1.0 AUDIT
ASSISTANCE SOFTWARE
1.1 The contractor shall utilize
the Regional Advanced Techniques Staff (RAT-STATS) software suite
to support its auditing process. There are a number of well-known,
reputable software statistical packages (e.g., SAS, R) that may
be used in conjunction with RAT-STATS.
1.2 RAT-STATS
when performing audit sampling. RAT-STATS is a statistical sampling
software package created by the Office of Inspector General (OIG)
to facilitate the auditing process.
1.3 RAT-STATS
offers an assortment of capabilities which include, but are not
limited to, random number generation, various sampling techniques,
sample size calculation, and extrapolation.
1.4 The contractor
shall download RAT-STATS from the Department of Health and Human
Services (DHHS) website. A number of important statistical considerations
related to the auditing process are summarized in
paragraph 2.0.
2.0 STATISTICAL
AUDIT METHODOLOGIES
2.1 The contractor shall use a
technically sound statistical analysis method and sampling design.
2.2 The contractor
shall use current statistical methods to determine sample size,
design of sample and analytical methods as determined by the scope
and the nature of the audit.
2.2.1 The contractor shall perform
and design the audit individually on a case-by-case basis.
2.2.2 The contractor
shall eliminate zero paid claims from the universe before the sample
selection. This includes claims which were not denied, have allowable
amounts, but zero dollars were paid.
2.2.3 Simple
random sampling involves using a random selection method to draw
a fixed number of sampling units from the frame without replacement
(i.e., not allowing the same sampling unit to be selected more than
once).
2.3 Stratified sampling involves
classifying the sampling units in the frame into non overlapping
groups, or strata. The stratification scheme ensures that a sampling
unit from a particular stratum is more likely to be similar in overpayment
amount to others in its stratum than to sampling units in other
strata. Other sampling methods include, but are not limited to,
multistage sampling, cluster sampling, and stratified cluster sampling.
2.4 The contractor
shall utilize a qualified statistician when developing statistical
samples.
3.0 PROBE SAMPLE AUDIT
3.1 The probe
sample shall employ simple random sampling if it is to be used to
evaluate the variability of overpayments in the claim universe.
The results of the probe sample audit may trigger the need for the
contractor to perform a Statistically Valid Random Sample (SVRS)
audit or a 100% audit.
3.2 Statistically Valid Random
Sample (SVRS)
3.2.1 Statistical sampling is used
to investigate and project (e.g., extrapolate) the amount of overpayment(s) made
on claims when a 100% audit is not used. Statistical sampling is
commonly used in consideration of a large number of claims of potentially
fraudulent claims and the dollar values associated with those claims
given available resources to conduct the audit.
3.2.2 There
are four key conditions that must be met in order for a SVRS to
produce a valid extrapolation. These conditions are:
• Properly defining the sampling
unit, sampling frame, and the universe;
• Applying an appropriate sampling
methodology;
• Calculating a suitable sample
size; and
• Sample the units sampled in
the frame so that it is representative of the fraudulent claims.
3.2.3 Focusing
the universe is performed by targeting specific claims which match
the allegations of the case, and removing low dollar claims that
will not be worth of recoupment.
3.2.3.1 The contractor shall select
sampling units from the applicable sampling frames via a random sampling
approach once the claims universe has been focused and evaluated
to determine the sampling plan and methodology to be performed.
3.2.3.2 The contractor shall electronically
generate sample sizes and random numbers customized for each audit
performed using RAT-STATS software referenced in
paragraph 1.0.
3.2.3.3 The focused claims universe
shall be sorted in Internal Control Number (ICN) ascending order
when the software’s sampled numbers are applied.
3.2.3.4 The contractor shall eliminate
zero paid claims from the universe before the sample selection.
This includes claims which were not denied, have allowable amounts,
but zero dollars were paid.
3.2.4 The contractor
shall record and achieve seed number of the random sample(s) so
that the sample(s) can be recreated at a later date if necessary.
The overall sampling plan and methodology may include a combination
of sampling approaches consisting of one or more SVRS or 100% claims
audit(s).
3.3 Stratified Sample
3.3.1 When the
focused universe of claims includes diversity in a key characteristic
such as paid dollar amounts or numbers of procedures billed within
the claim, the efficiency of the audit is improved by employing
a stratified sampling approach. If the potentially fraudulent claims
represent diverse subpopulations the audit will be stratified by
the contractor.
3.3.2 The contractor shall employ
stratification when the universe of claims where the fraud is suspected
to have occurred has a standard deviation greater than the average
overpayment. This characteristic of the claims universe will be
identified by the contractor using a random probe sample as described
in
paragraph 3.0, or by evaluation of the average
and standard deviation of paid amounts using the software referenced
in
paragraph 1.0. The paid amounts represent
the upper bound of possible overpayment for each claim when the
average overpayment is unknown and can be used for estimation.
