Category Archives: Medicaid Recipient Appeals
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:
Today I want to discuss the Medicare appeal process and its faults. Upon undergoing a Medicare audit by Safeguard or whichever auditor contracted by CMS, a provider usually receives a notice of overpayment. The 5-level appeal process is flawed as the first two levels rubber-stamp the findings. After the second level of appeal – the QIC level to the ALJ – recoupment occurs unless the provider set up an extended repayment schedule (ERS) or files for an injunction in federal court based on a taking of a property right; i.e., the right to reimbursement for services rendered.
Everyone deserves to be paid for medically necessary services rendered. The conundrum here is that the circuit courts are split as to the protections a provider deserves.
Whenever a federal injunction is filed, the Defendant auditor files a Motion to Dismiss based on (1) failure to exhaust administrative remedies and that the Medicare Act requires the administrative process; therefore, the federal court has no jurisdiction. The provider will argue that the federal action is ancillary to the substantive issue of whether the overpayment was in error and that its protected property right is being taken without due process.
A new case rendered October 1, 2021, Integrity Social Work Services, LCSW, LLC. V. Azar, 2021 WL 4502620 (E.D.N.Y 2021) straddles the fence on the issues. The EDNY falls within the 2nd circuit, which is undecidedly split. The 5th Circuit is, as well, split. District courts across the country are split on whether Medicare providers have a protected property interest in Medicare payments subject to recoupment. Several courts have found that the Medicare Act does create such a property right, including NC, 4th Circuit, Texas, Florida, Ohio, and Illinois, to name a few.
This provider was accused of an alleged overpayment of about 1 million. It argued that because it will not receive a prompt ALJ hearing that it will be driven out of business. This is a harsh and unacceptable outcome that readily occurs in about half the states. Providers should be aware of which State in which it resides and whether that State upholds a providers’ property interest in reimbursements for services rendered.
The Integrity Social Work Court found that, yes, jurisdiction in federal court was proper because the claims were ancillary to the substantive claims that would be heard by the ALJ. The provider was asking for a temporary stay of the recoupments until an ALJ hearing was concluded. As you read the case, you get false hope on the ruling. In the end, Judge Peggy Kuo found “Nor is the process to contest an overpayment or a recoupment decision arbitrary, outrageous, or even inadequate.”
Respectfully, I disagree. As does half the other courts. See, e.g., Accident, Injury & Rehab., PC v. Azar, No. 4:18-CV-2173 (DCC), 2018 WL 4625791, at *7 (D.S.C. Sept. 27, 2018); Adams EMS, Inc. v. Azar, No. H-18-1443, 2018 WL 3377787, at *4 (S.D. Tex. July 11, 2018); Family Rehab., Inc. v. Azar, No. 3:17-CV-3008-K, 2018 WL 3155911, at *4-5 (N.D. Tex. June 28, 2018). Juxtapose other courts have found that no such property interest exists. See, e.g., Alpha Home Health Solutions, LLC v. Sec’y of United States Dep’t of Health & Human Servs., 340 F. Supp. 3d 1291, 1303 (M.D. Fla. 2018); Sahara Health Care, Inc. v. Azar, 349 F. Supp. 3d 555, 572 (S.D. Tex. 2018); PHHC, LLC v. Azar, No. 1:18-CV-1824, 2018 WL 5754393, at *10 (N.D. Ohio Nov. 2, 2018); In Touch Home Health Agency, Inc. v. Azar, 414 F. Supp. 3d 1177, 1189-90 (N.D. Ill. 2019).
Providers – If you bring a claim to cease the recoupment, also sue on behalf of your Medicare beneficiaries’ property rights to freedom of choice of provider and access to care. Their rights are even stronger than the providers’ rights. I did this in Bader in Indiana and won based on the recipients’ rights.
Today I want to talk about two ways to increase revenue merely by ensuring that your patients’ rights are met. We talk about providers being audited for their claims being regulatory compliant, but how about self-audits to increase your revenue? I like these kind of audits! I am calling these audits “Reverse RAC audits”. Let’s bring money in instead of reimbursements recouped.
You can protect yourself as a provider and increase revenue by remembering and litigating on behalf of your consumers’ rights. Plus, your patients will be eternally grateful for your advocacy. It is a win/win. The following are two, distinct ways to increase revenue and protect your consumers’ rights:
- Ensuring freedom of choice of provider; and
- Appealing denials on behalf of your consumers.
Freedom of choice of provider.
In a federal case in Indiana, we won an injunction based on the patients’ rights to access to care.
42 CFR § 431.51 – Free choice of providers states that “(b) State plan requirements. A State plan must provide as follows…:
(1) A beneficiary may obtain Medicaid services from any institution, agency, pharmacy, person, or organization that is –
(i) Qualified to furnish the services; and
(ii) Willing to furnish them to that particular beneficiary.
