How well are Statutory Documentation Requirements Decreasing CMS Program Risks?

The Government Accountability Office (GAO) issued a report on March 27, 2019, stating CMS should assess documentation necessary to identify improper payments. The study was performed on Medicare FFS and Medicaid FFS improper payment data for four selected services types—home health, durable medical equipment (DME), laboratory, and hospice for fiscal years 2005 through 2017.

In fiscal year 2017, insufficient documentation comprised the majority of estimated FFS improper payments in both Medicare and Medicaid, with 64 percent of Medicare and 57 percent of Medicaid medical review improper payments. The report indicated that Medicare FFS had an estimated $23.2 billion in improper payments and Medicaid FFS had $4.3 billon in improper payments in fiscal year 2017 all due to insufficient documentation.

Part of the reason for doing this study was to examine “Medicare and Medicaid documentation requirements and factors that contribute to improper payments due to insufficient documentation”. Essentially, one goal was to determine how insufficient documentation contributes to improper payments based on Medicare FFS versus Medicaid FFS requirements for medical documentation as there is often a huge discrepancy between what Medicare requires for medical documentation and what Medicaid requires for medical documentation, even for the same services.

Insufficient documentation is defined as instances in which providers submit documentation that is insufficient to determine whether a claim was proper, such as when there is insufficient documentation to determine if services were medically necessary, or when a specific, required documentation element, such as a signature, is missing. Instances in which providers fail to submit requested documentation or respond that they do not have the requested documentation is counted separately and reported as no documentation. No documentation errors account for a very small number of improper payments.

There were two things about this report that struck me as interesting and provided food for thought. First, why is there a huge discrepancy between Medicare and Medicaid documentation requirements for medical necessity of these services and how, or does, that correlate to appropriate assessment of program risks by CMS? Second, why is this so hard? Why are providers failing so badly at providing the payer with full and sufficient medical record documentation to support services billed in the first place?

Why the discrepancy in documentation requirements?

For Medicaid programs, states primarily set the standards for documentation requirements and often do not require documentation such as progress notes from referring physicians to support medical necessity. In contrast, Medicare requires supporting documentation from the referring physician for the four services reviewed in this report. And, while both programs require signatures on provider documents, only Medicare has detailed standards for what constitutes a valid signature.

Without an understanding of how differing documentation requirements affect improper payment rates, CMS may not be able to fully identify and address FFS program risks. CMS told the GAO that they have not assessed the implications of how differing requirements between the programs may lead to differing assessments of the programs’ risks. So do greater documentation requirements equate to lower program risks? Or, is Medicaid’s shorter list of required documentation doing the job to adequately protect against program risks? I think this report illustrates that we don’t know the definitive answer to that.

Why are providers failing at providing supporting documentation?

This was actually my first question as I was reading through the report. Why is this so hard? The report very clearly shows in graphical and narrative ways that the poor response to additional documentation requests has been an issue for at least a decade, likely longer, and is not improving. Why is that? Does CMS have any concern over looking into the factors, barriers, behaviors, or failed processes that could be causing this very large lack of provision of appropriate medical records to the payer? Does CMS even have any skin in this game to improve those poor response rates? And, when I say poor response, I don’t mean the providers aren’t sending medical records; I mean that providers aren’t sending medical records that fully and appropriately support the medical necessity of the services provided and meet the statutory regulations for documentation of certain services.

According to the report, CMS officials are aware that some service providers are at a disadvantage in having to rely on documentation from the referring providers to support medical necessity. And, referring providers have little incentive to provide supporting documentation as there is no financial repercussion for not providing it. The report indicates that CMS has provided education to physicians on the need for submitting supporting documentation, but not much else has been done to encourage improved compliance with requests for records.

So far, CMS has participated in the Patients over Paperwork initiative begun in 2017 to simplify providers’ requirements for documentation. And, the report states that, thus far, CMS has clarified and amended several Medicare documentation requirements, including requirements for duplicate documentation, to help decrease the provider burden on documentation. It remains to be seen how much impact this program may have on decreasing the documentation burden on providers in the coming years.

So, did you know that Medicare’s CERT and Medicaid’s PERM contractors make multiple attempts to contact providers to get the medical record documentation they need for medical reviews? Both contractors allow providers 75 days to submit documentation, but will accept late submission as long as they have not yet reached their deadline to finalize their findings. If there is no response to an initial request for medical records and supporting documentation, the contractors will make at least three additional contacts with the provider requesting the documentation. Three additional contacts! For Medicare, if the services are referred services such as home health, DME or laboratory services, the CERT contractor will also reach out to the referring physicians for documentation. Once the contractors do receive documentation, if it’s not sufficient, they will reach out again for additional documentation.

Despite all of these efforts, in fiscal year 2017, the CERT contractor requested additional documentation from 22,815 providers out of 50,000 claims reviewed. 56% of the time, no additional documentation was provided. This just baffles me. In it’s simplest form, it’s seems to be a break down in the communication process back and forth. In today’s day and age of instant communication it seems difficult to fathom that after all of the attempted contacts from one entity to another that an adequate response is still not forthcoming. Imagine if 56% of your texts never made it to their intended recipient or didn’t result in a requested response from the receiver. With such poor response rates I can’t help but wonder how many dollars are being denied that could have been appropriately paid had the requested documentation been supplied.

I’m sure the current process of asking for and receiving required documentation is not a simple one and there are a lot of issues to consider if the process is to be improved. And, I’m certain there are barriers and roadblocks for both entities preventing the achievement of higher percentages of submission of appropriate medical record documentation. But, I think we need to do better. How can we know how much documentation is enough documentation if we can’t gather enough documentation to study it?

The GAO article can be found here: