Monthly Archives: January 2018

RAC Audits: How to Deal with Concurrent, Overpayment Accusations in Multiple Jurisdictions

You are a Medicare health care provider. You perform health care services across the country. Maybe you are a durable medical equipment (DME) provider with a website that allows patients to order physician-prescribed, DME supplies from all 50 states. Maybe you perform telemedicine to multiple states. Maybe you are a large health care provider with offices in multiple states.

Regardless, imagine that you receive 25, 35, or 45 notifications of alleged overpayments from 5 separate “jurisdictions” (the 5th being Region 5 (DME/HHH – Performant Recovery, Inc.). You get one notice dated January 1, 2018, for $65,000 from Region 1. January 2, 2018, you receive a notice of alleged overpayment from Region 2 in the amount of $210.35. January 3, 2018, is a big day. You receive notices of alleged overpayments in the amounts of $5 million from Region 4, $120,000 from Region 3, and two other Region 1 notices in the amount of $345.00 and $65,000. This continues for three weeks. In the end, you have 20 different notices of alleged overpayments from 5 different regions, and you are terrified and confused. But you know you need legal representation.

 

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Do you appeal all the notices? Even the notice for $345.00? Obviously, the cost of attorneys’ fees to appeal the $345.00 will way outweigh the amount of the alleged overpayment.

Here are my two cents:

Appeal everything – and this is why – it is a compelling argument of harassment/undue burden/complete confusion to a judge to demonstrate the fact that you received 20 different notices of overpayment from 5 different MACs. I mean, you need a freaking XL spreadsheet to keep track of your notices. Never mind that an appeal in Medicare takes 5 levels and each appeal will be at a separate and distinct status than the others. Judges are humans, and humans understand chaos and the fact that humans have a hard time with chaos. For example, I have contractors in my house. It is chaos. I cannot handle it.

While 20 distinct notices of alleged overpayment is tedious, it is worth it once you get to the third level, before an unbiased administrative law judge (ALJ), when you can consolidate the separate appeals to show the judge the madness.

Legally, the MACs cannot withhold or recoup funds while you appeal, although this is not always followed. In the case that the MACs recoup/withhold during your appeal, if it will cause irreparable harm to your company, then you need to get an injunction in court to suspend the recoupment/withhold.

According to multiple sources, the appeal success rate at the first and second levels are low, approximately 20%. This is to be expected since the first level is before the entity that determined that you owe money and the second level is not much better. The third level, however, is before an impartial ALJ. The success rate at that level is upwards of 75-80%. In the gambling game of life, those are good odds.

 

Will Health Care Providers Be Affected By the Government Shutdown?

Happy third day of the government shutdown.

deflated

According to Twitter (which is not always correct – shocker), the government shutdown may be lifted momentarily. At least, according to Jamie Dupree’s Twitter account, “From the Senate hallways – it seems like there are enough votes now to fund the government & end the shutdown.”

But, as of now, the government shutdown remains in effect, after Senators failed to come to an agreement to end it, late Sunday night. A vote is is ongoing that could end the shutdown with a short-term, spending bill that would last three weeks. A short-term answer to a much bigger problem is like putting a band-aid on a broken leg. In other words, a shutdown can happen again in three weeks. So, even if the shutdown is thwarted today, it may not matter. For future government shutdowns, we need to explore the consequences of a shutdown as it pertains to health care.

If you are a health care provider who accepts Medicare and/or Medicaid, then you are probably worried about the consequences of a federal government shutdown. As in, will you get your reimbursements for services rendered? We are currently on Day 3.

Health Care Related Consequences

The Department of Health and Human Services (DHHS) will send home — or furlough — about half of its employees, or nearly 41,000 people, according to an HHS shutdown contingency plan released this past Friday.

According to the HHS plan, the CDC will suspend its flu-tracking program.

Medicare

It depends. If the shutdown is short, medical providers will continue to receive reimbursements. If the shutdown is prolonged, reimbursements could be affected. As with Medicaid, Medicare has funding sources that don’t depend on Congress passing annual spending bills. Again, beneficiaries and providers should not be affected by a shutdown, unless it is prolonged.

Medicaid

States already have their funding for Medicaid through the second quarter, or the end of June, so no shortfall in coverage for enrollees or payments to providers is expected. Enrolling new Medicaid applicants is a State function, so that process should not be affected. Federal funding for the health insurance program for the low-income population is secure through the end of June.

States also handle much of the Children’s Health Insurance Program (CHIP), which provides coverage for lower-income children whose families earn too much to qualify for Medicaid. But federal funding for CHIP is running dry — its regular authorization expired on Oct. 1, and Congress has not agreed on a long-term funding solution. However, federal employees, who are necessary to make payments to states running low on funds will continue to work during a shutdown. The definition of “necessary?” Up in the air.

With a shutdown, there will be no new mental health or social services grants awarded and less monitoring of existing grants. The HHS departments most involved in issuing grants to health-care providers around the country would be particularly affected by the shutdown because more of their employees are furloughed. This includes the Substance Abuse and Mental Health Services Administration and the Administration for Children and Families.

FDA

The FDA’s food-safety inspection program hits pause. “FDA will be unable to support the majority of its food safety, nutrition and cosmetics activities,” the HHS contingency plan says. The exception is meat and poultry inspections carried out by the Agriculture Department’s Food Safety and Inspection Service.

Not health care related, but NASA tweeted “Sorry, but we won’t be tweeting/responding to replies during the government shutdown. Also, all public NASA activities and events are cancelled or postponed until further notice. We’ll be back as soon as possible! Sorry for the inconvenience.”

Is this legal? Well, as it pertains to Medicare and Medicaid providers receiving reimbursements, the government is required to follow the law.

42 CFR 422.520 require that the contract between CMS and the MA organization must provide that the MA organization will pay 95 percent of the “clean claims” within 30 days of receipt if they are submitted by, or on behalf of, an enrollee of an MA private fee-for-service plan or are claims for services that are not furnished under a written agreement between the organization and the provider.

42 CFR 447.45 requires that the Medicaid agency must pay 90 percent of all clean claims from practitioners, who are in individual or group practice or who practice in shared health facilities, within 30 days of the date of receipt.

Part D has a similar regulation, as does all Medicare and Medicaid service types.

Theoretically, if a government shutdown causes the federal or state government to violate the regulations that instruct those agencies to pay providers within 30 days, then providers would have a legal cause of action against the federal and/or state governments for not following the regulations.

Exciting News!! Knicole Emanuel and Team Joins Potomac Law Group!!

My team and I have transferred to Potomac Law Group! This was such a huge decision for us, but we are so super excited about the move. Nothing much will change – I will still be in Raleigh and will still maintain this blog. In fact, I will be able to blog more often, because Potomac does not require ungodly amount of billable hours! See below for more. Woot! Woot!

Plus, I am joining a team of attorneys who are amazing and talented.

My new contact information is kemanuel@potomaclaw.com, and my telephone number is (919) 219-9319.

  • Knicole Emanuel | Partner | Potomac Law Group, PLLC
  • 1300 Pennsylvania Avenue, NW, Suite 700
  • Washington, D.C. 20004
  • *Admitted to practice in NC and GA
  • Tel: (919) 219-9319 | Fax: (202) 318-7707

kemanuel@potomaclaw.com | www.potomaclaw.com

  • Raleigh, NC Office
  • 3613 Bentgrass Ct.
  • Apex, NC 27539

Introducing the Potomac Health Care Group:

We have:

Me.

Obviously.

Harry Silver

He has 40 years of experience advising clients on healthcare issues and handling complex litigation at trial and on appeal. He has briefed and argued appeals in 10 of the 12 U.S. Circuit Courts of Appeal, written briefs and cert. petitions in the U.S. Supreme Court, briefed and argued appeals in various state appellate courts. Impressive!

Susan Hendrix

She also focuses her practice on healthcare, investigations and litigation.  Ms. Hendrix provides compliance advice, and conducts internal investigations, with respect to health care regulations, health care guidance, and health care-related company policies.

Richard McHugh

With over 30 years of legal experience, Mr. McHugh also provides consultation and advice regarding legislative and regulatory developments affecting the employee benefits industry, including retirement, health care and executive compensation matters and related human resource issues.

Neil Belson

Neil Belson is a business-savvy attorney with nearly thirty years experience creating, negotiating and closing innovative deals for the development, transfer and protection of critical technologies. For transactions issues… 

Daryl Anne Lander

Ms. Lander focuses her practice on tax and ERISA issues relating to tax-qualified pension and 401(k) plans, health plans, nonqualified deferred compensation plans, other executive compensation, and fringe benefits. For employments issues…

Katy Van Pelt

She is a Partner in the firm’s Regulatory, Food & Drug, Healthcare, and Life Sciences practice groups.  She provides advice on a range of regulatory issues relevant to manufacturers of prescription drugs, medical devices, in vitro diagnostic products, analyte-specific reagents, laboratory developed tests, infant formula, and food. For regulatory issues…

Sheetal Patel

Sheetal Patel is a patent law specialist with several years of experience litigating chemical, biotech, and pharmaceutical patent cases as well as developing enforcement strategies including invalidity and infringement analyses, and due diligence. For patent issues…

These are not all the attorneys at Potomac Law Group; there many other, extremely talented, experienced, and intelligent attorneys. Plus, Potomac Law Group was named one of the best law firms in 2018 according to U.S. News.

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And get this – Potomac Law was named, along with Google, Facebook, and Starbucks, as one of 20 innovative companies in the crucial areas of women’s advancement and work life integration.

According to “Working Mother,” which, by the way, I am, “This firm bucks the overwork tradition of Big Law by giving attorneys freedom and flexibility to work from any location, with most choosing home offices. Founder Benjamin Lieber began Potomac Law Group in 2011 by recruiting stay-at-home-mom lawyers to rejoin the working world at the level of intensity they preferred. Today, half of the firm’s attorneys, partners and management are women. The culture explicitly rejects minimum billable hour requirements and embraces working remotely as a way “to be more productive and efficient in balancing our professional and personal commitments.””

Out of all the companies in America, Potomac was named by Working Mother as the best for, well, working mothers – only 20 companies were named!!

I will need to update my tags and categories for Medicaidlaw-NC…

And here is the obligatory, legal disclaimer:

Legal Disclaimer and Note:   I welcome your feedback, thoughts, questions, and suggestions.  Just a reminder: These materials have been prepared by me for informational purposes only and are not legal advice. Internet followers and online readers should not act upon this information without seeking independent legal counsel.

This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Please note that an attorney-client relationship, and corresponding confidentiality of information, does not arise until Potomac Law Group s has received an executed legal service agreement. Do not send us confidential information until you speak with one of our attorneys and get authorization to send that information to us. Potomac Law Group is pleased to receive inquiries from prospective clients regarding its services and its lawyers. However, an inquiry to Potomac Law Group should not disclose information about a particular matter prompting the inquiry.

While I try to update this site on a regular basis, I do not intend any information on this site to be treated or considered as the most current expression of the law on any given point, and certain legal positions expressed on this site, by passage of time or otherwise, may be superseded or incorrect. Readers should not consider the information provided to be an invitation for an attorney-client relationship, and should always seek the advice of independent legal counsel in the reader’s home jurisdiction.

The opinions expressed on this site are the opinions of the user, and do not necessarily reflect the opinions or positions of Potomac Law Group.

Suspension of Medicare Reimbursements – Not Over 180 Days! Medicaid – Indefinite?!

When you get accused of Medicare or Medicaid fraud or of an alleged overpayment, the federal and state governments have the authority to suspend your reimbursements. If you rely heavily on Medicaid or Medicare, this suspension can be financially devastating. If your Medicare or Medicaid reimbursements are suspended, you have to hire an attorney. And, somehow, you have to be able to afford such legal representation without reimbursements. Sadly, this is why many providers simply go out of business when their reimbursements are suspended.

But, legally, how long can the state or federal government suspend your Medicare or Medicaid payments without due process?

According to 42 C.F.R. 405.371, the federal government may suspend your Medicare reimbursements upon ” reliable information that an overpayment exists or that the payments to be made may not be correct, although additional information may be needed for a determination.” However, for Medicare, there is a general rule that the suspension may not last more than 180 days. MedPro Health Providers, LLC v. Hargan, 2017 U.S. Dist. LEXIS 173441 *2.

There are also procedural safeguards. A Medicare provider must be provided notice prior to a suspension and given the opportunity to submit a rebuttal statement explaining why the suspension should not be implemented. Medicare must, within 15 days, consider the rebuttal, including any material submitted. The Medicare Integrity Manual states that the material provided by the provider must be reviewed carefully.

Juxtapose Medicaid:

42 CFR 455.23 states that “The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part.”

Notice the differences…

Number one: In the Medicare regulation, the word used is “may” suspend.  In the Medicaid regulation, the word used is “must” suspend. This difference between may and must may not resonate as a huge difference, but, in the legal world, it is. You see, “must” denotes that there is no discretion (even though there is discretion in the good cause exception). On the other hand, “may” suggests more discretionary power in the decision.

Number two: In the Medicare regulation, notice is required. It reads, “Except as provided in paragraphs (d) and (e) of this section, CMS or the Medicare contractor suspends payments only after it has complied with the procedural requirements set forth at § 405.372.” 405.372 reads the Medicare contractor must notify the provider or supplier of the intention to suspend payments, in whole or in part, and the reasons for making the suspension. In the Medicaid regulation, no notice is required. 455.23 reads “The State Medicaid agency may  suspend payments without first notifying the provider of its intention to suspend such payments.”

Number three: In the Medicare regulation, a general limit of the reimbursement suspension is imposed, which is 180 days. In the Medicaid regulation, the regulations states that the suspension is “temporary” and must be lifted after either of the following (1) there is a determination of no credible allegations of fraud or (2) the legal proceedings regarding the alleged fraud are complete.

Yet I have seen States blatantly violate the “temporary” requirement. Consider the New Mexico situation. All the behavioral health care providers who were accused of Medicaid fraud have been cleared by the Attorney General. The regulation states that the suspension must be lifted upon either of the following – meaning, if one situation is met, the suspension must be lifted. Well, the Attorney General has cleared all the New Mexico behavioral health care providers of fraud. Criterion is met. But the suspension has not been lifted. The Health Services Department (HSD) has not lifted the suspension. This suspension has continued for 4 1/2 years. It began June 24, 2013. See blog, blog, and blog. Here is a timeline of events.

Why is there such a disparity in treatment with Medicare providers versus Medicaid providers?

The first thing that comes to mind is that Medicare is a fully federal program, while Medicaid is state-run. Although a portion of the funds for Medicaid comes from the federal government.

Secondly, Medicare patients pay part of costs through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage. Whereas, Medicaid patients pay nothing.

Thirdly, Medicare is for the elderly, and Medicaid is for the impoverished.

But should these differences between the two programs create such a disparity in due process and the length of reimbursement suspensions for health care providers? Why is a Medicare provider generally only susceptible to a 180 day suspension, while a Medicaid provider can be a victim of a 4 1/2 year suspension?

Parity, as it relates to mental health and substance abuse, prohibits insurers or health care service plans from discriminating between coverage offered for mental illness, serious mental illness, substance abuse, and other physical disorders and diseases. In short, parity requires insurers to provide the same level of benefits for mental illness, serious mental illness or substance abuse as for other physical disorders and diseases.

Does parity apply to Medicare and Medicaid providers?

Most of Medicare and Medicaid law is interpreted by administrative law judges. Most of the time, a health care provider, who is not receiving reimbursements cannot fund an appeal to Superior Court, the Court of Appeals, and, finally the Supreme Court. Going to the Supreme Court costs so much that most normal people will never present before the Supreme Court…it takes hundreds and hundreds upon thousands of dollars.

In January 1962, a man held in a Florida prison cell wrote a note to the United States Supreme Court. He’d been charged with breaking into a pool hall, stealing some Cokes, beer, and change, and was handed a five-year sentence after he represented himself because he couldn’t pay for a lawyer. Clarence Earl Gideon’s penciled message eventually led to the Supreme Court’s historic 1963 Gideon v. Wainwright ruling, reaffirming the right to a criminal defense and requiring states to provide a defense attorney to those who can’t afford one. But it does not apply to civil cases.

Furthermore, pro bono attorneys and legal aid attorneys, although much-needed for recipients, will not represent a provider.

So, until a health care provider, who is a gaga-zillionaire, pushes a lawsuit to the Supreme Court, our Medicare and Medicaid law will continue to be interpreted by administrative law judges and, perhaps, occasionally, by Superior Court. Do not take this message and interpret that I think that administrative law judges and Superior Court judges are incapable of interpreting the laws and fairly applying them to certain cases. That is the opposite of what I think. The point is that if the case law never gets to the Supreme Court, we will never have consistency in Medicare and Medicaid law. A District Court in New Mexico could define “temporary” in suspensions of Medicare and/or Medicaid reimbursements as 1 year. Another District Court in New York could define “temporary” as 1 month. Consistency in interpreting laws only happens once the Supreme Court weighs in.

Until then, stay thirsty, my friend.

Accused of a Medicare or Medicaid Overpayment? Remember That You May Fall Into an Exception That Makes You NOT Liable to Pay!!

In today’s health care world, post-payment review audits on health care providers who accept Medicare and/or Medicaid have skyrocketed. Part of the reason is the enhanced fraud, waste, and abuse detections that were implanted under ObamaCare. Then the snowball effect occurred. The Centers for Medicare and Medicaid Systems (CMS), which is the single federal agency designated by the Secretary of Health and Human Services (HHS), via authority from Congress, to manage Medicare and Medicaid nationwide, started having positive statistics to show Congress.

Without question, the recovery audit contractors (RACs) have recouped millions upon millions of money since 2011, when implemented. Every financial report presented to Congress shows that the program more than pays for itself, because the RACs are paid on contingency.

