Category Archives: Due process

NC Medicaid Dentists: June 12, 2018, Is Recoupment Day

June 12, 2018, is…

the 163rd day of the year. There will be 202 days left in 2018. It is the 24th Tuesday and the 85th day of spring. It is the Filipino Independence Day. And it is Recoupment Day for 80% or more of NC Medicaid dentists.

DHHS sent an important message to The Society of Oral and Maxillofacial Surgeons that 80% of dentists who accept Medicaid will be undergoing a recoupment – some for over $25,000. But for claims for dates of service 2013 and 2014. Claims that are 4 and 5 years old! Here is the message:

Please read the following email from Dr. Mark Casey with DMA regarding upcoming recoupment of funds from dentists:

Over a year ago, the Division of Medical Assistance (DMA) and our fiscal agent, CSRA, identified defects in NCTracks that had resulted in overpayments to enrolled dental providers in 2013-2014. DMA has been working on a plan to implement two (2) NCTracks system recoupments (claims reprocessing) that will affect a fairly large number of providers. We believe that giving the NCSOMS, other dental professional organizations and our enrolled dental providers plenty of advance notice prior to the recoupment date is a good idea. The number of providers impacted will not be as large as the Medicaid for Pregnant Women (MPW) recoupment of 2015.  You will find a summary of the notice below that will be sent to dental professional membership organizations as well as the two dental schools in the state.

DMA has gone through a lengthy process of identifying all providers who received overpayments and developing a plan for the NCTracks system recoupment.

I have seen the list of providers affected and we expect that a large majority (around 80%) will be able to repay the overpayment in one checkwrite based on their past claims activity. There will be some practices/providers who will be responsible for amounts approaching $25,000 or more. Practices with multiple offices will have multiple amounts recouped based on the multiple organization NPIs used for billing for each office. As you can see from the list of CDT codes that were overpaid below – diagnostic/preventive, restorative, denture repairs, extraction and the expose and bond codes (procedure codes where tooth numbers were reported and tooth surfaces were either reported or not reported) — we expect that general dentists, pediatric dentists and oral surgeons will be the dental provider types most affected by this recoupment.

As I indicated above, the messages that the dental professional organizations and the individual providers will be receiving over the next week or so will offer more detail than this email notice from me. If you have any questions or concerns regarding my email, please do not hesitate to contact me.

Mark W. Casey DDS, MPH

Dental Officer
Division of Medical Assistance
North Carolina Department of Health and Human Services
919 855-4280 office
Mark.Casey@dhhs.nc.gov

Reprocessing of Dental Claims for Overpayment

Issue:  Some dental claims that processed in NCTracks beginning July 1, 2013 through April 20, 2014 paid incorrectly resulting in overpayments to providers.

Duplicate dental claims that included a tooth number and no tooth surface such as procedure codes D0220, D0230, D1351, D2930, D2931, D2932, D2933, D2934, D3220, D3230, D3240, D3310, D3320, D3330, D5520, D5630, D5640, D5650, D5660, D7111, D7140, D7210, D7220, D7230, D7240, D7241, and D7250, D7280, and D7283 processed and paid incorrectly in NCTracks between July 1, 2013, and April 20, 2014.

Additionally, duplicate dental claims for restorative services that included a tooth number and one or more tooth surfaces such as procedure codes D2140, D2150, D2160, D2161, D2330, D2331, D2332, D2335, D2391, D2392, D2393, and D2394 processed and paid incorrectly in NCTracks between July 1, 2013 through October 14, 2013.

Based on NC Medicaid billing guidelines, these duplicate claims should have denied.  This caused an overpayment to providers.

Action: Duplicate dental claims identified with the two issues documented will be recouped and reprocessed in NCTracks to apply the duplicate editing correctly.  Any overpayments identified will be recouped.

Timing: Applicable dental claims will be reprocessed in the June 12, 2018, checkwrite to recoup the overpayments.

Remittance Advice: Reprocessed claims will be displayed in a separate section of the paper Remittance Advice with the unique Explanation of Benefits (EOB) code 10007 ‘DENTAL CLAIM REPROCESSED DUE TO PREVIOUS DUPLICATE PAYMENT’. The 835 electronic transactions will include the reprocessed claims along with other claims submitted for the checkwrite (there is no separate 835 for these reprocessed claims.)

Can DHHS recoup claims that are 4 and 5 years old? How about a mass recoupment without any details as to the reasons for the individual claims being recouped? How about a mass recoupment with no due process?

While we do not have a definitive answer from our court system, my answer is a resounding, “No!

 

 

Minor Documentation Errors, But Being Accused of a Medicare or Medicaid Overpayment? Not So Fast!!

In a January 11, 2018, opinion, a district court in Florida held that once the government learns of possible regulatory noncompliance or mistakes in billings Medicare or Medicaid, but continues to reimburse the provider for later claims – the fact that the government continues to reimburse the provider – can be evidence in court that the alleged documentation errors are minor and that, if the services are actually rendered, despite the minor mistakes, the provider should not be liable under the False Claims Act.

What?

Here is an example: Provider Smith undergoes a post-payment review of claims from dates of service January 1, 2016 – January 1, 2017. It is February 1, 2018. Today, Smith is told by the RAC auditor that he owes $1 million. Smith appeals the adverse decision. However, despite the accusation of $1 million overpayment, Smith continues providing medically necessary services the exact same way, he did in 2016. Despite the supposed outcome of the post-payment review, Smith continues to bill Medicare and Medicaid for services rendered in the exact same way that he did in 2016.

At least, according to UNITED STATES OF AMERICA AND STATE OF FLORIDA v. SALUS REHABILITATION, LLC, if Smith continues to be reimbursed for services rendered, this continued reimbursement can be evidence in court that Smith is doing nothing wrong.

Many of my clients who are undergoing post-payment or prepayment reviews decrease or cease all together billing for future services rendered. First, and obviously, stopping or decreasing billings will adversely affect them. Many of those clients will be financially prohibited from defending the post or prepayment review audit because they won’t have enough funds to pay for an attorney. Secondly, and less obvious, at least according to the recent decision in Florida district court mentioned above, continuing to bill for and get reimbursed fo services rendered and billed to Medicare and/or Medicaid can be evidence in court that you are doing nothing wrong.

The facts of the Salus Rehabilitation case, are as follows:

A former employee of a health care system comprising of 53 specialized nursing facilities (“Salus”) filed a qui tam claim in federal court asserting that Salus billed the government for unnecessary, inadequate, or incompetent service.

Break from the facts of the case to explain qui tam actions: A former employee who brings a qui tam action is called the “relator.” In general, the reason that former employees bring qui tam cases is money. Relators get anywhere between 15 -30 % of the award of damages. Many qui tam actions result in multi million dollar awards in damages – meaning that a relator can get rich quickly by tattling on (or accusing) a former employer. Qui tam actions are jury trials (why this is important will be explained below).

Come and listen to a story ’bout a man named Jed
Poor mountaineer barely kept his family fed
Then one day he was shooting for some food,
And up through the ground come a bubbling crude
(Oil that is, black gold, Texas tea)

In the Salus case, the relator (Jed) asserted that Salus failured to maintain a “comprehensive care plan,” ostensibly required by a Medicaid regulation and that this failure rendered Salus’ Medicaid claims fraudulent. Also, Jed asserted that a handful of paperwork defects (for example, unsigned or undated documents) demonstrated that Salus never provided the therapy purported by the paperwork and billed to Medicare. Jed won almost $350 million based on the theory “that upcoding of RUG levels and failure to maintain care plans made [the defendants’] claims to Medicare and Medicaid false or fraudulent.”  Oil, that is, black gold, Texas tea. You know Jed was celebrating like it was 1999.

Salus did not take it lying down.

The jury had awarded Jed $350 million. But in the legal world there is a legal tool if a losing party believes that the jury rendered an incorrect decision. It is called a Judgment as a Matter of Law. When a party files a Motion for Judgment as a Matter of Law, it is decided by the standard of whether a reasonable jury could find in favor of the party opposing the Motion, but it is decided by a judge.

In Salus, the Judge found that the verdict awarding Jed of $350 million could not be upheld. The Judge found that Jed’s burden was to show that the federal government and the state government did not know about the alleged record-keeping deficiencies but, had the governments known, the governments would have refused to pay Salus for services rendered, products delivered, and costs incurred. The Judge said that the record was deplete of any evidence that the governments would have refused to pay Salus. The Judge went so far to say that, theoretically, the governments could have implemented a less severe punishment, such as a warning or a plan or correction. Regardless, what the government MAY have done was not in the record. Specifically, the Judge held that “The resulting verdict (the $350 million to Jed), which perpetrates one of the forbidden “traps, zaps, and zingers” mentioned earlier, cannot stand. The judgment effects an unwarranted, unjustified, unconscionable, and probably unconstitutional forfeiture — times three — sufficient in proportion and irrationality to deter any prudent business from providing services and products to a government armed with the untethered and hair-trigger artillery of a False Claims Act invoked by a heavily invested relator.”

Wow. In other words, the Judge is saying that the verdict, which awarded Jed $350 million, will cause health care providers to NOT accept Medicare and Medicaid if the government is allowed to call every mistake in documentation “fraud,” or a violation of the False Claims Act. The Judge was not ok with this “slippery slope” result. Maybe he/she depends on Medicare…maybe he/she has a family member dependent on Medicaid…who knows? Regardless, this a WIN for providers!!

Legally, the Judge in Salus hung his hat on Universal Health Services, Inc. v. Escobar, 136 S. Ct. 1989 (2016), a Supreme Court case. In Escobar, the Supreme Court held that nit-picky documentation errors are not material and that materiality is required to condemn a provider under the False Claims Act. Escobar “necessarily means that if a service is non-compliant with a statute, a rule, or a contract; if the non-compliance is disclosed to, or discovered by, the United States; and if the United States pays notwithstanding the disclosed or discovered non-compliance, the False Claims Act provides a relator no claim for “implied false certification.”” (emphasis added). In other words, keep billing. If you are paid, then you can use that as evidence in court.

Escobar specifies that a “rigorous” and “demanding” standard for materiality and scienter precludes a False Claims Act claim based on a “minor or unsubstantial” or a “garden-variety” breach of contract or regulatory violation. Instead, Escobar assumes and enforces a course of dealing between the government and a supplier of goods or services that rests comfortably on proven and successful principles of exchange — fair value given for fair value received. Get it?? This is the first time that I have seen a judge be smart and intuitive enough to say – hey – providers are not perfect…and that’s ok. Providers may have insignificant documentation errors. But it is fundamentally unfair to prosecute a provider under the False Claims Act, which the Act is extraordinarily harsh and punitive, for minor, “garden variety” mistakes.

Granted, Salus was decided with a provider being prosecuted under the False Claims Act and not being accused of a pre or post-payment review finding of alleged overpayment.

But, isn’t it analogous?

A provider being accused that it owes $1 million because of minor documentation errors – but did actually provide the medically necessary services – should be afforded the same understanding that Salus was afforded. The mistakes need to be material. Minor mistakes should not be reasons for a 100% recoupment. Because there must be a course of dealing between the government and a supplier of goods or services that rests comfortably on proven and successful principles of exchange — fair value given for fair value received.

Oil has dried up, Jeb.

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.

 

Screen Shot 2018-01-22 at 5.19.57 PM

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.

 

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.

Inpatient Rehabilitation Facility Stay Claim Denials – Appeal Those Findings!

Centers for Medicare & Medicaid Services (CMS) created a new page on its Recovery Audit Contractor (RAC) website entitled “Provider Resources.” CMS indicated that it will post on this page any new issues the RACs have proposed to audit and are being evaluated by CMS for approval. It is like a glimpse behind the curtain to see the Great Oz. This is a fantastic resource for providers.  CMS posts a list of review topics that have been proposed, but not yet approved, for RACs to review. You can see the future!

Topics proposed for future audits:

  • Inpatient Rehabilitation Facility (IRF) Stays: Meeting Requirements to be considered Reasonable and Necessary;
  • Respiratory Assistive Devices: Meeting Requirements to be considered Reasonable and Necessary;
  • Excessive or Insufficient Drugs and Biologicals Units Billed;
  • E&M Codes billed within a Procedure Code with a “0” Day Global Period (Endoscopies or some minor surgical procedures);
  • E&M Codes billed within a Procedure Code with a “10” Day Global Period (other minor procedures);
  • E&M Codes billed within a Procedure Code with a “90” Day Global Period (major surgeries);

Over the next few weeks, intermittently (along with other blog posts), I will tackle these, and other, hot RAC audit topics.

IRFs are under fire in North Carolina, South Carolina, Virginia, and West Virginia!

Many patients with conditions like stroke or brain injury, who need an intensive medical rehabilitation program, are transferred to an inpatient rehabilitation facility.

Palmetto, one of Medicare’s MACs, conducted a prepayment review of IRFs in these four states. The results were bleak, indeed, and will, most likely, spur more audits of IRFs in the future. If you are a Medicare provider within Palmetto’s catchment area, then you know that Palmetto conducts a lot of targeted prepayment review. Here is a map of the MAC jurisdictions:

medicaremac

You can see that Palmetto manages Medicare for North Carolina, South Carolina, West Virginia, and Virginia. So Palmetto’s prepayment review covered its entire catchment area.

North Carolina Results A total of 28 claims were reviewed with 19 of the claims either completely or partially denied. The total dollars reviewed was $593,174.60 of which $416,483.42 was denied, resulting in a charge denial rate of 70.2 percent.

South Carolina Results A total of 24 claims were reviewed with 16 of the claims either completely or partially denied. The total dollars reviewed was $484,742.68 of which $325,266.43 was denied, resulting in a charge denial rate of 67.1 percent.

West Virginia Results
A total of two claims were reviewed with two of the claims either completely or partially denied. The total dollars reviewed was $32,506.21 of which $32,506.21 was denied, resulting in a charge denial rate of 100 percent.

Virginia Results
A total of 39 claims were reviewed with 31 of the claims either completely or partially denied. The total dollars reviewed was $810,913.83 of which $629,118.08 was denied, resulting in a charge denial rate of 77.6 percent.

In all 4 states, the most cited denial code was “5J504,” which means that “need for service/item not medically and reasonably necessary.” Subjective, right? I mean, who is better at determining medical necessity: (1) the treating physician who actually performs services and conducts the physical; or (2) a utilization auditor without an MD and who as never rendered medical services on the particular consumer? I see it all the time…former dental hygienists review the medical records of dentists and determine that no medial necessity exists…

When it comes to IRF Stays, what is reasonable and necessary?

According to Medicare policy and CMS guidance, the documentation in the patient’s IRF
medical record must demonstrate a reasonable expectation that the following criteria were met at the time of admission to the IRF. The patient must:

  • Require active and ongoing intervention of multiple therapy disciplines (Physical
    Therapy [PT], Occupational Therapy [OT], Speech-Language Pathology [SLP], or
    prosthetics/orthotics), at least one of which must be PT or OT;
  • Require an intensive rehabilitation therapy program, generally consisting of:
    ◦ 3 hours of therapy per day at least 5 days per week; or
    ◦ In certain well-documented cases, at least 15 hours of intensive rehabilitation
    therapy within a 7-consecutive day period, beginning with the date of admission;
  • Reasonably be expected to actively participate in, and benefit significantly
    from, the intensive rehabilitation therapy program (the patient’s condition and
    functional status are such that the patient can reasonably be expected to make
    measurable improvement, expected to be made within a prescribed period of time
    and as a result of the intensive rehabilitation therapy program, that will be of practical value to improve the patient’s functional capacity or adaptation to impairments);
  • Require physician supervision by a rehabilitation physician, with face-to-face
    visits at least 3 days per week to assess the patient both medically and functionally
    and to modify the course of treatment as needed; and
  • Require an intensive and coordinated interdisciplinary team approach to the
    delivery of rehabilitative care.

