tmf.org/hpmp/data/TX_DRGs1Day AllFY2003-by-DRG.pdf [accessed April 13, 2005]. Texas Medical Foundation. 2005c. TMF One-Day Stay Project Details. [Online]. Available: http://www.tmf.org/hpmp/projects/One-Day%20Stay%20Project%20Details.htm [ac- cessed April 28, 2005]. Texas Medical Foundation. 2005d. Update on Statewide Percentiles for PEPPER 3 Measures Through Fourth Quarter, FY2003 (JulySeptember 2003). [Online]. Available: http:// www.tmf.org/hpmp/data/Updated_PEPPER3_Q4FY2003.pdf [accessed April 13, 2005].
Representative terms from entire chapter: