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CodeMap® 10/04/2010: Medicare Provider Anti-Fraud Rule: Risk Classification CodeMap®-10/04/2010: Medicare Provider Anti-Fraud Rule: Risk Classification Archive

CodeMap® Compliance Briefing: 10/04/2010


Editor's Welcome

Recently, CMS published a proposed rule to implement many of the significant anti-fraud provisions included in the recently enacted Affordable Care Act. These anti-fraud measures have the potential to seriously impact the operations of diagnostic providers. The proposed rule contains provisions concerning the screening of providers enrolling or revalidating enrollment in Medicare and Medicaid, application fees to participate in the Medicare and Medicaid programs, the ability of CMS to suspend both enrollment and payments for a variety of fraud-related reasons, and mandatory compliance programs. As this list indicates, the proposed rule covers a lot of territory, and we will be discussing it, and the forthcoming finalized version, for months to come. Over the next two weeks, we will begin with an examination of the screening methods CMS proposes to ensure only ethical and competent providers participate in federally funded health care programs. This week, we will discuss risk classification and screening, and next week we will examine the actual screening methods and their implementation dates.

Sincerely,

Gregory Root, Esq.


Medicare Provider Anti-Fraud Rule: Risk Classification

by:Gregory B. Root, Esq.

gbroot@codemap.com

Introduction

The Affordable Care Act includes comprehensive screening requirements to aid CMS in limiting fraud, abuse, and waste. CMS' proposed rule states repeatedly that stricter screening mechanisms should help to not only significantly reduce fraud, abuse, and waste, but also change the fundamental design of these programs away from the present pay and chase systems.

Presently, CMS screens most providers either enrolling or revalidating their enrollment through state licensure and database checks. Examples of database checks include querying the OIG's list of excluded individuals and checking the Social Security Administrative Death Master File to ensure the applicant is alive and able to perform services.

Please note that CMS will use these screening tools and enhancements not only to assess providers enrolling for the first time in the Medicare and Medicaid programs, but also when providers revalidate their enrollment. CMS requires most types of providers to revalidate their enrollment every five years.

Classifications of Risk

CMS's proposed screening methods will vary depending on the type of provider. Under the proposal, CMS will group all provider types into one of three risk classifications; category 1 - limited risk, category 2 - moderate risk, and category 3 - high risk. Each category will be subject to differing levels of screening procedures. A particular provider type's assignment to a risk category is based upon CMS' assessment of the fraud, abuse, and waste risk typically associated with that type of provider. According to CMS, each assessment is based on a "variety of factors" including specific reports and alerts from other agencies such as the OIG and GAO. Please see the following lists for types of providers assigned to each risk category:

Category 1 - Limited Risk Providers: The following list is not exhaustive, it includes primarily diagnostic provider types classified as limited risk and likely CodeMap subscribers:

  • Physician/non-physician practitioners
  • Medical groups and clinics
  • Providers that are publicly traded entities (NYSE or NASDAQ)
  • Hospitals
  • Histocompatibility laboratories
  • Mammography screening centers
  • Portable X-ray suppliers
  • Ambulatory Surgical Centers
  • Skilled Nursing Facilities

Category 2 - Moderate Risk Providers:

  • Independent clinical laboratories
  • Independent diagnostic testing facilities
  • Comprehensive outpatient rehabilitation facilities
  • Community mental health centers
  • Ambulance providers

Category 3 - High Risk Providers:

  • Suppliers of durable medical equipment, prosthetics, orthotics, and supplies
  • Home health agencies and suppliers

Important Distinctions

Our subscribers that work in and for physician practices, hospitals, and clinics are most likely relieved to discover that CMS considers these types of organizations as representing only a limited risk of fraud, abuse, and waste. Likewise, it appears CMS will classify most providers of radiology and imaging services also as "limited risk" providers.

Unfortunately, a significant number of our subscribers that work in and for independent clinical laboratories do not share the same sense of relief. As the above list indicates, CMS proposes to classify independent clinical laboratories as "moderate risk" providers. This classification will result in independent clinical laboratories being subject to more stringent screening than hospitals, clinics, and group practices. 

