Category Archives: Denials of Claims

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!

 

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.

Merger of Cardinal and Eastpointe: Will [Should] It Go Through?

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.

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.

Going forward:

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?

damned

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.

Look into My Crystal Ball: Who Is Going to Be Audited by the Government in 2017?

Happy New Year, readers!!! A whole new year means a whole new investigation plan for the government…

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) publishes what is called a “Work Plan” every year, usually around November of each year. 2017 was no different. These Work Plans offer rare insight into the upcoming plans of Medicare investigations, which is important to all health care providers who accept Medicare and Medicaid.

For those of you who do not know, OIG is an agency of the federal government that is charged with protecting the integrity of HHS, basically, investigating Medicare and Medicaid fraud, waste, and abuse.

So let me look into my crystal ball and let you know which health care professionals may be audited by the federal government…

crystal-ball

The 2017 Work Plan contains a multitude of new and revised topics related to durable medical equipment (DME), hospitals, nursing homes, hospice, laboratories.

For providers who accept Medicare Parts A and B, the following are areas of interest for 2017:

  • Hyperbaric oxygen therapy services: provider reimbursement
  • Inpatient psychiatric facilities: outlier payments
  • Skilled nursing facilities: reimbursements
  • Inpatient rehabilitation hospital patients not suited for intensive therapy
  • Skilled nursing facilities: adverse event planning
  • Skilled nursing facilities: unreported incidents of abuse and neglect
  • Hospice: Medicare compliance
  • DME at nursing facilities
  • Hospice home care: frequency of on-site nurse visits to assess quality of care and services
  • Clinical Diagnostic Laboratories: Medicare payments
  • Chronic pain management: Medicare payments
  • Ambulance services: Compliance with Medicare

For providers who accept Medicare Parts C and D, the following are areas of interest for 2017:

  • Medicare Part C payments for individuals after the date of death
  • Denied care in Medicare Advantage
  • Compounded topical drugs: questionable billing
  • Rebates related to drugs dispensed by 340B pharmacies

For providers who accept Medicaid, the following are areas of interest for 2017:

  • States’ MCO Medicaid drug claims
  • Personal Care Services: compliance with Medicaid
  • Medicaid managed care organizations (MCO): compliance with hold harmless requirement
  • Hospice: compliance with Medicaid
  • Medicaid overpayment reporting and collections: all providers
  • Medicaid-only provider types: states’ risk assignments
  • Accountable care

Caveat: The above-referenced areas of interest represent the published list. Do not think that if your service type is not included on the list that you are safe from government audits. If we have learned nothing else over the past years, we do know that the government can audit anyone anytime.

If you are audited, contact an attorney as soon as you receive notice of the audit. Because regardless the outcome of an audit – you have appeal rights!!! And remember, government auditors are more wrong than right (in my experience).

Former mental health providers take fight over Medicaid funds to lawmakers

Loyal followers will remember the behavioral health care debacle that happened in New Mexico in June 2013. See blog and blog and blog. Basically, the State of New Mexico accused 15 behavioral health care companies of credible allegations of fraud and immediately froze all the companies’ Medicaid reimbursements. These 15 companies comprised 87.5% of New Mexico’s behavioral health providers. The companies were forced to close their doors. Hundreds of people lost their jobs. Hundreds of thousands of Medicaid recipients no longer received their medically necessary mental health and substance abuse services. It really was and is such a sad tragedy.

Now, more than 3 years later, the consequences of that payment suspension still haunts those providers. Once they were exonerated of fraud by the Attorney General, the single state entity, Human Services Department (HSD), is now accusing them – one by one – of alleged overpayments. These alleged overpayments are extrapolated. So 10 claims for $600 turns into $2 million. See blog.

I will leave Saturday the 30th of July to fly to Albuquerque, NM, to defend one of those behavioral health care providers in administrative court. The trial is scheduled to last two weeks.

Below is a great article from today’s The Santa Fe New Mexican about this:

By: Justin Horwath
ALBUQUERQUE — Executives of three former mental health agencies told state lawmakers Wednesday that they are still fighting the state’s determination that they overbilled Medicaid, and they are expected to repay millions of dollars, even after they have been cleared of criminal wrongdoing.

“Three years after the fact, and we are still plodding through this,” Shannon Freedle, who was an executive with the now-defunct Teambuilders Counseling Services in Santa Fe, told lawmakers on the Health and Human Services Committee during a hearing in Albuquerque. He was referring to allegations in June 2013 against 15 mental health providers that led to a statewide Medicaid service shake-up.

