Medicare Provider Appeals: Premature Recoupment Is Not OK!
A ZPIC audited a client of mine a few years ago and found an alleged overpayment of over $7 million. Prior to them hiring my team, they obtained a preliminary injunction in federal court – like I always preach to do – remember, that between the levels 2 and 3 of a Medicare provider appeal, CMS can recoup the alleged overpayment. This is sheer balderdash; the government should not be able to recoup funds that the provider, most likely, doesn’t owe. But this is the law. I guess we need to petition Congress to change this tomfoolery.
Going back to the case, an injunction stops the premature recoupments, but it does nothing regarding the actual alleged overpayments. In fact, the very reason that you can go to federal court based on an administrative action is because the injunction is ancillary to the merits of the contested case. Otherwise, you would have to exhaust your administrative remedies.
Here, we asserted, the premature recoupments (1) violated its rights to procedural due process, (2) infringed its substantive due-process rights, (3) established an “ultra vires” cause of action, and (4) entitled it to a “preservation of rights” injunction under the Administrative Procedure Act, 5 U.S.C. §§ 704–05. We won the battle, but not the war. To date, we have no date for an administrative law judge (“ALJ”) – or level 3 – hearing on the merits.
For those of you who have participated in a third-level, Medicare provider appeal will know that, many times, no one shows for the other side. The other side being the entity claiming that you owe $7million. For such an outlandish claim of $7 million, would you not think that the side protesting that you owe $7 million would appear and try to prove it? At my most recent ALJ hearing, no one appeared for the government. Literally, my client – a facility in NJ that serves the MS population – me and the ALJ were the only participants. Are the auditors so falsely confident that they believe their audits speaks for itself?
In this particular case, the questionable issue was whether the MS provider’s consumers met the qualifications for the skilled rehabilitation due to no exacerbated physical issues. However, we all know from the Jimmo settlement, that having exacerbated issues or improvement is not a requirement to requiring skilled rehab versus exercising with your spouse. The ALJ actually said – “I cannot believe this issue has gotten this far.” I agree.
TPE and Prepay Audits: Speak Softly, But Carry a Big Stick
Audits have now resumed to 100% capacity – or even 150% capacity. All audits that were suspended during COVID are reinstated. As you all know, RAC and MAC audits were reinstated back in August. CMS announced that Targeted Probe and Educate (TPE) audits would resume on Sept. 1, 2021. Unlike RAC audits, the stated goal of TPE audits is to help providers reduce claim denials and appeals with one-on-one education, focused on the documentation and coding of the services they provide. However, do not let the stated mission fool you. Failing a TPE audit can result in onerous actions such as 100 percent prepay review, extrapolation, referral to a RAC, or other action, a carefully crafted response to a TPE audit is critical. TPEs can be prepay or post-pay.
Speaking of prepayments, these bad babies are back in full swing. CareSource is one of the companies contracted with CMS to conduct prepayment reviews and urgent care centers seem to be a target. Prepayment review is technically and legally not a penalty; therefore being placed on prepayment review is not appealable. But do not believe these legalities – prepay is Draconian in nature and puts many providers out of business, especially if they fail to seek legal counsel immediately and believe that they will pass without any problem. When it comes to prepay, believing that everything will be ok, is a death trap. Instead get a big stick.
42 CFR §447.45 requires 90% of clean claims to be paid to a provider within 30 days of receipt. 99% must be paid within 90 days. The same regulations mandate the agency to conduct prepayment review of claims to ensure that the claims are not duplicative, the consumer is eligible for Medicare, or that the number of visits and services delivered are logically consistent with the beneficiary’s characteristics and circumstances, such as type of illness, age, sex, and service location. This standard prepayment review is dissimilar from a true prepayment review.
Chapter 3 of the Medicare Program Integrity Manual lays out the rules for a prepayment review audit. The Manual states that MACs shall deal with serious problems using the most substantial administrative actions available, such as 100 percent prepayment review of claims. Minor or isolated inappropriate billing shall be remediated through provider notification or feedback with reevaluation after notification. The new prepay review rules comments closed 9/13/21, so it will take effect soon.
If a 100% prepay is considered the most substantial administrative action, then why is it not considered an appealable sanction? I have, however, been successful in obtaining an injunction enjoining the suspension of payments without appealing being placed on prepay.
When requesting documentation for prepayment review, the MACs and UPICs shall notify providers when they expect documentation to be received. It is normally 30-days. The Manual does not allow for time extensions to providers who need more time to comply with the request. Reviewers shall deny claims when the requested documentation to support payment is not received by the expected timeframe. Any audit, but especially prepay audits can lead to termination under 42 CFR §424.535. You may choose to speak softly, but always carry a big stick.
Instead of Orange, Medicare Advantage Audits Are the New Black
In case you didn’t know, instead of orange, Medicare Advantage is the new black. Since MA plans are paid more for sicker patients, there are huge incentives to fabricate co-morbidities that may or may not exist.
Medicare Advantage will be the next most audited arena. Home health, BH, and the two-midnight rule had held the gold medal for highest number of audits, but MA will soon prevail.
As an example, last week- a New York health insurance plan for seniors, along with amedical analytics company the insurer is affiliated with, was accused by the Justice Department of committing health care fraud to the tune of tens of millions of dollars. The dollar amounts are exceedingly high, which also attracts auditors, especially the auditors who are paid on contingency fee, which is almost all the auditors.
CMS pays Medicare Advantage plans using a complex formula called a “risk score,” which is intended to render higher rates for sicker patients and less for those in good health. The data mining company combed electronic medical records to identify missed diagnoses — pocketing up to 20% of new revenue it generated for the health plan. But the Department of Justice alleges that DxID’s reviews triggered “tens of millions” of dollars in overcharges when those missing diagnoses were filled in with exaggerations of how sick patients were or with charges for medical conditions the patients did not have. “All problems are boring until they’re your own.” – Red
MA plans have grown to now cover more than 40% of all Medicare beneficiaries, so too has fraud and abuse. A 2020 OIG report found that MA paid $2.6 billion a year for diagnoses unrelated to any clinical services.
Diagnoses fraud is the main issue that auditors are focusing on. Juxtapose the other alphabet soup auditors – MACs, SMRCs, UPICs, ZPICs, MCOs, TPEs, RACs – they concentrate on documentation nitpicking. I had a client accused of FWA for using purple ink. “Yeah I said stupid twice, only to emphasize how stupid that is!” – Pennsatucky. Other examples include purported failing of writing the times “in or out” when the CPT code definition includes the amount of time.
Audits will be ramping up, especially since HHS has reduced the Medicare appeals backlog at the Administrative Judge Level by 79 percent, which puts the department on track to clear the backlog by the end of the 2022 fiscal year.
As of June 30, 2021, the end of the third quarter of FY 2021, HHS had 86,063 pending appeals remaining at OMHA, according to the latest status report, acquired by the American Hospital Association. The department started with 426,594 appeals. This is progress!!
Medicare Appeals: Time Is of the Essence!
Timing is everything. Missing a deadline germane to any type of Medicare or Medicaid audit is deadly. Miss an appeal deadline by one, single day, and you lose your right to appeal an overpayment.
If anyone has watched Schitt’s Creek, then you know that when Johnny and Moira Rose missed their deadline to file for and pay taxes, they lost their mansion, their money, and way of life. The same catastrophic loss can occur if a provider misses an appeal deadline. Then that provider will be up Schitt’s Creek.
Importantly, when it comes to Medicare appeals, your appeal is due 60 days after the reconsideration review decision. 42 CFR § 405.1014 – Request for an ALJ hearing or a review of a QIC dismissal. A third-level, Medicare provider appeal is considered “filed” upon receipt of the complete appeal at the Office of Medicare Hearings and Appeals, instead of the normal standard acceptance that an appeal is filed upon the mailing stamped date. As in, once you mail your appeal, it will be retroactively filed per the date of mailing. Not true for the third-level, Medicare provider appeal. It is considered filed the date of receipt.
Also, the regulatory clock starts ticking 5 days after the date the of the reconsideration review decision, because, the thought is that the U.S. Post Office will not take more than 5 days to deliver correspondence. Well, that assumption nowadays is inaccurate. The Post Office is a mess, and that’s an understatement. My friend, Dr. Ronald Hirsh told me that his overnighted packages have been received weeks later. More times than not, mail is received weeks after it was mailed, which makes the date of delivery imperative. Yet this regulation forces you to rely on the U.S. Post Office; it makes no logical sense.
We actually had a case in which the ALJ dismissed our appeal because the Post Office delivered the appeal on the 61st day after the reconsideration review decision, including the 5 days window. Literally, the 61st day. The reason that the appeal was received on the 61st day is because the 60th day fell on a holiday, a weekend, or a closure due to COVID – I cannot recall – but OMHA was closed. The mail delivery person had to return the next day to deliver the appeal. Yet, our appeal was dismissed based on the US Post Office! We filed a Motion to Reconsider, but the ALJ denied it. Our only chance at presenting to the ALJ was squashed – due to the Post Office.
We appealed the ALJ’s denial to the Medicare Appeals Council with hope of reasonableness. We have no decision yet. It certainly makes me want to say: Eww, David!
Medicare Provider Appeals: “Get Thee to an ALJ!”
“Get thee to a nunnery!” screamed Hamlet to Ophelia in frustration of his mother marrying Claudius so quickly after his father’s death. Similarly any provider who has undergone a Medicare appeal understands the frustration of getting the appeal to the administrative law judge level (the 3rd level). It takes years to do so, and it is the imperative step instead of the lower level rubber stamps. “Get thee to an ALJ!”
Per regulation, once you appeal an alleged Medicare overpayment, no recoupment of the disputed funds occurs until after you receive the second level review, which is usually the QIC upholding the overpayment. It is no secret that the Medicare provider appeals’ level one and two are basically an automatic approval process of the decision to recoup. “Something is rotten in the state of Denmark.” Hence, the importance of the ALJ level.
There are 5 levels of Medicare appeals available to providers:
- Redetermination
- Reconsideration
- Administrative Law Judge (ALJ)
- Departmental Appeals Board (DAB) Review
- Federal Court (Judicial) Review
The third level is the level in which you present your case to an ALJ, who is an impartial independent tribunal. Unfortunately, right now, it takes about five years between levels two and three, although with CMS hiring 70 new ALJs, the Office of Medicare Hearings and Appeals (OMHA) is optimistic that the backlog will quickly dissipate. Last week, I attended an ALJ hearing for a client based on an audit conducted in 2016. Five years later, we finally presented to the ALJ. When the ALJ was presented with our evidence which clearly demonstrated that the provider should not pay anything, he actually said, “I’m shocked this issue got this far.” As in, this should have been reversed before this level. “O what a noble mind is here o’erthrown!”
In many cases, a premature recoupment of funds in dispute will financially destroy the health care provider, which should not be the purpose of any overpayment nor the consequence of any fraud, waste, and abuse program. We are talking about documentation nit-picking. Not fraud. Such as services notes signed late, according to best practices. Or quibbles about medical necessity or the definition of in patient and the two-midnight rule.
You have all probably read my blogs about the Family Rehab case that came out in TX in 2019. A Court found that Family Rehab, a health care facility, which faced a $7 million alleged overpayment required an injunction. The Judge Ordered that CMS be enjoined from prematurely recouping Medicare reimbursements from Family Rehab. Now, be mindful, the Judge did not enjoin CMS the first time Family Rehab requested an injunction; Superior Court initially dismissed the case for lack of jurisdiction based on failure to exhaust its administrative remedies. But instead of giving up, which is what most providers would do when faced with a dismissed injunction request due to emotional turmoil and finances. “To be, or not to be: that is the question:” Instead, Family Rehab appealed the dismissal to the Court of Appeals and won. The 5th Circuit held that Superior Court does have jurisdiction to hear a collateral challenge on both procedural due process grounds as well as an ultra vires action. On remand, Family Rehab successfully obtained a permanent injunction.
The clinical issues supposedly in support of the overpayment are silly. In Family Rehab’s case, the ZPIC claims homebound criteria was not met when it is clearly met by a reasonable review of the documents.
Homebound is defined as:
Criteria One:
The patient must either:
- Because of illness or injury, need the aid of supportive devices such as crutches, canes, wheelchairs, and walkers; the use of special transportation; or the assistance of another person in order to leave their place of residence
OR
- Have a condition such that leaving his or her home is medically contraindicated.
