Category Archives: Alleged Overpayment
Durable Medical Equipment (DME) providers across the country are walking around with large, red and white bullseyes on their backs. Starting back in March 2017, the RAC audits began targeting DME and home health and hospice. DME providers also have to undergo audits by the Comprehensive Error Rate Testing Program (CERT).
The RAC for Jurisdiction 5, Performant Recovery, is a national company contracted to perform Recovery Audit Contractor (RAC) audits of durable medical equipment, prosthetic, orthotic and supplies (DMEPOS) claims as well as home health and hospice claims. Medicare Part B covers medically necessary DME. The following are the RAC regions:
Region 1 – Performant Recovery, Inc.
Region 2 – Cotiviti, LLC
Region 3 – Cotiviti, LLC
Region 4 – HMS Federal Solutions
Region 5 – Performant Recovery, Inc.
As you can see from the above map, we are in Region 3. The country is broken up into four regions. But, wait, you say, you said that Performant Recovery is performing RAC audits in region 5 – where is region 5?
Region 5 is the whole country.
The Centers for Medicare and Medicaid (CMS) has contracted with Performant Recovery to audit DME and home health and hospice across the whole country.
DME and home health and hospice providers – There is nowhere to hide. If you provide equipment or services within the blue area, region 5, you are a target for a RAC audit.
What are some common findings in a RAC audit for DME?
Without question, the most common finding in a RAC or CERT audit is “insufficient documentation.” The problem is that “insufficient documentation” is nebulous, at best, and absolutely incorrect, at worst. This error is by auditors if they cannot conclude that the billed services were actually provided, were provided at the level billed, and/or were medically necessary. An infuriating discovery was when I was defending a DME RAC audit and learned that the “real” reason for the denial of a claim was that no one went to the consumers door, knocked on it, and verified that a wheelchair had, in fact, been delivered. In-person verification of delivery is not a requirement, nor should it be. Such a burdensome requirement would unduly prejudice DME companies. Yes, you need to be able to show a signed and dated delivery slip, but you do not have to go to the consumer’s house and snap a selfie with the consumer and the piece of equipment.
Another common target for RAC audits is oxygen tubing, oxygen stands/racks, portable liquid oxygen systems, and oxygen concentrators. RAC auditors mainly look for medical necessity for oxygen equipment. Hospital beds/accessories are also a frequent find in a RAC audit. A high use of hospital beds/accessories codes can enlarge the target on your back.
Another recurrent issue that the RAC auditors cite is billing for bundled services separately. Medicare does not make separate payment for DME provider when a beneficiary is in a covered inpatient stay. RAC auditors check whether suppliers are inappropriately receiving separate DME payment when the beneficiary is in a covered inpatient stay. Suppliers can’t bill for DME items used by the patient prior to the patient’s discharge from the hospital. Medicare doesn’t allow separate billing for surgical dressings, urological supplies, or ostomy supplies provided in the hospital because reimbursement for them is wrapped into the Part A payment. This prohibition applies even if the item is worn home by the patient when leaving the hospital.
As always, documentation of the face to face encounter and the prescription are also important.
You can find the federal regulation for DME documentation at 42 CFR 410.38 – “Durable medical equipment: Scope and conditions.”
Once you receive an alleged overpayment, know your rights! Appeal, appeal, appeal!! The Medicare appeal process can be found here.
What if, right before your wedding day, you discover a secret about your betrothed that changes the very fabric of your relationship. For example, you find out your spouse-to-be is actually gay or a heroin addict. Not that there is anything bad about being gay or a heroin addict, but these are important facts to know and accept [or reject] about your future mate prior to the ringing of the wedding bells. The same is true with two companies that are merging to become one. The merged entity will be liable for any secrets either company is keeping. In this hypothetical, Eastpointe just found out that Cardinal has been cheating – and the wedding is set for July 1!
Cardinal Innovations and Eastpointe, two of our managed care organizations (MCO) charged with managing Medicaid behavioral health care funds plan to merge, effective July 1, 2017. Together the monstrous entity would manage Medicaid behavioral funds for 32 counties.
Last week the State Auditor published a scathing Performance Audit on Cardinal. State Auditor Beth Wood found more than $400,000 in “unreasonable” expenses, including corporate retreats at a luxury hotel in Charleston, S.C.; chartering planes to fly to Greenville, Rocky Mount and Smithfield; providing monthly detailing service for the CEO’s car; and purchasing alcohol, private and first-class airline tickets and other items with company credit cards.
Cardinal’s most significant funding is provided by Medicaid. Funding from Medicaid totaled $567 million and $587 million for state fiscal years 2015 and 2016, respectively. In other words, the State Auditor found that Cardinal is using our tax dollars – public money obtained by you and me – for entertainment, while concurrently, denying behavioral health care services and terminating providers from its catchment area. Over 30% of my salary goes to taxes. I do not accept Cardinal mismanaging my hard earned money – or anyone else’s. It is unacceptable!
“The unreasonable spending on board retreats, meetings, Christmas parties and travel goes against legislative intent for Cardinal’s operations, potentially resulting in the erosion of public trust,” the audit states.
Eastpointe, however, is not squeaky clean.
A June 2015 Performance Audit by the State Auditor found that its former chief financial officer Bob Canupp was alleged to have received kickbacks worth a combined $547,595. It was also alleged that he spent $143,041 on three agency vehicles without a documented business purpose. Canupp, chief executive Ken Jones and other employees also were determined to have used Eastpointe credit cards to make $157,565 in “questionable purchases.” There has not been an audit, thus far, on Eastpointe’s management of public funds. One can only hope that the results of the Cardinal audit spurs on Beth Wood to metaphorically lift the skirts of all the MCOs.
Given the recent audit on Cardinal, I would like to think that Eastpointe is hesitant to merge with such an entity. If a provider had mismanaged Medicaid funds like the State Auditor found that Cardinal did, without question, the authorities would be investigating the provider for Medicaid fraud, waste, and abuse. Will Eastpointe continue with the merger despite the potential liability that may arise from Cardinal’s mismanagement of funds? Remember, according to our State Auditor, “Cardinal could be required to reimburse the State for any payroll expenditures that are later disallowed because they were unauthorized.” – Post-payment review!!
Essentially, this is a question of contract.
We learned about the potential merger of Cardinal and Eastpointe back in January 2017, when Sarah Stroud, Eastpointe’s chief executive, announced in a statement that the agency plans to negotiate a binding agreement within weeks. The question is – how binding is binding?
Every contract is breakable, but there will be a penalty involved in breaching the contract, usually monetary. So – fantastic – if Eastpointe does back out of the merger, maybe our tax dollars that are earmarked for behavioral health care services for Medicaid recipients can pay the penalty for breaching the contract.
Another extremely troubling finding in Cardinal’s State Audit Report is that Cardinal is sitting on over $70 million in its savings account. The audit states that “[b]ased on Cardinal’s accumulated savings, the Department of Health and Human Services (DHHS) should consider whether Cardinal is overcompensated. For FY 2015 and 2016, Cardinal accumulated approximately $30 million and $40 million, respectively, in Medicaid savings. According to the Center for Medicaid and Medicare Services (CMS), Cardinal can use the Medicaid savings as they see fit.”
As Cardinal sees fit??!!?! These are our tax dollars. Cardinal is not Blue Cross Blue Shield. Cardinal is not a private company. Who in the world thought it a good idea to allow any MCO to use saved money (money not spent on behavioral health care services for Medicaid recipients) to use as it sees fit. It is unconscionable!
Because of my blog, I receive emails almost daily from mothers and fathers of developmentally disabled or mentally handicapped children complaining about Cardinal’s denials or reductions in services. I am also told that there are not enough providers within the catchment area. One mother’s child was approved to receive 16 hours of service, but received zero services because there was no available provider. Another family was told by an MCO that the family’s limit on the amount of services was drastically lower than the actual limit. Families contact me about reduced services when the recipient’s condition has not changed. Providers contact me about MCO recoupments and low reimbursement rates.
Cardinal, and all the MCOs, should be required to use our tax dollars to ensure that enough providers are within the catchment areas to provide the medically necessary services. Increase the reimbursement rates. Increase necessary services.