Along with Freedle, executives of the Santa Fe-based Easter Seals El Mirador and Albuquerque-based Hogares Inc. testified about the New Mexico Human Services Department’s continued claims of Medicaid overpayments long after the state Attorney General’s Office announced it found no evidence that any of the providers had committed fraud and many of the firms have shut down.

Some of the providers, meanwhile, say the state’s former Medicaid claims contractor, OptumHealth New Mexico, still owes them millions of dollars in back payments for treating patients before the shake-up. A group of behavioral health providers, including Teambuilders, Easter Seals and Hogares, filed a lawsuit against OptumHealth in state District Court in June. OptumHealth also faces at least three other lawsuits filed this year, accusing it of Medicaid fraud.

State Rep. Bill O’Neill, D-Albuquerque, called the Human Services Department’s actions “outrageous on so many levels.”

Rep. Christine Trujillo, also an Albuquerque Democrat, called for the resignation of Human Services Department Cabinet Secretary Brent Earnest and for “criminal charges to be pressed because this isn’t human error anymore — this is actually criminal behavior.” She is the second member of the committee to call for Earnest to step down.

No Republicans on the bipartisan committee were at the presentation.

Earlier Wednesday — at a news conference in Albuquerque promoting the Martinez administration’s efforts to tackle New Mexico’s drug abuse epidemic — Gov. Susana Martinez made a rare public comment about the decision in June 2013 to freeze Medicaid payments to the 15 mental health providers on allegations they had defrauded Medicaid, the state and federal program that provides health care to low-income residents. The state brought in five Arizona firms to replace the New Mexico providers, but three of them have since left the state, citing financial losses

Martinez said the decision to freeze the Medicaid payments “was recommended by the federal government.”

“But the patients were continued to be serviced and their services were not interrupted,” she said, “unless they decided on their own that they wanted to not continue.”

Asked to clarify Martinez’s statement about the federal government’s role in the Medicaid payment freeze, Michael Lonergan, the governor’s spokesman, said in an email that Martinez was “referencing federal law, which calls for the state to suspend payments and investigate any credible allegations of fraud.”

Federal law gave the state the option to freeze Medicaid payments but didn’t require it.

Kyler Nerison, a spokesman for the Human Services Department, defended the agency’s efforts to pursue the return of funds allegedly overpaid to the former Medicaid providers, saying in an email that the “Attorney General’s limited review of the agencies that had their payments suspended found thousands of cases of billing errors and other regulatory violations.

“Medicaid dollars should be used to help the people who need it most, and if these politicians want to turn a blind-eye to that kind of waste and abuse, that’s solely on them,” Nerison said. “The Human Services Department will continue working to recoup the misspent and overbilled Medicaid dollars as we continue to help more New Mexicans than ever before in both Medicaid and behavioral health services.”

Freedle said he will attend a Human Services Department hearing next week to contest the agency’s claim that Teambuilders owes the state $2.2 million. At issue is the agency’s use of extrapolation to determine the figure of the alleged overbilling. The agency pointed to 12 allegedly errant claims Teambuilders had made to OptumHealth requesting Medicaid reimbursements worth a total of $728.

But Freedle said the Human Services Department used overpayments found in a small sample of claims and multiplied the amount by 3,000 to determine overbilling over a longer period of time, without proving such billing errors occurred. An investigation by the Attorney General’s Office, which found no evidence of criminal fraud, also found a smaller error rate.

Patsy Romero, CEO of Easter Seals El Mirador, and Nancy Jo Archer, who was the CEO of Hogares, broke down in tears as they described the Human Services Department’s “fair hearing process.”

“That’s really and truly an oxymoron,” Archer said.

CMS’ Feeble Attempt to Decrease Medicare Appeal Backlog Will, At Least, Benefit Providers

On August 1, 2015, the Center for Medicare and Medicaid Services (CMS) clarified (limited) the scope of Medicare auditors in a published article entitled, “Limiting the Scope of Review on Redeterminations and Reconsiderations of Certain Claims.” (MLN Matters® Number: SE1521).

The limitations apply to Medicare Audit Contractors (MACs) and Qualified Independent Contractors (QICs). This new instruction will apply to audits conducted on or after August 1, 2015, and will not be applied retroactively. Important to note: this instruction does not apply to prepayment review, only post payment reviews.