If the patient meets one of the Criteria One conditions, then the patient must ALSO meet two additional requirements in Criteria Two below:
Criteria Two:
- There must exist a normal inability to leave home;
AND
- Leaving home must require a considerable and taxing effort.
In one of the claims that the ZPIC found no homebound status, the consumer was legally blind and in a wheelchair! The injunction hinged on the Court’s finding that because the ALJ stage is critical in decreasing the risk of erroneous deprivation, an injunction was necessary. I look forward to the ALJ hearing. “The rest is silence.”
Audits Surge with Medicare Advantage and TPE Audits Increased!
Everyone knows about audits of health care providers. But what about the billing companies? Or a data-analytics company? In a complaint filed last week, a New York data-mining company DxID is accused of allegedly helping a Medicare Advantage program game federal billing regulations in a way that enabled the plan to overcharge for patient treatment. As you know, Medicare Advantage plans are paid more for sicker patients. Supposedly, DxID combed medical records for “missed” diagnoses. For example, adding major depression to an otherwise happy consumer. A few years ago, I won an injunction for a provider who 100% relied on the billing company to bill. Because this company aggressively upcoded, we used the victims’ rights statutes in the SSA to defend the provider. And it worked. Providers often forget about the safety net found in the victims’ rights statutes if they wholly rely on a billing company.
This DXID complaint cites medical conditions that it says either were exaggerated or weren’t supported by the medical records, such as billing for treating allegedly unsupported claims for renal failure, the most severe form of chronic kidney disease. The Justice Department is seeking treble damages in the False Claims Act suit, plus an unspecified civil penalty for each violation of the law.
Medicare Advantage has been the target of multiple government investigations, Justice Department and whistleblower lawsuits and Medicare audits. One 2020 report estimated improper payments to the plans topped $16 billion the previous year. In July, the Justice Department consolidated six such cases against Kaiser Permanente health plans. In August, California-based Sutter Health agreed to pay $90 million to settle a similar fraud case. Previous settlements have totaled more than $300 million.
Breaking news: Targeted Probe and Educate audits (TPE) resumed September 1, 2021. Due to COVID, TPE audits had been suspended. Unlike recovery audits, the stated goal of TPE audits is to help providers reduce claim denials and appeals with one-on-one education focused on the documentation and coding of the services they provide. TPE audits are conducted by MACs. While originally limited in scope to hospital inpatient admissions and home health claims, CMS expanded the program to allow MACs to perform TPE audits of all Medicare providers for all items and services billed to Medicare. Beware the TPE audits; they are not as friendly as they purport. A TPE audit can result in a 100 percent prepay review, extrapolation, referral to a Recovery Auditor, or other action, so a carefully crafted response to a TPE audit is critical.
The TPE audit process begins when a provider receives a “Notice of Review” letter from the MAC which states the reasons the provider has been selected for review and requests 20-40 records be produced. Once the records are produced, the MAC will review the 20-40 claims against the supporting medical records and send the provider a letter detailing the results of their review. If the claims are found to be compliant, the TPE audit ends and the provider cannot be selected for review again for a year unless the MAC detects significant changes in provider billing. However, if the claims are found not to be compliant, the MAC will invite the provider to a one-on-one education session specific to the provider’s documentation and coding practices. The provider is then given 45 days to make changes and a second round of 20-40 records will be requested with dates of service no earlier than 45 days after the one-on-one education.
The provider will be given three rounds of TPE to pass. Do not use all three rounds; get it right the first time. If the provider fails pass after three rounds, they will be referred to CMS for further action. With MA, TPE, and audits of data-analytics companies ramping up, 2022 is going to be an audit frenzy.
Medicare Payment Parity: More Confusing Audits
Every time a regulation is revised, Medicare and Medicaid audits are altered…sometimes in the providers’ favor, most times not. Since COVID, payment parity has created a large discrepancy in reimbursement rates for Medicare across the country.
Payment parity is a State-specific, Governor decision depending on whether your State is red or blue.
Payment parity laws require that health care providers are reimbursed the same amount for telehealth visits as in-person visits. During the ongoing, pandemic, or PHE, many states implemented temporary payment parity through the end of the PHE. Now, many States are implementing payment parity on a permanent basis. As portrayed in the below picture. As of August 2021, 18 States have implemented policies requiring payment parity, 5 States have payment parity in place with caveats, and 27 States have no payment parity.