CMS states in the proposed rule, that provider types in the moderate category pose a greater risk of fraud, abuse, and waste because these entities enter these lines of business with limited experience and limited professional licensure. CMS goes on to state,

"Although independent clinical laboratories are subject to survey against CLIA requirements, there are nonetheless a number of potentials for fraud, not the least of which is the sheer volume of service and associated billing generated by these entities."

Clearly CMS is more concerned about the operations of independent clinical laboratories than other providers of diagnostic services. Next week, we will examine the increased screening mechanisms that will be applied to independent clinical laboratories as  a result of CMS' heightened risk classification. In fact, next week's briefing will discuss the actual screening tools that will apply to all three risk classifications, as well as the staggered implementation dates proposed in CMS' latest publication.

More Information

As mentioned earlier, the proposed Medicare Provider Anti-Fraud Rule will be the topic of several future CodeMap® Compliance Briefings. We will also discuss the rule in our upcoming CodeMap® TeleConference scheduled for October 20, 2010. For more information or to register for that TeleConference, please click here

Of particular interest to us, and our subscribers, is how CMS will implement regulations that mandate required compliance programs. CMS is already seeking input from all stakeholders, so we will not have to wait too long for their plan. However, based on CMS' classification of clinical laboratories as representing moderate risk, we predict CMS will propose fairly strict compliance program standards that apply to this group of diagnostic providers. We will discuss these developments both in future briefings and in the CodeMap® TeleConference scheduled for October 20, 2010.

If you wish to review the entire CMS proposed rule please click here.



