Category Archives: Alleged Overpayment
Post-COVID Medicare and Medicaid Provider Audits Are Here!
My esteemed colleagues with curious minds, today we embark on a journey into the complex world of Medicare and Medicaid provider audits, specifically orchestrated by the enigmatic entities known as Recovery Audit Contractors, or RACs. The dates of service (DOS) during COVID are specifically being targeted, and I’ve seen an uptick. With the plethora of exceptions, you need a specialized attorney.
Picture this: You’re a healthcare provider, diligently navigating the seas of Medicare and Medicaid reimbursement. All of a sudden, a tempest approaches – the Recovery Audit Contractors or RACs. These are the bounty hunters of the healthcare world, commissioned to recoup improper payments and ensure the ship of government healthcare funding stays afloat. And paid by contingency creating a financial incentive that some may call bias. The RACs even have the authority to extrapolate, making alleged overpayments to skyrocket, increasing its profit.
Now, you might wonder, “How do these RACs operate, and what laws govern their actions?” Well, let me shed some light on that. The Medicare RAC program was born out of the Tax Relief and Health Care Act of 2006, a legislative “masterpiece” that empowered RACs to review Medicare and Medicaid payments and, when necessary, claw back funds. It’s like having financial watchdogs on the prowl, ensuring taxpayer dollars are spent wisely.
A hospital client of mine provided outpatient services and billed Medicare for reimbursement during COVID. A RAC, armed with their legal authority, started scrutinizing these claims. Suddenly, the RAC believes that the hospital has been billing for services that don’t meet the necessary criteria. I love how RAC auditors without medical licenses purport to determine medical necessity for physicians. I hope you hear the sarcasm. The RAC alleged “upcoding” – alleging services were billed at a higher complexity than they actually were. The RACs, acting within the confines of the law, swoop in to recover those overpayments, ensuring the taxpayer’s purse strings are untangled.
We all know RACs are not infallible. Hopefully, you know this if you are a longtime reader. RACs mistakenly identify an overpayment or misinterpret complex healthcare regulations. That’s where the appeal process becomes crucial. The Medicare appeals process, defined under the Social Security Act, provides a right for providers to challenge RAC decisions. It’s a legal battleground where the provider can present evidence, argue their case, and seek justice against the RAC’s findings.
Now, let’s consider the Medicaid realm. The Medicaid RAC program, established by the Affordable Care Act in 2010, mirrors its Medicare counterpart. These RACs operate at the state level, conducting audits to identify and recover improper Medicaid payments. It’s like a dual-front war on wasteful spending, both federally and within individual states. Again, DOS during COVID are at issue.
For a concrete example, let’s imagine a nursing home submitting claims to Medicaid for resident services. The state-level Medicaid RAC, acting under the Affordable Care Act’s provisions, reviews these claims. If they discover discrepancies – perhaps services billed without proper documentation or purportedly unsupported by medical necessity – the RAC, wielding its legal mandate, initiates the recovery process.
The RACs, armed with the legislative might of the Tax Relief and Health Care Act and the Affordable Care Act, play a crucial role in safeguarding the integrity of Medicare and Medicaid reimbursements. While their actions may feel like storms to providers, it’s essential to recognize the checks and balances in place, including the appeals process, to ensure fairness and accuracy in the audit battlefield. As we navigate the seas of healthcare reimbursement, may our compass be true, our documentation impeccable, and our understanding of the law unwavering.
There Is No Law to Be Perfect in Medicare; Just Self-Disclose!
We all know that there is no law, regulation or statute that medical records supporting payment by Medicare or Medicaid must be perfect. There is no mandatory 100% compliant standard. Because humans err. In light of the ongoing financial strain brought about by the pandemic and the constraints imposed by Congress on Medicaid coverage disenrollments, State Medicaid agencies are poised to explore additional audits to manage increasing Medicaid expenditures. Recent developments, such as additional flexibilities granted by CMS, suggest a shifting landscape in how States respond to these challenges.
Anticipating a more assertive approach by States in dealing with service providers, potential measures could include rate cuts and enhanced scrutiny through service audits. This prompts a crucial examination of States’ and providers’ rights under federal Medicaid law to audit service provisions and recover overpayments, a legally intricate and noteworthy domain.
Medicaid RAC Audits are governed by 42 CFR 455 Subpart F—Medicaid Recovery Audit Contractors Program. Other Medicaid alleged overpayments are dictated by 42 CFR Chapter 433.