According to the report, “Cardinal paid about $1.9 million in FY 2015 employee bonuses and $2.4 million in FY 2016 employee bonuses. The average bonus per employee was about $3,000 in FY 2015, and $4,000 in FY 2016. The bonuses were coded to Cardinal’s administrative portion of Medicaid funding source in both years.” Cardinal employs approximately 635 employees.
Good to know that Cardinal is thriving. Employees are overpaid and receive hefty bonuses. Executives are buying alcohol, private and first-class airline tickets and other items with company credit cards. It hosts lavish Christmas parties and retreats. It sits on a $70 million savings account. While I receive reports from families and providers that Medicaid recipients are not receiving medically necessary services, that there are not enough providers within the catchment area to render the approved services, that the reimbursement rates for the services are too low to attract quality providers, that more expensive services are denied for incorrect reasons, and that all the MCOs are recouping money from providers that should not be recouped.
If I were Eastpointe, I would run, regardless the cost.
The NC State Auditor Beth Wood released an audit report on Cardinal Innovations yesterday, May 17, 2017. Here are the key findings. For the full report click here.
Cardinal is a Local Management Entity/Managed Care Organization (LME/MCO) created by North Carolina General Statute 122C. Cardinal is responsible for managing, coordinating, facilitating and monitoring the provision of mental health, developmental disabilities, and substance abuse services in 20 counties across North Carolina. Cardinal is the largest of the state’s seven LME/MCOs, serving more than 850,000 members. Cardinal has contracted with DHHS to operate the managed behavioral healthcare services under the Medicaid waiver through a network of licensed practitioners and provider agencies.
• Cardinal spent money exploring strategic opportunities outside of its core mission
• $1.2 million in CEO salaries paid without proper authorization
• Cardinal’s unreasonable spending could erode public trust
• Cardinal should consult and collaborate with members of the General Assembly before taking any actions outside of its statutory boundaries
• The Office of State Human Resources should immediately begin reviewing and approving Cardinal CEO salary adjustments
• The Department of Health and Human Services should determine whether any Cardinal CEO salary expenditures should be disallowed and request reimbursement as appropriate
• Cardinal should implement procedures consistent with other LME/MCOs, state laws, and federal reimbursement policy to ensure its spending is appropriate for a local government entity
My favorite? Recoup CEO salaries. Maybe we should extrapolate.
Electronic health records or EHR have metamorphosed health care. Choosing a vendor can be daunting and the prices fluctuate greatly. As a provider, you probably determine your EHR platform on which vendor’s program creates the best service notes… or which creates the most foolproof way of tracking time… or which program is the cheapest.
But…what’s in YOUR contract can be legally deadly.
Regardless how you choose your EHR vendor, you need to keep the following legal issues in mind when it comes to EHR and the law:
Regulatory and Clinical Coverage Policy Compliance
Most likely, your EHR vendor does not have a legal degree. Yet, you are buying a product and assuming that the EHR program complies with applicable regulations, rules, and clinical coverage policies – whichever are applicable to your type of service. Well, guess what? These regulations, rules, and clinical coverage policies are not stagnant. They are amended, revised, and re-written more than my chickens lay eggs, but a little less often, because my chickens lay eggs every day.
Think about it – The Division of Medical Assistance (DMA) publishes a monthly Medicaid Bulletin. Every month DMA provides more insight, more explanations, more rules that providers will be held accountable to follow.
Does your EHR program update every month?
You need to review your contract and determine whether the vendor is responsible for regulatory compliance or whether you are. If you are, should you put so much faith in the EHR program?
You are required to maintain your records (depending on your type of service) anywhere from 5-10 years. Let’s say that you sign a four year contract with EHR Vendor X. The four years expires, and you hire a new EHR vendor. You are audited. But Vendor X does not allow you access to the records because you no longer have a contract with them – not their problem!
You need to ensure that your EHR contract allows you access to your documents (because they are your documents) even in the event of the contract expiring or getting terminated. The excuse that “I don’t have access to that” does not equal a legal defense.
This is otherwise known as the “Blame Game.” If there is a problem with regulatory compliance, as in, the EHR records do not follow the regulations, then you need to know whether the EHR vendor will take responsibility and pay, or help pay, for attorneys’ fees to defend yourself.
