Category Archives: Medicare Audits
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.
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.
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:
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.
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!
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:
- 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!
The Center for Medicare and Medicaid Services (CMS) announced the expansion of Targeted Probe and Educate (TPE) audits. At first glance, this appears to be fantastic news coming on the heels of so much craziness at Health and Human Services (HHS). We have former-HHS Secretary Price flying our tax dollars all over. Dr. Don Wright stepping up as our new Secretary. The Medicare appeal backlog fiasco. The repeal and replace Obamacare bomb. Amidst all this tomfoolery, health care providers are still serving Medicare and Medicaid patients, reimbursement rates are in the toilet, which drives down quality and incentivizes providers to not accept Medicare or Medicaid (especially Caid), and providers are undergoing “Audit Alphabet Soup.” I actually had a client tell me that he receives audit letters requesting documents and money every single week from a plethora of different organizations.
So when CMS announced that it was broadening its TPE audits, it was a sigh of relief for many providers. But will TPE audits be the benign beasts they are purporting to be?
What is a TPE audit? (And – Can We Have Anymore Acronyms…PLEASE!)
CMS says that TPE audits are benevolent. CMS’ rhetoric indicates that these audits should not cause the toner to run out from overuse. CMS states that TPE audits will involve “the review of 20-40 claims per provider, per item or service, per round, for a total of up to three rounds of review.” See CMS Announcement. The idea behind the TPE audits (supposedly) is education, not recoupments. CMS states that “After each round, providers are offered individualized education based on the results of their reviews. This program began as a pilot in one MAC jurisdiction in June 2016 and was expanded to three additional MAC jurisdictions in July 2017. As a result of the successes demonstrated during the pilot, including an increase in the acceptance of provider education as well as a decrease in appealed claims decisions, CMS has decided to expand to all MAC jurisdictions later in 2017.” – And “later in 2017” has arrived. These TPE audits are currently being conducted nationwide.
Below is CMS’ vision for a TPE audit:
Clear? As mud?
The chart does not indicate how long the provider will have to submit records or how quickly the TPE auditors will review the documents for compliance. But it appears to me that getting through Round 3 could take a year (this is a guess based on allowing the provider 30 days to gather the records and allowing the TPE auditor 30 days to review).
Although the audit is purportedly benign and less burdensome, a TPE audit could take a whole year or more. Whether the audit reviews one claim or 20, having to undergo an audit of any size for a year is burdensome on a provider. In fact, I have seen many companies having to hire staff dedicated to responding to audits. And here is the problem with that – there aren’t many people who understand Medicare/caid medical billing. Providers beware – if you rely on an independent biller or an electronic medical records program, they better be accurate. Otherwise the buck stops with your NPI number.
Going back to CMS’ chart (above), notice where all the “yeses” go. As in, if the provider is found compliant , during any round, all the yeses point to “Discontinue for at least 12 months.” I am sure that CMS thought it was doing providers a favor, but what that tells me is the TPE audit will return after 12 months! If the provider is found compliant, the audit is not concluded. In fact, according to the chart, the only end results are (1) a referral to CMS for possible further action; or (2) continued TPE audits after 12 months. “Further action” could include 100% prepayment review, extrapolation, referral to a Recovery Auditor, or other action. Where is the outcome that the provider receives an A+ and is left alone??
CMS states that “Providers/suppliers may be removed from the review process after any of the three rounds of probe review, if they demonstrate low error rates or sufficient improvement in error rates, as determined by CMS.”
I just feel as though that word “may” should be “will.” It’s amazing how one word could change the entire process.
Silence Can Be Deadly: Can You Be Held Responsible for Medicare/caid Billings Errors That You Never Knew Existed?
You submit a claim for medically necessary services for a Medicaid recipient. Let’s say you provide behavioral health care services and prescribe medication for people who suffer from schizophrenia or bipolar. One member of your staff (a PA) prescribes Abilify to a child – perfectly acceptable treatment for schizophrenia. The child suffers a seizure and dies. It is discovered, unbeknownst to you, as the owner of the agency, that the staff member prescribing the medication was not appropriately supervised. You are shocked. You are dismayed. You are terrified.
Sure enough, someone tattles on you and a qui tam lawsuit is filed against your agency.
A qui tam (kwee tam) lawsuit is Latin for “who as well,” a lawsuit brought by a private citizen (popularly called a “whistleblower”) against a person or company who is believed to have violated the law in the performance of a contract with the government or in violation of a government regulation, when there is a statute which provides for a penalty for such violations. The whistleblower in qui tam lawsuits can be awarded a lot of money, which is why whistleblowers bring the lawsuits.
In other words, a qui tam lawsuit filed against you is bad…very bad.
You are looking at six figures, easily, in attorneys’ fees, years of litigation, endless sleepless nights, and a high dose of Prozac. All because one of your staff was not properly licensed and could not prescribe medication without supervision. And you had no idea…
Wait…what? Isn’t “intent” or, legally, “scienter” a requirement to prove fraud?? You mean that I could be prosecuted for fraud when I had zero intent to commit fraud, plus, I didn’t even know it was occurring?
This is what happened to Universal Health Services, Inc.’s subsidiary that provided behavioral health care services in Massachusetts. Universal Health Serv. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016).
The Court of Appeals for the First Circuit held that each time a billing party submits a claim, it implicitly communicates that it conformed to the relevant program requirements, such that it was entitled to receive payment. Every claim implicitly promised compliance of every law!
Imagine the slippery slope with this decision – a multi-state company with offices across the nation bills millions to Medicare and Medicaid monthly. Executive management is in Rhode Island. An office in Tampa fails to check the criminal background of its employees for a period of a year, but in all other ways complies with the regulations and renders medically necessary services that entire year. According to the 1st Circuit opinion, the company could be liable for fraud and the false claims act, resulting in millions of dollars of penalties.
Did it matter to the judge in this case that the company was large? What if it were a small company with one office and four staff?
Juxtapose the 7th Circuit which held only express (or affirmative) falsehoods can render a claim “false” or “fraudulent.” In other words, you can only be held liable for fraud if you purposely or affirmatively acted.
The Supreme Court (last year) held that the implied false certification theory can, at least in some circumstances, provide a basis for liability.
The thinking is that a half truth is a lie. Which is correct…but is it fraud? A classic example of an actionable half-truth in contract law is the seller who reveals that there may be two new roads near a property he is selling, but fails to disclose that a third potential road might bisect the property.
The False Claims Act imposes civil liability on “any person who . . . knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.” §3729(a)(1)(A). Here’s the prob-lem-o: Congress never defined what is “false.”
Here is what the Supreme Court had to say about the unlicensed social worker:
“So too here, by submitting claims for payment using payment codes that corresponded to specific counseling services, Universal Health represented that it had provided individual therapy, family therapy, preventive medication counseling, and other types of treatment. Moreover, Arbour staff members allegedly made further representations in submitting Medicaid reimbursement claims by using National Provider Identification numbers corresponding to specific job titles. And these representations were clearly misleading in context. Anyone informed that a social worker at a Massachusetts mental health clinic provided a teenage patient with individual counseling services would probably—but wrongly—conclude that the clinic had complied with core Massachusetts Medicaid requirements (1) that a counselor “treating children [is] required to have specialized training and experience in children’s services,” 130 Code Mass. Regs. §429.422, and also (2) that, at a minimum, the social worker possesses the prescribed qualifications for the job, §429.424(C). By using payment and other codes that conveyed this information without disclosing Arbour’s many violations of basic staff and licensing requirements for mental health facilities, Universal Health’s claims constituted misrepresentations.””
In English, this means that: With the act of submitting a Medicaid claim, you are promising that you have followed all rules, including the licensure status required for rendering that service.
The Court held that:
The issue is whether a defendant should face False Claims Act liability only if it fails to disclose the violation of a contractual, statutory, or regulatory provision that the Government expressly designated a condition of payment. The Court concluded that the FCA does not impose this limit on liability. But it also held that not every undisclosed violation of an express condition of payment automatically triggers liability. It matters whether the omission was material.
The Supreme Court determined that not all statutory or regulatory violations are material, disagreeing with the government and the 1st Circuit.
But the Court never made a decision regarding Universal Health Services, Inc. Instead, it vacated the 1st Circuit and remanded the case for reconsideration of whether respondents have sufficiently pleaded a False Claims Act violation. But in doing so, the Court gave guidance as to its opinion. It wrote: “This case centers on allegations of fraud, not medical malpractice.”
What that one sentence tells me is that the Supreme Court does not want to create liability for any and every regulatory omission/mistake on a Medicaid claim. Mistakes happen. People are human. Apparently, even the Supreme Court knows that…
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!
Four months after the Center for Medicare and Medicaid Services’ (CMS) Final Rule went in effect (March 2017) attempting to eliminate the Medicare appeal backlog and 6 months before United States District Court for the District of Columbia’s first court-imposed deadline (end of 2017) of reducing the Medicare appeal backlog by 30%, the Department of Health and Human Services (HHS) are woefully far from either. According to HHS’ June 2017 report on the Medicare appeal backlog, 950,520 claims will remain in the backlog by 2021. This is in stark contrast to the District Court’s Order that HHS completely eliminate the backlog by 2020. So will HHS be held in contempt? Throw the Secretary in jail? That is what normally happened when someone violates a Court Order.
Supposedly, HHS’ catastrophic inability to decrease the Medicare appeal backlog is not from a lack of giving the ole college try. But, in its June 2017 report, HHS blames funding.
