Category Archives: Federal Law
E/M Codes and When You Should NOT Fire Your Attorney!
Lately, I have been inundated with Medicare and Medicaid health care providers getting audited for E/M codes. I know Dr. Hirsh has spoken often about the perils of e/m codes. The thing about e/m codes is that everyone uses them. Hospitals, family physicians, urgent care centers, specialists, like cardiologists. Obviously, for a specialist, like cardiology, the higher level codes will be more common. A 99214 will be common compared to a generalist like a primary care physician, where a 99213 may be more common.
Here’s a little secret: the difference between a 99214 and 99213 is subjective. It’s so subjective that I have seen auditors who are hired by private companies to audit on behalf of CMS and are financially incentivized to find fault find 100% error rates. Who finds a 100% error rate? Not one claim out of 150 was compliant. Then, I come in and hire the best independent auditors or coders. There are generally two companies that I always use. The independent auditors are so good. Most importantly, they come in and find a much more probable error rate of almost zero.
Hiring an independent, expert coder to ensure that the RAC, MAC, UPIC, or TPE audits accurately is always part of my defense.
Recently, I learned what I should have known a long time ago, but is essential for our listeners to know. If your medical malpractice is with The Doctors Company, for free, you get $25k of – what TDC calls – Medi-Guard or regulatory compliance protection. In other words, you get audited by a UPIC and are informed that you owe an alleged $5 million, extrapolated, of course, you get $25k to pay an attorney for defense. Sadly, $25k will not come close to paying your whole defense, but it’s a start. No one scoffs at “free” money.
When accused of an alleged overpayment, placed on prepayment review, or accused of a credible allegation of fraud, your reimbursements could be in imminent danger of being suspended or recouped. It is imperative for the health care provider to stay apprised of what penalties they are facing. You want to know: “best case scenario and worst case scenario.”
And, providers, be cognizant of the gravity of your situation. Infringement of the false claims act can result in high penalties or jail, depending on the circumstances and the provider’s attorney. I had a client, who is an M.D. psychiatrist. She asked me what is the worst penalty possible. I am blunt and honest, apparently to a fault. I didn’t miss a beat. “Jail,” I said. She was horrified, called her insurance company, and requested a new attorney. TDC refused to fire me, so the doctor said that she will draft the self-disclosure herself. She also said that she submitted the falsified documents to the UPIC, so she was confident that the UPIC would not notice, but see below, time stamps are a bitch.
When I told the doctor that we needed to self-disclose to OIG because she had some Medicare claims, she screamed, “No! No! NO!” It was a video call and my sound wasn’t up loud, and I just watch her on the screen with her face all contorted and her mouth getting really big, then contract, then get really big, then contract, then get really big and then even bigger. The expert certified coder was present for the call, and he called me afterward asking me: “What was that?” And his wife, who overheard, said, “OMG. I would have lashed out.” I kept my cool. Honestly, I just felt bad for her because I can see the writing on the wall.
Obviously, a new attorney is not going to change the outcome. She falsified 17 dates of service because she wanted the service notes to be “perfect.” Well, providers, there is no such thing as perfect and changing diagnoses and CPT codes and adding details to the notes that, supposedly, you remember from a month ago is not ok.
I did feel bad for her for leaving me. I could have gotten her off without any penalties.
You see, English is not her first language. She misinterpreted an email from the UPIC and thought it said that you can fix any errors before submitting the documents. She fabricated 17 claims before I was hired instructed her to stop. I had a solid defense prepared. I was going to hire an independent auditor to audit her 147 claims with the 17 falsified claims. I would have hoped for a low error rate. Then, I would have conducted a self-audit and self-disclosed the fabrications to the UPIC with the explanation that it was a nonintentional harmless error that we are admitting. Self-disclosure can, sometimes, save you from penalties! However, if she doesn’t self-disclose, she will be caught. Unbeknownst to her, on page 6 of the service notes, it is time and date stamped. It revealed on what day she changed the data and what data she changed. Those of you who would also terminate your attorney because you think you can get by with the fraud without anyone noticing, think hard about whether you would like to suffer the worst penalty – jail – or have your attorney be honest and upfront and get you off without penalties by following the rules and self-disclosing any problems uncovered.
I have no idea what will happen to the doctor, but had she stayed with me, she would have escaped without penalty. When not to fire your attorney!
Ding Dong! PHE Is Dead!!!
