Complete HPMP Compliance Workbook (4MB - updated 12/2005)

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Background of HPMP

 

The purpose of Hospital Payment Monitoring Program (HPMP) is to measure, monitor and reduce the incidence of incorrect inpatient payments, focusing on accuracy of coding and diagnosis related group (DRG) assignment, medical necessity of services, and appropriateness of setting, billing, and prepayment denial. Payment errors are defined as the number of dollars paid in error to prospective payment system (PPS) hospitals, or the difference between the amount that should have been paid and the amount that was actually reimbursed. “Number of dollars paid in error” is an absolute value, meaning that errors include both overpayments and underpayments to hospitals.

 

HPMP is a follow-up to the Payment Error Prevention Program (PEPP), which was developed in 1999 during the 6th Statement of Work (SoW), in response to a Medicare payment audit conducted by the Office of the Inspector General (OIG). PEPP combined the philosophy and methods used in the health care quality improvement programs with the procedures used in case review. PEPP’s sole purpose was to reduce the occurrence of payment errors in the PPS hospital setting. During the 7th SoW, the focus changed to prevention of payment errors through education. To help accomplish this, Ohio KePRO provided claims data reports to providers, and education about such issues, as coding and DRG assignment, documentation, and observation versus inpatient admission.

 

In the 8th SoW, HPMP continues to focus on payment error prevention. Ohio KePRO reviews services provided in short-term acute care PPS hospitals, and long-term acute care hospitals (LTACs). We will review, for all records referred, the services provided to Medicare beneficiaries to determine whether those services:

 

• Are reasonable and medically necessary

• Are provided efficiently and in the most appropriate setting

• Support the validity of coded data based on medical information supplied by the provider

• Are correctly billed, and

• Are properly denied (if applicable).

 

Our review results in an initial determination that may result in approval or denial of payment and/or DRG changes.

 

Ohio KePRO also works with hospitals to reduce payment errors through data analysis and trending. We make available to hospitals on a quarterly basis the Program for Evaluating Payment Patterns Electronic Reports (PEPPER), which is an electronic data report containing provider-specific data for 13 target areas.

 

These areas have been identified by CMS as high risk for payment errors and include:

• DRG/Coding target areas

• Utilization and/or billing error target areas

• Combination of errors target areas (i.e., errors in DRG/coding, Utilization, billing)

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Random Sample Case Referral

 

Ohio KePRO reviews a random sample of records each month as part of the HPMP program.

 

On a monthly basis, CMS randomly selects a sample of Medicare cases from each state to be requested by Clinical Data Abstraction Centers (CDACs) for screening. 62 cases per state are sampled for each discharge month. The CDAC screens the records using a national generic utilization criteria set that may eventually be localized for each state. The CDAC also performs DRG validation with the guidance of its staff of credentialed medical record professionals. A 10% random sub-sample of the selected 62 Ohio records and all remaining records that do not meet the CDAC screens are referred on to Ohio KePRO for our review process.

 

Whenever Ohio KePRO receives a referral from the CDAC, we conduct a review using the medical record copy and other documentation sent to us by the CDAC. Ohio KePRO reviews these medical records for medical necessity, appropriate coding and DRG assignment, and quality issues using our screening criteria. All standard case review procedures as described in Ohio KePROs MOA Manual are followed. As with traditional case review, only physicians can determine that a utilization or quality concern exists, or make any other medical judgment determination. During the 7th Scope of Work, Ohio KePRO confirmed concerns on approximately 15% of utilization or DRG reviews.

 

CMS also refers cases to us as part of a random sample to estimate a national payment error rate for LTACs, and as part of a random sample to estimate national and fiscal intermediary-specific payment error rates for denied claims.

 

During the 8th SoW, Ohio KePRO plans to initiate a special HPMP project with hospitals or LTACs. This project will address identified inappropriate utilization, inaccurate coding patterns, and/or billing errors. Details of this project have not yet been decided.

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QIO Evaluation

 

During the 8th SOW, CMS again charges the QIOs with reducing their statewide Payment Error Rate, and in turn, the National Payment Error Rate. To accomplish this task, CMS is requiring all QIOs to:

• Ensure that their statewide Payment Error Rates do not increase more than 1.5 standard errors above their baseline absolute and net payment error rates.

