Category Archives: False Claims
Laboratories are under scrutiny by the OIG and State Medicaid Departments. Labs get urine samples from behavioral health care companies, substance abuse companies, hospitals, and primary care facilities, who don’t have their own labs. Owners of labs entrust their lab executives to follow procedure on a federal and/or state level for Medicare or Medicaid. Well, what if they don’t. For example, one client paid a urine collector/courier by the mile. That courier service collected urine from Medicaid consumers in NC, sometimes in excess of 90 times a year, when Medicaid only allows 24 per year. I have about 10-15 laboratory clients at the present.
Another laboratory’s urine collector collected the urine, but never brought the urine back to get tested. To which I ponder, where did all those urine specimens go?
Another laboratory had a standing order for over 6 years to test presumptive and definitive testing on 100% of urine samples.
OIG has smelled fraud within laboratories and is widening its search for fraudsters. Several laboratories are undergoing the most serious audits in existence. Not RAC, MAC, or UPIC audits, but audits of even more importance. They received CIDs or civil investigative demands from their State Medicaid Divisions. These requests, like RAC, MAC, or UPIC audits, request lots of documents. In fact, CIDs are legally allowed to request documents for a much longer period of time than RACs, which can only request 3 years back. Most CIDs are fishing for false claims under the False Claims Act (FCA). Stark and Anti-Kickback violations are also included in these investigations. While civil penalties can result in high monetary penalties, criminal violations result in jail time.
As everyone knows, labs must follow CLIA or be CLIA certified, which is the federal standard for which labs. The Clinical Laboratory Improvement Amendments (CLIA) of 1988 (42 USC 263a) and the associated regulations (42 CFR 493) provide the authority for certification and oversight of clinical laboratories and laboratory testing. Under the CLIA program, clinical laboratories are required to have the appropriate certificate before they can accept human samples for testing. There are different types of CLIA certificates, as well as different regulatory requirements, based on the types and complexity of clinical laboratory tests a laboratory conducts. CLIA, like CMS, has its own set of rules. When entities like CLIA or CMS have their own rules, sometimes those rules juxtapose law, which creates a conundrum for providers. If you own a lab, do you follow CLIA rules or CMS rules or the law? Let me give you an example. According to CLIA, you must maintain documentation regarding samples and testing for two years. So, if CLIA audits a laboratory, the audits requests will only go back for two years. Well, that’s all fine and dandy. Except according to the law, you have to maintain medical documents for 5 or 6 years, depending on the service type.
Recently, one of my labs received a CID for records going back to 2017. That is a 6-year lookback. Had the lab followed CLIA’s rules, the lab would only have documentation going back to 2021. Had the lab followed CLIA’s rules, when OIG knocked on its door, it would have NOT had four years of OIG’s request. Now I do not know, because I have never been in the position that my lab client only retained records for two years…thank goodness. If I were in the position, I would argue that the lab was following CLIA’s rules. But that’s the thing, rules are not laws. When in doubt, follow laws, not rules.
However, that takes me to Medicare provider appeals of RAC, MAC, and UPIC audits. Everything under the umbrella of CMS must follow CMS rules. Remember how I said that rules are not laws? CMS rules, sometimes, contradict law. Yet when a Medicare provider appeals an overpayment or termination, the first four levels of appeal are mandated to follow CMS rules. It is not until the 5th level, which is the federal district court that law prevails. In other words, the RAC, MAC, or UPIC, the 2nd level QIC, the 3rd level ALJ, and the 4th level Medicare Appeal Council, all must follow CMS rules. It is not until you appear before the federal district judge that law prevails.
Receiving a CID does not mean that your investigation will remain civil. Most investigations begin civilly. If the evidence uncovered demonstrates any criminal activity, your civil investigation can quickly turn criminal. I co-defend with a federal criminal attorney if the case has a chance to turn criminal. Believe me, there is a huge difference between federal and state criminal lawyers! Even with the best federal criminal lawyers, you want a Medicare and Medicaid expert lawyer on the team to dispute the regulatory accusations that a criminal attorney may not be as well-versed. I am so thankful that I moved my practice to Nelson Mullins, because we have a huge, yet highly-specialized health care practice. While we have a large number of lawyers, each partner specializes in slightly different aspects of health care. So, when I need a federal criminal attorney to partner-up with me, I just walk down the hall.
Laboratories: Beware! Be ready! Be prepared! Be lawyered up!
Every skilled nursing facility in the US will be subject to a five-claim audit starting THIS WEEK as regulators try to better assess and root out improper payments. Blah. Blah. Blah. The former is the first sentence in an article that is giving warning to skilled nursing facilities (“SNF”). But, we all know that PROPER PAYMENTS get caught in the wide net cast for improper payments. Innocent people get accused of crimes. Health care providers get accused of Medicare and Medicaid fraud or, at least, abhorrent billing.
The Centers for Medicare & Medicaid Services (“CMS”) announced the nationwide audits, which will be conducted by Medicare Administrative Contractors (“MACs”) on a rolling basis, with the MAC in every region required to pull five Medicare Part A claims from every facility they cover and review them for potential errors.
The results will lead to alleged overpayments, credible allegations of fraud, submittals to the OIG, and False Claims Act (“FCA”) penalties. The effort follows an HHS report that found skilled nursing facilities had the highest rate of improper payments, with nearly a quarter of those tied to insufficient documentation.
Most of the rest of my blog (except for what is important) is cut and pasted from the article (since I am not a journalist and cannot procure quotes):
“We haven’t seen anything like this in the recent past, at least not in the last 10 years,” said Stacy Baker, OTR/L, RAC-CT, director of audit services for Proactive LTC Consulting. “But it’s no surprise to see this sector-wide probe and educate. Looking back on Medicare FFS improper payment data, we’ve never seen SNF improper payment rates this high, and nearly doubling since the 2021 report.”
That rate stood at 15.1% in 2022, almost double the 7.79% rate in 2021. A CMS report blamed missing case-mix group component documentation. Baker billed the new initiative as an attempt to improve poor billing practices that emerged with the implementation of the Patient Driven Payment Model.
But the improper payments can’t be attributed to PDPM alone, said Alicia Cantinieri BSN, vice president of MDS policy and education for Zimmet Healthcare Services.
“That’s probably not the whole reason,” she said on a webinar earlier this month.
She noted that risk areas that could move providers to the front of the audit process include past performance, such as a history of additional documentation requests (“ADR”); frequent errors in Section GG, which sets payment rates for physical therapy, occupational and nursing groups; diagnoses without medical record to support MDS inclusion; and even illegible RN signatures. I bolded “even illegible RN signatures” because I cannot tell you how many times I have seen denials by auditors because they couldn’t read someone’s signature, and, therefore, could not verify their license. Have auditors heard of a phone?
“Keep in mind, there’s lots of low-hanging fruit for payment error aside from PDPM accuracy, such as but not limited to, compliant SNF Certs and Recerts and physician oversight regs,” Baker added. “These components should be included in the Triple Check process as well.”
The CMG for each HIPPS code also must be clearly supported to validate the claim.
The MACs will complete one round of probe and educate for every provider, instead of that usual potential three rounds, as per their traditional TPE program.
It is a good idea for providers to start analyzing data and conducting internal self-audits.
TIPS for an effective ADR response:
- SECURE AN ATTORNEY WHO SPECIALIZES IN THIS TYPE OF LEGAL WORK.
- Develop a process and team now. Assign responsibilities for tasks such as, but not limited to: identifying ADR requests, ensuring timely response to deadlines are met, pulling together medical records and documents required to support the HIPPS code, and reviewing the packet for completeness.
- Make copies. Never ever, ever, ever send originals.
- Organize documentation to make the contractor’s review easy, labeling critical sections such as physician orders, MDS assessments, Section GG documentation and more.
- Allow sufficient time for your lawyers and hired experts, both with clinical and MDS coding expertise, to review the claims and documentation for accuracy. If your attorney believes that your documentation has concerning issues, it is best to SELF-DISCLOSE. Self-disclosure can prevent penalties; whereas if you are caught, penalties will ensue.
