CMS Pub. 100-08, ch. 6, § 6.1.4

A. Obtain Medical Records and MDS

Medicare contractors shall obtain documentation necessary to make a MR

determination. Medical records must be requested from the provider and the MDS data

must be obtained from the national repository. Medicare contractors are to use the

MDS as part of the medical documentation used to determine whether the HIPPS codes

billed were accurate and appropriate. Medicare contractors shall use the QIES (Quality

Improvement & Evaluation System) Business Intelligence Center (QBIC) Fiscal

Intermediary (FI) Extract Reports to obtain the MDS data from the National Reporting

repository.

Additional information about the use of the FI Extract Reports can be found in the

QBIC User's Guide.

Information (QBIC documentation & training) can be found at https://qtso.cms.gov.

(Search for ‘QBIC’ when accessing the webpage.) Once the clinical reviewer has

utilized the FI Extract Reports to obtain the MDS(es) corresponding to the period being

reviewed, the reviewer will import the MDS data into the MDS QC Software System

to convert it into a readable format to be used, in conjunction with review of the

medical record, for the adjustment of the SNF claim.

Once the clinical reviewer has used the FI Extract Tool to obtain the MDS

corresponding to the period being reviewed, the reviewer will import the MDS QC

Software System to convert it into a readable format to be used, in conjunction with

review of the medical record for the adjustment of the SNF claim. The MDS QC

System Software and Reference Manual can be requested at

MDSQC@nerdvana.fu.com. The MDS QC Tool contractor will contact CMS for

approval of the request prior to sending out the MDS QC System Software and

Reference Manual by FedEx.

Medicare contractors shall also request documentation to support the HIPPS code(s)

billed, including notes related to the ARD, documentation relating to the look-back

periods which may fall outside the billing period under review, and documentation

related to the claim period billed. Since the ARD for each MDS marks the end of the

look-back period (which may extend back 30 days), the Medicare contractor must be

sure to obtain supporting documentation for up to 30 days prior to the ARD if

applicable. The requested documentation may include hospital discharge summaries

and transfer forms; physician orders and progress notes; patient care plans; nursing and

rehabilitation therapy notes; and treatment and flow charts and vital sign records,

weight charts and medication records.

Clinical documentation that supports medical necessity may be expected to include:

physician orders for care and treatments, medical diagnoses, rehabilitation diagnosis

(as appropriate), past medical history, progress notes that describe the beneficiary’s

response to treatments and his/her physical/mental status, lab and other test results, and

other documentation supporting the beneficiary’s need for the skilled services being

provided in the SNF.

During the review process, if the provider fails to respond to a Medicare contractor’s

Additional Documentation Request (ADR) within the prescribed time frame, the

Medicare contractor shall deny the claim. See Pub. 100-08, Medicare Program

Integrity Manual, chapter 3, section 3.2.3.8 for information on denials based on non-response to

ADRs and section 3.2.3.9 for handling of late documentation. If the provider furnishes

documentation that is incomplete/insufficient to support medical necessity, adjust the

bill in accordance with §1862(a)(1)(A) of the Act.

B. Make a Coverage Determination

For all selected claims, the Medicare contractor shall review medical

documentation and determine whether the following criteria are met, in order to

make a payment determination:

• The services must not be statutorily excluded--Determine whether the services

are excluded from coverage under any provision in §1862(a) of the Act other

than

§1862(a)(1)(A).

• MDS must have been transmitted to the state repository - The Medicare

contractor shall require that the provider submit the claim with the case-mix

classifiers obtained from the “Grouper” software, as instructed in Pub. 100-04,

Medicare Claims Processing Manual, chapter 6, § 30.1. Claims for which

MDSs have not been transmitted to the repository should therefore not be

submitted to Medicare for payment, and shall be denied. An exception to that

instruction occurs in the case where the beneficiary is discharged or dies on or

before day 8 of the SNF admission or readmission, as described in Chapter 2 of

the MDS 3.0 RAI manual. In that specific case, Medicare contractors shall pay

claims at the default rate, provided that level of care criteria were met and

skilled services were provided and were reasonable and necessary. In all other

cases, the Medicare contractor shall deny any claim for which the associated

MDS is not in the repository.

