Category Archives: CMS
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.
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!
But all is not lost… it all lies in the possibility…
A few weeks ago I blogged about Health and Human Services (HHS) possibly being held in contempt of court for violating an Order handed down on Dec. 5, 2016, by U.S. District Judge James Boasberg. See blog.
The District Court Judge granted a motion for summary judgment in favor of the American Hospital Association in AHA v. Burwell. He ordered HHS to incrementally reduce the backlog of 657,955 appeals pending before the agency’s Office of Medicare Hearings and Appeals over the next four years, reducing the backlog by 30% by the end of 2017; 60% by the end of 2018; 90% by the end of 2019; and to completely eliminate the backlog by Dec. 31, 2020.
This was a huge win for AHA – and Medicare providers across the country. Currently, when a provider appeals an adverse decision regarding Medicare, it costs an inordinate amount of attorneys’ fees, and the provider will not receive legal relief for upwards of 6 – 10 years, which can cause financial hardship, especially if the adverse action is in place during the appeal process. Yet the administrative appeal process was designed (poorly) to conclude within 1 year.
With the first deadline (the end of 2017) fast approaching and HHS publicly announcing that the reduction of 30% by the end of 2017 is impossible, questions were posed – how could the District Court hold HHS, a federal agency, in contempt?
We got the answer.
On August 11, 2017, the U.S. Appeals Court for the District of Columbia overturned the District Court; thereby lifting the requirement to reduce the Medicare appeal backlog.
Wiping tear from face.
The first paragraph of the Ruling, indicates the Court’s philosophic reasoning, starting with a quote from Immanuel Kant (not to be confused with Knicole Emanuel), CRITIQUE OF PURE REASON 548 (Norman Kemp Smith trans., Macmillan 1953) (1781) (“The action to which the ‘ought’ applies must indeed be possible under natural conditions.”)
First paragraph of the decision:
“”Ought implies can.” That is, in order for law – man-made or otherwise – to command the performance of an act, that act must be possible to perform. This lofty philosophical maxim, ordinarily relevant only to bright-eyed college freshmen, sums up our reasoning in this case.”
The Appeals Court determined that the District Court commanded the Secretary to perform an act – clear the backlog by certain deadlines – without evaluating whether performance was possible.
The Medicare backlog skyrocketed in 2011 due to the federally-required Medicare Recovery Audit Program (RAC). With the implementation of the RAC program, the number of appeals filed ballooned from 59,600 in fiscal year 2011 to more than 384,000 in fiscal year 2013. These appeals bottlenecked to the third level of appeal, which is before an administrative law judge (ALJ). As of June 2, 2017, there was a backlog of 607,402 appeals awaiting review at this level. On its current course, the backlog is projected to grow to 950,520 by the end of fiscal year 2021.
There is a way for a provider to “skip” the ALJ level and “escalate” the claim, but it comes at a cost. Several procedural rights must be forfeited.
It is important to note that the appellate decision does not state that the District Court does not have the authority to Order HHS to eliminate the appeals backlog.
It only holds that, because HHS claims that compliance is impossible, the District Court must rule on whether compliance is possible before mandating the compliance. In other words, the Appeals Court wants the lower court to make a fact-finding decision as to whether HHS is able to eliminate the backlog before ordering it to do so. The Appeals Court is instructing the lower court to put the horse in front of the cart.
The Appeals Court explicitly states that it is suspect that the Secretary of HHS has done all things possible to decrease the backlog. (“We also share the District Court’s skepticism of the Secretary’s assertion that he has done all he can to reduce RAC-related appeals.”) So do not take the Appeals Court’s reversal as a sign that HHS will win the war.
I only hope that AHA presents every possible legal argument once the case is remanded to District Court. It is imperative that AHA’s attorneys think of every possible legal misstep in this remand in order to win. Not winning could potentially create bad law, basically, asserting that the Secretary has no duty to fix this appeals backlog. Obviously, the Secretary is exactly the person who should fix the backlog in his own agency. To hold otherwise, would thwart the very reason we have a Secretary of HHS. Through its rhetoric, the Appeals Court made it clear that it, too, has severe reservations about HHS’ claim of impossibility. However, without question, AHA’s suggestion to the District Court that a timeframe be implemented to reduce the backlog is not the answer. AHA needs to brainstorm and come up with several detailed proposals. For example, does the court need to include a requirement that the Secretary devote funds to hire additional ALJs? Or mandate that the ALJs work a half day on Saturday? Or order that the appeal process be revised to make the process more efficient? Clearly, the mere demand that HHS eliminate the backlog within a certain timeframe was too vague.
From here, the case will be remanded back to the District Court with instructions to the Judge to determine whether the elimination of the Medicare appeal backlog is possible. So, for now, HHS is safe from being held in contempt. But the Secretary should take heed from the original ruling and begin taking steps in fixing this mess. It is highly likely that HHS will be facing similar deadlines again – once the District Court determines it is possible.
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.”
The Office of Inspector General (OIG) recently disseminated hundreds of recoupment letters to providers in New York who had percentage-based contracts with billing agents. OIG is seeking recoupment for services spanning a five-year period, plus 9% interest. See example redacted letter from OIG.
42 CFR 447.10 prohibits the re-assignment of provider claims and applies only to Medicaid. It is recommended that you pay your billing agent a flat fee or on a time basis.
North Carolina Medical Society also discourages fee splitting. On the NCMS website, the Society warns that “Except in instances permitted by law (N.C. Gen. Stat. § 55B-14(c)), it is the position of the Board that a licensee cannot share revenue on a percentage basis with a non-licensee. To do so is fee splitting and is grounds for disciplinary action.”
Not all States prohibit fee splitting, and if Medicare or Medicaid is not involved, then we look to state law. But if Medicare or Medicaid is involved, then federal law matters. Some States prohibit fee splitting for doctors, chiropractors, and hospitals, while other states do not prohibit fee splitting for massage therapists. So it is important to know your State’s laws.
Lawyers also have fee-splitting prohibitions. To split fees with a nonlawyer constitutes the practice of law without a license (and probably multiple other ethical concerns).
Physicians, group practices and management services organizations should continue to carefully examine their current and proposed arrangements to ensure compliance with the fee-splitting prohibition applicable to your State. If you are unsure, consult an attorney.
OIG may have started these audits in New York, but, as New York State says “Excelsior” – ever upward – we can be sure that OIG will continue across the country.
Hospital is shocked to learn that its Medicare contract with Health and Human Services may be terminated by April 16, 2017. Medicaid services may also be adversely affected. The hospital was notified of the possible Medicare contract termination on March 27, 2017, and is faced with conceivably losing its Medicare contract within a month of notification. Legal action cannot act fast enough – unless the hospital requests an emergency temporary restraining order, motion to stay, and preliminary injunction and files it immediately upon learning that its Medicare contract is terminated.
The Center for Medicare and Medicaid Services (CMS) threatened Greenville Memorial Hospital, part of Greenville Health System, in South Carolina, that Medicare reimbursements will cease starting April 16, 2017. According to CMS, Memorial’s emergency department is not compliant with Medicare regulations.
A public notice in the Greenville News says: “Notice is hereby given that effective April 15, 2017, the agreement between GHS Greenville Memorial Hospital, 701 Grove Road, Greenville, S.C. 29605 and the Secretary of Health and Human Service, as a provider of Hospital Services and Health Insurance for the Aged and Disabled Program (Medicare) is to be terminated. GHS Greenville Memorial Hospital does not meet the following conditions of participation. 42 CFR 482.12 Governing Body, 42 CFR 482.13 Patients’ Rights and 42 CFR 482.23 Nursing Services.”
“The Centers for Medicare and Medicaid Services has determined that GHS Greenville Memorial Hospital is not in compliance with the conditions of coverage. The Medicare program will not make payment for hospital services to patients who are admitted after April 16, 2017.”
The findings came after an onsite audit was conducted on March 13, 2017. Memorial was notified of the report on March 27, 2017.
Memorial must have submitted a corrective action plan by April 3, 2017, but it has not been released.
The emergency department at Memorial treats about 300 patients per day. An employee of Memorial estimates that the termination would lose net revenue from Medicare and Medicaid could potentially reach around $495 million. Greenville Memorial received $305 million in Medicare funding and $190 million from Medicaid in the most recent fiscal year, accounting for nearly six in 10 patients, officials said.
While CMS and Memorial refuse to discuss the details of the alleged noncompliance, CMS’ public notice cites three CFR cites: 42 CFR 482.12 Governing Body, 42 CFR 482.13 Patients’ Rights and 42 CFR 482.23 Nursing Services.
42 CFR 482.12 requires that hospitals have governing bodies and plans to follow Medicare regulations. Subsection (f) specifically requires that if a hospital has an emergency department that the hospital must follow 42 CFR 482.55 “Conditions of Participation,” which states that “The hospital must meet the emergency needs of patients in accordance with acceptable standards of practice.
(a) Standard: Organization and direction. If emergency services are provided at the hospital –
- The services must be organized under the direction of a qualified member of the medical staff;
- The services must be integrated with other departments of the hospital;
- The policies and procedures governing medical care provided in the emergency service or department are established by and are a continuing responsibility of the medical staff.
(b) Standard: Personnel.
- The emergency services must be supervised by a qualified member of the medical staff.
- There must be adequate medical and nursing personnel qualified in emergency care to meet the written emergency procedures and needs anticipated by the facility.”
The Memorial audit stemmed from a March 4, 2017, death of Donald Keith Smith, 48, who died as a result of traumatic asphyxiation. After an altercation, the patient was placed on a gurney, supposedly, face-down. South Carolina’s Department of Health and Environmental Controls Site Survey Agency investigated the hospital after the death and the audit found that hospital security officers improperly restrained Smith, strapping him face down to a gurney during an altercation, rendering him unable to breathe. The death was ruled a homicide.
Memorial terminated the security officers involved in the death.
Now the hospital is faced with its own potential death. The loss of Medicare and, perhaps, Medicaid reimbursements could financially kill the hospital. Let’s see what happens…
Under the Trump Administration, some Republican governors may look to move their Medicaid programs in a more conservative direction. In his latest column for Axios, Drew Altman discusses the arguments about Medicaid “work requirements” and why few people are likely to be affected by them in practice.