Which pushed the snowball down the hill to get bigger and bigger and bigger…

However, I was reading recent, nationwide case law on Medicare and Medicaid provider overpayments reviews (I know, I am such a dork), and I realized that many attorneys that providers hire to defend their alleged overpayments have no idea about the exceptions found in Sections 1870 and 1879 of the Social Security Act (SSA). Why is this important? Good question. Glad you asked. Because of this legal jargon called stare decisis (let the decision stand). Like it or not, in American law, stare decisis is the legal doctrine that dictates once a Court has answered a question,the same question in other cases must elicit the same response from the same court or lower courts in that jurisdiction. In other words, if “Attorney Uneducated” argues on behalf of a health care provider and does a crappy job, that decision, if it is against the provider, must be applied similarly to other providers. In complete, unabashed, English – if a not-so-smart attorney is hired to defend a health care provider in the Medicare and/or Medicaid world, and yields a bad result, that bad result will be applied to all health care providers subsequently. That is scary! Bad laws are easily created through poor litigation.

A recent decision in the Central District of California (shocker), remanded the Medicare overpayment lawsuit back to the Administrative Law Judge (ALJ) level because the ALJ (or the provider’s attorney) failed to adequately assess whether the exceptions found in Sections 1870 and 1879 of the SSA applied to this individual provider. Prime Healthcare Servs.-Huntington Beach, LLC v. Hargan, 2017 U.S. Dist. LEXIS 205159 (Dec., 13, 2017).

The provider, in this case, was a California hospital. The overpayment was a whopping total of $5,380.30. I know, a small amount to fight in the court of law and expend hundreds of thousands of attorneys’ fees. But the hospital (I believe) wanted to make legal precedent. The issue is extremely important to hospitals across the county – if a patient is admitted as inpatient and a contractor of CMS determines in a post payment review that the patient should have been admitted as an outpatient – is the hospital liable for the difference between the outpatient reimbursement rate and the inpatient reimbursement rate? To those who do not know, the inpatient hospital rates are higher than outpatient. Because the issue was so important and would have affected the hospital’s reimbursement rates (and bottom line) in the future, the hospital appealed the alleged overpayment of $5,380.30. The hospital went through the five levels of Medicare appeals. See blog. It disagreed with the ALJ’s decision that upheld the alleged overpayment and requested judicial review.

Judicial review (in the health care context): When a health care providers presents evidence before an ALJ and the ALJ ruled against the provider.The provider appeals the ALJ decision to Superior Court, which stands in as if it is the Court of Appeals. What that means is – that at the judicial review level, providers cannot present new evidence or new testimony. The provider’s attorney must rely on the   official record or transcript from the ALJ level. This is why it is imperative that, at the ALJ level, you put forth your best evidence and testimony and have the best attorney, because the evidence and transcript created from the ALJ level is the only evidence allowed from judicial review.

The exceptions found in Sections 1870 and 1879 of the SSA allow for a provider to NOT pay back an alleged overpayment, even if medical necessity does not exist. It is considered a waiver of the provider’s overpayment. If a Court determines that services were not medically necessary, it must consider whether the overpayment should be waived under Sections 1870 and 1879.

Section 1879 limits a provider’s liability for services that are not medically necessary when it has been determined that the provider “did not know, and could not reasonably have been expected to know, that payment would not be made for such services.” 42 U.S.C. 1395pp(a). A provider is deemed to have actual or constructive knowledge of non-coverage based on its receipt of CMS notices, the Medicare manual, bulletins, and other written directives from CMS. In other words, if CMS published guidance on the issue, then you are out of luck with Section 1879. The Courts always hold that providers are responsible for keeping up-to-date on rules, regulations, and guidance from CMS. “Ignorance of the law is no defense.”

Section 1870 of the SSA permits providers to essentially be forgiven for overpayments discovered after a certain period of time so long as the provider is “without fault” in causing the overpayment. Basically, no intent is a valid defense.

Sections 1879 and 1870 are extraordinary, strong, legal defenses. Imagine, if your attorney is unfamiliar with these legal defenses.

In Prime Healthcare, the Court in the Central District of California held that the ALJ’s decision did not clearly apply the facts to the exceptions of Sections 1870 and 1879. I find this case extremely uplifting. The Judge, who was Judge Percy Anderson, wanted the provider to have a fair shake. Hey, even if the services were not medically necessary, the Judge wanted the ALJ to, at the least, determine whether an exception applied. I feel like these exceptions found in Sections 1870 and 1879 are wholly underutilized.

If you are accused of an overpayment…remember these exceptions!!!

Appeal! Appeal! Appeal!