• SNF must have complied with the assessment schedule - In accordance with

42 CFR §413.343, in those instances when the assessment is not completed

timely, the contractor shall pay at the default rate for any days of care prior to

the assessment reference date of the required assessment.

The Interim Payment Assessment (IPA) is an optional assessment that

providers may complete to report a change in the patient’s classification. If an

IPA has been completed, medical reviewer will examine the medical

documentation as described in this section.

• Services are Reasonable and Necessary--Determine whether the services are

reasonable and necessary under §1862(a)(1)(A) of the Act. When making

reasonable and necessary determinations, contractors shall determine whether

the services indicated on the MDS were rendered and were reasonable and

necessary for the beneficiary’s condition as reflected by medical record

documentation. If the reviewer determines that none of the services provided

were reasonable and necessary or that none of the services billed were

supported by the medical record as having been provided, the Medicare

contractor shall deny the claim in full.

• Level of care requirement must be met--Determine whether the services met

the requirements according to 42 CFR §409.31.

- Under PPS, the beneficiary must meet level of care requirements as defined

in 42 CFR §409.31. The SNF PPS includes an administrative presumption

in which a beneficiary who is correctly assigned one of the designated case-mix classifiers on the initial Medicare (“5-day”) PPS assessment is

presumed to meet the SNF level of care through the assessment reference

date (ARD). This effectively creates a presumption of coverage for the

period from the first day of the Medicare covered services up to, and

including, the ARD for that assessment, which must be set for no later than

the eighth day of the SNF stay. The 5-day assessment may trigger a

presumption of coverage only when the SNF admission directly follows

discharge from a prior qualifying hospital stay. See Pub. 100-02, Medicare

Benefit Policy Manual, chapter 8, §30.1 for further explanation of the

administrative presumption of coverage.

- In the case described above, where the administrative presumption of

coverage exists, Medicare contractors shall review the claim and supporting

medical information specifically to confirm the correctness of the case-mix

classifier assignment that triggered the presumption. To determine if the

beneficiary was correctly assigned to a case-mix classifier, Medicare

contractors shall verify that the billed case-mix classifier is supported by the

associated provider documentation. Medicare contractors shall consider all

available information in determining coverage. This includes the MDS, the

medical records including physician, nursing, and therapy documentation,

and the beneficiary’s billing history.

- A beneficiary who is not assigned one of the case-mix classifiers designated

as representing the required level of care on the 5-day assessment

prescribed in 42 CFR 413.343(b) IS NOT automatically classified as either

meeting or not meeting the SNF level of care definition. Instead, the

beneficiary must receive an individual level of care determination using

existing administrative criteria and procedures, so documentation must

support that these beneficiaries meet the level of care requirements.

- For days after the assessment reference date of the 5-day assessment,

determination of the continued need for, and receipt of, a skilled level of

care will be based on the beneficiary’s clinical status and skilled care

needs for the dates of service under review.

- The level of care requirement includes the requirement that the beneficiary

must require skilled nursing or skilled rehabilitation services, or both on a

daily basis. Criteria and examples of skilled nursing and rehabilitation

services, including overall management and evaluation of the care plan and

observation of a patient’s changing condition, may be found at 42 CFR

§§409.32 and 409.33.

- An apparent interruption in daily skilled services should not be

interpreted to signal an end to daily skilled care. Rather, consideration

should be given to the provision of observation and assessment and

management and evaluation of the care plan during the review of

medical records.

C. Review Documentation and Enter Correct Data into the MDS QC Software

When Appropriate.

If the reviewer determines that coverage criteria are met and services are not

statutorily excluded, but some services provided were not reasonable and necessary

or were not supported in the medical record as having been provided as billed, the

current MDS QC System Software must be used to calculate appropriate payment.

Medicare contractors shall pay claims according to the case-mix classifier value

calculated using the MDS QC tool, regardless of whether it is higher or lower than

the case-mix classifier billed by the provider. If none of the services provided were

reasonable and necessary, the Medicare contractor shall deny the claim in full.