The federal Public Health Emergency (PHE) for COVID-19, declared under Section 319 of the Public Health Service (PHS) Act, is expiring at the end of the day on May 11, 2023, today! This is huge. There have been thousands of exceptions and waivers due to COVID throughout the last 2 1/2 years. But on the end of the day on May 11, 2023…POOF….
Most exceptions or waivers will immediately cease.
The Department claims it has been working closely with partners—including Governors; state, local, Tribal, and territorial agencies; industry; and advocates—to ensure an orderly transition out of the COVID PHE.
Yesterday, HHS released a Fact Sheet. It is quite extensive, as it should be considering the amount of regulatory compliance changes that will happen overnight!
Since January 2021, COVID deaths have declined by 95% and hospitalizations are down nearly 91%.
There are some flexibilities and actions that will not be affected on May 11.
Access to COVID vaccinations and certain treatments, such as Paxlovid and Lagevrio, will generally not be affected.
At the end of the PHE on May 11, Americans will continue to be able to access COVID vaccines at no cost, just as they have during the COVID PHE. People will also continue to be able to access COVID treatments just as they have during the COVID PHE.
At some point, the federal government will no longer purchase or distribute COVID vaccines and treatments, payment, coverage, and access may change.
On April 18, 2023, HHS announced the “HHS Bridge Access Program for COVID-19 Vaccines and Treatments.” to maintain broad access to vaccines and treatments for uninsured Americans after the transition to the traditional health care market. For those with most types of private insurance, COVID vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) are a preventive health service and will be fully covered without a co-pay when provided by an in-network provider. Currently, COVID vaccinations are covered under Medicare Part B without cost sharing, and this will continue. Medicare Advantage plans must also cover COVID vaccinations in-network without cost sharing, and this will continue. Medicaid will continue to cover COVID vaccinations without a co-pay or cost sharing through September 30, 2024, and will generally cover ACIP-recommended vaccines for most beneficiaries thereafter.
After the transition to the traditional health care market, out-of-pocket expenses for certain treatments, such as Paxlovid and Lagevrio, may change, depending on an individual’s health care coverage, similar to costs that one may experience for other covered drugs. Medicaid programs will continue to cover COVID treatments without cost sharing through September 30, 2024. After that, coverage and cost sharing may vary by state.
Major telehealth flexibilities will not be affected. The vast majority of current Medicare telehealth flexibilities that people with Medicare—particularly those in rural areas and others who struggle to find access to care—have come to rely upon throughout the PHE, will remain in place through December 2024. Plus, States already have significant flexibility with respect to covering and paying for Medicaid services delivered via telehealth. This flexibility was available prior to the COVID PHE and will continue to be available after the COVID PHE ends.
What will be affected by the end of the COVID-19 PHE:
Many COVID PHE flexibilities and policies have already been made permanent or otherwise extended for some time, with others expiring after May 11.
Certain Medicare and Medicaid waivers and broad flexibilities for health care providers are no longer necessary and will end. During the COVID PHE, CMS used a combination of emergency authority waivers, regulations, and sub-regulatory guidance to ensure and expand access to care and to give health care providers the flexibilities needed to help keep people safe. States, hospitals, nursing homes, and others are currently operating under hundreds of these waivers that affect care delivery and payment and that are integrated into patient care and provider systems. Many of these waivers and flexibilities were necessary to expand facility capacity for the health care system and to allow the health care system to weather the heightened strain created by COVID-19; given the current state of COVID-19, this excess capacity is no longer necessary.
For Medicaid, some additional COVID PHE waivers and flexibilities will end on May 11, while others will remain in place for six months following the end of the COVID PHE. But many of the Medicaid waivers and flexibilities, including those that support home and community-based services, are available for states to continue beyond the COVID PHE, if they choose to do so. For example, States have used COVID PHE-related flexibilities to increase the number of individuals served under a waiver, expand provider qualifications, and other flexibilities. Many of these options may be extended beyond the PHE.
Coverage for COVID-19 testing will change.
State Medicaid programs must provide coverage without cost sharing for COVID testing until the last day of the first calendar quarter that begins one year after the last day of the PHE. That means with the PHE ending on May 11, 2023, this mandatory coverage will end on September 30, 2024, after which coverage may vary by state.
The requirement for private insurance companies to cover COVID tests without cost sharing, both for OTC and laboratory tests, will end at the expiration of the PHE.
Certain COVID data reporting and surveillance will change. CDC COVID data surveillance has been a cornerstone of our response, and during the PHE, HHS had the authority to require lab test reporting for COVID. At the end of the COVID-19 PHE, HHS will no longer have this express authority to require this data from labs, which will affect the reporting of negative test results and impact the ability to calculate percent positivity for COVID tests in some jurisdictions. Hospital data reporting will continue as required by the CMS conditions of participation through April 30, 2024, but reporting will be reduced from the current daily reporting to weekly.
FDA’s ability to detect shortages of critical devices related to COVID-19 will be more limited. While FDA will still maintain its authority to detect and address other potential medical product shortages, it is seeking congressional authorization to extend the requirement for device manufacturers to notify FDA of interruptions and discontinuances of critical devices outside of a PHE which will strengthen the ability of FDA to help prevent or mitigate device shortages.
Public Readiness and Emergency Preparedness (PREP) Act liability protections will be amended. On April 14, 2023, HHS Secretary Becerra mailed all the governors announcing his intention to amend the PREP Act declaration to extend certain important protections that will continue to facilitate access to convenient and timely COVID vaccines, treatments, and tests for individuals.
More changes are occurring than what I can write in one, little blogpost. Know that auditors will be knocking on your doors, asking for dates of service during the PHE. Be sure to research the policies and exceptions that were pertinent during those DOS. This is imperative for defending yourself against auditors knocking on your doors.
And, as always, lawyer-up fast!
And just like the Wicked With of the West, DING DONG! The PHE is dead.
Medicare Extrapolation Under 50% Error Rate? No Extrapolation ALLOWED!
Earlier this year, I reported on the new extrapolation rules for all audits, including RAC, UPIC, TPE, CERT, etc. You know, that alphabet soup. The biggest change was that no extrapolation may be run if the error rate is under 50%. This was an exciting and unexpected new protection for health care providers. Now I have seen it in action and want to tell you about it.
A client of mine, an internal medicine facility in Alabama, received a notice of overpayment for over $3 million. This is the first case in which I saw the 50% error rate rule in action. Normally, I always tell clients that the first two levels of appeals are rubber-stamps. In other words, don’t expect to win. The QIC and the entity that conducted the audit saying you owe money are not going to overturn themselves. However, in this case, we were “partially favorable” at the QIC level. “Partially favorable” normally means mostly unfavorable. However, the partially favorable decision took the error rate from over 50% to under 50%. We re-grouped. Obviously, we were going to appeal because the new extrapolation was still over $1 million. However, before our ALJ hearing, we received correspondence from Palmetto that said our overpayment was $0. Confused, we wrote to the ALJ pointing out that Palmetto said our balance was zero. The Judge wrote back saying that, certainly, the money has already been recouped and the practice would get a refund if he reversed the denials.” “Ok,” we said and attended a telephonic hearing. We were unsuccessful at the hearing, and the ALJ upheld an alleged overpayment of over $1 million. We argued that the extrapolation should be thrown out due to the error rate being under 50%. The Judge still ruled against us, saying that CMS has the right to extrapolate, and the courts have upheld CMS’ ability to extrapolate. Ok, but what about the NEW RULE?
Later, we contacted Palmetto to confirm what the zero-balance meant. The letter read as if we did not owe anything, yet we had an ALJ decision mandating us to pay over a $1million. There was serious juxtaposition. After many hours of chasing answers on hold with multiple telephone answerers of Palmetto, we learned that, apparently, because the error rate dropped below 50% after the QIC level, Palmetto “wrote off” the nominal balance. Since an extrapolation was no longer allowed, the miniscule amount that Palmetto thought we owed wasn’t enough to pursue. However, the letter sent to us from Palmetto did not explain, “hey, we are writing off your overpayment because the error rate fell below 50%.” No, it was vague. We didn’t even know if it were true.
It took us reaching out to Palmetto and getting an email confirmation that Palmetto had written off the alleged overpayment due to the error rate dropping. Even the ALJ misinterpreted the letter, which tells me that Palmetto should revise its notices of write offs.
If Palmetto unilaterally dismisses or writes off any balance that is allegedly owed, the letter should explicitly explain this. Because providers and attorneys are not accustomed to receiving correspondence from a MAC, CMS, Palmetto, or any other auditing entity with GOOD NEWS. If we get GOOD NEWS from an auditing entity, that correspondence should be explicit.
Regardless, this was a huge win for me and my client, who was positively ecstatic with the outcome. Tune in next week, during which I will tell a story of how we battled successfully a qui tam action against a facility of 9 specialists due to a disgruntled employee who tried to blow the whistle on my specialists and their facility…falsely!
Supreme Court to Decide Mens Rea in FCA Claims!
First, I would like to give a quick shout out to my husband Scott. It’s his birthday today. Speaking of important days, another important day is imminent. Back in mid-January 2023, the United States Supreme Court granted certiorari in two consolidated cases from the 7th U.S. Circuit Court of Appeals — U.S. ex rel. Schutte v. SuperValu Inc., No. 21-1326, and U.S. ex rel. Proctor v. Safeway, Inc., No. 22-111 — which has teed up a case that could undermine one of the government’s most powerful tools for fighting fraud in government contracts and programs and, dare I say, overreaching tool. The False Claims Act (“FCA”). A jackhammer where a scalpel would suffice.
At issue is whether hundreds of major retail pharmacies across the country knowingly overcharged Medicaid and Medicare by overstating what their usual and customary prices were. In other words, the question presented is: Whether and when a defendant’s contemporaneous subjective understanding or beliefs about the lawfulness of its conduct are relevant to whether it “knowingly” violated the False Claims Act. Unlike most civil fraud actions, the FCA allows treble damages, which in “non-lawyer-ese” equals triple damages.
To Calculate Base Damages, you look at the injury. Determine what damages to the government resulted “because of” the defendant’s acts. The burden is on the government or the relator to prove that the damages sought were caused by the fraud. The defendant will want to be able to distance the alleged damages from the fraudulent acts to the extent possible (such that the damages cannot be said to have been caused by the defendant’s acts) in order to minimize its potential financial liability.
This case essentially began in 2006, when Walmart upended the retail pharmacy world by offering large numbers of frequently used drugs at very cheap prices — $4 for a 30-day supply — with automatic refills. That left the rest of the retail pharmacy industry desperately trying to figure out how to compete.
The pharmacies came up with various offers that matched Walmart’s prices for cash customers, but they billed Medicaid and Medicare using far higher prices, not what are alleged to be their usual and customary prices.
Walmart did report its discounted cash prices as usual and customary, but other chains did not, like Safeway and Supervalu. Even as the discounted prices became the majority of their cash sales, other retail pharmacies continued to bill the government at the previous and far higher prices.
For example, between 2008 and 2012, Safeway charged just $10 for almost all of its cash sales for a 90-day supply of a top-selling drug to reduce cholesterol. But it did not report $10 as its usual and customary price. Instead, Safeway told Medicare and Medicaid that its usual and customary price ranged from $81 to $109. In the Petition, Petitioner’s “expert estimated that Safeway received $127 million more in reimbursements from government health programs than it would have if it reported its price-match and discount club prices as its usual and customary prices.
A decision is expected this summer. Quote from the Petitioner about Safeway trying to hide their price matching policy from media or investigtors:
“With respect to price-matching, Safeway adopted an “official company policy” of denying that it would match Walmart prices “if an unidentified customer calls in. This is to avoid trouble with the media or competitors.” But “[i]f a regular customer known to you asks if we will match . . . the answer is YES.””
I foresee the pharmacies facing a looming overpayment. The Petition explains that, for example, after a pharmacy manager informed executives that Nebraska’s Medicaid program was requiring price-matched discount prices to be reported as U&C prices, an executive asked: “Does anyone think we have an issue here? My question is how the state of Nebraska will know that we offered to match any price out there.” In a follow-up communication, other executives pointed out that advertising their price-matching program would “Alert the Medicaid programs to start looking” into what Safeway was doing, and therefore stressed the “need to keep a low profile.” We shall see in June or July.
Dueling Ophthalmologists: Accusations of Violations of the False Claims Act for Refusal to Hire?
Today I have a story about dueling ophthalmologists. And, yes, I wrote “dueling,” as in fighting. This is a true story that the 6th Circuit heard about the False Claims Act (“FCA”). With the Appellate Circuit Courts split regarding the issue I will be discussing in this blog, I foresee the U.S. Supreme Court taking an appeal of this case for a final review if the losing ophthalmologist appeals. So, be on the watch. Because this case is defining what the FCA statute does not….remuneration.
Issue: Does renumeration cover (1) just payments and transfers of value; or (2) any act that may be valuable to another?
The case was published March 28, 2023, from the 6th Circuit. United States ex rel. Martin v. Hathaway, No. 22-1463, 2023 WL 2661358 (6th Cir. Mar. 28, 2023). In a rural part of Michigan, there was an ophthalmology group consisting of two physicians, the owner of the practice, Dr. Hathaway, and one employee physician, Dr. Martin. Dr. Martin overheard Dr. Hathaway negotiating a sale to a larger practice, and began to question her employment path. The sale fell through, but she had begun negotiations with the local hospital to become the hospital’s sole ophthalmologist. Well, Drs. Hathaway and Martin were the only ophthalmologists in this area, and Dr. Hathaway knew that if Dr. Martin went in-house to the local hospital Oaklawn that his business would suffer because his now-employee would become a competitor.
