Tuesday, April 18, 2017

CMS Post Results of RAC MDS Validation Study of SNF Therapy RUG Claims

Dan Ciolek


In the April 2017 issue of the Medicare Quarterly Provider Compliance Newsletter, the Centers for Medicare and Medicaid Services (CMS) posted results of a Recovery Audit Contractor (RAC) SNF coding validation study. In response to an Office of Inspector General (OIG) report, CMS directed the Recovery Auditor to review claims submitted by SNFs to determine the extent to which the Minimum Data Set (MDS) is accurate and supported by the resident’s medical records. Upon receipt of this requested documentation, the entire benefit period was reviewed to determine the appropriate level of care—not including the determination of medical necessity. The improper payment involved with this review is overpayment.


The review focused on three states, Alabama, Georgia, and Tennessee, and featured a population of 4,276 claims with service dates beginning on October 1, 2010 containing RU, RV, RH, RM, or RU therapy Resource Utilization Groups (RUGs). The audit identified more than $39 million worth of potential overpayments.


Two error codes relate to this study and the reviewed claims:

· No documentation was received to support the RUG billed.
· When documentation was submitted, based on actual evidence in the records, the services the provider billed and the MAC paid were either not performed, or products were not provided, that would support the RUG billed.


The CMS article offers the following guidance on how providers can avoid these problems. 

To verify that the Medicare bill accurately reflects the assessment information, three data items derived from the MDS assessment must be included on the Medicare claim:


Assessment Reference Date (ARD) – The ARD must be reported on the Medicare claim. If an MDS assessment was not completed, the ARD is not used and the claim must be billed at the default rate. CMS has developed mechanisms to link the assessment and billing records.

The RUG IV Group – The RUG group is calculated from the MDS assessment data. The software used to encode and transmit the MDS assessment data calculates the appropriate RUG group.

Health Insurance PPS (HIPPS) Codes – Each Medicare PPS assessment is used to support Medicare Part A payment for a maximum number of days. The HIPPS code must be entered on each claim, and must accurately reflect which assessment is being used to bill the RUG IV group for Medicare reimbursement.

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