You Have Been Placed on PrePayment Review: Now What?

You receive a certified correspondence. You sign for it. You open it.  The letter states that your company (that provides health care services to Medicaid recipients) has been placed on prepayment review.

As if this letter is not scary enough, the letter also cites all this North Carolina statutory laws and alludes to the federal regulations.  The letter talks about “credible allegations of fraud” and “aberrant billing practices” and, even scarier, states that “a provider may not appeal or otherwise contest a decision…to be placed on prepayment review.”

What a second!! So the NC state government is unilaterally placing you on prepayment review, which automatically suspends your Medicaid reimbursements for an indefinite period of time, potentially causing you monetary damages, your staff monetary damages, and your recipients to potentially lose their provider, and this unilateral decision is not appealable???

Not so fast!! (Although the legality of prepayment reviews and the lack of due process will need to be reserved for another blog).

First of all, what the heck is prepayment review?

Prepayment review is phrase denoting the Department of Health and Human Services (DHHS), Division of Medicaid (DMA)’s decision to place a health care provider on a kind of “heightened awareness list.”  So instead of just billing Medicaid services through your Managed Care Organization (MCO) or DMA, you have to send documents to another outside contracted companies, Recovery Audit Contrators (RACs), which, in turn, will decide whether your documentation is, at least, 70% compliant for 3 consecutive months.

So you know what a prepayment review is (at least in theory), so WHAT do you do?

Let’s start with what NOT to do:

  • Do not fool yourself into thinking that your documents are good enough to pass the 70%.  I am in no way saying that your documents are not compliant.  In fact, most likely, your documents are compliant.  I am merely stating that from prior experience, the RACs make passing the audits impossible. You probably will not believe me until you witness it firsthand, but the RACs will tell you what documentation is lacking, you will send the document to the RAC, and your claim will be denied for a completely different reason (but equally as ridiculous).
  • Do not live in the river called De-Nile and refuse to believe that your Medicaid contract will be terminated. It will, most likely, be terminated in the next 6 months.
  • Do not believe that DMA/Program Integrity (PI)/the RACs/the individual auditors are actually put in place to help you. While you hear, “Oh, your documents are in great shape,” you will receive denials after denials until your Medicaid contract is terminated.
  • Do not think that the harder you work to comply, the more likely you will comply and be placed off prepayment review.
  • Do not ignore the prepayment review status.
  • Do not think prepayment review is “no big deal.”
  • Do not think there is nothing you can do.

What to do:

  • Get a Medicaid attorney (as usual, I must say that you should get an attorney, not necessarily me, just any lawyer knowledgeable about Medicaid. I am not trying to advocate for myself; I am merely trying to help providers). The quicker you begin to contest the prepayment review status the better.
  • In a very detailed-oriented way, review your documents as if you were an objective outsider.  Remember, the RACs are objective (arguably) outsiders.
  • At the same as the above-mentioned action, review the pertinent DMA Clinical Policy that is germane to your practice (i.e., Outpatient Behavioral Therapy (OBT) follows Policy 8C), review the Basic Medicaid Billing Guide, and review the Medicaid contract you signed. Being knowledgeable is key.
  • Keep detailed notes on every communication and document you send to the RACs.
  • Keep a chart of all Medicaid recipients that are being reviewed, including the dates of service (DOS).
  • Stay organized.  If, for example, the RAC asks for an authorization for Patient X in an initial document request, you send it, then in a final request asks for the service note, you send it, then denies the service because of lack of patient’s consent for treatment, you need to be able to show the timeline of events.
  • Understand that you are not the only one.
  • Stay strong.

Remember, this is your business, your life, how you pay the bills and how you contribute to the community. It is important enough to not back down. As of today, prepayment reviews, according to North Carolina general statutes are allowed without appeal.

But, in the future, with enough providers challenging these statutes as being in violation of federal law, due process will be required.

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on April 16, 2013, in DHHS, Division of Medical Assistance, Federal Law, Health Care Providers and Services, Legal Analysis, Legislation, MCO, Medicaid, Medicaid Audits, Medicaid Contracts, NCGS 108C-7, North Carolina, Outpatient Behavioral Health, Prepayment Review, Provider Medicaid Contracts, Termination of Medicaid Contract and tagged , , , , , , . Bookmark the permalink. 1 Comment.

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