The hospital gave her a pending offer. Dr. Hathaway was infuriated. He told the hospital that if it hired Dr. Martin that he would move all his surgeries to another hospital. He even told the local hospital’s CEO that if the Board approved the hiring of Dr. Martin, it would be the “death knell” of his practice because the hospital’s future patients referrals would go to Dr. Martin and not him.
Dr. Hathaway pled with the CEO. It would be a lose-lose if you hire Dr. Martin, he said. It will cost hundreds of thousands of dollars to set up an internal ophthalmology line, while it would force Dr. Hathaway to pull his cases and go elsewhere.
Perhaps due to Dr. Hathaway’s threats, the Board elected to not hire Dr. Martin.
Dr. Martin did not take the rejection well.
She sued Dr. Hathaway, South Michigan, and Oaklawn in a qui tam action under the False Claims Act and Michigan’s False Claims Act. She accused Dr. Hathaway and Oaklawn Hospital of engaging in an illegal fraudulent scheme under the Anti-kickback Statute (“AKS”) and that claims for Medicare and Medicaid reimbursement resulting from the kickbacks violated the False Claims Act.
The definition of remuneration was at stake. The statute does not define renumeration. Does renumeration cover just payments and transfers of value or any act that may be valuable to another. The 6th Circuit held that renumeration only cover payments and other transfers of value.
The Complaint’s main theory of remuneration turns on the Oaklawn Board’s refusal to hire Dr. Martin in return for Dr. Hathaways general commitment to continue sending surgery referrals for his patients to Oaklawn.
You may recall that the FCA uses the word “payment,” whereas the AKS uses the word “remuneration,” which prompts the question whether remuneration means something broader.
The Court held, “no” – money and value needs to be defined as just that…money and value.
Dr. Hathaway gave Oaklawn no payment, no value. Dr. Martin lost in this case, but if she appeals, like I said, I foresee the US Supreme Court to weigh in.
Defending Medicare Providers Against FCA or Qui Tam Lawsuits
As a health care partner at Nelson Mullins, I’ve seen my fair share of False Claims Act (FCA) and Qui Tam actions against health care providers. It’s not uncommon for practices to receive unwarranted accusations of false claims, especially when it comes to billing Medicare. But fear not, my friends, for I’m here to provide some guidance on how to defend yourself. These cases are long and tedious, so it is important to maintain a bit of humor throughout the process – that and hire a really good attorney.
First things first, let’s talk about the False Claims Act. This federal law imposes liability on individuals and companies that defraud the government by submitting false claims for payment. Essentially, if you submit a claim for reimbursement from Medicare that you know is false, you could be on the hook for some serious penalties. However, the government has to prove that you had actual knowledge that the claim was false, which can be a tough burden to meet.
Now, let’s talk about Qui Tam actions. These are lawsuits brought by private individuals, also known as “whistleblowers,” on behalf of the government. The whistleblower stands to receive a percentage of any damages recovered by the government, so there’s a financial incentive for them to pursue these cases. Qui Tam actions can be especially tricky because the whistleblower doesn’t have to prove that you had actual knowledge that the claim was false – they just have to show that you submitted a false claim.
So, what can you do to defend yourself against these accusations? Well, for starters, make sure that you’re submitting accurate claims to Medicare. Seems obvious, right? But you’d be surprised at how many practices make mistakes when it comes to billing. Double-check your codes, make sure you’re only billing for services that were actually provided, and make sure your documentation supports the services you’re billing for.
If you do find yourself facing an FCA or Qui Tam action, don’t panic. You have the right to defend yourself, and there are plenty of strategies that can be employed to fight back. For example, you could argue that the government hasn’t met its burden of proof, or that the whistleblower doesn’t have enough evidence to support their claim. And don’t forget about the power of humor – a well-timed joke can go a long way in disarming your accusers. Obviously, I am kidding. The investigators have no humor.
In all seriousness, though, these cases can be incredibly complex and time-consuming, so it’s important to have experienced legal counsel on your side. At Nelson Mullins, we’ve represented numerous health care providers in FCA and Qui Tam actions, and we have the knowledge and expertise to help you navigate these challenges.