MLN Matters® Number: SE1521 was published in response to the overwhelming, increasingly, mushroomed backlog of Medicare appeals at the Administrative Law Judge (ALJ) level. Six years ago, prior to the Affordable Care Act (ACA), the number of Medicare appeals at the ALJ level was sustainable. Six years later, in 2015, the Medicare appeal backlog has skyrocketed to numbers beyond the comprehension of any adversely affected health care provider, i.e., over 547 days for adjudication!

So in order to combat these overwhelming, bottle-necked and “anything but speedy Medicare appeals,” CMS attempted to rectify the situation by setting new limitations (among other measures) as to the scope of authority that MACs and QICs may present on an audit.  However, these new limitations remind me of the hole that is in my front yard. Yes, a hole. The title of this story is “Inertia: What is Easy to Keep Going, Is Impossible to Pull Back” or “I love my husband’s intentions, but the result looks like the Medicare backlog.”

My wonderful husband and I purchased a small farm at the beginning of the year. If you have been following my blog over the past year, you will know that we have horses, peacocks, a micro pig, two dogs, and a 10-year-old. It is a whirlwind of fun.

Well, included in our purchase was a very shallow, very mosquito-ridden pond. It was about 4-5 inches deep and I never really thought about it. It was a pond. It was not beautiful, but it was not ugly. It was just there.

My husband tells me one day that he is going to “clean out the pond.”

BEFORE (except he already tore up the grass, so I do not have a true before picture):

smallpond

Every day, for three months, I come home to a deeper and deeper pond.

“I’m bound to hit a spring,” he would say. Or “Leroy says that there is a lot of water under our ground.” How Leroy came to this conclusion, I do not know. But, slowly, and almost unperceptively, each day the hole grows wider and deeper.

Until, one day, I come home to this:

AFTER:

hole

It would be funny if it were in your yard. (BTW: For scale, check out the horses (one is white, one is brown) in the top left corner.)

“I love my husband’s intentions, but the result looks like the Medicare backlog.”

You cannot undo digging a hole in your front yard that could swallow an elephant..or maybe two or three elephants. Just like you cannot undo a Medicare appeal backlog that could, potentially, fill my hole with its paperwork. You just have to make do, sit on your front porch, and admire the meteor-like hole that resides in your front lawn.

We (He) have (has) high hopes that our hole will become a lake or a swimming hole. In order to help the cause, I spit in it every time I walk by it. In the alternative, we sometimes aim the sprinkler toward the hole and let it run for a few hours. These are examples of our attempts of reconciling our hole into a beautiful swimming hole.

Similarly, when CMS created these MACs and QICs for Medicare audits, at first, it seemed that the MACs and QICs had no limits as to their scopes of authority to audit. Due to these overzealous and, sometimes, overreaching audits, the appeal backlog increased in number, then multiplied. Similar to the construction of my hole, the appeal backlog grew slowly, at first, then exponentially until the backlog is out of hand and uncontrollable. See blog.

One example of the seemingly limitless authority that the MACs and QICs wielded was that the auditors would provide reasons why claims were noncompliant, the defect could be cured, and the MACs and/or QICs would deny the claim for an entirely different reason.

The auditor would, in essence, be moving the goalposts after you kicked the ball. And the appeal backlog continued to swell.

The ability for the auditors to expand the review of claims beyond which was initially reviewed contributed the massive backlog of Medicare appeals at the ALJ level because more providers appeal an audit with which they disagree (common sense). Just like my hole in my front yard, the backlog of appeals grew, then ballooned until the number of Medicare appeals stuck in the backlog could possibly fill my hole. See blog for the Medicare appeal process and appeal deadlines.

According to the most current statistics available, there is a Medicare appeal backlog of approximately 870,000 appeals.  The average processing time for appeals decided in fiscal year 2015 is 547.1 days.

average time

Look at the balloon effect of “average processing time by fiscal year.” In 2009, the average processing time was 94.9 days (a little over 3 months). Now it is over 540 days (almost a year and a half)!!

“I love my husband’s intentions, but the result looks like the Medicare backlog.”

In an attempt to clear the backlog, CMS released MLN Matters® Number: SE1521, on August 1, 2015, in which “CMS has instructed MACs and QICs to limit their review to the reason(s) the claim or line item at issue was initially denied.” (emphasis added).

An exception, however, is if claims are denied for insufficient documentation and the provider submits documents, the claim may still be denied for lack of medical necessity if the documents submitted do not support medical necessity.