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.
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.
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
Today I’m going to answer a few inquiries about recovery audit contractor (“RAC”) audits from providers. A question that I get often is: “Do I have to submit the same medical records to my Medicare Administrative Contractor (“MAC”) that I submit to a RAC for an audit?” The answer is “No.” Providers are not required to submit medical records to the MAC if submitted to a RAC, but doing so is encouraged by most MACs. There is no requirement that you submit to the MAC what you submit to RACs. This makes sense because the MACs and the RACs have disparate job duties. One of the MACs, Palmetto, instructs providers to send records sent to a RAC directly to the Palmetto GBA Appeals Department. Why send the records for a RAC audit to a MAC appeals department? Are they forecasting your intentions? The instruction is nonsensical unless ulterior motives exist.
RAC audits are separate from mundane MAC issues. They are distinct. Quite frankly, your MAC shouldn’t even be aware of your audit. (Why is it their business?) Yet, many times I see the MACs cc-ed on correspondence. Often, I feel like it’s a conspiracy – and you’re not invited. You get audited, and everyone is notified. It’s as if you are guilty before any trial.
I also get this question for appeals – “Do I need to send the medical records again? I already sent them for the initial review. Why do I need to send the same documents for appeal?” I get it – making copies of medical records is time-consuming. It also costs money. Paper and ink don’t grow on trees. The answer is “Yes.” This may come as a shock, but sometimes documents are misplaced or lost. Auditors are humans, and mistakes occur. Just like, providers are humans, and 100% Medicare regulatory compliance is not required…people make mistakes; those mistakes shouldn’t cause financial ruin.
“Do the results of a RAC audit get sent to your MAC?” The answer is “Yes.” Penalties penalize you in the future. You have to disclose penalties, and the auditors can and will use the information against you. The more penalties you have paid in the past clear demonstrate that you suffer from abhorrent billing practices.
In fact, Medicare post-payment audits are estimated to have risen over 900 percent over the last five years. Medicare provider audits take money from providers and give to the auditors. If you are an auditor, you uncover bad results or you aren’t good at your job.
Politicians see audits as a financial win and a plus for their platform. Reducing fraud, waste, and abuse is a fantastic platform. Everyone gets on board, and votes increase.
Appealing your RAC audits is essential, but you have to understand that you won’t get a fair deal. The Medicare provider appeals process is an uphill battle for providers. And your MACs will be informed.
The first two levels, redeterminations and reconsiderations are, basically, rubber-stamps on the first determination.
The third level is the before an administrative law judge (ALJ), and is the first appeal level that is before an independent tribunal.
Moving to the False Claims Act, which is the ugly step-sister to regulatory non-compliance and overpayments. The government and qui tam relators filed 801 new cases in 2022. That number is down from the unprecedented heights reached in 2020 (when there were a record 922 new FCA cases), but is consistent with the pace otherwise set over the past decade, reflecting the upward trend in FCA activity by qui tam relators and the government since the 2009 amendments to the statute.
See the chart below for reference:
Whenever you receive correspondence with letterhead from the Department of Justice, Attorney General’s office, you know it’s important and you better take note.
A Civil or Criminal Investigative Demand is serious. Getting any communication from the U.S. Department of Justice can be a bit unnerving. That’s particularly true for Medicare and Medicaid providers receiving a Civil Investigative Demand (“CID”) for documents and testimony.
A CID is a tool used by the Justice Department (“DOJ”) to investigate potential violations of the False Claims Act (“FCA”). See blog. The DOJ can issue a CID whenever the DOJ has “reason to believe that any person may be in possession, custody, or control of any documentary material or information relevant to a false claims law investigation.” The bottom line is that the DOJ uses CIDs to obtain documents and identify potential witnesses so they can bring FCA suits against the recipient or others.
What is the False Claims Act anyway?
It’s a broad statute that punishes many things, one of which is making false statements to the government in connection with a claim for payment from the government. The DOJ often uses CIDs to investigate medical providers who seek payment from Medicare and Medicaid.
