EXHIBIT 10.19
AMENDMENT TO THE CORPORATE INTEGRITY AGREEMENT BETWEEN THE
OFFICE OF INSPECTOR GENERAL OF THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES
AND
LIFEPOINT HOSPITALS, INC.
The Office of Inspector General ("OIG") of the Department of Health and Human
Services and LifePoint Hospitals, Inc. ("LifePoint") entered into a Corporate
Integrity Agreement ("CIA") on December 21, 2000.
A. Pursuant to section XI.C. of LifePoint's CIA, modifications to the CIA
may be made with the prior written consent of both the OIG and
LifePoint. Therefore, the OIG and LifePoint hereby agree that
LifePoint's CIA will be amended as follows:
Section III.D., Review Procedures, of the CIA is hereby superseded by
the attached new section III.D., Review Procedures.
Appendix A of LifePoint's CIA is hereby superseded by the attached new
Appendix A.
B. The OIG and LifePoint agree that all other sections of LifePoint's CIA
will remain unchanged and in effect, unless specifically amended upon
the prior written consent of the OIG and LifePoint.
C. The undersigned LifePoint signatories represent and warrant that they
are authorized to execute this Amendment. The undersigned OIG signatory
represents that he is signing the Amendment in his official capacity
and that he is authorized to execute this Amendment.
D. This effective date of this Amendment will be the date on which the
final signatory of this Amendment signs this Amendment.
ON BEHALF OF LIFEPOINT
/s/ Xxxxxxx X. Xxxxxxx 04/25/2002
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Xxxxxxx X. Xxxxxxx DATE
Chairman and Chief Executive Officer
LifePoint Hospitals, Inc.
/s/ Xxxx Xxxx 04/25/2002
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Xxxx Xxxx DATE
Senior Vice President of Audit and Compliance
LifePoint Hospitals, Inc.
ON BEHALF OF THE OFFICE OF INSPECTOR GENERAL OF THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES
/s/ Xxxxx Xxxxxx 04/29/2002
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Xxxxx Xxxxxx DATE
Assistant Inspector General for Legal Affairs
Office of Inspector General
U.S. Department of Health and Human Services
D. Review Procedures.
1. General Description.
a. Retention of Independent Review Organization. Within
90 days of the effective date of this CIA, LifePoint shall retain an
entity (or entities), such as an accounting, auditing or consulting
firm (hereinafter "Independent Review Organization" or "IRO"), to
perform a review engagement to assist LifePoint in evaluating its
billing and coding practices. The Independent Review Organization
retained by LifePoint shall have expertise in the billing, coding,
reporting and other requirements of the particular sector of the health
care industry pertaining to matters that the IRO is reviewing and in
the general requirements of the Federal health care program(s) from
which LifePoint seeks reimbursement. The IRO shall assess, along with
LifePoint, whether it can perform the IRO review in a professionally
independent fashion taking into account any other business
relationships or other engagements that may exist.
b. Types of Engagement. LifePoint's Internal Audit and
Compliance Department (references to "LifePoint" in the review
procedures described in this CIA and the incorporated appendices refer
to this department) and the Independent Review Organization(s) shall
conduct an engagement that shall address LifePoint's billing and coding
to the Federal health care programs ("Billing Engagement") and shall
include a review of DRG and laboratory claims.
c. Frequency of Billing Engagement. The Billing
Engagement shall be performed annually and shall cover each of the
calendar years 2001 through 2005.
d. Retention of records. The IRO and LifePoint shall
retain and make available to the OIG upon request all work papers
related to the engagement (including, but not limited to, all
substantive correspondence exchanged regarding the reports) and all
draft and final reports delivered to LifePoint.
2. Billing Engagement. The Billing Engagement shall be composed
of the following types of reviews: a "DRG Claims Review," a "Laboratory Claims
Review," a "Systems Review," and an Operations DRG Review." The Claims Reviews
and corresponding Reports are discussed in detail in Appendices A, B, and C to
this CIA, which are incorporated by reference.
a. DRG Claims Review.
i. DRG Claims Review. LifePoint shall perform a
Claims Review to identify any overpayments through an
appraisal of inpatient discharges paid by Medicare DRG to
LifePoint. The Claims Reviews shall be performed in accordance
with the procedures set forth in Appendix A to this CIA. The
Claims Reviews shall cover the two six-month periods during
each year covered by the Billing Engagement. LifePoint will
perform Claims Reviews at a minimum of two hospitals during
each six-month period (for a minimum of four hospitals each
year.) The hospitals, and the DRGs to be reviewed at each
hospital, will be chosen as set forth in section III.D.2.c.
ii. DRG Claims Review Report. LifePoint shall
prepare a report based upon each Claims Review performed
("Claims Review Report"). The Claims Review Report shall be
created in accordance with the procedures set forth in
Appendix A to this CIA.
iii. IRO Review. With respect to LifePoint's
Claims Reviews, the IRO will prepare a report documenting the
IRO's findings with respect to the following procedures:
A. The IRO will obtain LifePoint's
workpapers and perform procedures to test concurrence
with the criteria included in section III.D.2.c.
B. The IRO will select a random sample
of a minimum of 10% of the Items reviewed by
LifePoint pursuant to the DRG Claims Review and
reperform LifePoint's workplan steps.
b. Laboratory Claims Review.
i. Claims Review. LifePoint shall perform a
Claims Review to identify any overpayments through an
appraisal of outpatient laboratory claims submitted by
LifePoint to the Medicare program and paid by Medicare. The
Claims Reviews shall be performed in accordance with the
procedures set forth in Appendix A to this CIA. The Claims
Reviews shall cover the two six-month periods during each year
covered by the Billing Engagement. LifePoint will perform
Claims Reviews at a minimum of two hospitals during each
six-month period (for a minimum of four hospitals each year.)
The hospitals, and the tests to be reviewed at each hospital,
will be chosen as set forth in section III.D.2.c.
ii. Laboratory Claims Review Report. LifePoint
shall prepare a report based upon each Laboratory Claims
Review performed ("Claims Review Report"). The Claims Review
Report shall be created in accordance with the procedures set
forth in Appendix A to this CIA.
iii. IRO Review. With respect to LifePoint's
Laboratory Claims Review, the IRO will prepare a report
documenting the IRO's findings with respect to the following
procedures:
A. The IRO will obtain LifePoint's
workpapers and perform procedures to test concurrence
with the criteria set forth in section III.D.2.c.
B. The IRO will select a random sample
of a minimum of 10% of the Items reviewed pursuant to
the Laboratory Review and re-perform LifePoint's
workplan steps.
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c. Selection of Hospitals for Claims Reviews.
i. DRG Claims Review Hospital Selection.
LifePoint shall select the two hospitals subject to review
during each six-month period as follows:
A. The hospital that has the highest
percentage of Medicare focused DRGs, as compared to
total Medicare DRGs, during the relevant six month
period under review, will be chosen. (However, if a
hospital has already been selected under this process
during any of the immediately preceding two reviews
then the hospital with the next highest percentage
shall be chosen instead).
B. One hospital will be randomly
selected using RAT-STATS. A replacement hospitals
should be generated in case the hospital randomly
selected has already been identified under section
III.D.2.c.i.A.
ii. Laboratory Claims Review Hospital Selection.
LifePoint shall select the two hospitals subject to review
during each six-month period as follows:
A. The hospital that has the highest
percentage of Medicare outpatient laboratory services
revenue, as compared to total Medicare outpatient
services revenue, during the relevant six month
period, will be chosen. (However, if a hospital has
already been selected under this process during any
of the immediately preceding two reviews then the
hospital with the next highest percentage shall be
chosen instead).
B. One hospital will be randomly
selected using RAT-STATS. A replacement hospital
should be generated in case the hospital randomly
selected has already been identified under section
III.D.2.c.ii.A.
d. Systems Review. LifePoint shall review LifePoint's
billing and coding systems and/or operations (the "Systems Review").
The Systems Review shall include the reviews described in Appendix B
for at least four hospitals. The Systems Review shall consist of a
thorough review of the following as more specifically described in
Appendix B:
i. LifePoint's billing systems and/or
operations relating to claims submitted to all Federal health
care programs (including, but not limited to, the operation of
the billing system, safeguards to ensure proper claim
submission and billing, and procedures to correct inaccurate
billing); and
ii. LifePoint's coding systems and/or operations
relating to claims submitted to all Federal health care
programs (including, but not limited to, the process by which
claims are coded, safeguards to ensure proper coding, and
procedures to correct inaccurate coding).
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e. Systems Review Report. LifePoint shall prepare a
report based upon each Systems Review performed ("Systems Review
Report"). The Systems Review Report shall include LifePoint's findings
and supporting rationale regarding:
i. all findings and recommendations regarding
LifePoint's billing systems and/or operations;
ii. all findings and recommendations regarding
LifePoint's coding systems and/or operations; and
iii. any recommendations LifePoint may have to
improve any of these systems, operations, and processes.
f. Operational DRG Review. LifePoint shall review
LifePoint's DRG coding for hospital inpatients (the "Operational DRG
Review"). The Operational DRG Review shall include the reviews
described in Appendix C for at least eight hospitals. The Operational
DRG Review shall consist of a thorough review of the DRG coding
operations (including a review of at least 50 DRG claims at each
hospital) as more specifically described in Appendix C. Except for the
fact that the review of claims need not meet the statistical confidence
and precision parameters set forth in Appendix A, the Operational DRG
Review shall be conducted in a manner consistent with Appendix A, e.g.,
paid claims without supporting documentation shall be considered an
error and the total reimbursement received by LifePoint for such Paid
Claim shall be deemed an Overpayment.
g. Operational DRG Review Report. LifePoint shall
provide to the OIG in its Annual Reports the Executive Summaries
related to the Operational DRG Reviews. The Executive Summaries shall
include a summary of the Medicare and other Federal health care program
overpayments (including number of overpayments, dollar amount of
overpayments, and percentage of paid dollars attributable to
overpayments) identified in each Operational DRG Review. All other
documents related to the Operational DRG Reviews shall be available to
the OIG upon request.
3. Validation Review. In the event the OIG has reason to believe
that: (a) LifePoint's Billing Engagement fails to conform to the requirements of
this CIA; or (b) LifePoint's or the IRO's findings or Billing Engagement results
are inaccurate, the OIG may, at its sole discretion, conduct its own review to
determine whether the Billing Engagement complied with the requirements of the
CIA and/or the findings or Billing Engagement results are inaccurate
("Validation Review"). LifePoint agrees to pay for the reasonable cost of any
such review performed by the OIG or any of its designated agents so long as it
is initiated before one year after LifePoint's final Annual Report and any
additional information requested by the OIG is received by the OIG.
Prior to initiating a Validation Review, the OIG shall notify LifePoint
of its intent to do so and provide a written explanation of why the OIG believes
such a review is necessary. To resolve any concerns raised by the OIG, LifePoint
may request a meeting with the OIG to discuss the results of any Billing
Engagement submissions or findings; present any additional or relevant
information to clarify the results of the Billing Engagement or to
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correct the inaccuracy of the Billing Engagement; and/or propose alternatives to
the Validation Review. LifePoint agrees to provide any additional information as
may be requested by the OIG under this section in an expedited manner. The OIG
will attempt in good faith to resolve any Billing Engagement issues with
LifePoint prior to conducting a Validation Review. However, the final
determination as to whether or not to proceed with a Validation Review shall be
made at the sole discretion of the OIG.
