Riverbend Governmental Benefits Administration as fiscal intermediary was contracted by CMS and New Jersey to audit both Medicare and Medicaid cost reports for New Jersey healthcare providers. Now, though, Riverbend is only contracted to audit Medicaid cost reports, and another fiscal intermediary, Highmark, will be auditng Medicare cost reports. Will New Jersey providers benefit from this change?? See full story....

Highmark, headquartered in Pennsylvania, is the new Medicare Administrator Contractor (MAC) for New Jersey and is now responsible for all Medicare cost report audits. Riverbend, located in Tennessee, had provided cost report audits for both Medicare and Medicaid to New Jersey in prior years, but now is contracted to review only Medicaid cost reports for New Jersey. Will this change in oversight and staffing affect the reimbursement of New Jersey healthcare providers? There should be little change to Medicare reimbursement under Highmark as the new MAC, but Medicaid payments may decrease in New Jersey because outpatient services are still mostly cost-based.

Riverbend has re-tooled their audit teams and has begun to approach New Jersey providers with full Medicaid cost report audits utilizing up to four auditors and, sometimes, up to four weeks of on-site reviews. Highmark has stated that it may do an on-site Medicare audits once every three or four years and rely on desk audits to facilitate CMS review requirements. Riverbend’s initial focus is auditing years 2005 and 2006, and it is requiring an extensive listing of work papers and documentation. Riverbend is also requesting additional cost reporting documentation items, including copies of charge masters, policies and procedures for the accumulation of patient days, sample of inpatient and outpatient uniform bills, listings and locations of all clinics, and copies of selected job descriptions, to name a few. Riverbend has completed nearly ten Medicaid cost report audits and is in the process of scheduling the balance for all New Jersey providers.

We have been informed that these audits go beyond anything that was previously experienced by providers, even when Blue Cross was the intermediary. All documentation is being thoroughly reviewed and questioned for accuracy by the Medicaid auditors. Riverbend is focusing its audits to recover the most available reimbursement dollars, much like the RAC approach. By providing a different audit approach utilizing previous years, Riverbend is now making a distinction between the Medicare and Medicaid cost reports, as now each stands on its own accuracy and interpretation. The following reimbursement issues on which Riverbend is focusing its resources on include:

• Part B Physician Allowed Costs
• Duplicate Billing
• Physician Time Studies
• Statistical Support
• Malpractice Costs
• Clinic Charges and Mapping

Riverbend is utilizing strict timeframes for documentation requests and has yet to present a formal appeal process. New Jersey healthcare providers should also consider the possible financial impact these audits will have on their prior year calculated reserves for year-end financial statements.

New Jersey healthcare providers need to stay proactive and prepare for these new Medicaid audits. Reimbursement dollars are in short supply and the financial health of your facility depends on your focused involvement.

PS. The author would like to acknowledge various New Jersey financial providers for their feedback included in this article. A special thanks goes to the NJHFMA Proaction Committee.

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