Did you notice how often the word “generally” or “reasonably” was used? Because the standard for an IRF stay is subjective. In fact, I would wager a bet that if I reviewed  the same documentation as the Palmetto auditors did, that I could make a legal argument that the opposite conclusion should have been drawn. I do it all the time. This is the reason that so many audits are easily overturned…they are subjective!

Therefore, when you get an audit result, such as the ones referenced above:

APPEAL! APPEAL! APPEAL!

How Does OIG Target Provider Types for Audits and Who Needs to Worry?

Interestingly, how OIG and who OIG targets for audits is much more transparent than one would think. OIG tells you in advance (if you know where to look).

Prior to June 2017, the Office of Inspector General’s (OIG) OIG updated its public-facing Work Plan to reflect those adjustments once or twice each year. In order to enhance transparency around OIG’s continuous work planning efforts, effective June 15, 2017, OIG began updating its Work Plan website monthly.

Why is this important? I will even take it a step further…why is this information crucial for health care providers, such as you?

These monthly reports provide you with notice as to whether the type of provider you are will be on the radar for Medicare and Medicaid audits. And the notice provided is substantial. For example, in October 2017, OIG announced that it will investigate and audit specialty drug coverage and reimbursement in Medicaid – watch out pharmacies!!! But the notice also states that these audits of pharmacies for speciality drug coverage will not begin until 2019. So, pharmacies, you have over a year to ensure compliance with your records. Now don’t get me wrong… you should constantly self audit and ensure regulatory compliance. Notwithstanding, pharmacies are given a significant warning that – come 2019 – your speciality drug coverage programs better be spic and span.

Another provider type that will be on the radar – bariatric surgeons. Medicare Parts A and B cover certain bariatric procedures if the beneficiary has (1) a body mass index of 35 or higher, (2) at least one comorbidity related to obesity, and (3) been previously unsuccessful with medical treatment for obesity. Treatments for obesity alone are not covered. Bariatric surgeons, however, get a bit less lead time. Audits for bariatric surgeons are scheduled to start in 2018. Considering that 2018 is little more than a month away, this information is less helpful. The OIG Work Plans do not specific enough to name a month in which the audits will begin…just sometime in 2018.

Where do you find such information? On the OIG Work Plan website. Click here. Once you are on the website, you will see the title at the top, “Work Plan.” Directly under the title are the “clickable” subjects: Recently Added | Active Work Plan Items | Work Plan Archive.  Pick one and read.

You will see that CMS is not the only agency that OIG audits. It also audits the Food and Drug Administration and the Office of the Secretary, for example. But we are concerned with the audits of CMS.

Other targeted providers types coming up:

  • Telehealth
  • Security of Certified Electronic Health Record Technology Under Meaningful Use
  • States’ Collection of Rebates on Physician-Administered Drugs
  • States’ Collection of Rebates for Drugs Dispensed to Medicaid MCO Enrollees
  • Adult Day Health Care Services
  • Oversight of States’ Medicaid Information Systems Security Controls
  • States’ MCO Medicaid Drug Claims
  • Incorrect Medical Assistance Days Claimed by Hospitals
  • Selected Inpatient and Outpatient Billing Requirements

And the list goes on and on…

Do not think that if your health care provider type is not listed on the OIG website that you are safe from audits. As we all know, OIG is not the only entity that conducts regulatory audits. The States and its contracted vendors also audit, as well as the RACs, MICs, MACs, CERTs

Never forget that whatever entity audits you, YOU HAVE APPEAL RIGHTS!

Knicole Emanuel Featured on Hospital Finance Podcast – Medicare Appeal Backlog (Legal Update)

On September 6, 2017, I appeared on the Besler Hospital Finance Podcast regarding:

Update on the Medicare appeals backlog [PODCAST]

Feel free to listen to the podcast, download it, and share with others!

 

“Ought Implies Can” – Court Reverses Decision Forcing HHS to Eliminate Medicare Appeal Backlog

But all is not lost… it all lies in the possibility…

A few weeks ago I blogged about Health and Human Services (HHS) possibly being held in contempt of court for violating an Order handed down on Dec. 5, 2016, by U.S. District Judge James Boasberg. See blog.

The District Court Judge granted a motion for summary judgment in favor of the American Hospital Association in AHA v. Burwell. He ordered HHS to incrementally reduce the backlog of 657,955 appeals pending before the agency’s Office of Medicare Hearings and Appeals over the next four years, reducing the backlog by 30% by the end of 2017; 60% by the end of 2018; 90% by the end of 2019; and to completely eliminate the backlog by Dec. 31, 2020.

This was a huge win for AHA – and Medicare providers across the country. Currently, when a provider appeals an adverse decision regarding Medicare, it costs an inordinate amount of attorneys’ fees, and the provider will not receive legal relief for upwards of 6 – 10 years, which can cause financial hardship, especially if the adverse action is in place during the appeal process. Yet the administrative appeal process was designed (poorly) to conclude within 1 year.

With the first deadline (the end of 2017) fast approaching and HHS publicly announcing that the reduction of 30% by the end of 2017 is impossible, questions were posed – how could the District Court hold HHS, a federal agency, in contempt?

We got the answer.

On August 11, 2017, the U.S. Appeals Court for the District of Columbia overturned the District Court; thereby lifting the requirement to reduce the Medicare appeal backlog.

deflatedWiping tear from face.

The first paragraph of the Ruling, indicates the Court’s philosophic reasoning, starting with a quote from Immanuel Kant (not to be confused with Knicole Emanuel), CRITIQUE OF PURE REASON 548 (Norman Kemp Smith trans., Macmillan 1953) (1781) (“The action to which the ‘ought’ applies must indeed be possible under natural conditions.”)

First paragraph of the decision:

“”Ought implies can.” That is, in order for law – man-made or otherwise – to command the performance of an act, that act must be possible to perform. This lofty philosophical maxim, ordinarily relevant only to bright-eyed college freshmen, sums up our reasoning in this case.”

The Appeals Court determined that the District Court commanded the Secretary to perform an act – clear the backlog by certain deadlines – without evaluating whether performance was possible.

The Medicare backlog skyrocketed in 2011 due to the federally-required Medicare Recovery Audit Program (RAC). With the implementation of the RAC program, the number of appeals filed ballooned from 59,600 in fiscal year 2011 to more than 384,000 in fiscal year 2013. These appeals bottlenecked to the third level of appeal, which is before an administrative law judge (ALJ). As of June 2, 2017, there was a backlog of 607,402 appeals awaiting review at this level. On its current course, the backlog is projected to grow to 950,520 by the end of fiscal year 2021.

There is a way for a provider to “skip” the ALJ level and “escalate” the claim, but it comes at a cost. Several procedural rights must be forfeited.

It is important to note that the appellate decision does not state that the District Court does not have the authority to Order HHS to eliminate the appeals backlog.

It only holds that, because HHS claims that compliance is impossible, the District Court must rule on whether compliance is possible before mandating the compliance. In other words, the Appeals Court wants the lower court to make a fact-finding decision as to whether HHS is able to eliminate the backlog before ordering it to do so. The Appeals Court is instructing the lower court to put the horse in front of the cart.

The Appeals Court explicitly states that it is suspect that the Secretary of HHS has done all things possible to decrease the backlog. (“We also share the District Court’s skepticism of the Secretary’s assertion that he has done all he can to reduce RAC-related appeals.”) So do not take the Appeals Court’s reversal as a sign that HHS will win the war.

I only hope that AHA presents every possible legal argument once the case is remanded to District Court. It is imperative that AHA’s attorneys think of every possible legal misstep in this remand in order to win. Not winning could potentially create bad law, basically, asserting that the Secretary has no duty to fix this appeals backlog. Obviously, the Secretary is exactly the person who should fix the backlog in his own agency. To hold otherwise, would thwart the very reason we have a Secretary of HHS. Through its rhetoric, the Appeals Court made it clear that it, too, has severe reservations about HHS’ claim of impossibility. However, without question, AHA’s suggestion to the District Court that a timeframe be implemented to reduce the backlog is not the answer. AHA needs to brainstorm and come up with several detailed proposals. For example, does the court need to include a requirement that the Secretary devote funds to hire additional ALJs? Or mandate that the ALJs work a half day on Saturday? Or order that the appeal process be revised to make the process more efficient? Clearly, the mere demand that HHS eliminate the backlog within a certain timeframe was too vague.

From here, the case will be remanded back to the District Court with instructions to the Judge to determine whether the elimination of the Medicare appeal backlog is possible. So, for now, HHS is safe from being held in contempt. But the Secretary should take heed from the original ruling and begin taking steps in fixing this mess. It is highly likely that HHS will be facing similar deadlines again – once the District Court determines it is possible.

The Reality of Prepayment Review and What To Do If You Are Tagged – You’re It!

Prepayment review is a drastic tool (more like a guillotine) that the federal and state governments via hired contractors review the documentation supporting services for Medicare and Medicaid prior to the provider receiving reimbursement. The providers who are placed on prepayment review are expected to continue to render services, even if the provider is not compensated. Prepayment review is a death sentence for most providers.

The required accuracy rating varies state to state, but, generally, a provider must meet 75% accuracy for three consecutive months.

In the governments’ defense, theoretically, prepayment review does not sound as Draconian as it is. Government officials must think, “Well, if the provider submits the correct documentation and complies with all applicable rules and regulations, it should be easy for the provider to meet the requirements and be removed from prepayment review.” However, this false reasoning only exists in a fantasy world with rainbows and gummy bears. Real life prepayment review is vastly disparate from the rainbow and gummy bears prepayment review.

In real life prepayment review:

  • The auditors may use incorrect, inapplicable, subjective, and arbitrary standards.

I had a case in which the auditors were denying 100% ACTT services, which are 24-hour mental health services for those 10% of people who suffer from extreme mental illness. The reason that the auditor was denying 100% of the claims was because “lower level services were not tried and ruled out.” In this instance, we have a behavioral health care provider employing staff to render ACTT services (expensive), actually rendering the ACTT services (expensive), and getting paid zero…zilch…nada…for a reason that is not required! There is no requirement that a person receiving ACTT services try a lower level of service first. If the person qualifies for ACTT, the person should receive ACTT services. Because of this auditor’s misunderstanding of ACTT, this provider was almost put out of business.

Another example: A provider of home health was placed on prepayment review. Again, 90 – 100% of the claims were denied. In home health, program eligibility is determined by an independent assessment conducted by the Division of Medical Assistance (DMA) via Liberty, which creates an individualized plan of care. The provider submitted claims for Patient Sally, who, according to her plan, needs help dressing. The service notes demonstrated that the in-home aide helped Sally dress with a shirt and pants. But the auditor denies every claim the provider bills for Sally (which is 7 days a week) because, according to the service note, the in-home aide failed to check the box to show she/he helped put on Sally’s shoes. The auditor fails to understand that Sally is a double amputee – she has no feet.

Quis custodiet ipsos custodes – Who watches the watchmen???

  • The administrative burden placed on providers undergoing prepayment review is staggering.

In many cases, a provider on prepayment review is forced to hire contract workers just to keep up with the number of document requests coming from the entity that is conducting the prepayment review. After initial document requests, there are supplemental document requests. Then every claim that is denied needs to be re-submitted or appealed. The amount of paperwork involved in prepayment review would cause an environmentalist to scream and crumple into the fetal position like “The Crying Game.”

  • The accuracy ratings are inaccurate.

Because of the mistakes the auditors make in erroneously denying claims, the purported “accuracy ratings” are inaccurate. My daughter received an 86 on a test. Given that she is a straight ‘A’ student, this was odd. I asked her what she got wrong, and she had no idea. I told her to ask her teacher the next day why she received an 86. Oops. Her teacher had accidentally given my daughter an 86; the 86 was the grade of another child in the class with the same first name. In prepayment review, the accuracy ratings are the only method to be removed from prepayment, so the accuracy of the accuracy ratings is important. One mistaken, erroneously denied claim damages the ratings, and we’ve already discussed that mistakes/errors occur. You think, if a mistake is found, call up the auditing entity…talk it out. See below.

  • The communication between provider and auditor do not exist.

Years ago my mom and I went to visit relatives in Switzerland. (Not dissimilar to National Lampoon’s European Vacation). They spoke German; we did not. We communicated with pictures and hand gestures. To this day, I have no idea their names. This is the relationship between the provider and the auditor.

Assuming that the provider reaches a live person on the telephone:

“Can you please explain to me why claims 1-100 failed?”

“Don’t you know the service definitions and the policies? That is your responsibility.”

“Yes, but I believe that we follow the policies. We don’t understand why these claims are denied. That’s what I’m asking.”

“Read the policy.”

“Not helpful.”

  • The financial burden on the provider is devastating.

If a provider’s reimbursements are 80 – 100% reliant on Medicaid/care and those funds are frozen, the provider cannot meet payroll. Yet the provider is expected to continue to render services. A few years ago, I requested from NC DMA a list of providers on prepayment review and the details surrounding them. I was shocked at the number of providers that were placed on prepayment review and within a couple months ceased submitting claims. In reality, what happened was that those providers were forced to close their doors. They couldn’t financially support their company without getting paid.

Ok, now we know that prepayment review can be a death sentence for a health care provider. How can we prepare for prepayment review and what do we do if we are placed on prepayment review?

  1. Create a separate “what if” savings account to pay for attorneys’ fees. The best defense is a good offense. You cannot prevent yourself from being placed on prepayment review – there is no rhyme or reason for such placement. If you believe that you will never get placed on prepayment review, then you should meet one of my partners. He got hit by lightning – twice! (And lived). So start saving! Legal help is a must. Have your attorney on speed dial.
  2. Self-audit. Be proactive, not reactive. Check your documents. If you use an electronic records system, review the notes that it is creating. If it appears that all the notes look the same except for the name of the recipient, fix your system. Cutting and pasting (or appearing to cut and paste) is a pitfall in audits. Review the notes of the highest reimbursement code. Most likely, the more the reimbursement rate, the more likely to get flagged.
  3. Implement an in-house policy about opening the mail and responding to document requests. This sounds self evident, but you will be surprised how many providers have multiple people getting and opening the mail. The employees see a document request and they want to be good employees – so they respond and send the documents. They make a mistake and BOOM – you are on prepayment review. Know who reviews the mail and have a policy for notifying you if a document request is received.
  4. Buck up. Prepayment review is a b*^%$. Cry, pray, meditate, exercise, get therapy, go to the spa, medicate…whatever you need to do to alleviate stress – do it.
  5. Do not think you can get off prepayment review alone and without help. You will need help. You will need bodies to stand at the copy machine. You will need legal help. Do not make the mistake of allowing the first three months pass before you contact an attorney. Contact your attorney immediately.

The slow-motion unraveling of New Mexico’s Medicaid crackdown (With Sound Bites From Me).

There’s no getting around it. Four years after Gov. Susana Martinez’s administration charged 15 behavioral health organizations with potentially defrauding the state’s Medicaid program, its case has experienced a slow-motion unraveling.

No Medicaid fraud was ever found. And those eye-popping estimates that added up to $36 million the organizations had overbilled Medicaid?

In the summer of 2017, the Human Services Department (HSD) is seeking drastically lower reimbursements for overbilling the public health insurance program for low-income residents, a review of public records and state court documents has found.

Now exonerated by the state Attorney General’s Office, many organizations are challenging even those much-lower estimates in administrative hearings or in state court.

Consider Teambuilders Counseling Services, one of the accused behavioral health providers.

Last fall it received a new estimate from the New Mexico Human Services Department. Previous numbers had varied from as high as $9.6 million to as low as $2 million. But the new figure deviated sharply from earlier calculations when Chester Boyett, an administrative law judge in the state agency’s Fair Hearings Bureau, ruled Teambuilders owed only $896.35.

Boyett argued his agency had built its $2 million estimate of Medicaid overbilling on faulty analysis, according to his 12-page decision.

Nancy Smith-Leslie, the department’s director of the Medical Assistance Division, ignored Boyett’s recommendation. In a Jan. 6 letter she said the agency’s analysis was sound, even though she seemed to confirm Boyett’s critique in a Nov. 2 memo in which she had noted the inaccuracy of the extrapolated amount. In that memo Teambuilders and its attorney had not “sufficiently disputed” the method of extrapolation, however, she wrote.

In her Jan. 6 letter, Smith-Leslie sought to clear up matters. She amended her previous statement, saying the extrapolation referred to in her Nov. 2 memo indeed was correct.

Teambuilders and its attorney, Knicole Emanuel, appealed HSD’s ruling over whether Teambuilders overbilled Medicaid and by how much to state court, where three other former behavioral health organizations are fighting HSD’s extrapolated overpayments.

Boyett’s finding that Teambuilders owed hundreds rather than millions of dollars — even if it was ignored — represents a compelling data point given where things stand with other providers.

The state in May reduced to $484.71 what it said Southwest Counseling Center owed after accusing it of overbilling Medicaid by as much as $2.8 million as recently as January.

And last September HSD closed the books  on another organization — Las Cruces-based Families and Youth Inc. — without demanding any reimbursements for overbilling and releasing $1.4 million in Medicaid dollars the state had suspended. The action represented a reversal after a state-ordered 2013 audit that found $856,745 in potential Medicaid overbilling by FYI.

In fact, a review of state and court documents by New Mexico In Depth reveals a pattern regarding the state agency’s overbilling estimates: In many cases, they are moving targets, usually on a downward trajectory.

Like Southwest’s, some have dropped spectacularly. Setting aside Boyett’s figure of $896, even the $2 million HSD claims Teambuilders owes is far smaller than a high of $12 million.

Hogares Inc., another organization accused of fraud, watched last year as the state revised its overbilling estimates five times over six months, starting at $9.5 million in January and ending with $3.1 million in June, according to state court documents.

Meanwhile, Easter Seals El Mirador, initially accused of $850,000 in potential Medicaid overbilling, now stands accused of $127,000.

Emanuel and Bryan Davis, another attorney representing many of the formerly accused organizations, said the constantly changing estimates are due to HSD.

The state agency is examining a sampling of each organization’s Medicaid claims and asking the organizations for documentation to prove the government program was properly billed, they said.

“In most cases (the overbilling estimates) are dropping precipitously” as organizations submit the documents requested by HSD, Davis said.

To cite one example, HSD’s latest overbilling estimate for Counseling Associates, Inc. is $96,000, said Davis, who represents the organization. That compares to $3 million in potential overbilling a 2013 state-ordered audit found.

It is a perplexing situation, given that the Human Services Department found “‘credible allegations of fraud” against the 15 organizations using that 2013 audit, which was performed by Massachusetts-based Public Consulting Group Inc.

“They threw PCG’s audit in the trash,” Davis said of HSD, noting the cost. HSD agreed to pay PCG up to $3 million for the study in February 2013.

The current situation caused Davis to wonder “why PCG didn’t have these documents in the first place,” he said.

Emanuel offered a pointed answer.

“HSD did not allow PCG to gather all the documents,” she said.

A spokesperson for HSD did not respond multiple requests for comment for this story.

Repercussions of the Medicaid crackdown

The fight over Medicaid overbilling isn’t the only legacy left from the Medicaid crackdown, which happened the last week of June 2013.

The Martinez administration’s decision affected lives. Many lives if you listen to behavioral health advocates and officials in the 15 organizations.

Charging the organizations with fraud and then suspending Medicaid payments to many of them disrupted mental health and addiction services for tens of thousands of New Mexicans. It created chaos for employees. And four years on it has left a number of business failures in its wake, with many of the accused organizations unable to survive long-term without Medicaid dollars.

Teambuilders, which once operated 52 locations in 17 New Mexico counties, is no longer in business, according to Emanuel. Neither is Las Cruces-based Southwest Counseling Center. Or Hogares.

At the same time a gap in care has opened up after three of five Arizona companies the Martinez administration brought in to care for the vulnerable populations have departed the state, leaving New Mexico to pick up the pieces.

“It’s a mess. It’s disgusting,” said James Kerlin, executive director of The Counseling Center of Alamogordo, which no longer sees clients. Like Teambuilders, Hogares, Southwest Counseling and others, it was unable to stay in business without the flow of Medicaid dollars the state suspended. “I want the public to know where we’re at and what’s been done to us. I’m going to start making a lot of noise. This is ridiculous.”