4. Independence Certification. The IRO shall include in its
report(s) to LifePoint a certification or sworn affidavit that it has evaluated
its professional independence with regard to the Billing Engagement and that it
has concluded that it is, in fact, independent.
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APPENDIX A
A. CLAIMS REVIEW.
1. DEFINITIONS. For the purposes of the DRG and Laboratory Claims
Reviews, the following definitions shall be used:
a. Claims Review Sample: A statistically valid, randomly
selected, sample of items selected for appraisal in the DRG or
Laboratory Claims Review.
b. Item: (i) for the purposes of a DRG review, an "Item"
is a hospital inpatient discharge for which LifePoint has been
reimbursed by Medicare on the basis of one of the focused DRGs set
forth in Appendix D; and (ii) for the purposes of a Laboratory Review,
an "Item" is an outpatient laboratory test. The OIG shall have the
right to change the DRGs included in Appendix D at any time during the
term of the CIA.
c. Overpayment: The amount of money LifePoint has
received in excess of the amount due and payable under any Federal
health care program requirements.
d. Paid Claim: A code or line item submitted by
LifePoint and for which LifePoint has received reimbursement from the
Medicare program.
e. Population: All Items for which LifePoint has
submitted a code or line item and for which LifePoint has received
reimbursement from the Medicare program (i.e., a Paid Claim) during the
six-month period covered by the DRG or Laboratory Claims Review. To be
included in the Population, an Item must have resulted in at least one
Paid Claim.
f. Error Rate: The Error Rate shall be the percentage of
net Overpayments identified in the sample. The net Overpayments shall
be calculated by subtracting all underpayments identified in the sample
from all gross Overpayments identified in the sample. (Note: Any
potential cost settlements or other supplemental payments should not be
included in the net Overpayment calculation. Rather, only underpayments
identified as part of the Discovery Sample or Full Sample (as
applicable) shall be included as part of the net Overpayment
calculation.) The Error Rate is calculated by dividing the net
Overpayment identified in the sample by the total dollar amount
associated with the Items in the sample.
g. RAT-STATS: OIG's Office of Audit Services Statistical
Sampling Software. RAT-STATS is publicly available to download through
the Internet at "xxx.xxx.xxx/xxx/xxx/xxxxxxx.xxxx."
2. DESCRIPTION OF CLAIMS REVIEW. Each DRG and Laboratory Claims
Review shall consist of an appraisal of a statistically valid sample of Items
(the Claims Review Sample) that can be projected to the total Population.
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a. DRG Claims Review. The DRG Claims Review shall
include a Discovery Sample and, if necessary, a Full Sample. The
applicable definitions, procedures, and reporting requirements are
outlined in this Appendix A.
b. Discovery Sample. LifePoint shall randomly select and
review a sample of 50 Medicare Paid Claims submitted by or on behalf of
LifePoint. The Paid Claims shall be reviewed based on the supporting
documentation available at LifePoint or under LifePoint's control and
applicable billing and coding regulations and guidance to determine
whether the claim submitted was correctly coded, submitted, and
reimbursed.
i. If the Error Rate for the Discovery Sample
is less than 5%, no additional sampling is required, nor is
the Systems Review required. (Note: The threshold listed above
does not imply that this is an acceptable error rate.
Accordingly, LifePoint should, as appropriate, further analyze
any errors identified in the Discovery Sample. LifePoint
recognizes that the OIG or other HHS component, in its
discretion and as authorized by statute, regulation, or other
appropriate authority may also analyze or review Paid Claims
included, or errors identified, in the Discovery Sample.)
ii. If the Discovery Sample indicates that the
Error Rate is 5% or greater, LifePoint shall perform a Full
Sample and a Systems Review, as described below.