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04/01/2005 Place of Service (POS) Codes
03/18/2005 Subscriber Questions
03/11/2005 Medically Unbelieveable Edits
03/04/2005: Final Hospital Compliance Guidance 4
02/25/2005: Final Hospital Compliance Guidance 3
02/18/2005 Final Hospital Compliance Guidance 2
02/11/2005 Final Hospital Compliance Guidance
02/04/2005 Final Diabetes Screening Rules
01/28/2005 Medicare Appeals II
01/21/2005: Medicare Appeals I
01/14/2005 Providing Services to SNFs
01/07/2005 Medicare Errors
12/17/2004 Year End Subscriber Questions
12/10/2004 Coding Flow Cytometry Services
12/08/2004 Alert: 2005 CodeMap Manual Production Schedule
12/03/2004 Diabetes Screening Tests
11/22/2004 Announcing CodeMap Data Files
11/19/2004 Flow Cytometry Coding and Reimbursement
11/12/2004 New Venipuncture Rules
11/05/2004 Medicare Cardiovascular Screening Benefits
10/29/2004 Subscriber Questions
10/22/2004 Genetic Testing Modifiers
10/15/2004 Coding Glucose Tests
10/08/2004 Shared Laboratories
10/01/2004 Stark II and POLs
09/24/2004 New CPT Codes for Pathology Services
09/17/2004 New CPT Codes for Lab Services
08/27/2004 SNF Consolidated Billing Exceptions
08/20/2004 The OIG Exclusion Program
08/13/2004 Medicare Initial Preventive Physical Exam
08/06/2004 New Medicare Coverage for Screening Tests
07/30/2004 Discounts to Financially Needy Patients
07/23/2004 Date of Service for Lab Tests
07/16/2004 New CPT Codes for 2005
06/25/2004 Updates to NCDs and LMRPs
06/18/2004 New Compliance Program Guidance for Hospitals II
06/11/2004 New Compliance Program Guidance for Hospitals II
06/04/2004 Annual Physician Notices
05/21/2004 Screening Pap Smear Coverge
05/14/2004 Transfusion Medicine Codes II
05/07/2004 Transfusion Medicine Codes I
04/23/2004 Anti-Mark-Up Controversy
04/16/2004 Subscriber Questions
04/09/2004 Genetic Testing Codes II
04/02/2004 Genetic Testing Codes I
03/26/2004 Laboratory Marketing Practices III
03/19/2004 Laboratory Marketing Practices II
03/12/2004 Laboratory Marketing Practices I
03/05/2004 Medicare Payment for CLIA Waived Tests
02/27/2004 Medicare Payment for ReferredTests
02/20/2004 Grace Period for CPT Codes Eliminated
02/14/2004 CCI Edits Associated with New Lab and Pathology Codes
02/06/2004 CCI Edits Associated with New Radiology Codes
01/30/2004 Venipunctures
01/23/2004 The Medicare Prescription Drug, Improvement, and Modernization Act of 2003
01/16/2004 Travel Allowances
12/19/2003 Medicare Modernization Act
12/12/2003 Medicare Reform Bill Part 2
12/05/2003 Medicare Reform Bill Part 1
11/21/2003 New HCPCS Codes for CBCs without Platelets
11/07/2003 GA, GY and GZ Modifiers
10/31/2003 Specimen Collection
10/24/2003 Coding Qualitative Drugs-of-Abuse Tests
10/17/2003 The OIG's Work Plan, Medicare CDs, Recent Enforcement Actions.
10/10/2003 ESRD Composite Rate Lab Tests
10/03/2003 End Stage Renal Disease (ESRD) Reimbursement for Automated Tests
09/26/2003 Proposed Rules from the OIG
09/12/2003 Category III (Tracking) CPT Codes
09/05/2003 New Proposed Rules for Flow Cytometry
08/15/2003 Thyroid Testing
08/01/2003 CMS Lab Reimbursement Meeting
07/25/2003 NCD Misconceptions
07/18/2003 The -GZ Modifier
07/11/2003 Screening Mammogram Codes
06/27/2003 Correct Coding Edits II
06/20/2003 Correct Coding Edits I
06/13/2003 Diagnosis Coding Rules II
06/06/2003 Diagnosis Coding Rules I
05/23/2003 Revised Medicare Appeals Provisions II
05/16/2003 Revised Medicare Appeals Provisions I
05/09/2003 Business Associates Agreements
05/02/2003 Pathologist Interpretation of Clinical Lab Tests
04/25/2003 TC Billing of Pathology Services
04/18/2003 Medicare Reimbursement for Pathology Services
04/11/2003 How to Respond to a Search Warrant
03/28/2003 How to Respond to Subpoenas
03/21/2003 How to Respond to Investigators
03/14/2003 Mandatory Claim Submission
03/07/2003: Who Can Order Diagnostic Tests?
02/28/2003 Changes in 2003 Physician Fee Schedule
02/21/2003 Medical Necessity Requirements for Chemistry Panels, Part II
02/14/2003 Medical Necessity Requirements for Chemistry Panels I
02/07/2003: ABNs and Client Cooperation
01/31/2003: Patient Ordered and/or Performed Testing
01/24/2003: The Beneficiary Anti-Kickback Statute
01/17/2003: Significant Changes in 2003 Medicare Reimbursement
01/10/2003: 2003 Medicare Lab and Physician Fee Schedules
12/13/2002: More National Coverage Policies
12/06/2002: How Medicare Sets Fees for New CPT Codes
11/22/2002: Critical Year End Dates
11/15/2002: 2003 Medicare Laboratory Fee Schedule
11/08/2002: Stark Self-Referral Prohibitions
11/01/2002: Using Modifiers -59 and -91
10/25/2002: Introduction to Privacy Regulations
10/18/2002: New Codes for Obstetrical Ultrasound
10/11/2002: National Coverage Determinations (NCDs)
10/04/2002: Implementing a Radiology Compliance Program
09/27/2002: New 2003 Lab CPT Codes
09/20/2002: Automated Order Entry
09/13/2002: National Coverage Policy for Lipids
09/06/2002: The Anti-Kickback Statute
08/23/2002: Using the New ABN Forms
08/16/2002: Advance Beneficiary Notices
08/09/2002: Medicare Coverage for PET Scans
08/02/2002: Reflex Testing
07/26/2002: 2003 Hematology CPT Code Changes II
07/19/2002: 2003 Hematology CPT Code Changes I
07/12/2002: Direct Billing Rules II
06/28/2002: Direct Billing Rules I
06/21/2002: Medicare Reimbursement for Lipid Panels
06/14/2002: Bone Density Studies
06/07/2002: CLIA Waived Testing Rules
05/31/2002: Blood Draws and the Anti-kickback Statute
National Coverage Determination (NCD) Updates
05/01/2002 - CodeMap® Quarterly Reports, Volume I, No. 2
01/15/2002 - CodeMap® Quarterly Reports, Volume I, No. 1