Counting the Cost – and a Roadmap to Survival (Part 1 of 7)

A few people are starting to whisper about their experience with the Targeted Probe and Educate (TPE) process directed at claims for Hyperbaric Oxygen Therapy (HBOT). The Medicare Administrative Carriers (MACs) are supposed to educate the doctor, but so far, the “education” aspect has involved the targeted physicians educating the auditors about coverage policy for HBOT.  Auditors seem to be using the same guidance document as the Hyperbaric Prior Authorization project with the same effect. As usual, there is no “paragraph indent” in their guidance document between the section on diabetic foot ulcers and late effects of radiation. As a result, auditors continue to deny hyperbaric oxygen claims on patients with late effects of radiation because they do not ALSO have a diabetic foot ulcer. Additionally, it appears that the 30-day delay to starting HBOT, which is only for diabetic foot ulcers, is being applied incorrectly to all indications, including failing grafts.

If you work through the entire TPE process, you might avoid paying back money for the specific claims that were denied. However, on one “educational” phone call, even when the auditor agreed with the practitioner that their denial was a mistake, she said she wouldn’t change their determination of the facility’s “error rate.” The MACs provided some limited information about a process they called “Targeted Medical Review” that pre-dated TPE. In some cases, error rates over 90% were determined by the MAC after reviewing only a small number of claims (see table below).

Targeted Medical Review Results

HBOT Audit Alphabet

There are a lot of audit processes focused on HBOT and they are confusing. It appears MACs are implementing the TPE process nationwide, but pre-payment review is also widespread.  These audits are separate from the Office of the Inspector General (OIG) audit of the Medicare Administrative Carriers WPS and First Coast. After the WPS and First Coast audits by the OIG, letters were sent out informing hospitals to “self-audit” their hyperbaric charges, and then give back their hyperbaric payments retroactive six years.  The red targets on the graphic below indicate that he audit type is “targeted” and not random. Note that nearly all these audits are targeted.

Types of Audits and When They Occur in the Claims Process

From TPE to RAC

Even when the initial TPE denials are reversed, a high error rate sticks like chewing gum on the cat. A high error rate can result in referral for an audit by a Recovery Audit Contractor (RAC), but they could also refer you to the Office of the Inspector General (OIG). Separately, a RAC audit of HBOT charges in “Region 1” was announced a few months ago. Region 1 involves the following states: CT, IN, KY, MA, ME, NH, NY, OH, RI, VT. Remember that the RACs take a percentage of what they recoup.

Why is this happening?

These audits are happening because Medicare is bankrupt (see graph below). There was a $14 BILLION deficit in 2014.  Currently, 2026 is the year in which the Medicare trust fund is anticipated to become insolvent. Paybacks resulting from these audits are helping to fund Medicare.

Of course, simply getting hospitals to return their hyperbaric charges will not solve the massive Medicare shortfall. The purpose of the new Quality Payment Program is to reduce Medicare Spending per Beneficiary (MSPB). That’s the topic of my next blog – where MSPB meets HBOT.

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