So, to sum it up: be accurate in your billing, be prepared to defend yourself, and don’t be afraid to use a little humor to lighten the mood. And if all else fails, just remember the wise words of Mark Twain: “Humor is the great thing, the saving thing after all. The minute it crops up, all our hardnesses yield, all our irritations and resentments flit away, and a sunny spirit takes their place.”
#FalseClaimsAct #Medicare #QuiTam #HealthcareLaw #NelsonMullins #DefendYourself #AccuracyIsKey #HumorIsTheBestMedicine #MarkTwainQuotes
Risk Adjustment Audits Are Here!!! Watch Out MAOs!
Risk adjustment is hugely important in Medicare Advantage (MA). Risk adjustment is intended to financially adjust taking into account the underlying severity of beneficiaries’ health conditions and appropriately compensate private insurers with vastly varying expectations for expenditures. In each year, plans receive higher payments in direct proportion to documented risk: A 5 percent increase in documented risk leads to a 5 percent increase in payment. Yet, because MAO have considerable control over the documentation, it is common for insurers to erroneously document patient risk and receive inflated payments from CMS, at least according to several CMS and OIG Reports.
Enter Risk Adjustment Data Validation (RADV) audits.
These are the main corrective action for overpayments made to Medicare Advantage organizations (MAO) when there is a lack of documentation in the medical record to support the diagnoses reported for risk adjustment
CMS has conducted contract-level RADV audits by selecting about 30 contracts for audit annually (roughly 5 percent of MA contracts). CMS then selects samples from each contract of up to 201 beneficiaries divided into three equal strata (low, average, and high risk). Auditors then comb through each beneficiary’s medical records to determine whether diagnoses that the MA plan submitted are supported by documentation in the medical record. From this process, auditors can calculate an error rate for the sample, which can then be extrapolated to the rest of the contract. For instance, if auditors determine that an insurer overcoded a sample’s risk by 5 percent, auditors could infer that plans under that contract were overpaid by 5 percent. Historically, however, CMS has only sought to collect the overpayments identified for the sample of audited beneficiaries. Not any more!
A CMS Final Rule, published February 1, 2023, addresses extrapolation, CMS’ decision to not apply a fee-for-service (FFS Adjuster) in RADV audits, and the payment years in which these policies will apply. Once it goes into effect on April 3, 2023, CMS estimates it will result in the recoupment of $4.7 billion in overpayments from MA insurers over the next decade.
As for extrapolations, CMS will not extrapolate RADV audit findings for PY 2011-2017 and will begin collection of extrapolated overpayment findings for any CMS and OIG audits conducted in PY 2018 and any subsequent payment year.
The improper payment measurements conducted each year by CMS that are included in the HHS Agency Financial Report, as well as audits conducted by the HHS-OIG, have demonstrated that the MA program is at high risk of improper payments. In fiscal year (FY) 2021 (based on calendar year 2019 payments), OIG calculated that CMS made over $15 billion in Part C overpayments, a figure representing nearly 7 percent of total Part C payments.
The HHS-OIG has also released several reports over the past few years that demonstrate a high risk of improper payments in the MA program.
Looking forward – Expect more MAO audits.
P.S. I will be presenting a webinar on Monday, March 20, 2023, via the Assent platform regarding:
FTC ELIMINATING NON-COMPETE AGREEMENTS HOW THAT WILL AFFECT HOSPITALS AND LTC
DATE : MARCH 20, 2023 | EST : 01:00 PM | PST : 10:00 AM | DURATION : 60 MINUTES
Feel free to sign up and listen!!
PRF Audits: If You Did Not Report or Use Properly, You May Have a Recoupment!
Hello, my blog readers. Over the last two weeks, I have joined Nelson Mullins in the Raleigh office, attended Nelson Mullins’ healthcare retreat in Charlotte, and attended the Long Term and Post-Acute Care Law and Compliance conference in New Orleans, LA. It has been quite a whirlwind! I also appeared on RACMonitor, as I do every Monitor Monday.
Joining Nelson Mullins has been fantastic. There is a deep bench of health care attorneys, so now I am able to offer my clients all legal services they may need.
Today I am writing about provider relief funds (“PRF”) audits because, folks, PRF audits are HERE. If providers failed to report their PRF or used the funds for non-allowable items having nothing to do with COVID, HHS and OIG may recoup the funds.
An allowable expense under the PRF must be used to prevent, prepare for, and respond to coronavirus. PRF recipients must follow their basis of accounting (e.g., cash, accrual, or modified accrual) to determine expenses. The cited expenses, as well as losses, must not have been reimbursed from other sources and other sources must not be obligated to reimburse them.