CMS issued a new Final Rule in January 2017, which took effect March 2017, in hopes of reducing the massive Medicare provider appeal backlog that has clogged up the third level of appeal of Medicare providers’ adverse actions. In the third level of appeal, providers make their arguments before an administrative law judge (ALJ). For information on all the Medicare appeal levels, click here.
The Office of Medicare Hearings and Appeals (OMHA) claims that it currently can adjudicate roughly 92,000 appeals annually. The current backlog is approximately 667,326 appeals that HHS estimates will grow to 950,520 by 2021. The average number of days between filing a Petition with OMHA and adjudicating the case is around 1057.2 days.
HHS had high hopes that these changes would eliminate the backlog. In HHS’ Final Rule Fact Sheet, it states “with the administrative authorities set forth in the final rule and the FY 2017 proposed funding increases and legislative actions outlined in the President’s Budget, we estimate that that the backlog of appeals could be eliminated by FY 2020.” The changes made to the Medicare appeals process by the January 2017 Final Rule is the following:
Changes to the Medicare Appeals Process
The changes in the final rule are primarily focused on the third level of appeal and will:
- Designate Medicare Appeals Council decisions (final decisions of the Secretary) as precedential to provide more consistency in decisions at all levels of appeal, reducing the resources required to render decisions, and possibly reducing appeal rates by providing clarity to appellants and adjudicators.
- Allow attorney adjudicators to decide appeals for which a decision can be issued without a hearing and dismiss requests for hearing when an appellant withdraws the request. That way ALJs can focus on conducting hearings and adjudicating the merits of more complex cases.
- Simplify proceedings when CMS or CMS contractors are involved by limiting the number of entities (CMS or contractors) that can be a participant or party at the hearing.
- Clarify areas of the regulations that currently causes confusion and may result in unnecessary appeals to the Medicare Appeals Council.
- Create process efficiencies by eliminating unnecessary steps (e.g., by allowing ALJs to vacate their own dismissals rather than requiring appellants to appeal a dismissal to the Medicare Appeals Council); streamlining certain procedures (e.g., by using telephone hearings for appellants who are not unrepresented beneficiaries, unless the ALJ finds good cause for an appearance by other means); and requiring appellants to provide more information on what they are appealing and who will be attending a hearing.
- Address areas for improvement previously identified by stakeholders to increase the quality of the process and responsiveness to customers, such as establishing an adjudication time frame for cases remanded from the Medicare Appeals Council, revising remand rules to help ensure cases keep moving forward in the process, simplifying the escalation process, and providing more specific rules on what constitutes good cause for new evidence to be admitted at the OMHA level of appeal.
In early June 2017, HHS issued its second status report on the Medicare appeals backlog and the outlook does not look good.
CMS held a call on June 29, 2017, to discuss recent regulatory changes intended to streamline the Medicare administrative appeal processes, reduce the backlog of pending appeals, and increase consistency in decision-making across appeal levels.
Now HHS is in danger of violating a Court Order.
In December 2016, the District Court for the District of Columbia held in American Hospital Association v Burwell case Ordered HHS to release to status reports every 90 days and the complete elimination of the backlog by 2020, HHS is also required to observe several intermediary benchmarks: 30% reduction by the end of 2017, 60% by the end of 2018, 90% by the end of 2019, and then ultimately 100% elimination by the end of 2020.
BUT LITTLE TO NOTHING HAS CHANGED.
HHS itself has maintained since the requirements were instituted that the elimination of the backlog would not be possible. June’s report projects 950,520 claims will remain by 2021, but this projection is still very far from meeting the court order.
HHS blames funding.
But even significant increase of funding (from about $107 million in 2017, to $242 million in 2018) will not cure the problem! I find it very disturbing that $242 million could not eliminate the Medicare appeal backlog. So what will happen when HHS fails to meet the Court’s mandate of a 30% reduction of the backlog by the end of 2017? Hold the Secretary in contempt?
The court in Burwell drafted a “what if” into the Decision—the Court stated: “if [HHS] fails to meet [these] deadlines, Plaintiffs may move for default judgment or to otherwise enforce the writ of mandamus.” This allows the Court authority to enforce its Decision, but it has not motivated HHS to try any innovative procedures to reduce the backlog. So far no additional actions have been attempted, and the backlog remains.
If HHS is in violation of the Court Order at the end of 2017, the Court could issue harsh penalties. (Or the Court could do nothing and be a complete disappointment).
On July 13, 2017, Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced the Department of Justice’s (DOJ) biggest-ever health care fraud takedown. 412 health care providers were charged with health care fraud. In total, allegedly, the 412 providers schemed and received $1.3 billion in false billings to Medicare, Medicaid, and TRICARE. Of the 412 defendants, 115 are physicians, nurses, and other licensed medical professionals. Additionally, HHS has begun the suspension process against 295 health care providers’ licenses.