On the federal level, H.R. 4748: Helping Every American Link To Healthcare Act of 2021 was introduced July 28, 2021. HR 4748 allows providers to furnish telehealth services using any non-public facing audio or video communication product during the 7-year period beginning the last day of the public health emergency. Yay. But that doesn’t help parity payments.
For example, NY is one of the states that has passed no parity regulation, temporary or permanent. However, the Governor signed an Executive Order mandating parity between telehealth and physical services. Much to the chagrin of the providers, the managed long-term care organizations reduced the Medicare and Medicaid reimbursements for social adult day care centers drastically claiming that the overhead cost of rendering virtual services is so much lower., which is really not even accurate. You have to ensure that your consumers all have access to technology. About four-in-ten adults with lower incomes do not have home broadband services (43%) or a desktop or laptop computer (41%). And a majority of Americans with lower incomes are not tablet owners.
Amidst all this confusion on reimbursement rates, last week, HHS released $25.5 billion on provider relief funds and promised increased audits. Smaller providers will be reimbursed at a higher rate than larger ones, the department said. Which leads me tov think: and perhaps be audited disproportionately more.
The first deadline for providers to report how they used grants they have already received is coming up at the end of September, but HHS on Friday announced a two-month grace period. HHS has hired several firms to conduct audits on the program.
Remember on June 3, 2021, CMS announced that MACs could begin conducting post-payment reviews for dates of service on or after March 1, 2020. Essentially, auditors can review any DOS with or without PHE exceptions applicable, but the PHE exceptions (i.e., waivers and flexibilities) continue, as the PHE was extended another 90 days and likely will be again through the end of this year.
I’m currently defending an audit spanning a 4-month period of June 2020 – September 2020. Interestingly, even during the short, 4 month, period, some exceptions apply to half the claims. While other apply to all the claims. It can get tricky fast. Now imagine the auditors feebly trying to remain up to speed with the latest policy changes or COVID exceptions.
Here, in NC, there was a short period of time during which physician signatures may not even be required for many services.
In addition to the MAC and SMRC audits, the RAC has shown an increase in audit activities, as have the UPICs and most state Medicaid plans. Commercial plan audits have also been on the rise, though they were under no directive to cease or slow audit functions at any time during the PHE.
Lastly, audit contractors have increasingly hinted to the use of six-year, lookback audits as a means for providers that have received improper payments to refund overpayments due. This 6- year lookback is the maximum lookback period unless fraud is alleged. It is important to note that the recoupments are not allowed once you appeal, so appeal!
Medicare Consumers May Be Great House-Flippers: Keep Your Mind Wise
I have a guest blogger today – what an honor! Teresa Greenhill is the co-creator of MentalHealthforSeniors.com, which is dedicated to providing seniors with information on physical and mental fitness. Being a senior herself, Teresa, with some help from her granddaughter, manages the website as a way to keep her busy and help other seniors be active and happy in their golden years.
Teresa’s blog today is about Medicare consumers creating a “senior” business…make money as a senior! Think it can’t be done?? Read Teresa’s blog below.
Breaking Into the House-Flipping Business: A Guide for Seniors
House-flipping can be a lucrative and rewarding venture for seniors. Maybe you are a retiree looking for a second career. Maybe you’ve always wanted to get competitive in the world of real estate. Or maybe you’re just trying to stay occupied and active while bringing in a little extra cash. Whatever the case, if you’re considering trying your hand at house-flipping, here are some of the basics you should know.
Seniors tend to thrive in the field of real estate.
Success in real estate can hinge very much on how well you deal with people. And this is something that many seniors have become adept at, over the years. You’ve probably had your share of managing difficult personalities. You can often anticipate issues before they arise. And most importantly, your own life experience sets you up to empathize with what others may be going through. Individuals who are selling or buying a home will appreciate the chance to deal with someone who is competent and calm, and who understands their worries. The bonus for seniors is that the work is relatively undemanding and allows you to set your own schedule.
You don’t need to be a real estate agent.
You don’t need to train to be an agent, or be certified as an agent, in order to get into flipping houses. That doesn’t mean there aren’t benefits to getting your real estate agent’s license, however. As a licensed agent, you will save money on commissions. You will also have better and earlier access to real estate listings. And being educated in the ins and outs of home buying and selling will make the entire process run more smoothly for you.