Like it or not, the EHR vendor does not undergo audits by the state and federal government. The EHR vendor does not undergo post and pre-payment reviews for regulatory compliance. You do. It is your NPI number that is held accountable for regulatory compliance.
You need to check whether there is an indemnification clause in the EHR contract. In other words, if you are accused of an overpayment because of a mistake on the part of the vendor, will the vendor cover your defense? My guess is that there is no indemnification clause.
HIPAA laws require that you minimize the access to private health information (PHI) and prevent dissemination. With hard copies, this was easy. You could just lock up the documents. With EHR, it becomes trickier. Obviously, you have access to the PHI as the provider. But who can access your EHR on the vendor-side? Assuming that the vendor has an IT team in case of computer issues, you have to consider to what exactly does that team have access.
I recently attended a legal continuing education class on data breach and HIPAA compliance for health care. One of the speakers was a Special Agent with the FBI. This gentleman prosecutes data breaches for a living. He said that hackers will pay over $500 per private medical document. Health care companies experienced a 72% increase in cyberattacks between 2013 and 2014. Stolen health care information is 10 times more valuable than your credit card information.
Obviously, I am exaggerating here. I do not believe that The Walking Dead is real and in our future. But here is my point – You are held accountable for maintaining your medical records, even in the face of an act of God or terrorism.
Example: It was 1996. Provider Dentist did not have EHR; he had hard copies. Hurricane Fran flooded Provider Dentist’s office, ruining all medical records. When Provider Dentist was audited, the government did not accept the whole “there was a hurricane” excuse. Dentist was liable for sever penalties and recoupments.
Fast forward to 2017 and EHR – Think a mass computer shutdown won’t happen? Just ask Delta about its August 2016 computer shutdown that took four days and cancelled over 2000 flights. Or Medstar Health, which operates 10 hospitals and more than 250 outpatient facilities, when in March 2016, a computer virus shut down its emails and…you guessed it…its EHR database.
So, what’s in YOUR contract?
You are a provider, and you accept Medicare and Medicaid. You find out that the person with whom you contracted to provide extraction services for your dental patients has been upcoding for the last few months. -or- You discover that the supervisory visits over the past year have been less than…well, nonexistent. -or- Or your licensed therapist forgot to mention that her license was revoked. What do you do?
What do you do when you unearth a potential, past overpayment to you from Medicare or Medicaid?
Number One: You do NOT hide your head!
Do not be an ostrich. First, being an ostrich will have a direct correlation with harsher penalties. Second, you may miss mandatory disclosure deadlines, which will lead to a more in-depth, concentrated, and targeted audits by the government, which will lead to harsher penalties.
As for the first (harsher penalties), not only will your potential, monetary penalties leap skyward, but knowledge (actual or should have had) could put you at risk for criminal liability or false claims liability. As for increased, monetary penalties, recent Office of Inspector General (OIG) information regarding the self disclosure protocol indicates that self disclosure could reduce the minimum multiplier to only 1.5 times the single damages versus 2-10 times the damages without self disclosure.
As for the second (missing deadlines), your penalties will be exorbitantly higher if you had or should have had actual knowledge of the overpayments and failed to act timely. Should the government, despite your lack of self disclosure, decide to audit your billings, you can count on increased scrutiny and a much more concentrated, in-depth audit. Much of the target of the audit will be what you knew (or should have) and when you knew (or should have). Do not ever think: “I will not ever get audited. I am a small fish. There are so many other providers, who are really de-frauding the system. They won’t come after me.” If you do, you will not be prepared when the audit comes a’knocking on your door – and that is just foolish. In addition, never underestimate the breadth and scope of government audits. Remember, our tax dollars provide almost unlimited resources to fund thousands of audits at a time. Being audited is not like winning the lottery, Your chances are not one in two hundred million. If you accept Medicare and/or Medicaid, your chances of an audit are almost 100%. Some providers undergo audits multiple times a year.
Knowing that the definition of “knowing” may not be Merriam Webster’s definition is also key. The legal definition of “knowing” is more broad that you would think. Section 1128J(d)(4)(A) of the Act defines “knowing” and “knowingly” as those terms are defined in 31 U.S.C. 3729(b). In that statute the terms “knowing” and “knowingly” mean that a person with respect to information—(i) has actual knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity of the information; or (iii) acts in reckless disregard of the truth or falsity of the information. 31 U.S.C. 3729(b) also states that knowing and knowingly do not require proof of specific intent to defraud.
Number Two: Contact your attorney.
It is essential that you have legal counsel throughout the self disclosure process. There are simply too many ways to botch a well-intended, self disclosure into a casus belli for the government. For example, OIG allows three options for self disclosure; however, one option requires prior approval from OIG. Your counsel needs to maintain your self disclosure between the allowable, navigational beacons.
Number Three: Act timely.
You have 60-days to report and pay. Section 1128J(d)(2) of the Social Security Act requires that a Medicare or Medicaid overpayment be reported and returned by the later of (1) the date that is 60 days after the date on which the overpayment was identified or (2) the date any corresponding cost report is due, if applicable. See blog.
If you have a Medicare issue, please continue to Number Four. If your issue is Medicaid only, please skip Number Four and go to Number Five. If your issue concerns both Medicare and Medicaid, continue with Number Four and Five (skip nothing).
Number Four: Review the OIG Self Disclosure Protocol (for Medicare).
OIG publishes a Self Disclosure Protocol. Read it. Print it. Frame it. Wear it. Memorize it.
Since 2008, OIG has resolved 235 self disclosure provider cases through settlements. In all but one of these cases, OIG released the disclosing parties from permissive exclusion without requiring any integrity measures. What that means is that, even if you self disclose, OIG has the authority to exclude you from the Medicare system. However, if you self disclose, may the odds be ever in your favor!
Number Five: Review your state’s self disclosure protocol.
While every state differs slightly in self disclosure protocol, it is surprising how similar the protocol is state-to-state. In order to find your state’s self disclosure protocol, simply Google: “[insert your state] Medicaid provider self disclosure protocol.” In most cases, you will find that your state’s protocol is less burdensome than OIG’s.
On the state-side, you will also find that the benefits of self disclosure, generally, are even better than the benefits from the federal government. In most states, self disclosure results in no penalties (as long as you follow the correct protocol and do not hide anything).
Number Six: Draft your self disclosure report.
Your self disclosure report must contain certain criteria. Review the Federal Registrar for everything that needs to be included.
It is important to remember that you are only responsible for self disclosures going back six years (on the federal side).
Mail the report to:
330 Independence Avenue, Room 5527
Washington, DC 20201
Or you can self disclose online at this link.
Class Action Lawsuit Alleges Right to Inpatient Hospital Stays: Hospitals Are Damned If They Do…and Don’t!
Hospitals – “Lend me your ears; I come to warn you, not to praise RACs. The evil that RACs do lives after them; The good is oft interred with their appeals; So let it be with lawsuits.” – Julius Caesar, with modifications by me.
A class action lawsuit is pending against U.S. Health and Human Services (HHS) alleging that the Center for Medicare and Medicaid Services (CMS) encourages (or bullies) hospitals to place patients in observation status (covered by Medicare Part B), rather than admitting them as patients (covered by Medicare Part A). The Complaint alleges that the treatments while in observation status are consistent with the treatments if the patients were admitted as inpatients; however, Medicare Part B reimbursements are lower, forcing the patient to pay more out-of-pocket expenses without recourse.
The United States District Court for the District of Connecticut refused to dismiss the class action case on February 8, 2017, giving the legal arguments within the Complaint some legal standing, at least, holding that the material facts alleged warrant investigation.
The issue of admitting patients versus keeping them in observation has been a hot topic for hospitals for years. If you recall, Recovery Audit Contractors (RACs) specifically target patient admissions. See blog and blog. RAC audits of hospital short-stays is now one of the most RAC-reviewed issues. In fiscal year 2014, RACs “recouped” from hospitals $1.2 billion in allegedly improper inpatient claims. RACs do not, however, review outpatient claims to determine whether they should have been paid as inpatient.
On May 4, 2016, CMS paused its reviews of inpatient stays to determine the appropriateness of Medicare Part A payment. On September 12, 2016, CMS resumed them, but with more stringent rules on the auditors’ part. For example, auditors cannot audit claims more than the six-month look-back period from the date of admission.
Prior to September 2016, hospitals would often have no recourse when a claim is denied because the timely filing limits will have passed. The exception was if the hospital joined the Medicare Part A/Part B rebilling demonstration project. But to join the program, hospitals would forfeit their right to appeal – leaving them with no option but to re-file the claim as an outpatient claim.
With increased scrutiny, including RAC audits, on hospital inpatient stays, the class action lawsuit, Alexander et al. v. Cochran, alleges that HHS pressures hospitals to place patients in observation rather than admitting them. The decision states that “Identical services provided to patients on observation status are covered under Medicare Part B, instead of Part A, and are therefore reimbursed at a lower rate. Allegedly, the plaintiffs lost thousands of dollars in coverage—of both hospital services and subsequent skilled nursing care—as a result of being placed on observation status during their hospital stays.” In other words, the decision to place on observation status rather than admit as an inpatient has significant financial consequences for the patient. But that decision does not affect what treatment or medical services the hospital can provide.
While official Medicare policy allows the physicians to determine the inpatient v. observation status, RAC audits come behind and question that discretion. The Medicare Policy states that “the decision to admit a patient is a complex medical judgment.” Ch. 1 § 10. By contrast, CMS considers the determination as to whether services are properly billed and paid as inpatient or outpatient to be a regulatory matter. In an effort to avoid claim denials and recoupments, plaintiffs allege that hospitals automatically place the patients in observation and rely on computer algorithms or “commercial screening tools.”
In a deposition, a RAC official admitted that if the claim being reviewed meets the “commercial screening tool” requirements, then the RAC would find the inpatient status is appropriate, as long as there is a technically valid order. No wonder hospitals are relying on these commercial screening tools more and more! It is only logical and self-preserving!
This case was originally filed in 2011, and the Court of Appeals overturned the district court’s dismissal and remanded it back to the district court for consideration of the due process claims. In this case, the Court of Appeals held that the plaintiffs could establish a protected property interest if they proved their allegation “that the Secretary—acting through CMS—has effectively established fixed and objective criteria for when to admit Medicare beneficiaries as ‘inpatients,’ and that, notwithstanding the Medicare Policy Manual’s guidance, hospitals apply these criteria when making admissions decisions, rather than relying on the judgment of their treating physicians.”
HHS argues that that the undisputed fact that a physician makes the initial patient status determination on the basis of clinical judgment is enough to demonstrate that there is no due process property interest at stake.
The court disagreed and found too many material facts in dispute to dismiss the case.
Significant discovery will be explored as to the extent to which hospitals rely on commercial screening tools. Also whether the commercial screening tools are applied equally to private insureds versus Medicare patients.
Significant discovery will be explored on whether the hospital’s physicians challenge changing a patient from inpatient to observation.
Significant discovery will be explored as to the extent that CMS policy influences hospital decision-making.
Hospitals need to follow this case closely. If, in fact, RAC audits and CMS policy is influencing hospitals to issue patients as observation status instead of inpatient, expect changes to come – regardless the outcome of the case.
As for inpatient hospital stays, could this lawsuit give Medicare patients the right to appeal a hospital’s decision to place the patient in observation status? A possible, future scenario is a physician places a patient in observation. The patient appeals and gets admitted. Then hospital’s claim is denied because the RAC determines that the patient should have been in observation, not inpatient. Will the hospitals be damned if they do, damned if they don’t?
In the meantime:
Hospitals and physicians at hospitals: Review your policy regarding determining inpatient versus observation status. Review specific patient files that were admitted as inpatient. Was a commercial screening tool used? Is there adequate documentation that the physician made an independent decision to admit the patient? Hold educational seminars for your physicians. Educate! And have an attorney on retainer – this issue will be litigated.
When you have a Medicare appeal, it is not uncommon for the appeal process to last years and years – up to 3-6 years in some cases. There has been a backlog of approximately 800,000+ Medicare appeals (almost 1 million), which, with no change, would take 11 years to vet.
A Federal Court Judge says – that is not good enough!