c. Full Sample. If necessary, as determined by
procedures set forth above, LifePoint shall perform an additional
sample of Paid Claims using commonly accepted sampling methods and in
accordance with this Appendix A. The Full Sample should be designed to
(1) estimate the actual Overpayment in the population with a 90%
confidence level and with a maximum relative precision of 25% of the
point estimate and (2) conform with the Centers for Medicare and
Medicaid Services' statistical sampling for overpayment estimation
guidelines. The Paid Claims shall be reviewed based on supporting
documentation available at LifePoint or under LifePoint's control and
applicable billing and coding regulations and guidance to determine
whether the claim submitted was correctly coded, submitted, and
reimbursed. For purposes of calculating the size of the Full Sample,
the Discovery Sample may serve as the probe sample, if statistically
appropriate. Additionally, LifePoint may use the Items sampled as part
of the Discovery Sample, and the corresponding findings for those 50
Items, as part of its Full Sample. The OIG, in its full discretion, may
refer the findings of the Full Sample (and any related workpapers)
received from LifePoint to the appropriate Federal health care program
payor, including the Medicare contractor (e.g., carrier, fiscal
intermediary, or DMERC), for appropriate follow-up by that payor.
d. Claims Systems Review. If LifePoint's Discovery
Sample identifies an Error Rate of 5% or greater, LifePoint shall also
conduct a Systems Review. Specifically, for each claim in the Discovery
Sample and Full Sample that resulted in an Overpayment, LifePoint
should perform a "walk through" of the system(s) and process(es) that
generated the claim to identify any problems or weaknesses that may
have resulted in the identified Overpayments. LifePoint shall prepare a
report
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containing the observations and recommendations on suggested
improvements to the system(s) and the process(es) that generated the
claim.
e. Repayment of Identified Overpayments. In accordance
with section III.H.1 of the CIA, LifePoint agrees to repay within 30
days any Overpayment(s) identified in the Discovery Sample or the Full
Sample (if applicable), regardless of the Error Rate, to the
appropriate payor and in accordance with payor refund policies.
LifePoint agrees to make available to the OIG any and all documentation
that reflects the refund of the Overpayment(s) to the payor.
f. Laboratory Claims Review Sample. Each Laboratory
Claims Review Sample shall consist of an appraisal of a random sample
of 200 Items for each hospital for each period under review.
g. Item Appraisal. For each Item appraised (either as
part of the Claims Review Sample or of the Probe Sample), only Paid
Claims shall be evaluated. Every Paid Claim in the Claims Review Sample
shall be evaluated by LifePoint. Ten percent of all Paid Claims in the
DRG or Laboratory Probe Sample Review or the DRG or Laboratory Claims
Review shall be evaluated by the IRO to determine whether the claim
submitted was correctly coded, submitted, and reimbursed. Each
appraisal must be sufficient to provide all information required under
the Claims Review Report.
h. Paid Claims without Supporting Documentation. For the
purpose of appraising Items included in the Claims Review and/or the
Probe Sample, any Paid Claim for which LifePoint cannot produce
documentation sufficient to support the Paid Claim shall be considered
an error and the total reimbursement received by LifePoint for such
Paid Claim shall be deemed an Overpayment. Replacement sampling for
Paid Claims with missing documentation is not permitted.
i. Use of First Samples Drawn. For the purposes of all
samples (Probe Sample(s) and Claims Review Sample(s)) discussed in this
Appendix, the Paid Claims associated with the Items selected in the
first sample (or first sample for each strata, if applicable) shall be
used. In other words, it is not permissible to generate a number of
random samples and then select one for use as the Probe Sample or
Claims Review Sample.