In Bader v. Wernert, MD, we successfully obtained an injunction enjoining the State of Indiana from terminating a health care facility. We sued on behalf of a geneticist – Dr. Bader – whose facility’s contract was terminated from the Medicaid program for cause. We sued Dr. Wernert in his official capacity as Secretary of the Indiana Family and Social Services Administration. Through litigation, we saved the facility’s Medicaid contract from being terminated based on the rights of the consumers. The consumers’ rights can come to the aid of the provider.
Keep in mind that some States’ Waivers for Medicaid include exceptions and limitations to the qualified and willing provider standard. There are also limits to waiving the freedom of choice of provider, as well.
Appealing consumers’ denials.
This is kind of a reverse RAC Audit. This is an easy way to increase revenue.
Under 42 CFR § 405.910 – Appointed representatives, a provider of services may appeal on behalf of the consumers. If you appeal on behalf of your consumers, the obvious benefit is that you could get reimbursed for the services rendered that were denied. You cannot charge a fee for the service; however, so please keep this in mind.
One of my clients currently has hired my team appealing all denials that are still viable under the statute of limitations. There are literally hundreds of denials.
Over the past few years, they had hundreds of consumers’ coverage get denied for one reason or the other. Allegedly not medically necessary or provider’s trainings weren’t conveyed to the auditors. In other words, most of the denials are egregiously wrong. Others are closer to call. Regardless these funds were all a huge lump of accounts’ receivables that was weighing down the accounting books.
Now, with the help of my team, little by little, claim by claim, we are chipping away at that accounts’ receivables. The receivables are decreasing just by appealing the consumers’ denials.
A sneaky and under-publicized matter, which will affect every one of you reading this, slid into common law last year with a very recent case, dated Jan. 9, 2020, upholding and expanding the findings of a 2018 case, Lucia v. SEC, 138 S. Ct. 2044 (U.S. 2018). In Lucia, the Supreme Court upheld the plain language of the U.S. Constitution’s Appointments Clause.
The Appointments Clause prescribes the exclusive means of appointing “officers.” Only the President, a court of law, or a head of department can do so. See Art. II, § 2, cl. 2.
In Lucia, the sole issue was whether an administrative law judge (ALJ) can be appointed by someone other than the President or a department head under Article II, §2, cl. 2 of the U.S. Constitution, or whether ALJs simply federal employees. The Lucia court held that ALJs must be appointed by the President or the department head; this is a non-delegable duty. The most recent case, Sara White Dove-Ridgeway v. Nancy Berrryhill, 2020 WL 109034, (D.Ct.DE, Jan. 9, 2020), upheld and expanded Lucia.
ALJs are appointed. In many states, ALJs are direct employees of a single state agency. In other words, in many states, about half, the payroll check that an ALJ receives bears the emblem of the department of health for that state. I have litigated in administrative courts in approximately 33 states, and have seen my share of surprises. In one case, many years ago, LinkedIn informed me that my appointed ALJ was actually a professional photographer by trade.
Lucia, however, determined that ALJs at the Securities and Exchange Commission (SEC) were “officers of the United States,” subject to the Appointment Clause of the Constitution, which requires officers to be appointed by the president, the heads of departments, or the courts. The court’s decision raised concern at the U.S. Department of Health and Human Services (HHS) because its ALJs had not been appointed by the secretary, but rather by lower agency officials.
The court also held that relief should be granted to “one who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case.” Whether that relief is monetary, in the form of attorneys’ fees reimbursed or out-of-pocket costs, it is unclear.
In July 2018, President Trump’s Executive Order 13843 excepted ALJs from the competitive service, so agency heads, like HHS Secretary Alex Azar, could directly select the best candidates through a process that would ensure the merit-based appointment of individuals with the specific experience and expertise needed by the selecting agencies.
The executive order also accepted all previously appointed ALJs. So there became a pre-July 16, 2018, challenge and a post-July 16, 2018, based on Trump’s Executive Order. Post-July 16, 2018, appointees had to be appointed by the President or department head. But the argument could be made that ALJs appointed pre-July 16, 2018, were grandfathered into the more lax standards. In Dove-Ridgway, Social Security benefits were at issue. On July 5, 2017, ALJ Jack S. Pena found a plaintiff not disabled. On Jan. 7, 2019, the plaintiff filed an appeal of the ALJ’s decision, seeking judicial review from the district court. In what seems to be the fastest decision ever to emerge from a court of law, two days later, a ruling was rendered. The District Court found that even though at the time of the administrative decision, Lucia and Trump’s Executive Order had not been issued, the court still held that the ALJ needed to have been appointed constitutionally. It ordered a remand for a rehearing before a different, constitutionally appointed ALJ, despite the fact that Trump had accepted all previously appointed ALJs.
In this firsthand, post-Jan. 9, 2020, era, we have an additional defense against Medicare or Medicaid audits or alleged overpayments in our arsenal: was the ALJ appointed properly, per the U.S. Constitution?