Many providers were recipients of provider relief funds or PRF during the COVID pandemic. If providers received these funds there were reporting requirements and use requirements. Now audits are being conducted to ensure the funds’ proper use and reporting. Audits are being rolled out on two different fronts: (1) HHS; and (2) HRSA – or Health Resources Services Administration.
On Feb. 25, 2022, the American Institute of Certified Public Accountants’ (AICPA) Government Audit Quality Center (GAQC) provided long-awaited guidance to for-profit healthcare organizations that are subject to the Provider Relief Fund (PRF) audit requirements. The guidance came in the form of a practice aid entitled HHS Audit Requirements for For-Profit Entities with Awards from the Provider Relief Fund Program and Other HHS Programs. Its goal is to provide clarity to for-profit healthcare entities that expend $750,000 or more in federal awards in a given reporting period, which includes the PRF and other federal awards included in the Assistance Listing but excludes Paycheck Protection Program funds. Based on the practice aid, here is a summary of audit options available to for-profit entities to meet the audit compliance requirements of the U.S. DHHS.
- Uniform Guidance Audits
- Single Audit – A single audit requires an audit of both the financial statements under Generally Accepted Government Auditing Standards (GAGAS) and a compliance audit under Uniform Guidance. The compliance audit requires testing compliance with any major program(s) as defined by Uniform Guidance as well as obtaining an understanding of internal control over compliance and testing the internal control over compliance for each major program identified. The results are two auditor’s reports: one on the financial statements and one on compliance and internal controls over compliance. This option is necessary if federal regulations require a financial statement audit. This option is available to entities with funding from multiple programs from any federal agency.
- Program-Specific Audit – The program-specific audit is similar to the single audit except that it removes the financial statement audit requirement. Therefore, tests of compliance, an understanding of internal control over compliance, and testing internal control over compliance are required for this engagement. A schedule of a specific element of a financial statement would be prepared. The results are two auditor’s reports: one on the schedule of a specific element of a financial statement (the PRF funding) and one on compliance and internal controls over compliance. This option is only available if the entity has funding under one HHS program, such as the PRF.
- Financial-Related Audit Under GAGAS – A financial-related audit under GAGAS requires an audit to be conducted on only one schedule of a specific element of the financial statements. This option is only available if all federal funds expended during the period were from HHS programs. The schedule (the HHS Schedule) would include all federal awards from HHS, including the PRF. It does not require an audit of the financial statements or any testing of internal controls over compliance. It does require compliance testing, but no opinion on compliance is issued. The result is an auditor’s report only on the HHS Schedule.
There are 4 reporting periods per year that will be audited. Reporting for the 2023 4th period is going on now. Providers who received a PRF (General or Targeted) exceeding $10,000 in the aggregate, from July 1, 2021, to December 31, 2021, are required to report on their use of funds during RP4. The deadline to submit a report is March 31, 2023.
There is an appeal process if you receive a Final Repayment Notice. Once you receive a Final Repayment Notice, you have 60 days to either pay or appeal.
- Providers who do not take one of these actions within 60 days of HRSA’s Final Repayment Notice may be referred by HRSA to the HHS Program Support Center (PSC) for the initiation of debt collection activities.
- PSC, in coordination with the U.S. Department of Treasury, will issue formal debt collection letters to all providers that HRSA refers for debt collection. At this point, PSC and Treasury will take over all debt collection communications with referred providers. Debt collection activities may include accrual of interest, penalties, and recovery of funds by offsetting other Federal payments allocated to the entity.
HRSA cannot establish payment plans for outstanding debts. Once the repayment amount has been referred to PSC and becomes official debt, providers can apply for repayment plans directly with PSC.
Texas Medical Society Sues CMS Over 600% Spike in Administrative Fees
The Texas Medical Association (TMA) is challenging a 600% hike in administrative fees for seeking federal dispute resolution in the No Surprises Act (NSA) situations. The association seeks relief by filing a fourth lawsuit in the U.S. District Court for the Eastern District of Texas. The Texas Medical Society is the largest state medical society in the nation, even though it is the 2nd largest State followed by Alaska, representing more than 57,000 physicians and medical student members.
The hike only applies to out-of-network physicians or provider and a health plan payor. These situations occur when emergency services are provided by a doctor or health care provider outside of the patient’s insurance network or when out-of-network services are provided at an in-network facility.
