September 30, 2015

Using RVUs to Predict Compliance Risk

Using RVUs to Predict Compliance Risk

Some practices pay lots of attention to RVU data, and some ignore it completely. It is often a function of the philosophy of the practice. Are you tracking work, number of patients, gross charges, net collections (or all of the above) or other calculus. Because some outside entities that are reviewing payments measure and compare RVUs per physician per specialty by geography, practices are well served to understand this thought process and act accordingly. This Medical Economics article tells more.

Conducting an internal review of your practice’s work using RVUs can help predict, and perhaps ward off, a compliance audit. Here’s how.

Typically, healthcare professionals view relative value units (RVUs) as a way to model the business of medicine. In fact, I have already presented several business cases for this, such as cost accounting, productivity, fee scheduling, and more. There seems to be, however, one benefit of measuring RVU utilization that is most often overlooked: compliance risk. In fact, it almost seems counterintuitive as RVUs measure resource consumption and since this seems like such an internal issue, it can be very confusing thinking about how this can apply to an external review of the practice or the physician.

To note, an RVU does, as stated above, measure consumption of resources. In essence, it measures how much time, effort, and money are poured into providing a service to a patient; and that is any patient, not just a Medicare beneficiary. While Medicare may have its own payer rules, pretty much every payer — private or government — pays attention to the number of RVUs reported by a practice. Why? Because RVUs are easily converted into dollars and dollars get everyone’s attention.

Some government auditing entities, such as Recovery Audit Contractors (RACs), get paid a commission based on the dollar amount of Medicare overpayments they find within a practice. But before even conducting an audit, they are able to estimate the potential find by estimating the number of RVUs at risk. The same goes for the private payers; they know how much they pay a practice based on RVUs, which they often convert to cost-per-RVU and apply to their company’s bottom line.

Let’s say that a provider reports 3,000 RVUs associated to a particular high risk code, such as a 99233. According to the Comprehensive Error Rate Testing (CERT) study, a study conducted by CMS to estimate the amount of payments made in error to a medical practice, procedure code 99233 is overpaid (or paid in error) nearly 28 percent of the time. In this case, an auditor could estimate that, of the 3,000 RVUs associated with that code, 28 percent, or 840, are potentially at risk, meaning that it is likely the payments were made in error. Multiply those 840 RVUs times the current Medicare conversion factor of $35.8228 and the auditor can monetize the potential recovery at just over $30,000. And that’s just for one procedure code.

RVUs, particularly work RVUs, are also easily converted into time. For 2014, there are nearly 8,000 procedure codes within the physician fee schedule Resource-Based Relative Value Scale (RBRVS) database that contain a number of minutes associated to the work RVU. For example, for procedure code 99233, according to the official time file, it would take a physician, on average, a total of 40 minutes to provide this service. If the provider reported 1,000 of these, then they would be reporting, on average, 40,000 minutes, or 667 hours of work effort. If you add up all the time associated with all the procedures for a given provider, it gives you an estimate of the total number of hours assessed for the amount of work reported during a given period of time. The rule of thumb is, anything over 2.5 times HHS Office of the Inspector General’s determination of fair market value (FMV) — currently 2,000 — constitutes an increased risk of an audit. So, if you add up all the time for all the procedures that a given provider has reported during, say, a year, anything over 5,000 hours (2.5 times FMV) significantly increases their risk of an audit. I know this for a fact rather than just anecdote as I have defended a number of physicians in both civil investigations and criminal investigations that resulted solely based on the number of work RVUs and/or assessed hours reported during any given time period.

The bottom line? Pay attention to what you are doing. Ask yourself this question: Are the number of work RVUs and/or assessed hours I am reporting believable? If not, then make sure you conduct your own internal review first. Remember, semper paratus, or “always prepared” goes a long way in protecting ourselves from the consequences of aberrant behavior.

Source: Medical Economics

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