3.3.3 The stratification
will then be employed to split the universe of claims where the
fraud was suspected to have occurred into smaller, non-overlapping
groups, or strata. Within a stratum, the claims are more similar
to each other than to the other claims in the universe of fraudulent
claims.
3.3.3.1 The contractor may use their
discretion in identifying the number and characteristics of strata needed
for an audit, such that each stratum has a standard deviation less
than the average paid or overpayment amount. Each stratum’s subset
of claims will then be sampled using a random selection method or
a 100% audit. A stratified audit when properly designed will require
the sampling of fewer claims overall or have improved statistical
results for the generally extrapolated amounts, because the variability
will be decreased in each stratum.
3.3.3.2 The contractor may apply additional
sampling methods at their discretion including, but not limited to,
multistage sampling, cluster sampling, and stratified cluster sampling.
3.4 One-Hundred
Percent (100%) Claims Audit
The contractor may need to
perform a 100% claims audit.
3.4.1 Situations
may include a small stratum of high dollar claims which should be
audited at 100% as part of stratified sampling approach. Alternatively,
even lower dollar claims may need to be audited at 100% if the claims are
not similar (in terms of procedure, paid amount, or other characteristics)
to a large group of other claims in the universe.
3.4.2 In the
vast majority of cases, the unit to be statistically sampled is
the entire claim (which includes all paid line-items).
3.4.3 The contractor
shall review the beneficiary’s entire Episode of Care (EOC) as part
of the audit when the circumstances dictate.
3.4.3.1 In this case, the contractor
shall discuss the specifics of this approach with Defense Health
Agency (DHA) Program Integrity Office (PI) prior to selecting the
sample(s) as there are ways of auditing the beneficiary’s EOC while
still using the claim as the sampling unit.
3.4.3.2 In other unusual circumstances,
a probe sample audit may be required (e.g., an audit that is not statistically
valid). A statistically valid sample may or may not follow the probe
sample audit.
3.5 External
Audit - Beneficiary Inquiry
3.5.1 A secondary method of determining
probable fraudulent practices is to conduct a verification of services
with beneficiaries. This may be used to supplement a claims audit
method, and address 100% of the beneficiaries who received services
from a provider within a recent period of no more than one year.
If the provider is seeing more than 50 beneficiaries for which claims
have been submitted, a systematic sample may be used. (e.g., an
interval of every fifth, 10th, claim). Generally, no less than 50
external verification letters shall be sent. A suspense period for
responses to the verifications letters shall be 30 business days,
with a follow-up either written, or by phone by the 30th business
day. If the response is not received, the contractor may contact
the beneficiary by phone to receive responses.
3.5.2 An external
audit to the provider shall be conducted where a bill has been allegedly
altered.
4.0 AUDITS
4.1 Audits
are performed to examine and verify the accuracy of claims.
4.2 The contractor
shall determine the type of audit appropriate for the particular
circumstances on a case-by-case basis.
4.3 The contractor’s
Program Integrity staff who perform records reviews and audits shall
include an appropriate number of Registered Nurses (RNs), or equally
qualified medically trained professional(s) and credentialed coding
or credentialed medical billing professionals with the education
and anti-fraud experience.
4.3.1 These personnel must shall have
a thorough knowledge of TRICARE regulatory provisions, policy, and standards.
The reviewer shall document, in detail, the rationale for the audit
findings. The review must be dated and include the clinical specialty
and qualifications of the reviewer and the signature (not initials)
and the legibly printed name of the reviewer.
4.3.2 The contractor
shall have a credentialed coding or credentialed medical billing
professional or both on staff that has professional coding, reimbursement,
and anti-fraud education and experience that provides support in
the performance of medical records audits and program integrity
functions.
4.3.3 In cases where clinical issues
may be included in an audit, the contractor’s audit team shall include
a member with clinical expertise in the area under review.
4.4 Reporting
Audit Findings
4.4.1 The contractor shall report
audit findings in a clear and concise manner in an automated spreadsheet, accompanied
by a description of the audit with summary information in quantifiable
terms.
4.4.1.1 The contractor shall include
the findings on the DHA PI Audit Worksheet for each SVRS performed. For
reporting requirements, see DD Form 1423, Contract Data Requirements
List (CDRL), located in Section J of the applicable contract. The
supporting audit spreadsheets shall provide the criteria used for
determination of overpayments (e.g., no entry, not a benefit).
4.4.1.2 An analysis of the frequency
of the occurrence of overpayments can lead to conclusions concerning further
investigative actions. Other methods of analyses may be used concerning
abusive practices.
4.4.2 The contractor
shall include individual audit sheets documenting individual findings
(which will then be summarized in the audit worksheet(s) (e.g.,
overpayment summary by claim line, audit summary report, extrapolation
(sample) verification spreadsheet). Individual file folders, labeled
with identifying information, shall be generated as appropriate
and must contain all applicable documentation or data required to
support the audit finding, which will include but not be limited
to: claim copy, explanation of benefits, individual audit sheets, evaluation
and management score sheet, and medical record documentation reviewed
by the auditor.