Programming Note: Listen to Knicole Emanuel’s live reports on Monitor Monday, 10-10:30 a.m. EST.
As seen on RACMonitor.
It’s that time of year again. The legislators are back in town. Moral Mondays resume. And all eyes are on the General Assembly. But, this is the short session, and the General Statutes limit the powers of legislative law-making in the short session.
For those of you who do not know how our General Assembly (GA) works and the difference between the short and long sessions, let me explain:
In odd-numbered years, the GA meets in January and continues until it adjourns. There is no requirement as to the length of the long session, but it is normally about 6 months. In the long session, everything is fair game. New laws or changes to the existing laws can be proposed in long sessions for all of the subjects on which the GA legislates.
The short session reconvenes every even-numbered year and typically lasts 6 weeks. Last year the long session adjourned July 26, 2013, and the GA reconvened May 14, 2014.
There are limits as to what measures may be considered in the short session. In fact, at the end of the long session, the GA passed Resolution 2013-23, which states exactly what topics/bills may be considered in the short session.
So…the question is: What Medicaid bills may be considered during this short session?
Now there are of course, exceptions. For example, any bill that directly and primarily affects the State Budget can be introduced. Obviously, a Medicaid bill could, arguably, directly and primarily affect the budget.
The bills I enumerated above, however, are the bills that are allowed to be considered in the short session because they constitute a crossover bill, that is, these bills were passed one house and were received in the other during last year’s long session and are considered “still alive” for consideration during the current short session.
So what do these Medicaid bills propose?
House Bill 674 could be a game changer for Medicaid providers. The bill, which passed the House last year with a vote of 116-0, would direct the Program Evaluation Division to study the contested case process in regards to Medicaid providers. There are 3 key components in this study according to the bill:
1. The Division must review the procedures for a contested case hearing under NCGS 150B and determine whether there is a way to streamline the process and decrease backlog.
2. The Division must consider alternative methods of review other than the contested cases.
3. The Division must review NCGS 108C-12 to determine whether any amendments to the law would improve the cost-effectiveness and efficiency of the Medicaid appeal process. (NCGS 108C-12 is the statute that allows providers to appeal adverse decisions to the Office of Administrative Hearings (OAH)).
Whew. The Program Evaluation Division would have its work cut out for it if the bill passes!
House Bill 674 was received by the Senate on May 5, 2013, and it passed its first reading.
House Bill 867 is named “An Act to Allow for the Movement of Certain Medicaid Recipients,” and it purports to allow those recipients with an 1915(c) Innovations Waiver slot to move about the State and for the slots to be recognized uniformly across the State. This way a person with an Innovations Waiver would not need to re-apply in another county if he or she moves there. However, for those served by the managed care organizations (MCOs), residency is determined by the county in which the recipient currently resides.
Then we come to House Bill 320. See my blog,”HB320: The Good News and the Bad News for NC Medicaid Providers.”
House Bill 320 mainly speaks to Medicaid recipient appeals, but imbedded within the language is one tiny proposed change to NCGS 108C-1. Just an itty, bitty change.
NCGS 108C-1 provides the scope of 108C (which applies to providers) and currently reads, “This Chapter applies to providers enrolled in Medicaid or Health Choice.”
If House Bill 320 passes, NCGS 108C-1 will read, “This Chapter applies to providers enrolled in Medicaid or Health Choice. Except as expressly provided by law, this Chapter does not apply to LME/MCOs, enrollees, applicants, providers of emergency services, or network providers subject to Chapter 108D of the General Statutes.”
If House Bill 320 passes, what, may I ask, will be a Medicaid provider’s appeal options if NCGS 108C does not apply to MCOs? And would not the new scope of NCGS 108C-1 violate the State Plan, which explicitly gives OAH the jurisdiction over any contracted entity of the Department of Health and Human Services (DHHS)? See my blogs on MCOs: “NC MCOs: The Judge, Jury and Executioner,” and “A Dose of Truth: If an MCO Decides Not to Contract With You, YOU DO HAVE RIGHTS!”
I also wonder, if House Bill 320 passes, what effect this revision to NCGS 108C-1 will have. Arguably, it could have no effect because of the above-mentioned language in the State Plan, the 4th Circuit Court of Appeals case that determined that MCOs are agents of the state, and the fact that the Department is defined in 108C-2 to include any of its legally authorized agents, contractors, or vendors.
On the other hand, in every single lawsuit that I would bring on behalf of a provider against an MCO, I would have another legal obstacle to overcome. The MCO’s attorney would invariably make the argument that OAH does not have jurisdiction over the MCO because the scope of 108C has been changed to exclude the MCOs. They have been arguing already that OAH lacks jurisdiction over the MCOs since NCGS 108D was passed, but to no avail.
Needless to say, the MCO lobbyists will be pushing hard for H 320 to pass. H 320 passed its 3rd reading on May 15, 2013, by a vote of 114-0, and the Senate received it on May 16, 2013.