• Complete 90% of HPMP reviews within the CMS prescribed timeframes

• Either submit a project with the intent to reduce actual or estimated payment errors, or justification for exclusion from doing a project

 

Ohio’s baseline absolute and net payment error rates for the 8th SOW are 3.31 and 3.09 respectively and were calculated using data from fiscal year 2003 (October 2002 through September 2003). These rates place Ohio 16th lowest out of the 52 QIOs for the absolute rate, and 23rd lowest for the net rate.

 

The calculation of the payment error rates involves several different variables, which include:

• Sum of all dollars in error for a given timeframe

• Number of records that were randomly sampled for the timeframe

• Total number of discharges for the timeframe

• Total Medicare dollars reimbursed for the timeframe

 

Using these variables the error rate is calculated by:

• Dividing the dollars in error for the given timeframe by the number of records randomly sampled for that same timeframe to arrive at an Average Payment Error Amount.

• Multiplying the Average Payment Error Amount by the number of discharges for the same time frame to obtain the Total Dollars in Error

• Dividing the Total Dollars in error by the total Medicare dollars reimbursed and multiplying by 100 to obtain the Estimated Weighted Payment Error rate.

 

Ohio KePRO monitors these rates monthly to ensure that they are not approaching the baseline plus 1.5 standard errors that CMS expects QIOs not to exceed for our re-measurement period which is fiscal year 2006 (October 2005 through September 2006).

 

Currently, data through the second quarter of fiscal year 2005 puts Ohio at a rolling 4-quarter absolute rate of 1.92, and a net rate of 1.80. Because of the time lag of almost a year between when the claims are billed and the point in which final data is made available, Ohio KePRO will not know how we have impacted Ohio’s payment error rate for the re-measurement time frame until late 2007.

 

The project plan that we are proposing to show reduction in Ohio’s payment error rate is in the works to meet the March 1st, 2006 submission deadline to CMS. Upon approval of the project plan, we will make more of the project details available. Meanwhile, Ohio KePRO continues review of cases selected for HPMP and is currently completing all HPMP reviews with 100% timeliness.

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PEPPER Data Report helps identify and prevent hospital payment errors

 

The Program for Evaluating Payment Patterns Electronic Report (PEPPER) is an electronic data report that presents the pattern of payments to each hospital in Ohio from CMS in comparison with the rest of the acute care, prospective payment system (PPS), short stay inpatient hospitals in Ohio

 

In 1998 the Office of the inspector General (OIG) released the “The Office of Inspector General’s Compliance Program Guidance for Hospitals” which encouraged hospitals to develop and implement a compliance program. One aspect of a compliance program involves ensuring that charges for Medicare services are medically necessary, and correctly documented and billed. As such, hospitals should conduct regular audits to ensure that the medical necessity for admission and treatment is documented and that bills for Medicare services are correct.

 

As a result of the OIG’s statement, PEPPER was developed by the TMF Health Quality Institute at the direction of CMS to provide a tool that would help hospitals in prioritizing their auditing tasks. Ohio KePRO distributes this report quarterly via QualityNet Exchange to all PPS, short stay inpatient hospitals in Ohio and uses the data to work with those hospitals in identifying and preventing payment errors.

 

The PEPPER is grouped into 13 CMS selected Target areas that were chosen based on historical knowledge, experience, and analysis of payment errors related to medically unnecessary admissions, inappropriate readmissions and DRG upcoding. The analysis highlighted these areas as at high risk for payment errors. The 13 target areas listed in PEPPER are:

• DRG 014 discharges as a percent of DRGs 014, 015, and 524 discharges

• DRG 079 discharges as a percent of DRGs 079, 080, and 090 discharges

• DRG 089 discharges as a percent of DRGs 088, 089, and 090 discharges

• DRG 127 One-Day Stays as a percent of all DRG 127 discharges

• DRG 143 One-Day Stays as a percent of all DRG 143 discharges

• DRGs 182 & 183 One-Day Stays as a percent of all DRGs 182 and 183 discharges

• DRG 243 discharges as a percent of all discharges

• DRGs 296 & 297 One-Day Stays as a percent of all DRGs 296 and 297 discharges

• DRG 416 discharges as a percent of DRGs 416, 320 and 321 discharges

• Seven-Day re-admissions to the same facility or elsewhere as a percent of all discharges

• One-Day Stays excluding transfers as a percent of all discharges

• Three-Day Stay Transfers to SNF or SB as a percent of all discharges

• DRGs with Complication or Co-morbidity as a percent of DRGs with or with out CC discharges

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How can hospitals use PEPPER?

