CMS esMD and eMDR Electronic Audit Notification and Response and Other Available Cost-Effective Government Tools

In today’s challenging health information technology landscape, end user providers are constantly looking for ways to make complex operations easier and more efficient. Luckily, there are low cost—and often free—federal government software programs available. This article will demonstrate how end user providers such as hospitals, networks, and physician service groups can save significant costs by knowing the government market and shopping around.

Note that, in some cases, the software addresses complex operations that require certification. In those cases, it may be wise for the end user to contract with a service that has already attained certification rather than do it themselves.

While there are many tools available, this article will primarily focus on software and services tools related to the Centers for Medicare and Medicaid (CMS) electronic submission of medical data (esMD) project.

A Brief History of esMD

The esMD project began quite a few years ago as the brainchild of Melanie Combs-Dyer and her compliance team at CMS. The original purpose of the project was to look back at past hospital claims that were already paid by CMS in order to review for any errors in the claims’ validity and the associated payments. This project was initiated under the American Recovery and Reinvestment Act of 2009 (ARRA) following the 2008 recession. As such, CMS hired contractors to perform this review, known as recovery audit contractors—or simply as RAC auditors. Auditors were assigned to designated parts of the country as they reviewed past claims. To inform hospitals they were being audited, the RACs would send a letter of notification regarding the claim in question, containing the patient’s name and requesting further documentation on those claims. These letters are called additional documentation requests (ADRs), and they still are in use today.

At the time, a hospital could be audited no more than once every 45 days, and there were a maximum number of audits that CMS could administer in that time frame to the same hospital based on the hospital size. If a hospital received an ADR, they were typically required to respond within 30 days or the auditor would mark the hospital as noncompliant and begin a collection process for the claim items that were paid in the past as part of the recovery of funds. To avoid this, the hospital could start an appeal, of which there were four levels. This process worked both ways. If a hospital submitted a claim but asked for less than the claim should have been paid due to errors in coding, the RAC would discover an underpayment in the review and this would create positive cash flow to the hospital, as CMS would reimburse the difference.

Following rigorous testing, the esMD program allows the certification of private companies to submit responses to audits electronically. These organizations are known as Health Information Handlers (HIHs). There are only between 15 and 20 HIHs in existence, and most have nationwide coverage. Hospitals can opt to enlist the aid of an HIH, or they have a couple of other options:

• Send paper evidence to the auditors.
• Apply the free downloadable software to their own systems, become certified, and then submit the electronic documentation.

As this process can be difficult and expensive, the government allows the option for outside firms to act as a third-party vendor and fulfill this role. Providers should evaluate their options when it comes to the possibility of enlisting a vendor that offers these services. Some vendors are full-service, and others take on specific roles, which allows clients to mix and match HIH vendors to achieve an optimal price with services appropriate to the client’s workflow.

Where We Are Today

After a pause in the program to clean up the appeals backlog, the esMD program is once again active and thriving. Though there are still auditors referred to as RACs, the majority are now known simply as review contractors, or RCs. In addition, other auditing entities are now involved in esMD such as QIOs (quality improvement organizations); Medicare Administrative Contractors, or MACs; other type of auditors with specific areas of focus such as Comprehensive Error Rate Testing (CERT) auditors; and others. Additionally, the audited provider is no longer simply a hospital that sends in Medicare Part A claims. Many different entity types, such as nonemergent ambulatory services, clinics, entities requiring prior authorizations, and even hyperbaric chamber organizations, are involved. We are now beginning to see audits going to providers who submit Part B claims to CMS and post-acute care entities such as skilled nursing facilities (SNF), home health, and hospice.

A new feature in the esMD program is the ability of an HIH to not only facilitate the sending of evidence to the audit contractor after the provider receives the additional request letter (ADR) letter in the US Postal Service (USPS) mail system, but to also either send these letters electronically to the providers or list a specific website to the provider showing audits due, from who, and due dates. This avoids the potential post office delays in paper delivery and delays caused by ADRs going to the wrong address and taking time away from that crucial 30-day response window. This feature is known as eMDR, or electronic medical documentation request. Not all HIHs have this capability, so it is good to check ahead of time.

There have also been offshoot CMS pilots under the esMD theme. One in particular that my organization was involved in was known as the electronic medical documentation interoperability (EMDI) pilot. This pilot concentrated on the technological multiprovider trail that a patient with chronic conditions endures through many systems of care such as from discharge from a hospital to activity with a durable medical equipment vendor, and to clinics, home health, or skilled nursing. Like the bundled payments initiative from the CMS Innovation Center, EMDI viewed the patient journey as an episode across many providers for a single condition or a cluster. HL7 CCDA, DIRECT Messaging, and FHIR were used for this demonstration project. Now that it is completed, we are anxiously awaiting to see if and when CMS will announce the effort from the pilot to becoming a production release.

The esMD project is growing in capabilities and through the use of leading edge technologies such as HL7 FHIR. FHIR will allow CMS the ability to utilize fields within the electronic patient records and be able to mix and match these fields across multiple settings of care for the patient. As time goes one, I see the integration of many of the CMS programs such as MIPS and Value-Based Purchasing following a similar platform as esMD. I also see an expansion into the commercial payers now supporting Part C Medicare Advantage Plans. It is an exciting time for health technology.

For more information on esMD, visit www.cms.gov/esMD.

Louis Galterio (LGalterio@SuncoastRHIO.com) is president at Suncoast RHIO Inc. in Florida.