You will need to start with a certain amount of funding.
House-flipping is not one of those fields you can leap into without preparation, and this includes financial preparation. Before you decide that house-flipping is right for you, check to see whether you are financially ready to make a good start. The biggest expense you will face is the acquisition cost, which will vary depending on location, the size of the property, and its condition. You will also have to deal with renovation expenses and property taxes. Other costs involved in house-flipping include utilities, inspections, permits, and closing costs. So yes, this is a field that is easier to break into if you have plenty of cash on hand. But seniors who don’t have much expendable income still may be able to get a bank or home equity loan to start off.
Should you buy fixer-uppers?
When going into house flipping, the idea is that you will sell a house for more than you spent on it – so, yes, some renovation is a given. But there’s a limit to how much renovation and repair is a good idea. Even a home that looks decent at first glance could have a host of problems including expensive issues pertaining to the foundation, the roof, or the structure itself. Look out for mold, asbestos, termite damage, and wiring problems. A good choice is a home that will benefit immensely from less expensive aesthetic updates such as a good paint job, new cabinets, or improved landscaping. Of course, much depends on how skilled you are at home renovations and repairs, yourself.
Will you have to hire employees?
If you plan on making this a business, you may want to bring on more permanent hires. Or you may prefer simply to deal with contractors. Either way, make sure you hire individuals or companies that have good reviews and are well regarded. Don’t forget that you will need to manage payroll, as soon as you start hiring others. So make sure anyone you bring on fills out the appropriate paperwork, and have an organized system for paying them promptly and correctly.
If you feel you have what it takes to succeed at – and enjoy – house-flipping, this may be the beginning of an exciting new phase in your life. Just be sure you are well informed, and sufficiently financially equipped to get your start safely. If you are a senior interested in real estate and also have legal questions pertaining to Medicaid or Medicare in the Raleigh area, contact Knicole C. Emanuel of Medicaid Law NC.
Meaningful Use Increases Audits
Today I want to discuss EHR – electronic health records and RAC audits. We all remember the government pushing providers into purchasing EHR. It’s known as the meaningful use (MU) program, which is now known as the Promoting Interoperability Programs. CMS initially provided 10 incentives to accelerate the adoption of EHRs to meet program requirements. Now, physicians who fail to participate in MU will receive a penalty in the form of reduced Medicare reimbursements, at a minimum. Multiple audits at a maximum. Physicians must use certified electronic health records technology (CEHRT) and demonstrate meaningful use through an attestation process at the end of each MU reporting period to avoid the penalty.
Audits for MU can equal tens of thousands of dollars. The monetary amount is not as high as other RAC audits for medical records. One of my clients is a pediatric facility in Georgia. His facility received an alleged overpayment of $34,000 for two of his physicians not meeting the meaningful use criteria 8 and 9. We were going to fight it, but the two physicians who were dinged had quit and would not testify positively on behalf of my client. Plus, attorneys’ fees would surpass the penalty. Criteria 8 and 9 constitute proving your consumer have email and actually open their emails to check their health care internet folders, which are ridiculous criteria.
On September 2, 2020, CMS published the Fiscal Year (FY) 2021 Medicare Hospital Inpatient Prospective Payment System (IPPS) for Acute Care Hospitals and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) Final Rule which included program requirements for calendar year (CY) 2021. In this final rule, CMS continued its advancement of EHR utilization, focusing on burden reduction, and improving interoperability, and patient access to health information.
Meaningful use’s not anticipated consequence is ramping up RAC audits. Many RAC auditors are using EHR to claim “copy and paste.” Obviously, the point of EHR is to morph all service notes into a certain standard-looking note. But standard-looking notes scream copy and paste to RAC auditors. Maybe RAC auditors haven’t digested meaningful use yet.
On August 2, 2021 CMS released the Fiscal Year (FY) 2022 Medicare Hospital Inpatient Prospective Payment System for Acute Care Hospitals and Long-term Care Hospital Prospective Payment System Final Rule. For more information on the proposed changes, visit the Federal Register.
COVID affected EHR audits too.
The deadline for eligible hospitals and critical access to submit a hardship exception application is September 1, 2021.