This new instruction found in MLN Matters No. SE1521 is an attempt by CMS to reconcile the huge backlog of Medicare appeals at the ALJ level. It is a small gesture. Quite frankly, this instruction should be self-evident as it is inherently unfair to providers to move the goalposts during an audit. I liken this gesture to my husband aiming the sprinkler toward the hole.

sprinkler

In other words, in my opinion, this feeble gesture alone, will not solve the problem. But, in the meantime, it will benefit providers who have been suffering from the goalposts being moved during an audit.

Once something is so big…

“I love my husband’s intentions, but the result looks like the Medicare backlog.”

Maybe the backlog will be fixed when my hole has transformed to a swimming hole.

Attention: All Medicaid Providers Whose Services Require Prior Authorization: A Way to Increase Revenue and Help Medicaid Recipients…Or…Killing Two Birds with One Stone

Attention: All Medicaid Providers Whose Services Require Prior Authorization

A Way to Increase Revenue and Help Medicaid Recipients

Have you heard the cliché: “Killing two birds with one stone….?”

The phrase is thought to have originated in the early 1600s when slingshots were primarily used for bird hunting.  (BTW: My husband, who is an expert bird hunter (with guns), I am sure, would be able to hit two birds with one stone…he is that good.  In fact, he may have already shot two birds with one bullet).  Anyway, Thomas Hobbs, an English political philosopher, is generally given credit for coining the phrase in 1656, although Ovid has a similar expression in Latin over 2000 years prior.  Killing two birds with one stone generally means achieving two objectives with one action. (Which, obviously, is a good thing).

For our purposes here, killing two birds with one stone means that by undergoing one action (appealing all Medicaid recipients’ denials, terminations, and reductions for services requiring prior authorization) two positive results are achieved:

1. The Medicaid recipients have their denials, terminations, and reductions appealed (or…people who need services may actually get those necessary services); and

2. Your provider company makes more money.

Not all Medicaid services require prior authorization.  But many do.  Many prescription drugs require prior approval.  Certain services during a pregnancy for a Medicaid pregnant woman require prior authorization. In behavioral health care, almost all services require prior authorizations (although there are some unmanaged visits in outpatient behavioral health (OBT) that do not require prior authorization).  Even though other Medicaid services require prior authorization, this blog and NCGS 108D only applies to behavioral health care (because NCGS 108D applies to MCOs and the MCOs only manage behavioral health care).  You should appeal all other denied, terminated, or reduced Medicaid services that require prior authorization, but the appeal process in this blog pertains to behavioral health care.

Why care about Medicaid recipient appeals?

It is indisputable that people start companies to make money (except 501(c) companies).  You’ve heard all the cliches…”Money makes the world go around…” “The lack of money is the root of all evil…” “Money: power at its most liquid…”

We’ve also heard all the cliches…”Money can’t buy happiness…” “I have no money, no resources, no hope. I am the happiest man alive….” “Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants.”

Regardless whether you believe that money is a necessary evil or the key to happiness, it is without question that people need money to get by in life.  Therefore, when people create companies, it is, normally, with the intent to make money.

Medicaid providers are no exception.

True, Medicaid reimbursements are crappy.  But, despite the crappy/low Medicaid reimbursements, Medicaid providers still hope to make some profit…and do good. (2 birds…1 stone).

We all want to make money and help Medicaid recipients, right? (I know I do).

So with my “handy dandy” tips in this blog, you, too, can kill two birds with stone. You can do both: make more money and help Medicaid recipients.

Wait, I thought providers could not appeal on behalf of our clients? I have heard this incorrect statement over and over from multiple clients.  It simply is not true.

NCGS 108D(4)(b) states that “[e]nrollees, or network providers authorized in writing to act on behalf of enrollees, may file requests for grievances and LME/MCO level appeals orally or in writing. However, unless the enrollee or network provider requests an expedited appeal, the oral filing must be followed by a written, signed grievance or appeal.” (emphasis added).

You just need the Medicaid recipient’s consent in writing.

Increased Profit AND Providing Medicaid Services to Recipients: Two Birds…One Stone!

First, how would appealing all terminations, denials and reductions for Medicaid services increase profit for you, as a provider?

For terminations and reductions (not initial authorizations), if you appeal, the Medicaid recipients are required to receive maintenance of service (MOS).  This means that, at the very least (even if you lose), if you appeal, you are able to provide services and be reimbursed for services during the appeal process. 

For example, you have a developmentally disabled (DD) Medicaid client, who has received 8 hours/day personal care services (PCS) for the last 4 years.  You submit your yearly plan of care (POC) requesting 8 hours PCS/day per norm.  The managed care organization (MCO) reduces your client’s PCS to 6 hours/day.  If you timely appeal the reduction or termination, the MCO will be required to reimburse for 8 hours PCS/day throughout the appeal process.