B. CLAIMS REVIEW REPORT. The following information shall be included in
each Claims Review Report:
1. CLAIMS REVIEW METHODOLOGY
a. Claims Review Objective: A clear statement of the
objective intended to be achieved by the DRG or Laboratory Claims
Review.
b. Sampling Unit: A description of the Item as that term
is utilized for the DRG or Laboratory Claims Review. As noted in
section A.1.b above, (i) for the purposes of a DRG review, an "Item" is
a hospital inpatient discharge for which LifePoint has been reimbursed
by Medicare on the basis of one of the "high-risk"
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DRGs set forth in Appendix D; and (ii) for the purposes of a Laboratory
Review, an "Item" is an outpatient laboratory test.
c. Claims Review Population: A description of the
Population subject to the DRG or Laboratory Claims Review.
d. Sampling Frame: A description of the sampling frame,
which is the totality of Items from which the Probe Sample and Claims
Review Sample have been selected and an explanation of the methodology
used to identify the sampling frame. In most circumstances, the
sampling frame will be identical to the Population.
e. Sources of Data: A description of the documentation
relied upon by the IRO when performing the DRG or Laboratory Claims
Review (e.g., medical records, physician orders, certificates of
medical necessity, requisition forms, local medical review policies,
HCFA program memoranda, Medicare carrier or intermediary manual or
bulletins, other policies, regulations, or directives).
f. Review Protocol: A narrative description of how the
Claims Review was conducted and what was evaluated. This shall include
a description of the analysis used to determine which hospitals were
chosen for review under the Billing Engagement and the statistics
relevant to the selection of the hospitals.
2. STATISTICAL SAMPLING DOCUMENTATION
a. The number of Items appraised in the Probe Sample and
in the Claims Review Sample.
b. A copy of the RAT-STATS printout of the random
numbers generated by the "Random Numbers" function.
c. A copy of the RAT-STATS printout of the "Sample Size
Estimators" results used to calculate the minimum number of Items for
inclusion in the Claims Review Sample.
d. A copy of the RAT-STATS printout of the "Variable
Appraisals" function results for the Probe Sample.
e. The Sampling Frame used in the Probe Sample(s) and
the Claims Review Sample will be available to the OIG upon request.
3. CLAIMS REVIEW RESULTS
a. Narrative Results.
i. A narrative description of how the Claims
Review was conducted and what was evaluated. This shall
include a description of the analysis used to determine which
hospitals were chosen for review under the Billing Engagement
and the statistics relevant to the selection of the hospitals.
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ii. A narrative explanation of LifePoint's
findings and supporting rationale (including reasons for
errors, patterns noted, etc.) regarding the Claims Review,
including the results of the Discovery Sample, and the results
of the Full Sample (if any) with the gross Overpayment amount,
the net Overpayment amount, and the corresponding Error
Rate(s) related to the net Overpayment.
b. Quantitative Results
i. Total number and percentage of instances in
which LifePoint determined that the Paid Claim submitted by
the LifePoint hospital ("Claim Submitted") differed from what
should have been the correct claim ("Correct Claim"),
regardless of the effect on the payment.
ii. Total number and percentage of instances in
which the Claim Submitted differed from the Correct Claim and
in which such difference resulted in an Overpayment to
LifePoint.
iii. The total dollar amount of all Paid Claims in
the Claims Review Sample and the total dollar amount of
Overpayments associated with the Paid Claims identified by the
DRG or Laboratory Claims Review. (This is the total dollar
amount of the Overpayments identified in section B.3.b above.)
iv. Error Rate in the sample.
v. A spreadsheet of the DRG or Laboratory
Claims Review results that includes the following information
for each Paid Claim appraised: Federal health care program
billed, beneficiary health insurance claim number, date of
service, procedure code submitted, procedure code reimbursed,
allowed amount reimbursed by payor, correct procedure code (as
determined by LifePoint), correct allowed amount (as
determined by LifePoint), dollar difference between allowed
amount reimbursed by payor and the correct allowed amount.
(See Attachment 1 to this Appendix.)
4. CLAIMS SYSTEMS REVIEW. Observations, findings and
recommendations on possible improvements to the system(s) and process(es) that
generated the Overpayment(s).
5. CREDENTIALS. The names and credentials of the individuals who:
(1) designed the statistical sampling procedures and the review methodology
utilized for the DRG or Laboratory Claims Review; and (2) performed the DRG or
Laboratory Claims Review.
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