4.5 Medical Necessity Audits for
Medical or Mental Health Claims
4.5.1 The contractor shall perform
medical necessity audits that are performed by a RN, or equally
qualified medically trained professional, who can make medical judgments
based on professional education and experience. This means RNs or
qualified Physician’s Assistants (PAs) for medical claims. A qualified
Licensed Practical Nurse (LPN) or Licensed Vocational Nurse (LVN),
working directly under the close supervision of an RN or PA, may
be used, if the contractor submits the LPN’s or LVN’s full resume
and a detailed scope of authority and responsibility to the Contracting
Officer’s Representative (COR) for approval before the LPN or LVN
assumes a medical review role. For mental health claims, a clinical
psychologist, psychiatric nurse practitioner, a psychiatrist or
an equally qualified professional shall perform the audit.
4.5.2 These
personnel shall have a thorough knowledge of TRICARE regulatory
provisions, policy, and standards.
4.5.3 The reviewer
shall document, in detail, the rationale for the audit findings.
4.5.4 The review
shall be dated and include the clinical specialty and qualifications
of the reviewer and the signature (not initials) and the legibly
printed name of the reviewer.
4.5.5 Claims
that the reviewer cannot make a determination on shall be referred
to the contractor’s medical staff, or an external consultant at
no cost to the Government. Use of medical staff or consultants is
expected and required not only for initial reviews but post-payment
analyses and audit requests from DHA PI.
4.5.6 The contractor
shall involve physicians, consultants with a specialty appropriate
to the case and allegations whenever the case is complex, physicians
or consultants at no cost to the Government.
4.5.7 Other
types of audits shall be performed to suit the allegations or aberrant
billing practices such as probe, non-invasive, EOC, or calendar
and are left up to the determination of the contractor. This shall
include also utilizing other investigative techniques such as license
verification and Internet research.
4.6 Prescription
Records Audit for Pharmacy Claims Or Pharmacy Claims Audit
4.6.1 Audits
shall be performed by a qualified trained professional, who can
make judgments based on professional education and experience such
as a certified pharmacy technician, a pharmacist, Doctor of Pharmacy or
an equally qualified trained professional.
4.6.2 These
personnel shall have a thorough knowledge of TRICARE regulatory
provisions, policy and standards.
4.6.3 The reviewer
shall document, in detail, the rationale for the audit findings.
4.6.4 The review
shall be dated and include the clinical specialty and qualifications
of the reviewer and the signature (not initials) and the legibly
printed name of the reviewer.
4.6.5 Claims
that the reviewer cannot make a determination on shall be referred
to the contractor’s pharmacy staff (or if available, medical staff)
or an external consultant at no cost to the Government. Use of pharmacy
staff or an external consultant is expected and required not only
for initial reviews but post-payment analyses and audit requests
from DHA PI.
4.6.6 The contractor shall perform
other types of audits to suit the allegations or aberrant billing
practices such as probe, non-invasive, etc.
4.6.7 The contractor
shall utilize other investigative techniques such as performing
purchase verification, license verification, and Internet research.
4.7 Dental
Necessity Audits for Dental Claims
4.7.1 Dental necessity audits must
be performed by a qualified trained professional, who can make judgments
based on professional education and experience such as a certified
dental technician, a dentist, or an equally qualified trained professional.
4.7.2 These
personnel shall have a thorough knowledge of TRICARE regulatory
provisions, applicable contract, policy and standards.
4.7.3 The reviewer
shall document, in detail, the rationale for the audit findings.
The review shall be dated and include the clinical specialty and
qualifications of the reviewer and the signature (not initials)
and the legibly printed name of the reviewer.
4.7.4 Claims
that the reviewer cannot make a determination on shall be referred
to the contractor’s dental staff or an external consultant at no
cost to the Government. Use of dental staff or consultants is expected
and required not only for initial reviews but post-payment analyses
and audit requests from DHA PI.
4.7.5 Other
types of audits shall be performed to suit the allegations or aberrant
billing practices (e.g., probe, non-invasive, EOC). This shall also
include utilizing other investigative techniques such as license
verification, and Internet research.
4.8 The contractor
shall ensure compliance with the Alcohol, Drug Abuse and Mental
Health Administration (ADAMHA) Reorganization Act, Public Law 102-321
(July 10, 1992) and implementing regulations including 42 Code of
Federal Regulations (CFR) Part 2, when data requested includes services
related to substance abuse or mental health and medical records
requests.
4.9 Request for Mental Health Records
- Psychotherapy Notes
The contractor
shall not request that a provider submit psychotherapy notes as
defined by “notes recorded by a mental health professional which
document or analyze the contents of a counseling session and that
are separated from the rest of the medical record”. The refusal
to submit such information shall not result in the denial of the
claim or allegations of fraud or abuse. The provider is responsible
for extracting information to support that the claim is for reasonable
and necessary services. If the provider does not submit information
to substantiate that the services were medically necessary, the
claim shall be denied.