Kerlin’s organization was the first of the 15 organizations exonerated by then Attorney General Gary King in early 2014. And it offered the earliest glimpse of the weaknesses in the Martinez administration’s case against the behavioral health providers.

First signs of weakness in the state’s case

HSD hired PCG to audit all 15 organizations and it found $655,000 in potential Medicaid overbilling by the Counseling Center.

PCG reached that conclusion after finding $1,873 in questionable Medicaid claims and then extrapolating from those claims that the center could have overbilled Medicaid by more than $600,000 based on the size of its Medicaid business over several years.

But during its fraud investigation the AG’s office flagged fewer Counseling Center claims than PCG and found a much lower cost of potential overbillings. It resolved some of the issues by reviewing records and interviewing staff.

In many cases, auditors give staff of audited organizations an opportunity to refute findings or address misunderstandings before finalizing their findings. For example, most state and local governmental agencies are audited annually in New Mexico. Staff within those agencies are afforded the chance to see and respond to audit findings within a certain amount of time before audits are made public.

Kerlin did not get that opportunity during the PCG audit.

PCG later confirmed to NMID that it is the firm’s standard procedure to give companies a chance to respond before issuing official audit findings. A PCG spokesperson would not tell NMID why that didn’t happen in New Mexico.

By the time HSD held a hearing for the Counseling Center, the state agency had lowered its Medicaid overbillings estimate to $379,135. And Kerlin finally was able to hear the accusations against his organization.

Counseling Center submitted evidence to rebut the state agency’s claims, but the hearing officer sided with HSD. The Counseling Center appealed to state court.

In late 2015, State District Court Judge Francis Mathew ruled in favor of Kerlin’s organization, calling HSD’s hearing decision “arbitrary, capricious or otherwise not in accordance with law.”

In addition, the judge found the administrative law judge had shifted the burden of proof from HSD to the Counseling Center and then set too high a standard for the organization. Citing portions of the administrative law judge’s ruling, Mathew noted  the Counseling Center had “offered certain amount of credible evidence in opposition” to HSD’s findings but not as much as the hearing officer required: a “100 percent audit” of records, which the state district judge found “unreasonable.”

HSD appealed the judge’s decision to the state Court of Appeals.

Examples of rejected claims 

The overly stringent standards for documentation — and even a basic lack of understanding by HSD staff of Medicaid billing requirements — can be found in cases involving other organizations that are contesting the department’s charges of overbilling, a review of court documents found.

In a motion appealing the administrative law judge’s ruling that it owed the state $127,240, Easter Seals disputed seven claims, including one HSD had rejected because there was no medication consent form in place, even though the patient and parent had signed a general informed consent form and the patient’s parent was present when the medication was prescribed.

According to the court document, “There was no dispute that the service was medically necessary and was provided to J.A. There is no question as to quality of care provided to the recipient of services.”

Another claim was rejected because there was no doctor’s signature on a psychosocial assessment, however the state could provide no legal requirement for the signature, according to Easter Seals’ appeal. “A signature might be best practice, or advisable, but it is not a requirement,” the filing argued.

Also in the appeal, Easter Seals noted that the Human Service Department’s coding witness not only could not cite rules disallowing two services to be delivered during the same time period, but also appeared to be using a coding manual from Medicare, the insurance for seniors, and not Medicaid. And furthermore, she did not even realize there was a manual for Medicaid.

HSD ignored evidence in 2013 that refuted overbilling claims 

Even those organizations that have avoided administrative hearings and court battles have stories to tell about HSD and its actions.

Consider Presbyterian Medical Services, which signed an agreement with the Human Services Department in 2013 to pay $4 million after PCG found nearly $4.5 million in potential Medicaid overbillings.

It wasn’t an easy decision, its CEO said this week, and it shouldn’t be construed as agreement with the state’s conclusions.

“We agree to disagree” is how Steven Hansen put it.

Until Presbyterian began negotiating an agreement, in fact, it had not seen the findings of the PCG audit.

During the negotiations PMS officials found documents they thought could refute PCG’s audit findings, Hansen and other PMS officials told state lawmakers in October 2014.

Presbyterian tried to give the files to PCG and the Human Services Department as proof that they had properly billed Medicaid for payment. The consulting firm said it would review the documentation if directed to by HSD, but PCG later told Presbyterian Medical Services the state agency “did not want to accept those records.”

“We believe there is a strong argument that nothing was owed back to HSD,” Presbyterian’s general counsel told lawmakers in 2014.

At that point, Presbyterian had to make a choice: Settle with the state or fight and possibly run out of money.

Presbyterian settled, paying the $4 million.

The decision has worked out for the organization.

“We’re doing more business than we did before” the 2013 crackdown, Hansen said.

That’s because as the Arizona providers the Martinez administration brought in have left New Mexico, Presbyterian Medical Services has taken over mental health and addiction services.

Presbyterian has added Carlsbad, Alamogordo, Deming, Espańola, Grants, Artesia, Santa Fe and Rio Rancho to the places it provides behavioral health services, Hansen said, adding it’s “bits and pieces” of areas formerly serviced by three of the five Arizona companies.

“We feel like it’s going in a good direction for us,” Hansen said. “That’s hard for us to say because there were so many great organizations that are no longer in the state. But we’ve had to move on.”