The charges include allegations of billing for medically unnecessary treatments or services that were not really provided. The DOJ has evidence that many of the defendants had illegal kickback schemes set up. More than 120 of the defendants were charged with unlawfully or inappropriately prescribing and distributing opioids and other narcotics.
While this particular sting operation resulted from government investigations, not all health care fraud is discovered through government investigation. A great deal of fraud is uncovered through private citizens coming forward with incriminating information. These private citizens can file suit against the fraudulent parties on behalf of the government; these are known as qui tam suits.
Being a whistleblower goes against what most of us are taught as children. We are taught not to be a tattletail. I have vivid memories from elementary school of other kids acting out, but I would remain silent and not inform the teacher. But in the health care world, tattletails are becoming much more common – and they make money for blowing that metaphoric whistle.
What is a qui tam lawsuit?
Qui tam is Latin for “who as well.” Qui tam lawsuits are a type of civil lawsuit whistleblowers (tattletails) bring under the False Claims Act, a law that rewards whistleblowers if their qui tam cases recover funds for the government. Qui tam cases are a powerful weapon against Medicare and Medicaid fraud. In other words, if an employee at a health care facility witnesses any type of health care fraud, even if the alleged fraud is unknown to the provider, that employee can hire an attorney to file a qui tam lawsuit to recover money on behalf of the government. The government investigates the allegations of fraud and decides whether it will join the lawsuit. Health care entities found guilty in a qui tam lawsuit will be liable to government for three times the government’s losses, plus penalties.
The whistleblower is rewarded for bringing these lawsuits. If the government intervenes in the case and recovers funds through a settlement or a trial, the whistleblower is entitled to 15% – 25% of the recovery. If the government doesn’t intervene in the case and it is pursued by the whistleblower team, the whistleblower reward is between 25% – 30% of the recovery.
These recoveries are not low numbers. On June 22, 2017, a physician and rehabilitative specialist agreed to pay $1.4 million to resolve allegations they violated the False Claims Act by billing federal health care programs for medically unreasonable and unnecessary ultrasound guidance used with routine lab blood draws, and with Botox and trigger point injections. If a whistleblower had brought this lawsuit, he/she would have been awarded $210,000 – 420,000.
On June 16, 2017, a Pennsylvania-based skilled nursing facility operator agreed to pay roughly $53.6 million to settle charges that it and its subsidiaries violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary therapy and hospice services. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by 7 former employees of the company. The whistleblower award – $8,040,000 – 16,080,000.
There are currently two, large qui tam cases against United Health Group (UHG) pending in the Central District of California. The cases are: U.S. ex rel. Benjamin Poehling v. UnitedHealth Group, Inc. and U.S. ex rel. Swoben v. Secure Horizons, et al. Both cases were brought by James Swoben, who was an employee and Benjamin Poehling, who was the former finance director of a UHG group that managed the insurer’s Medicare Advantage Plans. On May 2, 2027, the U.S. government joined the Poehling lawsuit.
The charges include allegations that UHG:
- Submitted invalid codes to the Center for Medicare and Medicaid Services (CMS) that it knew of or should have known that the codes were invalid – some of the dates of services at issue in the case are older than 2008.
- Intentionally avoided learning that some diagnoses codes or categories of codes submitted to their plans by providers were invalid, despite acknowledging in 2010 that it should evaluate the results of its blind chart reviews to find codes that need to be deleted.
- Failed to follow up on and prevent the submissions of invalid codes or submit deletion for invalid codes.
- Attested to CMS each year that the data they submitted was true and accurate while knowing it was not.
UHG would not be in this expensive, litigious pickle had it conducted a self audit and followed the mandatory disclosure requirements.
What are the mandatory disclosure requirements? Glad you asked…
Section 6402(a) of the Affordable Care Act (ACA) creates an express obligation for health care providers to report and return overpayments of Medicare and Medicaid. The disclosure must be made by 60 days days after the date that the overpayment was identified or the date any corresponding cost report is due, if applicable. Identification is defined as the point in which the provider has determined or should have determined through the exercise of due diligence that an overpayment exists. CMS expects the provider to proactively investigate any credible information of a potential overpayment. The consequences of failing to proactively investigate can be seen by the UHG lawsuits above-mentioned. Apparently, UHG had some documents dated in 2010 that indicated it should review codes and delete the invalid codes, but, allegedly, failed to do so.
How do you self disclose?
According to CMS:
“Beginning June 1, 2017, providers of services and suppliers must use the forms included in the OMB-approved collection instrument entitled CMS Voluntary Self-Referral Disclosure Protocol (SRDP) in order to utilize the SRDP. For disclosures of noncompliant financial relationships with more than one physician, the disclosing entity must submit a separate Physician Information Form for each physician. The CMS Voluntary Self-Referral Disclosure Protocol document contains one Physician Information Form.”