The federal agencies set the initial administrative fee at $50 and announced in October 2022 it would remain at $50 for 2023. Two months later the agencies announced a 600% hike in the fee to $350 beginning in January 2023, “due to supplemental data analysis and increasing expenditures in carrying out the Federal IDR process since the development of the prior 2023 guidance.”
The steep jump in fees will dramatically curtail many physicians’ ability to seek arbitration when a health plan offers insufficient payment for care.
The reason that I know the TX Medical Society filed this lawsuit, because it just happened, is because I joined ASMAC, which is the American Society of Medical Association Counsel. It’s an amazing association comprised of Presidents of State medical associations all of whom are lawyers trying to protect physicians. Kelly Walla is the Vice President and General Counsel for the Texas Medical Association, and she circulated an email letting us know. She was a week late in circulating the email because, apparently, the power has been out in Austen.
The association claims that the new uptick in administrative fees violates the notice and comment requirements. I do have a personal question – if the association is successful and gets the fee requirement eradicated due to notice and comment violations, wouldn’t TX just reinstitute the hike in fees, but allow comments next time? If we really ask ourselves, do the comments matter? Who looks at them and do they carry any weight?
Since this hike only applies to out-of-network providers, I wonder if, in TX, the networks are closed. Closed networks means that, supposedly, the network has enough providers and it’s not accepting more providers. What network has “enough providers?” If the law states that everyone has the freedom to pick their provider of choice or “access to care,” then a closed network would fly in the face of that prospect. I have been successful in fighting “closed networks” in the past and gaining access to that “closed network.”
Going back to Texas, the rules include establishing the nonrefundable administrative fee all parties must pay to enter the federal independent dispute resolution (IDR) process in the event of a payment disagreement between an out-of-network physician or provider and a health plan in circumstances covered by the law. The suit lists two radiology groups as plaintiffs: the Texas Radiological Society and Houston Radiology Associated. These groups bill small value claims, so they will be particularly hurt because most claims billed are less than $350, according to the suit. Apparently, the Emergency Department Practice Management Association supports the association’s lawsuit. CMS’ reasoning for the hike is the backlog. But, making independent dispute resolution more expensive, when doctors have a right to IDR, in my opinion, is counterintuitive. Get more arbitrators. Don’t heighten your fences.
Recoupment, Recoupment, Everywhere and Not a Drop to Keep
The Rime of the Ancient Mariner, a poem written by Samuel Coleridge, states “Water, water everywhere, nor any drop to drink.” It is a tale of retribution. The poem talks about a mariner who is traveling with his fellow sailors. Suddenly, when the mariner finds an albatross chasing them, the mariner at once kills the albatross in cold blood without any major reason. After the killing of the bird, nothing goes well with the mariner. He is not in a position even to hold communion with God. Killing an albatross is symbolic of showing a criminal disregard for a creature of nature.
Now, imagine the mariner is a Medicare or Medicaid auditor. You are the albatross. According to Coleridge, an auditor that needlessly and mindlessly accuses you of owing $1 million in alleged overpayments should suffer dire consequences. However, unlike in poetry, the auditors suffer nothing. The albatross may or may not perish. A health care company may or may not go bankrupt due to the mariner/auditor’s inane actions.
I have a case right now that the auditor applied the 1995 AND 1997 guidelines, instead of only the 1995 or 1997 guidelines. The auditor created a more rigid criteria than what was actually required. Not ok.
So, how do you stop recoupment when you are accused of owing money for allegedly improperly billing Medicare or Medicaid?
- Hire an attorney as soon as you receive a Tentative Notice of Overpayment (“TNO”). Do not do, what multiple clients of mine have done, do not wait until the last few days of being allowed to appeal the TNO until you contact an attorney. You want your attorney to have time on his or her side! And yours!
- Appeal timely or recoupment will begin. If you do not appeal, recoupment will occur.
- Start putting money aside to pay for attorneys’ fees. I hate saying this, but you are only as good (legally) as what you can pay your attorneys. Attorneys have bad reputations regarding billing, but in a situation in which you are accused of owing mass amounts of money or, in the worst case scenario, of fraud against Medicare, you want an experienced, specialized attorney, who understands Medicare and Medicaid. Note: You do not need to hire an attorney licensed or located in your State. Administrative Law Courts (where you go for Medicare and Medicaid legal issues) do not require the attorneys to be legally licensed in the State in which they are practicing. At least, most States do not require attorneys to be licensed in the State in which they are practicing. There are a few exceptions.
- Meditate. The process is tedious.
