Becker's Spine Review

Executive Briefing: The Future of Spine Surgery According to data published on the Palmetto GBA website, a pre-payment review of 137 claims in North Carolina led to 90 of the claims either completely or partially denied. The total dollars reviewed of $3,436,774.63 and $2,246,323.73 was denied, resulting in a charge denial rate of 65 percent. In Virginia and West Virginia combined, a total of 114 claims were reviewed, with 78 claims either completely or partially denied. The total dollars reviewed was $2,920,116.48, out of which $1,895,448.24 was denied, for a charge denial rate of 65 percent. In the vast majority of these spinal fusion cases, denial code 5J504 was used with a denial description of "Need for services not medically and reasonably necessary." More specific "granular" denial findings can be viewed in the chart below: Unlike commercial payers who most often require upfront data prior to a spine or joint replacement procedure (prior authorization or pre-approval), Medicare and their payment contractors are not set up this way. "In the past with Medicare, as long as you billed and coded for the procedure and met the stated criteria on the surface, the payment was usually paid to both the facility and the surgeon performing the case," says Neumann. Today, with greater pre-payment review authority being given to MACs it's creating a whole new ball game. Under a pre-payment review, MACs have greater authority to examine the medical necessity documentation prior to making payment. There is an important difference with this type of pre-payment review compared to a post proce- Denial Code Denial Description Specific 'Granular' Denial Findings 5J504 Need for Services Not No documentation of pain impacting the functional Medically and Reasonably ability of beneficiary Necessary 5J504 Need for Services Not No documentation of conservative measures/treatMedically and Reasonably ments failed (without specific interventions given) or Necessary neurological impairment-spinal stenosis 5J504 No x-ray, CT or MRI results submitted detailing Need for Services Not Medically and Reasonably mechanical instability, deformity of the lumbar spine Necessary or neural compression 5J504 Need for Services Not There were no biopsy or LP results submitted showMedically and Reasonably ing significant infection that would require this type Necessary of procedure 5J502 Information submitted does not support dates billed The operative procedure was not included in the documentation submitted (Thoracic, Lumbar, Sacral Fusion) "These are rather significant denial rates that both hospitals and surgeons can ill-afford especially considering the fact that these procedures have already been performed," say Zeman. "With post-surgical payment denials like this, it is absolutely imperative that the history, diagnostic and procedural information along with the discharge status of the patient as coded and reported by the hospital, match both the attending physician description and the information contained in the patient's medical record." Often, the documentation from the doctor's office and the hospital record is not in sync, says Neumann, whose firm also provides specialized orthopedic and spine coding analysis and reimbursement "hotline" services. "This is why we're so vigilant in performing analysis for hospitals and spine surgeons, particularly from a training and educational standpoint." Neumann added, "Quite frankly, there is often a process communication breakdown between surgeon, (employed or voluntary), and the hospitals where these cases are performed. When we perform a medical necessity documentation and coding analysis, we use the results to help train and in many cases, re-train surgeons along with everyone else involved so the potential of medical necessity documentation errors are reduced significantly. That's why constant education and internal audits on surgical charts are so important as they help to identify if your hospital or surgical practice has a problem." dure recovery audit probe. In the case of the CMS pre-payment review, the case has already been performed and can be denied based on a lack of medical necessity documentation. This is very risky business for both hospitals and spine surgeons because if denied on a pre-payment review, reimbursement is at risk for a procedure already performed. In their October 18, 2013 announcements, CMS issued  Transmittal 489, providing MACs with instructions and guidance on 100 percent prepayment and random reviews. The guidance, effective November 19, 2013, provides MACs with additional authority to conduct prepayment reviews. CMS stated that they considered 100 percent prepayment reviews "appropriate" only upon finding that "a provider has a prolonged time period of non-compliance with CMS policies" while notably leaving a "prolonged time period of noncompliance" undefined. CMS stated that any MAC seeking to conduct a 100 percent prepayment review must inform the CMS contracting officer's representation, regional office technical monitor, and the business function lead in advance. "The crux of the issue here is that in many of these probes, the MACs are requiring that the physician office documentation appear in the hospital chart or the hospitals and the surgeon would not be reimbursed for services," says Zeman. 39 "In 2013 we had been seeing an increase in recovery audit contractors' requests for medical records to validate medical necessity," says Zeman. According to the recent American Hospital Association survey of more than 12,000 hospitals, in the second quarter of 2013 alone, complex audit denials by RACs rose 58 percent, with two-thirds of hospitals reporting the most expensive RAC requests are medical necessity denials. Of the medical necessity denials reported in the survey, 62 percent were not because the care itself was unnecessary, but because of one-day stays in the wrong place. "Of course the big difference between these RAC audits and MAC pre-payment review is the flow of the money. "At least with a RAC audit, you've already been paid and you can appeal the recoupment demands. With a pre-payment denial, you've already done the case and you may never get paid," says Zeman. With both types of reviews the most common reason for denials is the lack of medical necessity documentation. "These medical necessity documentation errors are often avoidable and can be alleviated with improved process flow and communications between the hospital and the surgeon. This is why our analyses have proven to be so valuable. We take a sample of cases, review the entire chart for its medical necessity documentation completeness and then report the results back to the hospital or the practice. Obviously it's more helpful to find errors in an internal proactive self-audit where results can be used for training and education rather than after the procedure when payment is at jeopardy of being denied," says Zeman. Jurisprudence in the spine market arena This past July, the Justice Department prosecuted 55 hospitals in 21 states, recovering $34 million in settlements for spinal kyphoplasty procedures that were inappropriately billed to Medicare as inpatient procedures. According to CMS, this procedure can be performed safely and effectively as an outpatient without any need for a more costly hospitalization. The Justice Department maintained that the hospitals performed these procedures on an inpatient basis in order to increase their Medicare billings. In total, more than 100 hospitals have now paid approximately $75 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures. The government previously had settled with Medtronic Spine, the corporate successor to Kyphon. Medtronic, who purchased Kyphon in July 2007 for $3.9 billion, paid a separate $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty as an inpatient procedure, as the minimally invasive procedure should have been done on an outpatient basis. "By keeping patients overnight, without regard to medical necessity, hospitals could seek greater reimbursement from Medicare and make much larger profits on kyphoplasty," said Kathy Mehltretter, U.S. Attorney for the Western District of New York in Buffalo where one of the cases had originally been filed.

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