Just because the Investigative Demand is labeled “civil” does not mean that the investigation is only civil; it could take a turn towards criminal. In other words, something sparked the DOJ’s attention, but, perhaps there were no allegations of criminal action, the investigation could start and the investigator could uncover something they consider criminal. An investigation earmarked as civil can turn criminal with the uncovering of one document.
On the other hand, the investigator could review all the documents and conclude that there is not even a civil violation. Very rarely, do the investigators contact you to tell you that the investigation is over and no violation was found. Most of the time, you are put on notice that you are being investigated, then hear nothing from the investigator in perpetuity.
Recently, I had an investigator inform me that the review of. my client was complete, and the file was being closed. But that’s the only time in 22 years that I was informed that nothing noncompliant was found. Usually, time just passes.
If you are found to have violated the FCA, the government can triple the amount of penalties, so the numbers get very high very quickly.
The Justice Department obtained more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2021. This is the second largest annual total in False Claims Act history, and the largest since 2014. Settlement and judgments since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $70 billion.
A much lesser known provision of the FCA is the reverse one. Not to blow everyones’ minds, but there is also a “reverse false claims” provision of the False Claims Act. The reverse false claims provision permits the government or relators to pursue defendants who are alleged to have hidden or reduced an obligation to pay the government through false statements, or who have violated the 60-day payment rule’s obligation to return “identified overpayments.” These claims typically have been raised in the context of cost reporting, Medicare Part C, or related to alleged failures to fulfill obligations under the 60-day payment rule. The government and relators have increasingly relied on the reverse false claims provision to support stand-alone claims or have used it in conjunction with affirmative false claims. However, because the reverse false claims provision is very lightly used compared to affirmative false claims provisions, there is a dearth of case law defining it or exploring its parameters. The case law that does exist is primarily from district courts and, as the survey of case law contained herein illustrates, there is little guidance from the Circuit Courts or the U.S. Supreme Court.
Intent or deliberate disregard is required to prove the false claims act – reverse and regular.
Failure to respond to a CID completely could warrant criminal contempt. This is especially important to note, as civil investigate demand sounds much less important than a subpoena. But a CID is, in essence, a subpoena. Immediately, implement a “legal hold” upon receipt of the CID, and don’t forget to avoid producing privileged documents.
After the investigation is complete, if there are violations of the FCA uncovered, you will receive correspondence that states in “all-caps” and bold font:
Rule 408 FOR SETTLEMENT PURPOSES ONLY
FRE 408 prohibits the use of settlement negotiations as evidence. After reviewing the offer, get with your legal counsel to discuss next steps.
Everyone knows about audits of health care providers. But what about the billing companies? Or a data-analytics company? In a complaint filed last week, a New York data-mining company DxID is accused of allegedly helping a Medicare Advantage program game federal billing regulations in a way that enabled the plan to overcharge for patient treatment. As you know, Medicare Advantage plans are paid more for sicker patients. Supposedly, DxID combed medical records for “missed” diagnoses. For example, adding major depression to an otherwise happy consumer. A few years ago, I won an injunction for a provider who 100% relied on the billing company to bill. Because this company aggressively upcoded, we used the victims’ rights statutes in the SSA to defend the provider. And it worked. Providers often forget about the safety net found in the victims’ rights statutes if they wholly rely on a billing company.
This DXID complaint cites medical conditions that it says either were exaggerated or weren’t supported by the medical records, such as billing for treating allegedly unsupported claims for renal failure, the most severe form of chronic kidney disease. The Justice Department is seeking treble damages in the False Claims Act suit, plus an unspecified civil penalty for each violation of the law.
Medicare Advantage has been the target of multiple government investigations, Justice Department and whistleblower lawsuits and Medicare audits. One 2020 report estimated improper payments to the plans topped $16 billion the previous year. In July, the Justice Department consolidated six such cases against Kaiser Permanente health plans. In August, California-based Sutter Health agreed to pay $90 million to settle a similar fraud case. Previous settlements have totaled more than $300 million.
