Author Archives: kemanuel

Suspension of Audits During the Coronavirus?

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Effective immediately, survey activity is limited to the following (in Priority Order):

  • All immediate jeopardy complaints (cases that represents a situation in which entity noncompliance has placed the health and safety of recipients in its care at risk for serious injury, serious harm, serious impairment or death or harm) and allegations of abuse and neglect;
  • Complaints alleging infection control concerns, including facilities with potential COVID-19 or other respiratory illnesses;
  • Statutorily required recertification surveys (Nursing Home, Home Health, Hospice, and ICF/IID facilities);
  • Any re-visits necessary to resolve current enforcement actions;
  • Initial certifications;
  • Surveys of facilities/hospitals that have a history of infection control deficiencies at the immediate jeopardy level in the last three years;
  • Surveys of facilities/hospitals/dialysis centers that have a history of infection control deficiencies at lower levels than immediate jeopardy.

See CMS QSO-20-12-ALL.

Obviously, there are so many questions. Providers across the country are asking whether they need to comply with document requests. Are TPE audits continuing? Do they need to comply with ongoing ADRs?

Every bulletin that CMS publishes instigates more detailed and complex questions. With all these relaxed guidelines, won’t RACs, etc. have a field day when this is all over? Of course they will.

General Recommendations:

  • Be proactive.
  • Document everything.
  • Deadlines will be extended.
  • Exceptions will be made.
  • Keep all email correspondence.
  • Maintain copies of everything that you submit. (Do not rely on electronic computer software programs).
  • Keep track of CMS updates.

Email me questions, and I will try to respond.

Also, feel free to reach out to the government: QSOG_EmergencyPrep@cms.hhs.gov.

Effective date: 30 days from the memo, which equals April 3, 2020.

 

 

Inconsequential Medicare Audits Could Morph into a Whopper of a Whale

Emergency room physicians or health care providers are a discrete breed – whales in a sea of fish. Emergency room doctors have – for the most part – been overlooked by the RAC auditors or TPE, ZPIC, or MAC auditors. Maybe it’s because, even RAC auditors have children or spouses that need ER services from time to time. Maybe it’s because ER doctors use so many different billers. Normally, an ER doctor doesn’t know which of his or her patients are Medicaid or Medicare. When someone is suffering from a a broken leg or heart attack, the ER doctor is not going to stop care to inquire whether the patient is insured and by whom. But should they? Should ER doctors have to ask patients their insurer? If the answer includes any sort of explanation that care differs depending on whether someone is covered by Medicare or Medicaid or has private insurance, then, sadly, the answer may be yes.

ER doctors travel to separate emergency rooms, which are owned by various and distinct entities, and rely on individual billing companies. They do not normally work at only one hospital. Thus, they do not always have the same billers. We all know that not all billers are created equal. Some are endowed with a higher understanding of billing idiosyncrasies than others.

For example, for CPT codes 99281-99285 – Hospital emergency department services are not payable for the same calendar date as critical care services when provided by the same physician or physician group with the same specialty to the same patient. 

We all know that all hospitals do not hire and implement the same billing computer software programs. The old adage – “you get what you pay for” – may be more true than we think. Recent articles purport that “the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care.” – Think a comment like that would red-flag ER doctors services by RAC, MAC and ZPIC auditors? The white whale may as well shoot a water spray 30 feet into the air.

Will auditing entities begin to watch ER billing more closely? And what are the consequences? When non-emergency health care providers are terminated by Medicare, Medicaid, or a MAC or MCO’s network, there is no emergency – by definition. Juxtapose, the need for ER health care providers. ER rooms cannot function with a shortage of  physicians and health care providers. Even more disturbing is if the termination is unwarranted and seemingly inconsequential – only affecting under 4 surgeries per month – but acts as the catalyst for termination of Medicare, Medicaid, and private payors across the board.

I have a client named Dr. Ishmael. His big fish became the MAC Palmetto – very suddenly. Like many ER docs, he rotates ERs. He provides services for Medicare, Medicaid, private pay, uninsured – it doesn’t matter to him, he is an ER doctor. He gets a letter from one MAC. In this case, it was Palmetto. Interestingly enough, Palmetto is his smallest insurance payor. Maybe 2 surgeries a month are covered by Palmetto. 90% of his services are provided to Medicaid patients. Not by his choice, but by demographics and circumstance. The letter from Palmetto states that he is being excluded from Palmetto’s Medicare network, effective in 10 days. He will also be placed on the CMS preclusion list in 4 months.

We appeal through Palmetto, as required. But, in the meantime, four other MACs, State Medicaid and BCBS terminate Dr. Ishmael’s billing privileges for Medicare and Medicaid based on Palmetto’s decision. Remember, we are appealing Palmetto’s decision as we believe it is erroneous. But because of Palmetto’s possibly incorrect decision to terminate Dr. Ishmael’s Medicare billing privileges, all of a sudden, 100% of Dr. Ishmael’s services are nonbillable and nonreimburseable…without Dr. Ishmael or the hospital ever getting the opportunity to review and defend against the otherwise innocuous termination decision.

Here, the hospital executives, along with legal counsel, schedule meetings with Dr. Ishmael. “They need him,” they say. “He is important,” they say. But he is not on the next month’s rotation. Or the next.

They say: “Come and see if ye can swerve me. Swerve me? ye cannot swerve me, else ye swerve yourselves! man has ye there. Swerve me?”

Billing audits on ER docs for Medicare/caid compliance are distinctive processes, separate from other providers’ audits. Most providers know the insurance of the patient to whom they are rendering services. Most providers use one biller and practice at one site. ER docs have no control over the choice of their billers. Not to mention, the questions arises, who gets to appeal on behalf the ER provider? Doesn’t the hospital reap the benefit of the reimbursements?

But one seemingly paltry, almost, minnow-like, audit by a cameo auditor can disrupt an entire career for an ER doc. It is imperative to act fast to appeal in the case of an ER doc.  But balance speed of the appeal with the importance of preparing all legal arguments. Most MACs or other auditing entities inform other payors quickly of your exclusion or termination but require you to put forth all arguments in your appeal or you could waive those defenses. I argue against that, but the allegations can exist nonetheless.

The moral of the story is ER docs need to appeal and appeal fast when billing privileges are restricted, even if the particular payor only constitutes 4 surgeries a month. As Herman Melville said: “I know not all that may be coming, but be it what it will, I’ll go to it laughing.” 

Sometimes, however, it is not a laughing matter. It is an appealable matter.

FACT SHEET: EXPANSION OF THE ACCELERATED AND ADVANCE PAYMENTS PROGRAM FOR PROVIDERS AND SUPPLIERS DURING COVID-19 EMERGENCY

CMS published the below fact sheet for providers yesterday (March 28, 2020).

In order to increase cash flow to providers of services and suppliers impacted by the 2019 Novel Coronavirus (COVID-19) pandemic, the Centers for Medicare & Medicaid Services (CMS) has expanded our current Accelerated and Advance Payment Program to a broader group of Medicare Part A providers and Part B suppliers. The expansion of this program is only for the duration of the public health emergency. Details on the eligibility, and the request process are outlined below.

The information below reflects the passage of the CARES Act (P.L. 116-136).

Accelerated/Advance Payments

An accelerated/advance payment is a payment intended to provide necessary funds when there is a disruption in claims submission and/or claims processing. These expedited payments can also be offered in circumstances such as national emergencies, or natural disasters in order to accelerate cash flow to the impacted health care providers and suppliers.

CMS is authorized to provide accelerated or advance payments during the period of the public health emergency to any Medicare provider/supplier who submits a request to the appropriate Medicare Administrative Contractor (MAC) and meets the required qualifications.

Eligibility & Process

Eligibility: To qualify for advance/accelerated payments the provider/supplier must:

1. Have billed Medicare for claims within 180 days immediately prior to the date of signature on the provider’s/supplier’s request form

2. Not be in bankruptcy,

3. Not be under active medical review or program integrity investigation, and

4. Not have any outstanding delinquent Medicare overpayments.

Amount of Payment: Qualified providers/suppliers will be asked to request a specific amount using an Accelerated or Advance Payment Request form provided on each MAC’s website. Most providers and suppliers will be able to request up to 100% of the Medicare payment amount for a three-month period. Inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals are able to request up to 100% of the Medicare payment amount for a six-month period. Critical access hospitals (CAH) can request up to 125% of their payment amount for a six-month period.

Processing Time: Each MAC will work to review and issue payments within seven (7) calendar days of receiving the request.

Repayment: CMS has extended the repayment of these accelerated/advance payments to begin 120 days after the date of issuance of the payment. The repayment timeline is broken out by provider type below:

o Inpatient acute care hospitals, children’s hospitals, certain cancer hospitals, and Critical Access Hospitals (CAH) have up to one year from the date the accelerated payment was made to repay the balance.

o All other Part A providers and Part B suppliers will have 210 days from the date of the accelerated or advance payment was made to repay the balance. The payments will be recovered according to the process described in number 7 below. •

Recoupment and Reconciliation: o The provider/supplier can continue to submit claims as usual after the issuance of the accelerated or advance payment; however, recoupment will not begin for 120 days. Providers/ suppliers will receive full payments for their claims during the 120-day delay period. At the end of the 120-day period, the recoupment process will begin and every claim submitted by the provider/supplier will be offset from the new claims to repay the accelerated/advanced payment. Thus, instead of receiving payment for newly submitted claims, the provider’s/supplier’s outstanding accelerated/advance payment balance is reduced by the claim payment amount. This process is automatic. o The majority of hospitals including inpatient acute care hospitals, children’s hospitals, certain cancer hospitals, and critical access hospitals will have up to one year from the date the accelerated payment was made to repay the balance. That means after one year from the accelerated payment, the MACs will perform a manual check to determine if there is a balance remaining, and if so, the MACs will send a request for repayment of the remaining balance, which is collected by direct payment. All other Part A providers not listed above and Part B suppliers will have up to 210 days for the reconciliation process to begin. o For the small subset of Part A providers who receive Period Interim Payment (PIP), the accelerated payment reconciliation process will happen at the final cost report process (180 days after the fiscal year closes). A step by step application guide can be found below. More information on this process will also be available on your MAC’s website.

Step-by-Step Guide on How to Request Accelerated or Advance Payment

1. Complete and submit a request form: Accelerated/Advance Payment Request forms vary by contractor and can be found on each individual MAC’s website. Complete an Accelerated/Advance Payment Request form and submit it to your servicing MAC via mail or email. CMS has established COVID-19 hotlines at each MAC that are operational Monday – Friday to assist you with accelerated payment requests. You can contact the MAC that services your geographic area.

To locate your designated MAC, refer to https://www.cms.gov/Medicare/Medicare-Contracting/Medicare-AdministrativeContractors/Downloads/MACs-by-State-June-2019.pdf.

CGS Administrators, LLC (CGS) – Jurisdiction 15 (KY, OH, and home health and hospice claims for the following states: DE, DC, CO, IA, KS, MD, MO, MT, NE, ND, PA, SD, UT, VA, WV, and WY) The toll-free Hotline Telephone Number: 1-855-769-9920 Hours of Operation: 7:00 am – 4:00 pm CT The toll-free Hotline Telephone Number for Home Health and Hospice Claims: 1-877-299- 4500 Hours of Operation: 8:00 am – 4:30 pm CT for main customer service and 7:00 am – 4:00 pm CT for the Electronic Data Interchange (EDI) Department

First Coast Service Options Inc. (FCSO) – Jurisdiction N (FL, PR, US VI) The toll-free Hotline Telephone Number: 1-855-247-8428 Hours of Operation: 8:30 AM – 4:00 PM ET

National Government Services (NGS) – Jurisdiction 6 & Jurisdiction K (CT, IL, ME, MA, MN, NY, NH, RI, VT, WI, and home health and hospice claims for the following states: AK, AS, AZ, CA, CT, GU, HI, ID, MA, ME, MI, MN, NH, NV, NJ, NY, MP, OR, PR, RI, US VI, VT, WI, and WA) The toll-free Hotline Telephone Number: 1-888-802-3898 Hours of Operation: 8:00 am – 4:00 pm CT

Novitas Solutions, Inc. – Jurisdiction H & Jurisdiction L (AR, CO, DE, DC, LA, MS, MD, NJ, NM, OK, PA, TX, (includes Part B for counties of Arlington and Fairfax in VA and the city of Alexandria in VA)) The toll-free Hotline Telephone Number: 1-855-247-8428 Hours of Operation: 8:30 AM – 4:00 PM ET

Noridian Healthcare Solutions – Jurisdiction E & Jurisdiction F (AK, AZ, CA, HI, ID, MT, ND, NV, OR, SD, UT, WA, WY, AS, GU, MP) The toll-free Hotline Telephone Number: 1-866-575-4067 Hours of Operation: 8:00 am – 6:00 pm CT

Palmetto GBA – Jurisdiction J & Jurisdiction M (AL, GA, NC, SC, TN, VA (excludes Part B for the counties of Arlington and Fairfax in VA and the city of Alexandria in VA), WV, and home health and hospice claims for the following states: AL, AR, FL, GA, IL, IN, KY, LA, MS, NM, NC, OH, OK, SC, TN, and TX) The toll-free Hotline Telephone Number: 1-833-820-6138 Hours of Operation: 8:30 am – 5:00 pm ET

Wisconsin Physician Services (WPS) – Jurisdiction 5 & Jurisdiction 8 (IN, MI, IA, KS, MO, NE) The toll-free Hotline Telephone Number: 1-844-209-2567 Hours of Operation: 7:00 am – 4:00 pm CT 4 | Page Noridian Healthcare Solutions, LLC – DME A & D (CT, DE, DC, ME, MD, MA, NH, NJ, NY, PA, RI, VT, AK, AZ, CA, HI, ID, IA, KS, MO, MT, NE, NV, ND, OR, SD, UT, WA, WY, AS, GU, MP) The toll-free Hotline Telephone Numbers: A: 1-866-419-9458; D: 1-877-320-0390 Hours of Operation: 8:00 am – 6:00 pm CT CGS Administrators, LLC – DME B & C (AL, AR, CO, FL, GA, IL, IN, KY, LA, MI, MN, MS, NM, NC, OH, OK, SC, TN, TX, VA, WI, WV, PR, US VI) The toll-free Hotline Telephone Numbers: B: 866-590-6727; C: 866-270-4909 Hours of Operation: 7:00 am – 4:00 pm CT

2. What to include in the request form: Incomplete forms cannot be reviewed or processed, so it is vital that all required information is included with the initial submission. The provider/supplier must complete the entire form, including the following:

  1. Provider/supplier identification information:
  2. Legal Business Name/ Legal Name;
  3. Correspondence Address;
  4. National Provider Identifier (NPI);
  5. Other information as required by the MAC.
  6. Amount requested based on your need.

Most providers and suppliers will be able to request up to 100% of the Medicare payment amount for a three-month period. However, inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals are able to request up to 100% of the Medicare payment amount for a six-month period. Critical access hospitals (CAH) can now request up to 125% of their payment amount for a six-month period.

7. Reason for request: i. Please check box 2 (“Delay in provider/supplier billing process of an isolated temporary nature beyond the provider’s/supplier’s normal billing cycle and not attributable to other third party payers or private patients.”); and ii. State that the request is for an accelerated/advance payment due to the COVID19 pandemic.

3. Who must sign the request form? The form must be signed by an authorized representative of the provider/supplier.

4. How to submit the request form: While electronic submission will significantly reduce the processing time, requests can be submitted to the appropriate MAC by fax, email, or mail. You can also contact the MAC provider/supplier helplines listed above.

5. What review does the MAC perform? Requests for accelerated/advance payments will be reviewed by the provider or supplier’s servicing MAC. The MAC will perform a validation of the following eligibility criteria:

  1. Has billed Medicare for claims within 180 days immediately prior to the date of signature on the provider’s or supplier’s request form,
  2. Is not in bankruptcy,
  3. Is not under active medical review or program integrity investigation,
  4. Does not have any outstanding delinquent Medicare overpayments.

6. When should you expect payment? The MAC will notify the provider/supplier as to whether the request is approved or denied via email or mail (based on the provider’s/supplier’s preference). If the request is approved, the payment will be issued by the MAC within 7 calendar days from the request.

7. When will the provider/supplier be required to begin repayment of the accelerated/ advanced payments? Accelerated/advance payments will be recovered from the receiving provider or supplier by one of two methods:

  1. For the small subset of Part A providers who receive Period Interim Payment (PIP), the accelerated payment will be included in the reconciliation and settlement of the final cost report.
  2. All other providers and suppliers will begin repayment of the accelerated/advance payment 120 calendar days after payment is issued.

8. Do provider/suppliers have any appeal rights? Providers/suppliers do not have administrative appeal rights related to these payments. However, administrative appeal rights would apply to the extent CMS issued overpayment determinations to recover any unpaid balances on accelerated or advance payments.

Coronavirus Shuts Down Courts

Coronavirus shuts down Courts across North Carolina. As of now, Superior and District Courts remain open…for now.

*My next blog will explore the new budget and emergency measures implemented for Medicare and Medicaid. More money will be funded to both during this crisis…TBD. How is the Coronavirus impacting health care?

The following emergency directive was initiated, effective TODAY.

On 10 March 2020, Governor Roy Cooper declared a state of emergency in North Carolina in response to the emerging public health threat posed by COVID-19. Since that time, the World Health Organization has designated the COVID-19 outbreak as a global pandemic, and the North Carolina Department of Health and Human Services has urged all North Carolinians to take steps to reduce the spread of infection. Accordingly, I hereby determine and declare under N.C.G.S. § 7A-39(b)(2) that catastrophic conditions resulting from the public health threat posed by COVID-19 exist in all counties of this state. Although the superior courts and district courts remain open, two emergency directives are necessary to reduce the spread of infection.

Emergency Directive 1

I order that all superior court and district court proceedings be scheduled or rescheduled for a date no sooner than 30 days from the issuance of this order, unless: 1. the proceeding will be conducted remotely; 2. the proceeding is necessary to preserve the right to due process of law (e.g., a first appearance or bond hearing, the appointment of counsel for an indigent defendant, a probation hearing, a probable cause hearing, etc.); 3. the proceeding is for the purpose of obtaining emergency relief (e.g., a domestic violence protection order, temporary restraining order, juvenile custody order, judicial consent to juvenile medical treatment order, civil commitment order, etc.); or 4. the senior resident superior court judge, chief business court judge, or chief district court judge determines that the proceeding can be conducted under conditions that protect the health and safety of all participants. This emergency directive does not apply to any proceeding in which a jury has already been empaneled. This emergency directive does not apply to grand juries which have already been empaneled. This emergency directive does not prohibit a judge or other judicial officer from exercising any in chambers or ex parte jurisdiction conferred by law upon that judge or judicial officer, as provided by law. Additionally, I encourage the superior courts and district courts to liberally grant additional accommodations to parties, witnesses, attorneys, and others with business before the courts who are at a high risk of severe illness from COVID-19.

Emergency Directive 2

I further order that the clerks of superior court shall post a notice at the entrance to every court facility in their county directing that any person who has likely been exposed to COVID-19 should not enter the courthouse. A person who has likely been exposed to COVID-19 who has business before the courts shall contact the clerk of superior court’s office by telephone or other remote means, inform court personnel of the nature of his or her business before the court, and receive further instruction. For purposes of this order, a person who has likely been exposed to COVID-19 is defined as any person who: 1. has traveled to China, South Korea, Japan, Italy, or Iran within the previous 14 days; 2. has been directed to quarantine, isolate, or self-monitor; 3. has been diagnosed with COVID-19; or 4. resides with or has been in close contact with any person in the above mentioned categories.

* * * The directives contained in this order will take effect Monday, 16 March 2020.

This order may be extended in whole or in part for additional 30-day periods if necessary.

Issued this the 13th day of March, 2020. Cheri Beasley, Chief Justice Supreme Court of North Carolina

State Agencies Must Follow the State Medicare Plan! Or Else!

Accused of an alleged overpayment? Scrutinize the Department’s procedure to determine that alleged overpayment. One step out of line (in violation of any pertinent rule) by the Department and the overpayment is dismissed.

Ask yourself: Did the State follow Medicare State Plan Agreement? (The Plan germane in your State).

In a Mississippi Supreme Court case, the Mississippi Department of Medicaid (“DOM”) alleged that a hospital owed $1.2226 million in overpayments. However, the Court found that DOM failed to follow proper procedure in assessing the alleged overpayment. Since the DOM failed to follow the rules, the $1.2226 million alleged overpayment was thrown out.

The Court determined that the DOM, the single state agency charged with managing Medicare and Medicaid, must follow all pertinent rules otherwise an alleged overpayment will be thrown out.

Two cases premised on the notion that the DOM must follow all pertinent rules were decided in MS – with polar opposite endings.

  • Crossgates River Oaks Hosp. v. Mississippi Div. of Medicaid, 240 So. 3d 385, 388 (Miss. 2018); and
  • Cent. Mississippi Med. Ctr. v. Mississippi Div. of Medicaid, No. 2018-SA-01410-SCT, 2020 WL 728806, at *2–3 (Miss. Feb. 13, 2020).

In Crossgates, the hospitals prevailed because the DOM had failed to adhere to the Medicare State Plan Agreement. Applying the same legal principles in Cent. MS Med. Ctr, the DOM prevailed because the DOM adhered to the Medicaid State Plan.

It is as simple as the childhood game, “Simon Says.” Do what Simon (State Plan) says or you will be eliminated.

Crossgates

In the 2018 MS Supreme Court case, the Court found that the MS Department failed to follow the Medicare State Plan Agreement in determining an overpayment for a provider, which meant that the overpayment alleged was arbitrary. The thinking is as follows: had the Department followed the rules, then there may not be an overpayment or the alleged overpayment would be a different amount. Since the Department messed up procedurally, the provider got the whole alleged overpayment dismissed from Court. It is the “fruit of the poisonous tree” theory. See Crossgates River Oaks Hosp. v. Miss. Div. of Medicaid, 240 So. 3d 385 (Miss. 2018).

While Courts generally afford great deference to an agency’s interpretation of its regulations, once the agency violates a procedural rule, it is not entitled to that deference. The Court found that the DOM’s interpretation of Attachment 4.19–B of the State Plan was inconsistent with the relevant regulation. Crossgates River Oaks Hosp. v. Mississippi Div. of Medicaid, 240 So. 3d 385, 388 (Miss. 2018).

Throughout these proceedings, the DOM never articulated an explanation for its failure to exclude the radiology and laboratory charges or for its use of a blended rate in place of actual costs, absent altering or amending the State Plan. The clear language of the State Plan establishes that DOM’s choice to reduce payments to the Hospitals was arbitrary, capricious, and not supported by substantial evidence.

Central MS Medical Center

Juxtapose the Central Mississippi Medical Center case, which, by the way has not been released for publication. Atop the header for the case is the following warning:

“NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.”

With that caveat, the MS Supreme Court held that Medicaid State Plans that are accepted by CMS reign supreme and must be followed. In this case, the MS State Plan required the DOM to use the Medicare Notice of Program Reimbursement (NPR) to establish the final reimbursement.

According to the Supreme Court, the agency followed the rules. Thus, the agency’s adverse determination was upheld. It does not matter what the adverse determination was – you can insert any adverse determination into the equation. But the equation remains stedfast. The State must follow the State Plan in order to validate any adverse decision.

Why Auditors Can’t be Unbiased

Last week on Monitor Mondays, Knicole Emanuel, Esq. reported on the case of Commonwealth v. Pediatric Specialist, PLLC, wherein the Recovery Audit Contractors’ (RACs’) experts were prohibited from testifying because they were paid on contingency. This means that the auditor (or the company for which they work) is paid some percentage of the overpayment findings it reports.

In this case, as in most nowadays, the overpayment estimate was based upon extrapolation, which means that the auditor extended the overpayment amount found in the sample to that of all claims within the universe from which the sample was drawn. I have written about this process before, but basically, it can turn a $1,500 overpayment on the sample into a $1.5 million overpayment demand.

The key to an effective extrapolation is that the statistical process is appropriate, proper, and accurate. In many audits, this is not the case, and so what happens is, if the provider believes that the extrapolation is not appropriate, they may choose to challenge the results in their appeal. Many times, this is when they will hire a statistician, like me, to review the statistical sampling and overpayment estimate (SSOE), including data and documentation to assist with the appeal. I have worked on hundreds of these post-audit extrapolation mitigation appeals over the years, and even though I am employed by the provider, I maintain a position as an independent fact-finder.  My reports are based on facts and figures, and my opinion is based on those findings. Period.

So, what is it that allows me to remain independent? To perform my job without undue influence or bias? Is it my incredibly high ethical standards? Check! My commitment to upholding the standards of my industry? Check!  Maybe my good looks? Well, not check! It is the fact that my fees are fixed, and are not contingent on the outcome. I mean, it would be great if I could do what the RACs do and cash in on the outcomes of a case, but alas, no such luck.

In one large class-action case in which I was the statistical expert, the defendant settled for $122 million. The law firm got something like a quarter or a third of that, and the class members all received some remuneration as well. Me? I got my hourly rate, and after the case was done, a bottle of Maker’s Mark whiskey as a thank you. And I’m not even sure that was appropriate, so I sent it back. I would love to be paid a percentage of what I am able to save a client in this type of appeal. I worked on a case a couple of years ago for which we were able to get the extrapolation thrown out, which reduced the payment demand from $5.9 million to $3,300. Imagine if I got paid even 2 percent of that; it would be nearly $120,000. But that can’t happen, because the moment my work product is tied to the results, I am no longer independent, nor unbiased. I don’t care how honest or ethical you are, contingency deals change the landscape – and that is as true for me, as an expert, as it is for the auditor.

In the pediatric case referenced above, the RAC that performed the audit is paid on a contingency, although I like to refer to it as a “bounty.” As such, the judge ruled, as Ms. Emanuel reported, that their experts could not testify on behalf of the RAC. Why not? Because the judge, unlike the RAC, is an independent arbiter, and having no skin in the game, is unbiased in their adjudication. But you can’t say that about the RAC. If they are being paid a “bounty” (something like 10 percent), then how in the world could they be considered independent and unbiased?

The short answer is, they can’t. And this isn’t just based on standards of statistical practice; it is steeped in common sense. Look at the appeal statistics; some 50 percent of all RAC findings are eventually reversed in favor of the provider. If that isn’t evidence of an overzealous, biased, bounty-hunting process, I don’t know what is. Basically, as Knicole reported, having their experts prohibited from testifying, the RAC was unable to contest the provider’s arguments, and the judge ruled in favor of the provider.

But, in my opinion, it should not stop here. This is one of those cases that exemplifies the “fruit of the poisonous tree” defense, meaning that if this case passes muster, then every other case for which the RAC did testify and the extrapolation held should be challenged and overturned. Heck, I wouldn’t be surprised if there was a class-action lawsuit filed on behalf of all of those affected by RAC extrapolated audits. And if there is one, I would love to be the statistical expert – but for a flat fee, of course, and not contingent upon the outcome.

And that’s the world according to Frank.

Frank Cohen is a frequent panelist with me on RACMonitor. I love his perspective on expert statistician witnesses. He drafted based off a Monitor Monday report of mine. Do not miss both Frank and me on RACMonitor, every Monday.

Inconsequential Medicare Audits Could Morph into a Whopper of a Whale

Emergency room physicians or health care providers are a discrete breed – whales in a sea of fish. Emergency room doctors have – for the most part – been overlooked by the RAC auditors or TPE, ZPIC, or MAC auditors. Maybe it’s because, even RAC auditors have children or spouses that need ER services from time to time. Maybe it’s because ER doctors use so many different billers. Normally, an ER doctor doesn’t know which of his or her patients are Medicaid or Medicare. When someone is suffering from a a broken leg or heart attack, the ER doctor is not going to stop care to inquire whether the patient is insured and by whom. But should they? Should ER doctors have to ask patients their insurer? If the answer includes any sort of explanation that care differs depending on whether someone is covered by Medicare or Medicaid or has private insurance, then, sadly, the answer may be yes.

ER doctors travel to separate emergency rooms, which are owned by various and distinct entities, and rely on individual billing companies. They do not normally work at only one hospital. Thus, they do not always have the same billers. We all know that not all billers are created equal. Some are endowed with a higher understanding of billing idiosyncrasies than others.

For example, for CPT codes 99281-99285 – Hospital emergency department services are not payable for the same calendar date as critical care services when provided by the same physician or physician group with the same specialty to the same patient. 

We all know that all hospitals do not hire and implement the same billing computer software programs. The old adage – “you get what you pay for” – may be more true than we think. Recent articles purport that “the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care.” – Think a comment like that would red-flag ER doctors services by RAC, MAC and ZPIC auditors? The white whale may as well shoot a water spray 30 feet into the air.

Will auditing entities begin to watch ER billing more closely? And what are the consequences? When non-emergency health care providers are terminated by Medicare, Medicaid, or a MAC or MCO’s network, there is no emergency – by definition. Juxtapose, the need for ER health care providers. ER rooms cannot function with a shortage of  physicians and health care providers. Even more disturbing is if the termination is unwarranted and seemingly inconsequential – only affecting under 4 surgeries per month – but acts as the catalyst for termination of Medicare, Medicaid, and private payors across the board.

I have a client named Dr. Ishmael. His big fish became the MAC Palmetto – very suddenly. Like many ER docs, he rotates ERs. He provides services for Medicare, Medicaid, private pay, uninsured – it doesn’t matter to him, he is an ER doctor. He gets a letter from one MAC. In this case, it was Palmetto. Interestingly enough, Palmetto is his smallest insurance payor. Maybe 2 surgeries a month are covered by Palmetto. 90% of his services are provided to Medicaid patients. Not by his choice, but by demographics and circumstance. The letter from Palmetto states that he is being excluded from Palmetto’s Medicare network, effective in 10 days. He will also be placed on the CMS preclusion list in 4 months.

We appeal through Palmetto, as required. But, in the meantime, four other MACs, State Medicaid and BCBS terminate Dr. Ishmael’s billing privileges for Medicare and Medicaid based on Palmetto’s decision. Remember, we are appealing Palmetto’s decision as we believe it is erroneous. But because of Palmetto’s possibly incorrect decision to terminate Dr. Ishmael’s Medicare billing privileges, all of a sudden, 100% of Dr. Ishmael’s services are nonbillable and nonreimburseable…without Dr. Ishmael or the hospital ever getting the opportunity to review and defend against the otherwise innocuous termination decision.

Here, the hospital executives, along with legal counsel, schedule meetings with Dr. Ishmael. “They need him,” they say. “He is important,” they say. But he is not on the next month’s rotation. Or the next.

They say: “Come and see if ye can swerve me. Swerve me? ye cannot swerve me, else ye swerve yourselves! man has ye there. Swerve me?”

Billing audits on ER docs for Medicare/caid compliance are distinctive processes, separate from other providers’ audits. Most providers know the insurance of the patient to whom they are rendering services. Most providers use one biller and practice at one site. ER docs have no control over the choice of their billers. Not to mention, the questions arises, who gets to appeal on behalf the ER provider? Doesn’t the hospital reap the benefit of the reimbursements?

But one seemingly paltry, almost, minnow-like, audit by a cameo auditor can disrupt an entire career for an ER doc. It is imperative to act fast to appeal in the case of an ER doc.  But balance speed of the appeal with the importance of preparing all legal arguments. Most MACs or other auditing entities inform other payors quickly of your exclusion or termination but require you to put forth all arguments in your appeal or you could waive those defenses. I argue against that, but the allegations can exist nonetheless.

The moral of the story is ER docs need to appeal and appeal fast when billing privileges are restricted, even if the particular payor only constitutes 4 surgeries a month. As Herman Melville said: “I know not all that may be coming, but be it what it will, I’ll go to it laughing.” 

Sometimes, however, it is not a laughing matter. It is an appealable matter.

Are ALJ Appointed Properly, per the Constitution?

A sneaky and under-publicized matter, which will affect every one of you reading this, slid into common law last year with a very recent case, dated Jan. 9, 2020, upholding and expanding the findings of a 2018 case, Lucia v. SEC, 138 S. Ct. 2044 (U.S. 2018). In Lucia, the Supreme Court upheld the plain language of the U.S. Constitution’s Appointments Clause.

The Appointments Clause prescribes the exclusive means of appointing “officers.” Only the President, a court of law, or a head of department can do so. See Art. II, § 2, cl. 2.

In Lucia, the sole issue was whether an administrative law judge (ALJ) can be appointed by someone other than the President or a department head under Article II, §2, cl. 2 of the U.S. Constitution, or whether ALJs simply federal employees. The Lucia court held that ALJs must be appointed by the President or the department head; this is a non-delegable duty. The most recent case, Sara White Dove-Ridgeway v. Nancy Berrryhill, 2020 WL 109034, (D.Ct.DE, Jan. 9, 2020), upheld and expanded Lucia.

ALJs are appointed. In many states, ALJs are direct employees of a single state agency. In other words, in many states, about half, the payroll check that an ALJ receives bears the emblem of the department of health for that state. I have litigated in administrative courts in approximately 33 states, and have seen my share of surprises. In one case, many years ago, LinkedIn informed me that my appointed ALJ was actually a professional photographer by trade.

Lucia, however, determined that ALJs at the Securities and Exchange Commission (SEC) were “officers of the United States,” subject to the Appointment Clause of the Constitution, which requires officers to be appointed by the president, the heads of departments, or the courts. The court’s decision raised concern at the U.S. Department of Health and Human Services (HHS) because its ALJs had not been appointed by the secretary, but rather by lower agency officials.

The court also held that relief should be granted to “one who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case.” Whether that relief is monetary, in the form of attorneys’ fees reimbursed or out-of-pocket costs, it is unclear.

In July 2018, President Trump’s Executive Order 13843 excepted ALJs from the competitive service, so agency heads, like HHS Secretary Alex Azar, could directly select the best candidates through a process that would ensure the merit-based appointment of individuals with the specific experience and expertise needed by the selecting agencies.

The executive order also accepted all previously appointed ALJs. So there became a pre-July 16, 2018, challenge and a post-July 16, 2018, based on Trump’s Executive Order. Post-July 16, 2018, appointees had to be appointed by the President or department head. But the argument could be made that ALJs appointed pre-July 16, 2018, were grandfathered into the more lax standards. In Dove-Ridgway, Social Security benefits were at issue. On July 5, 2017, ALJ Jack S. Pena found a plaintiff not disabled. On Jan. 7, 2019, the plaintiff filed an appeal of the ALJ’s decision, seeking judicial review from the district court. In what seems to be the fastest decision ever to emerge from a court of law, two days later, a ruling was rendered. The District Court found that even though at the time of the administrative decision, Lucia and Trump’s Executive Order had not been issued, the court still held that the ALJ needed to have been appointed constitutionally. It ordered a remand for a rehearing before a different, constitutionally appointed ALJ, despite the fact that Trump had accepted all previously appointed ALJs.

In this firsthand, post-Jan. 9, 2020, era, we have an additional defense against Medicare or Medicaid audits or alleged overpayments in our arsenal: was the ALJ appointed properly, per the U.S. Constitution?

Programming Note: Listen to Knicole Emanuel’s live reports on Monitor Monday, 10-10:30 a.m. EST.

As seen on RACMonitor.

Fifth Circuit Rules Individual Mandate Unconstitutional but Leaves ACA’s Fate Uncertain

Extra, extra, read all about it: Breaking News!

In a 2-1 decision issued December 18, a Fifth Circuit panel held that the individual mandate under the Affordable Care Act (ACA) is unconstitutional after Congress zeroed out the penalty in tax reform legislation.

Although the ruling was a victory for the 18 Republican-led states that initiated the challenge to the ACA, the appeals court side-stepped the critical issue of severability—i.e., whether other parts of the sprawling health care law could stand without the mandate—remanding to the district court for further proceedings.

In December 2018, U.S. District Court for the Northern District of Texas Judge Reed O’Connor ruled that no part of the ACA could stand after the Tax Cuts and Jobs Act (TCJA) essentially eliminated the ACA’s “shared responsibility payment” for failing to comply with the mandate to buy insurance. The judgment was stayed pending appeal.

As a practical matter, the panel decision maintains the status quo and prolongs the litigation, likely leaving a final resolution of the ACA’s fate until after the 2020 elections.

California Attorney General Xavier Becerra, who headed the coalition of mostly Democratic-led states that intervened to defend the law, said California “will move swiftly to challenge this decision.”

“For now, the President got the gift he wanted—uncertainty in the healthcare system and a pathway to repeal—so that the healthcare that seniors, workers and families secured under the Affordable Care Act can be yanked from under them,” Becerra said in a statement.

Texas Attorney General Ken Paxton applauded the panel’s decision, saying the opinion recognized “that the only reason the Supreme Court upheld Obamacare in 2012 was Congress’ taxing power, and without the individual mandate’s penalty, that justification crumbled.”

Judge Jennifer Walker Elrod, who President George W. Bush appointed to the Fifth Circuit, wrote the majority opinion, which was joined by Judge Kurt D. Englehardt, an appointee of President Donald Trump. The third panel member, Judge Carolyn Dineen King, was appointed by President Jimmy Carter, dissented.

The appeals court first concluded that the individual plaintiffs, the 18 plaintiff states, and the intervening states all had standing, an issue that the parties debated during oral arguments in July.

On the merits, the majority held once Congress zeroed out the shared responsibility payment, the individual mandate could no longer be upheld as a tax as it was under the Supreme Court’s decision in Nat’l Fed. of Independent Bus. v. Sebelius, 567 U.S. 519 (2012).

After finding the individual mandate was unconstitutional, the majority declined to resolve whether, or how much, of the ACA could stand on its own.

Instead, the appeals court remanded to the district court to determine “with more precision what provisions of the post-2017 ACA are indeed inseverable from the individual mandate.” The appeals court also told the lower court to consider the federal government’s “newly-suggested relief of enjoining the enforcement only of those provisions that injure the plaintiffs or declaring the Act unconstitutional only as to the plaintiff states and the two individual plaintiffs.”

The complexity of the ACA statutory scheme, which includes provisions regulating insurance, amending Medicare, funding preventative health care programs, enacting antifraud requirements, and establishing or expanding drug regulations, requires “a careful, granular approach” for determining severability, which the majority was not satisfied O’Connor had done.

In the majority’s view, O’Connor’s decision was incomplete because it didn’t sufficiently address the intent of the 2017 Congress in zeroing out the penalty in the TCJA. Nor did O’Connor parse “through the over 900 pages of the post-2017 ACA, explaining how particular segments are inextricably linked to the individual mandate.”

The appeals court therefore remanded with instructions for the district court “to employ a finer-toothed comb . . . and conduct a more searching inquiry into which provisions of the ACA Congress intended to be inseverable from the individual mandate.”

In her dissent, Judge King argued that by refusing to address severability, which in her view was plain given that Congress in 2017 removed the individual mandate’s enforcement mechanism while leaving the remaining provisions of the ACA intact, the majority “unnecessarily prolong[s] this litigation and the concomitant uncertainty over the future of the healthcare sector.”

King said she would vacate the district court’s order because none of the plaintiffs had standing to challenge the coverage requirement, would conclude that the coverage requirement is constitutional without the enforcement mechanism, and would find, in any event, the provision “entirely severable” from the remainder of the ACA.

Texas v. United States, No. 19-10011 (5th Cir. Dec. 18, 2019).

Article from American Health Lawyers Association.

New Mexico Settlement…Six Years Later!

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For the full press release.

This New Mexico settlement…What a long strange trip it’s been!

The litigation started in 2013 (six years ago). I was a partner at another Raleigh, NC law firm. Out of the blue, a woman called me from New Mexico and asked whether I would be willing to fly to New Mexico to testify before the General Assembly regarding Public Consulting Group (PCG) and the company’s extrapolation and audit history.

See blog, blog, and blog.

I did. I testified before the NM General Assembly’s subcommittee for behavioral health care. Sitting next to me was a gentleman from PCG. He happened to be the team leader (not sure what his exact title was) for PCG’s audits in NM and NC. In his defense, he graciously sat there and testified against me while I told some horror stories of PCG audits. See blog.

I met the 15 behavioral health care providers’ CEOs who were accused of credible allegations of fraud. Their stories were so emotional and heart-tugging. These people had dedicated their lives and careers to New Mexico’s most needy population – those on Medicaid and suffering from mental health, substance abuse, and/or developmental disabilities – not for money, but because they cared. Then June 24, 2013, the State of New Mexico accused them all of credible allegations of fraud. NM’s proof? A PCG audit that found no credible allegations of fraud. But Human Services Department (HSD) instructed PCG to remove “no credible allegations of fraud,” and HSD referred the audits to the Attorney General (AG) claiming that credible allegations of fraud existed. Sound like a movie? It could be; it is a conspiracy theory story along the lines of Area 51. Is it a coincidence that Area 51 and the NM behavioral health care debacle both occurred in NM?

I’d like to get some sleep before I travel
But if you got a warrant, I guess you’re gonna come in.” – Grateful Dead

A timeline of the events, starting in 2013, has been memorialized by multiple news organizations. See Timeline.

“June 24 — An audit paid for by the New Mexico Human Services Department and conducted by Public Consulting Group (PCG) finds that nearly $33.8 million in Medicaid overpayments were made to 15 behavioral health providers in the state.

June 24 — New Mexico Human Services Department notifies the 15 behavioral health providers that there is a “credible allegation of fraud for which an investigation is pending,” and immediately suspends all Medicaid payments.

June 25 — Officials with the New Mexico Human Services Department send initial contracts to five Arizona companies: Agave Health Inc.Valle Del SolLa Frontera Inc.Southwest Network Inc., and Turqouise Health and Wellness, Inc., to temporarily take over New Mexico behavioral health organizations for a combined price tag of $17.85 million. It’s estimated the move will impact about 30,000 patients. From a July 18 email: “I am following up on the proposed contract between HSD and Open Skies Healthcare (affiliated with Southwest Network, located in Phoenix). On July 3, 2013, I responded to Larry’s [Heyeck, Deputy General Counsel for HSD] June 25 email concerning the contract…”

July 17 – Eight agencies go to U.S. District Court to restore funding.

July 25 – A memo generated by one of the 15 affected providers, TeamBuilders, indicates it will stop taking new clients.

July 25 – A state district judge turns the PCG audit over to New Mexico State Auditor Hector Balderas, and orders the audit protected from public disclosure.

Aug. 21 – In a 15-1 vote New Mexico’s Legislative Finance Committee objects to the Human Services Department moving $10 million from it’s budget to pay Arizona agencies to take over New Mexico providers due to concerns over secrecy surrounding the process.

Aug. 27 – New Mexico In Depth and the Las Cruces Sun-Newsfile a lawsuit demanding the public release of the PCG audit.

Aug. 28 – Federal officials hold conference call to hear about widespread disruptions to clients of behavioral health providers in transition.

Aug. 29 – An Inspection of Public Records Act request filed by KUNM reveals contract communications between New Mexico Human Services Department officials and Arizona providers as early as May 29, a full month before the audit was released by Public Consulting Group.

Sept. 3 – Public Consulting Group representative Thomas Aldridge tells the New Mexico Legislative Behavioral Health Subcommittee that he helped state officials vet at least one Arizona firm before it even began its audit of agencies in the state.

Sept. 3 — Lawyer Knicole Emanuel testifies to ongoing problems with PCG audits conducted in North Carolina as well as lawsuits triggered by PCG activities. “In some of the PCG audits that I have encountered, PCG has said the Medicaid provider owes $700,000, $800,000, $1.5 million, these exorbitant amounts, and at the end of the day when they look at all the documents, it goes down to like $200 or $300.”

Sept. 10 – The Santa Fe New Mexican reports that political ads defending Gov. Susana Martinez have begun rolling out, framing the behavioral health takeover as a crackdown on Medicaid fraud.”

I litigated 4 administrative appeals. Even after the NM AG came out and stated that there was no fraud, HSD accused the providers of owing alleged overpayments, some upwards of $12 million. These amounts were extrapolated.

In the very first administrative appeal, for The Counseling Center, the extrapolation expert was one of HSD’s attorneys. Upon questions regarding his extrapolation and statistical experience and the foundation for his expertise, he testified that took a class on statistics in college. I guess I could be a bowling expert.

PCG only testified in the first two administrative appeals. I guess after PCG testified that they were never given the opportunity to finish their audit due to HSD and that PCG found no fraud, but HSD removed that language from the report, HSD smartened up and stopped calling PCG as a witness. PCG certainly was not bolstering HSD’s position.

For three of the administrative appeals, we had the same administrative law judge (ALJ), who appeared to have some experience as an ALJ. For one of the appeals, we had a younger gentleman as the ALJ, who, according to LINKEDIN, was a professional photographer.

About 5 years after the accusations of fraud, the AG came out and exonerated all the providers. Apparently, there never was any fraud. Only accusations. These exonerations, however, did not stop the allegations of overpayments to HSD. The exonerations also did not stop these companies from going out of business, being tried as fraudsters in the eyes of the public, losing their companies, firing staff, closing their doors, and losing everything.

This was all done under the administration of Susana Martinez – not saying that politics played a huge role in the act of overthrowing these providers.

The providers all appealed their alleged overpayments and filed a lawsuit against HSD and the State for damages suffered from the original allegation of fraud that was found to be meritless.

After an election and a new administration took control, the State of New Mexico settled with the providers, as you can see from the above press release.

FYI building in Las Cruces, NM.

During the long journey over the past 6 years, one of the CEOs, Jose Frietz, passed away. He had started his company Families & Youth, Inc. in 1977. A month before he died on March 2, 2016, the AG exonerated FYI.

In 2013, Larry Heyeck was one of the attorneys for HSD. Multiple times during the witch hunt for Medicaid fraud, it appeared that Heyeck had some sort of personal vendetta against the 15 providers. According to one article, “Heyeck singled out Roque Garcia, former acting CEO of Southwest Counseling Services (Las Cruces), who was a recipient of the payments and asked legislators, “What does this mean? How can this money be accounted for to ensure that it isn’t used for private benefit?” Heyeck then asserted that Garcia had abused agency travel funds largely paid for by Medicaid through lavish travel to resort destinations in a private aircraft.”

Garcia wasn’t the only provider accused of misappropriating Medicaid funds. Shannon Freedle and his wife Lorraine were ostracized for having their abode in Hawaii.

Larry Heyeck, had an article published in the December 2012’s American Bar Association’s “The Health Lawyer” discussing the effect of 42 CFR 455.23 on Medicaid fraud and suspensions of Medicaid reimbursements. It was entitled, “Medicaid Payment Holds Due to Credible Allegations of Fraud.” Seem apropos?

By 2016, all 15 providers were cleared of allegations of fraud, but most were out of business.

Now – December 4, 2019 – a press release is disseminated to show that the last of the providers settled with the State of New Mexico. What the press release fails to express is the struggle, the financial and non-financial damages, the emotional turmoil, and the devastation these companies have endured over the past 6 years. No amount of money could ever right their catastrophic, past 6-years or the complete demise of their companies based on erroneous allegations of fraud.

Sometimes the light’s all shinin’ on me; Other times, I can barely see; Lately, it occurs to me; What a long, strange trip it’s been.” – Grateful Dead