Industry Memo on Medicare Filtering: A To Do List

By now, MAO plans have had about a month to read and understand the July 21, 2015 “Industry Memo: Medicare Filtering” letter that was published by CMS.   The letter contained clarifications and confirmations of previously disclosed information as well as new information on the proposed rules CMS will be using to conduct risk filtering.  Some highlights of the letter are: CMS fishing expedition

  • Diagnosis received from the Encounter Data Processing System submissions will be used to calculate risk adjustment dollars for the 2015 payment year (2014 Dates of Service (DOS)) as previously disclosed.
  • CMS will apply their own filter to Encounter Data received from MAOs to determine if a diagnosis is risk adjustable.
  • After confirming and appropriate place of service, CMS will use a risk filter that is CPT only for professional encounters (no specialty codes will be considered).  The codes for 2014 DOS can be found here.
  • Institutional Inpatient encounters will have all diagnosis accepted as long as they are Bill Type 11x or 41x without treatment code filtering.
  • Institutional Outpatient encounters will also filter on bill type (8 types accepted), but also be subjected to the CPT/HCPCS filtering from professional encounters.
  • Risk adjustment calculations for PY 2015 will use Encounter data as a source of additional codes.
  • Risk adjustment calculations for PY 2016 will be a weighted average of 90% RAPS and 10% EDPS scores.
  • Plans are responsible for deleting diagnosis codes from both RAPS and the Encounter data collected and filtered  by CMS by using chart reviews.
  • The submission deadline for 2014 DOS is February 1st, 2016.

Some thoughts and recommendations

The wording of the approach for 2015 PY tells us that risk adjustment dollars won’t go DOWN as a result of the introduction of EDPS data.  While it is true that it can only go up with the addition of EDPS diagnosis, every additional EDPS sourced HCC represents additional RADV risk over what the plan allows today through risk filtering efforts.  2015 DOS / 2016 PY data will use a 90/10 weighted average on payments meaning there can be both upside and downside to risk adjustment revenue.

The biggest problem however, is that there is a lot to do and not much time to do it.  Counting back from February 1, 2016, there are five months.  Plans will have to identify differences and decide if those differences need to be deleted or not.

  • Plans should not wait for CMS to provide the MAO-004 report to indicate what codes have been used for risk adjustment from encounter data under the new rules.  It will take time to approve the proposed rules and more time to start applying the filter and actually send out the backlog of MAO-004 reports.
    • Start tracking, at the very least, diagnosis submitted by encounter for 2014 DOS submissions.  Tracking individual diagnosis would be even better.
    • Apply the proposed CMS CPT filter to come up with a potential list of Encounter Data HCCs per encounter.
    • Use Encounter data HCCs to build a table of Encounter Data Member HCCs.
    • Compare Encounter data Member HCCs to RAPS Member HCCs and identify differences as top priorities for review.  There may not be time or resources to delete every diagnosis submission difference, but if the difference does not involve an actual pick up, the plan is a bit less exposed.
    • Use your own results as a known good to compare to the results of the MAO-004 when it is finally delivered to ensure CMS is applying the filter correctly.
    • Mine RAPS process for automatic deletes and ensure these are done on both sides (e.g. Professional AMI codes like 410.xx)

Another big problem has to do with the EDI process to be used to submit chart review deletes.  It is technically difficult, cumbersome to track and still unclear in some areas.

  • CMS has specified chart review deletes use a REF segment to indicate that diagnosis codes listed be treated as deletes.  At the very least, this REF segment would mean that chart reviews would need to be either “ADDs” or “DELETEs”.  While previous CMS presentations show examples of both in the same transaction, they are not EDI x12 5010 compliant and I assume have been since abandoned.
  • These deletes are not like RAPS deletes that delete on a member level.  Instead they are tied to specific encounters.  This is a problem because. . .
  • There is typically a many to one relationship between a single chart review and many encounters.  If a plan can only delete codes related to a specific ICN, many chart review deletes will have to be sent to actually delete a diagnosis.
    • Example: A chart is reviewed that spans eight encounters.  While the doctor’s notes indicate a history of a stroke, the medical biller each time coded 410.01 as an AMI – Initial episode instead of the 412.xx that would indicate the patient had a history of stroke.  The chart review uncovered this mistake and recommended the 410.xx be deleted and the 412 be added.  To do this, at least 9 chart review transactions would have to be sent.  8 of them would have to be matched to 8 different ICNs for the deletes of the 410.xx codes and at least one more would have to be sent to add back in the 412.xx.
  • Clarification on the EDI problems and Chart review delete process has been requested from CMS.

What are your thoughts?  What is your plan doing to address these issues?  Are there important things I missed or got wrong?  What has your analysis of the CPT filter turned up as a concern?  I’ll monitor comments closely and respond quickly.