Breaking news: Targeted Probe and Educate audits (TPE) resumed September 1, 2021. Due to COVID, TPE audits had been suspended. Unlike recovery audits, the stated goal of TPE audits is to help providers reduce claim denials and appeals with one-on-one education focused on the documentation and coding of the services they provide. TPE audits are conducted by MACs. While originally limited in scope to hospital inpatient admissions and home health claims, CMS expanded the program to allow MACs to perform TPE audits of all Medicare providers for all items and services billed to Medicare. Beware the TPE audits; they are not as friendly as they purport. A TPE audit can result in a 100 percent prepay review, extrapolation, referral to a Recovery Auditor, or other action, so a carefully crafted response to a TPE audit is critical.
The TPE audit process begins when a provider receives a “Notice of Review” letter from the MAC which states the reasons the provider has been selected for review and requests 20-40 records be produced. Once the records are produced, the MAC will review the 20-40 claims against the supporting medical records and send the provider a letter detailing the results of their review. If the claims are found to be compliant, the TPE audit ends and the provider cannot be selected for review again for a year unless the MAC detects significant changes in provider billing. However, if the claims are found not to be compliant, the MAC will invite the provider to a one-on-one education session specific to the provider’s documentation and coding practices. The provider is then given 45 days to make changes and a second round of 20-40 records will be requested with dates of service no earlier than 45 days after the one-on-one education.
The provider will be given three rounds of TPE to pass. Do not use all three rounds; get it right the first time. If the provider fails pass after three rounds, they will be referred to CMS for further action. With MA, TPE, and audits of data-analytics companies ramping up, 2022 is going to be an audit frenzy.
Once You STOP Accepting Medicaid/Care, How Much Time Has to Pass to Know You Will Not Be Audited? (For Past Nitpicking Documentation Errors)
I had a client, a dentist, ask me today how long does he have to wait until he need not worry about government, regulatory audits after he decides to not accept Medicare or Medicaid any more. It made me sad. It made me remember the blog that I wrote back in 2013 about the shortage of dentists that accept Medicaid. But who can blame him? With all the regulatory, red tape, low reimbursement rates, and constant headache of audits, who would want to accept Medicare or Medicaid, unless you are Mother Teresa…who – fun fact – vowed to live in poverty, but raised more money than any Catholic in the history of the recorded world.
What use is a Medicaid card if no one accepts Medicaid? It’s as useful as our appendix, which I lost in 1990 and have never missed it since, except for the scar when I wear a bikini. A Medicaid card may be as useful as me with a power drill. Or exercising lately since my leg has been broken…
The answer to the question of how long has to pass before breathing easily once you make the decision to refuse Medicaid or Medicare? – It depends. Isn’t that the answer whenever it comes to the law?
By Whom and Why You Are Being Investigated Matters
If you are being investigated for fraud, then 6 years.
If you are being investigated by a RAC audit, 3 years.
If you are being investigated by some “non-RAC entity,” then it however many years they want unless you have a lawyer.
If being investigated under the False Claims Act, you have 6 – 10 years, depending on the circumstances.
If investigated by MICs, generally, there is a 5-year, look-back period.
ZPICS have no particular look-back period, but with a good attorney, reasonableness can be argued. How can you be audited once you are no longer liable to maintain the records?
The CERT program is limited by the same fiscal year.
The Alternative: Self-Disclosure (Hint – This Is In Your Favor)
If you realized that you made an oops on your own, you have 60-days. The 60-day repayment rule was implemented by the Centers for Medicare and Medicaid Services (“CMS”), effective March 14, 2016, to clarify health care providers’ obligations to investigate, report, and refund identified overpayments under the Affordable Care Act (“ACA”).
Notably, CMS specifically stated in the final rule that it only applies to traditional Medicare overpayments for Medicare Part A and B services, and does not apply to Medicaid overpayments. However, most States have since legislated similar statutes to mimic Medicare rules (but there are arguments to be made in courts of law to distinguish between Medicare and Medicaid).
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…