Medicare contractors shall use the most current version of MDS QC System Software

to review and calculate appropriate payment for SNF claims. The medical reviewer

will examine the medical documentation to make a determination as to whether it

supports the data entered into the MDS assessment completed by the provider and

extracted from the repository. If a discrepancy is noted, the reviewer shall enter the

correct data reflected in the medical record, according to the instructions in the MDS

QC System Software Reference Manual. The reviewer shall consider all available

medical record documentation in entering data into the software. This includes

physician, nursing, and therapy documentation, and the beneficiary’s billing history.

Review of the claim form alone does not provide sufficient information to make an

accurate payment determination.

D. Outcome of Medical Record Review

The Medicare contractor shall take action to pay the claim appropriately, for the days on

which the SNF was in compliance with the assessment schedule (pay the default rate for

the days on which the SNF provided covered care, but was not in compliance with the

assessment schedule), as described in each of the following situations—

Services are Reasonable and Necessary as Documented on the MDS Submitted to the

Repository:

• If no discrepancies are noted between the MDS submitted to the repository and the

patient’s medical record, during the relevant assessment period for the timeframe

being billed, the Medicare contractor shall verify that the case-mix classifier

submitted on the claim matches the case-mix classifier on the MDS imported from

the repository into the MDS QC tool, and:

o If the facility case-mix classifier obtained through the MDS QC tool matches

the case-mix classifier submitted on the claim, the Medicare contractor shall

pay the claim as billed for all covered days associated with that MDS, even if

the level of therapy changed during the payment period.

o If the facility case-mix classifier obtained through the MDS QC tool DOES

NOT match the case-mix classifier submitted on the claim, the Medicare

contractor shall pay the claim at the appropriate level based on the case-mix

classifier level on the MDS submitted to the repository (and subsequently

obtained through the MDS QC tool) for all covered days associated with that

MDS, even if the services provided changed during the payment period.

Some Services are Reasonable and Necessary but Not Supported as Billed in Patient Medical

Record:

• If some skilled services were appropriate, but some services provided were not

reasonable and necessary or were not supported by the medical record as having been

provided as billed, and the reviewer determines (based on data entered from the

medical record into the MDS QC System Software) that:

o The discrepancies are such that they do not result in a change in the case-mix

classification level as calculated by the MDS QC tool, during the relevant

assessment period for the timeframe being billed, the Medicare contractor

shall accept the claim as billed for all covered days associated with that MDS,

even if the level of skilled care changed during the payment period.

o There is another case-mix classifier for which the beneficiary qualifies, the

Medicare contractor shall pay the claim according to the correct case-mix

classifier calculated using the MDS QC System Software for all covered days

associated with that MDS, and recoup any overpayments as necessary.

Need For Skilled Care Ends:

• If the reviewer determines that the beneficiary falls to a non-skilled level of care at

some point during the period under review, the Medicare contractor shall deny the

claim from the date on which the beneficiary no longer meets level of care criteria.

General Information for All HIPPS Codes

- No Skilled Care Needed or Provided--If the reviewer determines that none

of the services furnished were reasonable and necessary and that no skilled

care is needed or provided, the Medicare contractor shall deny the claim

from the date that skilled care ended.

- Services Billed But Not Furnished--If the reviewer determines that any of

the services billed were not furnished, deny the claim in part or full and, if

applicable, the Medicare contractor shall apply the fraud and abuse

guidelines in Pub 100-08, Medicare Program Integrity Manual, chapter 4.

A partial denial is defined as either the disallowance of specific days within the stay

or reclassification into a lower case-mix classifier.

For any full or partial denials made, adjust the claim accordingly to recoup the

overpayment. A partial denial based on classification into a new case-mix

classification code or a full denial because the level of care requirement was not met

are considered reasonable and necessary denials (§1862(a)(1)(A)) and are subject to

appeal rights.

It is important to recognize the possibility that the necessity of some services could be

questioned and yet not impact the case-mix classification. The case-mix classification

may not change because there are many clinical conditions and treatment regimens that

qualify the beneficiary for the case-mix classifier to which he or she was assigned.

When reviewing bills, if the reviewer suspects fraudulent behavior, e.g., a pattern of

intentional reporting of inaccurate information for the purpose of payment or the

billing for services which were not furnished or quality of care concerns, it is the

Medicare contractor’s responsibility to refer the provider to the appropriate entity for

further investigation.