Judge James Boasburg Ordered that the Medicare appeal backlog be eliminated in the following stages:
- 30% reduction from the current backlog by Dec. 31, 2017 (approximately a 300,000 case reduction within 1 year);
- 60% reduction from the current backlog by Dec. 31, 2018;
- 90% reduction from the current backlog by Dec. 31, 2019; and
- Elimination of the backlog of cases by Dec. 31, 2020;
A Medicare appeal has 5 steps. See blog. The backlog is at the Administrative Law Judge (ALJ) level – or, Level 3.
This backlog is largely attributable to the Medicare Recovery Audit Contractor (RAC) programs. In 2010, the federal government implemented the RAC program to recoup allegedly improper Medicare reimbursement payments. The RAC program (for both Medicare and Medicaid) has been criticized for being overly broad and burdensome and “nit picking,” insignificant paperwork errors. See blog.
While the RAC program has recovered a substantial sum of alleged overpayments, concurrently, it has cost health care providers an infinite amount of money to defend the allegations and has left Health and Human Services (HHS) with little funds to adjudicate the number of Medicare appeals, which increase every year. The number of Medicare appeals filed in fiscal year 2011 was 59,600. In fiscal year 2013, that number boomed to more than 384,000. Today, close to 1 million Medicare appeals stand in wait. The statutory adjudication deadline for appeals at the ALJ level is 90 days, yet the average Medicare appeal can last over 546 days.
The American Hospital Association (AHA) said – enough is enough!
AHA sued HHS’ Secretary Sylvia Burwell in 2014, but the case was dismissed. AHA appealed the District Court’s Decision to the Court of Appeals, which reversed the dismissal and gave the District Court guidance on how the backlog could be remedied.
Finally, last week, on December 5, 2016, the District Court published its Opinion and set forth the above referenced mandated dates for eliminating the Medicare appeal backlog.
While, administratively, the case was dismissed, the District Court retained “jurisdiction in order to review the required status reports and rule on any challenges to unmet deadlines.”
In non-legalese, the Court said “The case is over, but we will be watching you and can enforce this Decision should it be violated.”
This is a win for all health care providers that accept Medicare.
Knicole Emanuel Interviewed on Recent Success: Behavioral Health Care Service Still Locked in Overbilling Dispute with State
Last Thursday, I was interviewed by a reporter from New Mexico regarding our Teambuilders win, in which an administrative judge has found that Teambuilders owes only $896 for billing errors. Here is a copy of an article published in the Santa Fe New Mexican, written by Justin Horwath:
The true tragedy is that these companies, including Teambuilders, should not have been put out of business based on false allegations of fraud. Not only was Teambuilders cleared of fraud, but, even the ALJ agreed with us that Teambuilders does not owe $12 million – but a small, nominal amount ($896.35). Instead of having the opportunity to pay the $896.35 and without due process of law, Teambuilders was destroyed – because of allegations.
One of our clients in New Mexico had an alleged Medicaid recoupment of over $12 million!! Actually, $12,015,850.00 – to be exact. (See below). After we presented our evidence and testimony, the Judge found that we owe $896.35. I call that a win!
In this case, the Human Services Department (HSD) in New Mexico had reviewed 150 random claims. Initially, HSD claimed that 41 claims out of 150 were noncompliant.
But, prior to the hearing, we saved over $10 million by pointing out HSD’s errors and/or by providing additional documentation.
And then the ALJ’s decision after we presented our evidence and testimony –
Boom! Drop the mike…
…………………………….not so fast…
……………………………………………..picking the mike back up…
You see, in New Mexico, the administrative law judges (ALJs) cannot render decisions. Look in the above picture. You see where it reads, “Recommendation?” That is because the ALJs in New Mexico can only render recommendations.
Because Medicaid has a “single state agency” rule; i.e., that only one agency may render discretionary decisions regarding Medicaid, and HSD is the single state agency in New Mexico charged with managing Medicaid, only HSD may render a discretionary decision. So in NM, the ALJ makes a recommendation and then the Secretary of HSD has the choice to either accept or reject the decision.
Guess whether HSD accepted or rejected the ALJ’s recommendation?
Now we will have to appeal the Agency’s Decision to overturn the ALJ recommendation.
Here, in NC, we obtained a waiver from the Centers of Medicare and Medicaid Services (CMS) to allow our ALJs to render Decisions. See blog.
I still consider this a win.