NCGS 108D-6(c) states: “Continuation of Benefits. – An LME/MCO shall continue the enrollee’s benefits during the pendency of a LME/MCO level appeal to the same extent required under 42 C.F.R. § 438.420.”

42 C.F.R. 438.420 states that:

“Continuation of benefits. The MCO or PIHP must continue the enrollee’s benefits if—

(1) The enrollee or the provider files the appeal timely;
(2) The appeal involves the termination, suspension, or reduction of a previously authorized course of treatment;
(3) The services were ordered by an authorized provider;
(4) The original period covered by the original authorization has not expired; and
(5) The enrollee requests extension of benefits.

Pay particular attention to subsection (5)…the enrollee must request MOS.  Don’t forget to add that little phrase into the form that you have the enrollee sign to consent to appeal.

MOS allows you to be paid during the appeal AND the Medicaid recipient to receive the medically necessary services during the pendency of the appeal.

Two birds…one stone.

For terminations and reductions, there is no need to ask for an expedited hearing (will discuss momentarily), because with MOS, there is no hurry (the recipient is receiving the needed services and you are getting paid).

So, let’s turn to an initial denial for a Medicaid service that requires prior authorization and the appeal process:

If the MCO denies an initial authorization, the Medicaid recipient is not entitled to MOS.  However, appealing these initial denials are just as important to (a) the recipients; and (b) your profit as appealing the terminations and denials.

But an appeal can takes months and the recipient (assuming medical necessity truly exists) needs the behavioral health care services in order to not decompensate. So how can the appeal help?

Answer: Request an expedited appeal.

NCGS 108D-7 states:

“When the time limits for completing a standard appeal could seriously jeopardize the enrollee’s life or health or ability to attain, maintain, or regain maximum function, an enrollee, or a network provider authorized in writing to act on behalf of an enrollee, has the right to file a request for an expedited appeal of a managed care action no later than 30 days after the mailing date of the notice of managed care action. For expedited appeal requests made by enrollees, the LME/MCO shall determine if the enrollee qualifies for an expedited appeal. For expedited appeal requests made by network providers on behalf of enrollees, the LME/MCO shall presume an expedited appeal is necessary.”

Important: You still have 30 days to appeal.

Even more important: The MCO is required, by statute, to PRESUME an expedited appeal is necessary.

True the General Assembly really gave mentally ill, developmentally disabled, and substance abuse population the shaft when they passed, and McCrory signed, Senate Bill 553, now Session Law 2013-397, by placing the legal burden of proof on the Medicaid recipient in all circumstances (really??), but the small ray of hope is that, at least as it pertains to expedited appeals, the MCO must presume that an expedited appeal is necessary for the well-being of the recipient.

Going back to expedited appeals, the MCO must make “reasonable efforts” (yes, there is too much wiggle room there) to notify the Medicaid recipient/provider of a denial of an expedited appeal within 2 days.  I also believe that is in the best interest of an MCO to authorize expedited appeals, because….could you imagine the implications and legal liability on the MCO if the MCO denies an appeal to be expedited and something horrible happens to the Medicaid recipient as a direct result of the MCO’s refusal to expedite the appeal????  Or, even worse, the recipient harms others as a  result of the appeal not being expedited??? WHOOO HOOOO….talk about bad PR!!!

So, two days to determine whether the MCO will accept the request for an expedited appeal.  How long for a decision?

According to NCGS 108D-7(d), “[i]f the LME/MCO grants a request for an expedited LME/MCO level appeal, the LME/MCO shall resolve the appeal as expeditiously as the enrollee’s health condition requires, and no later than three working days after receiving the request for an expedited appeal. The LME/MCO shall provide the enrollee and all other affected parties with a written notice of resolution by United States mail within this three-day period.”  (emphasis added).

So, basically, if the MCO takes 2 days to decide to accept the expedited appeal, then there is only 1 additional day to determine the results of the appeal.  That is fast…I don’t care who you are!!

If the MCO denies the expedited appeal, then the MCO has 45 days to provide a decision.

Very Important:  Any adverse decision from an MCO is appealable to the Office of Administrative Hearings (OAH).

Ok, recap:  You, as a provider, want to appeal all Medicaid recipient denials, terminations, and reductions for the following two reasons:

1. Increase profitability for your company; and

2. Help the Medicaid recipients by appealing denials, terminations or reductions, and, hopefully, obtaining the medically necessary services for your clients.

Win…win.

2 birds…1 stone.