 

Hospitals can use PEPPER to guide their auditing and monitoring activities related to the identification and prevention of payment errors. PEPPER provides statewide comparative data that enables hospitals to identify where they differ from their peers with regards to the above noted high risk areas. The data can assist hospitals in identifying both potential overpayments as well as potential underpayments.

 

To learn more about PEPPER, click on the link below to view the PEPPER User Guide.

 

Download the PEPPER User Guide (Adobe Acrobat Reader is required)

 

To obtain the most updated information on PEPPER, please visit the PEPPER Web page at:

 

http://www.hpmpresources.org/PEPPER/tabid/72/Default.aspx

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Payment Errors (HPMP Intervention)

 

The payment error rate is based on chart reviews completed by Ohio KePRO. In December 2005, Ohio KePRO sent letters to 55 selected hospitals, requesting them to participate in CMS's initiative is to reduce the payment errors made to PPS facilities.

 

As part of our contract we are required to work with providers within Ohio to actively reduce the payment errors. This is step one of our HPMP program for the 8th SoW. We have divided this group of 55 providers into two groups.

• Group 1 providers are requested to submit a (Quality Improvement Plan (QIP) to Ohio KePRO. This group was selected based on the number of errors that the facility had in the charts that Ohio KePRO reviewed. We also included in our letter if that provider was an outlier in eight or more PEPPER target areas.

• Group 2 providers only had one error in the charts that we reviewed; however, they also fell into the outlier status in the PEPPER reports.

 

Therefore, we are requesting a letter from these facilities stating that they have reviewed the data that we have sent to them and what conclusion they drew from their analysis. We would expect that they would let us know either that they identified an area of concern or that they believe it is appropriate for their facility be an outlier based on their patient population. Also we would expect them to review their one error and determine if it is a system issue or a practice pattern that may be prevalent in more cases.

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Quality Improvement Plans (QIPs)

 

Ohio KePRO’s Review Department is working with providers throughout the state to improve quality of care delivered to Medicare beneficiaries and reduce payment error rates. The quality improvement plan is a valuable tool used by the Review Department to help correct issues of concern related to quality, utilization, and coding. Ohio KePRO reviews individual cases or trends in review outcomes prior to requesting a Quality Improvement Plan (QIP) be implemented to address the area of concern and improve the process. If necessary, Ohio KePRO helps the provider develop the quality improvement plan. Ohio KePRO is required to notify the Centers for Medicare & Medicaid Services (CMS) if a provider refuses to participate in the development of a quality improvement plan. QIPs should contain the following elements:

• A description of expected outcomes and goals. These must be measurable.

• A description of actions to be taken to correct the quality concern.

• Assignment of responsibility – who will do each step.

• A time frame for initiating and completing the plan.

• A description of the process for ensuring the actions, resolve the pattern of concern.

• A method to monitor and measure progress.

 

At predetermined intervals, Ohio KePRO monitors the progress of the QIP. After successful completion of the QIP, Ohio KePRO sends a letter to the provider indicating the case has been closed. The intent of the QIP plan is to let Ohio KePRO know how the provider determined the root cause of an identified problem, the steps that they have taken to resolve the problem, and how/when they are going to measure if their steps have resolved the problem. A typical QIP allows enough time to analyze the data, determine if there is a problem, determine the root cause of the problem, and develop a plan of action to resolve the problem. Implementation of the plan should take only a few days -- ideally the solution to the problem should be as simple as possible. Measurement should occur at intervals based on the implementation plan -- typically we would expect initial measurement to occur soon after implementation, then one month, three months, and six months later. At each measurement phase the provider should evaluate if the steps taken have improved the measurements. If not, then the provider should go back to step 1 and restart the process.

 

Link to the QIP Action Plan Template (click here to view and download QIP Action Plan Template).

 

The second step of our HPMP program for the 8th SoW is to develop a project to work with providers on compliance, unnecessary admissions, coding, and documentation errors. We are in the process of developing this project and hope to have a draft of the project complete by the end of the year.