News: Majority of improper payments for hospital outpatient services were due to insufficient documentation, CMS says

The improper payment rate for hospital outpatient services for the 2016 Comprehensive Error Rate Testing (CERT) report period was 5.4%, at a projected cost of $3.1 billion, which accounts for 7.5% of the overall Medicare fee-for-service improper payment rate, according to the Medicare Quarterly Provider Compliance Newsletter. And, according to CMS, the majority of those improper payments were due to insufficient documentation errors. Many hospital outpatient claims lacked:

• An order or documentation supporting the intent to order laboratory or other diagnostic tests, and/or
• Supporting documentation for the medical necessity of the service provided

The October 2017 Medicare Quarterly Provider Compliance Newsletter gives several examples of the types of insufficient documentation resulting in a payment recovery by the auditor, each illustrating one or both of the problems cited above.

CDI specialists in the outpatient setting need to be cognizant of the documentation needed to support medical necessity and double check that all orders, signatures, and the like are in order. Providers should also be educated on what is expected of them. The outpatient world is fast-paced; educating providers may be much more fruitful than trying to catch the issues prior to the bill dropping.

In each of the four examples provided in the newsletter, it’s important to notice that the provider was sent additional requests for documentation which either returned the same documentation or no documentation at all.

Though it would certainly be better for the record to go out will all the necessary documentation in the first place, there should also be a process for responding to the additional documentation requests adequately rather than simply resending the same information. The word “additional” is crucial here.

Editor’s note: To read the entire October issue of the Medicare Quarterly Provider Compliance Newsletter, click here. To read about CDI in the emergency department, click here. To read the ACDIS Advisory Board’s White Paper on the subject of outpatient CDI, click here. To read an article related to denials management and the use of CERT reports, click here.