“Data mining programs” intensify scrutiny of Medicare claims

 By Paula E. Hartman-Stein, Ph.D.

            Boston – On the heels of victories in recent hard-fought Congressional battles over mental health parity and prevention of double-digit fee cuts for psychotherapy, new and stringent oversight of claims by congressionally approved agencies are the next challenge for Medicare providers.

            In an early morning symposium at the APA convention, Jim Georgoulakis, Ph.D., the APA representative to the Relative Update Committee (RUC) of the American Medical Association, began by suggesting that psychologists should not wonder whether they will be audited but rather when they will be audited.

            Two new “data mining programs,” the Comprehensive Error Rate Testing (CERT) and the Recovery Audit Contractor (RAC) programs are aimed at preventing improper payments in the Medicare system by looking for patterns in claims data and then generating predictions based on them.

            Georgoulakis said that from 2005 to 2008 the programs functioned in three states, costing the government $201 million. The return on the investment was $980 million, a 5-to-1 ratio, “an unbelievable return on an investment,” he said.

            “Congress and the Center for Medicare and Medicaid Services (CMS) believe that there is a lot of inefficiency and fraud in healthcare, and they are attacking both of those areas using different tools.” Congress mandated that by the end of 2010 all 50 states are to have the new programs in place.

            The order of the claim oversight is first the regional Medicare carriers who pay the claims, followed by the CERT contractors who determine claims processing errors by the carriers and are responsible for requesting and obtaining documentation to support payments for selected claims. A CERT contractor reviews services that are paid incorrectly, whether overpaid or underpaid, and notifies the Medicare contractor to adjust accordingly.

            The next layer is the RAC program that provides independent oversight over the CERTS. The RACs are financially incentivized. Georgoulakis explained, “They get a lot more money when they find errors in the payments of the carriers.”

            The RACS pass on information to the Program Safeguard Contractors (PSC) who then identify cases of suspected fraud and refer those to the Office of Inspector General (OIG) for criminal or civil prosecution, monetary penalties and/or administrative sanctions.

            According to Georgoulakis, mental health may be an easy target for the RAC program because the criteria for medical necessity is not as straightforward to pinpoint compared to physical medicine. Medical necessity must be supported by the patient’s progress in therapy and a plan with clearly identified goals. “In mental health if we’re not doing treatment plan revisions every 30-60-90 days we can really get nailed,” he said.

            The definition of medical necessity used by CMS is “Services or items reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the malfunctioning of a malformed body part.” Georgoulakis said that when a patient reaches a point where further improvement does not appear to be indicated or there is little expectation of improvement, the services are no longer considered reasonable or necessary.

            Other reasons for RAC denials of payment are incorrect coding of claims and insufficient documentation in the patient chart. Coverage may also be limited if the service is provided more frequently than allowed under a national coverage policy, a local medical policy or a clinically accepted standard of practice, according to Georgoulakis.

            He said the clinical record should document target symptoms, goals of therapy, methods of monitoring outcome and how the treatment is expected to improve the health status or functioning of the patient.

            In another symposium at APA, Donna Rasin-Waters, Ph.D., of New York presented the elements of a voluntary compliance plan recommended by the OIG for all Medicare providers. She said that self-auditing and monitoring examine patterns of denied claims or those resulting in overpayment.

            “A compliance plan is the number one mitigating factor in cases of suspected abuse or fraud. It is the best insurance plan a practitioner can have,” said Georgoulakis.

 National Psychologist, Vol. 17, No. 5, p. 9.

             Paula E. Hartman-Stein, Ph.D. is a psychologist, consultant and trainer specializing in behavioral healthcare of older adults. She is director of Geriatric Psychology at Summa Health System in Akron, Ohio, and chair of the first expert work group to develop quality measures in psychology and social work. She can be reached at cha@en.com or through her website, www.centerforhealthyaging.com