To establish a foundational understanding, it’s essential to consider the mandate imposed by Congress in section 1902(a)(30)(A) of the Social Security Act. States are required to incorporate provisions in their Medicaid plans to “safeguard against unnecessary utilization of … care and services.” This underscores the federal interest in ensuring responsible use of matching funds, given the federal government’s financial contribution to the program.
A landmark case illustrating the complexities of this mandate is the 1999 decision by the Supreme Judicial Court of Massachusetts in Massachusetts Eye and Ear Infirmary v. Commissioner of Medical Assistance. The court evaluated Massachusetts Medicaid’s retrospective utilization review policy, emphasizing the need for meaningful definitions of terms like “inpatient” and “outpatient” to avoid arbitrary penalties on providers.
Moving to the realm of overpayments, CMS regulations, specifically at 42 C.F.R. § 433.316, provide guidance on how States should proceed when identifying overpayments. The regulations recommend written notification to providers, with states having the discretion to choose whether to notify in cases of suspected fraud. Furthermore, States are required to take “reasonable actions” based on state collections law to recoup overpayments, with a one-year timeframe to return the federal share of identified overpayments to CMS.
Determining when a State “discovers” an overpayment is a critical aspect outlined in the regulations. The discovery is pegged to specific events, such as the state contacting the provider, the provider notifying the state, formal initiation of recoupment, or a federal official identifying the overpayment. Significantly, the regulations focus more on CMS’s relationship with the state than on the state’s relationship with providers.
Recent legal precedents, such as the Wisconsin Supreme Court’s decision in Professional Home Care Providers v. Wisconsin Department of Health Services, underscore the need for states to operate within the bounds of their granted authority. In this case, the court rejected a Medicaid agency’s “perfection” policy, emphasizing that state law must align with CMS regulations in overseeing overpayment recovery.
As States grapple with revenue shortfalls exacerbated by the pandemic, the potential for increased efforts to recoup overpayments from providers looms large. Legal challenges, exemplified by recent decisions in Massachusetts and Wisconsin, underscore the delicate balance States must strike in these endeavors, emphasizing the limits within which they must operate as they navigate the complex terrain of Medicaid law and financial constraints.
Expect audits. Be ready to defend yourself. Self audits are so important. If you self audit and find a problem and self-disclose, you will not receive penalties. Self-disclosures are key. When I told a group of law students this key information, one asked, has you told a client to self-disclose and they refused? To which I said yes. One time. A female doctor informed me that she falsified 7 medical records, I said that she should disclose. She screamed at me in her language, fired me, and hired a new attorney and withheld the information about falsifying records.
She is jail currently.
2024 SNF Audits Are Robust! What You Need to Know:
Skilled Nursing Facilities (“SNF”) have special audits or should I say, more robust audits. The overall gist of these federal audits of SNFs for Medicare compliance, staffing seems to be the most troubling.
We all know that in March of 2020, both The Joint Commission (TJC) and the Centers for Medicare & Medicaid Services (CMS) pressed pause on audits, accreditation surveys, and health inspections due to COVID-19. Shortly thereafter, CMS inspections and rating updates were back in full swing as of January 2021, TJC audits and surveys are proceeding more robustly. COVID funds are especially scrutinized. Passing audits and inspections are crucial to maintaining your nursing home’s accreditation and Medicare-certified status so you can stay in business. Here’s what your HR department should know about SNF audits and ratings, and how you can help prepare for them.
Skilled Nursing Facility Audits and Quality Rating System
Together, the CMS and The Joint Commission (“TJC”) assess skilled nursing facilities’ patient care, quality of service, and provider qualifications.
The TJC survey and auditing process is designed to evaluate accredited nursing care centers once every 3 years through unannounced visits and documentation reviews that include:
- Assessments of patient safety
- Observations of services and provider or caregiver performance
- On-site or virtual staff interviews
- Physical survey of the facility
- Review of the facility’s ability to maintain updated practitioner documentation
CMS tests nursing home quality levels using a five-star quality rating system, which is updated regularly on its facility comparison site, Nursing Home Compare. The site organizes nursing homes by rating and helps consumers and their families and caregivers choose the right facility. This rating system gives each nursing home a score of between 1 and 5 based on four major factors:
- Health inspections. This portion of the rating is a combination of the results from a facility’s three most recent health inspections and three most recent investigations due to complaints. Trained inspectors pay an on-site visit to test the nursing home’s ability to meet minimum quality requirements through a specific process.
- Staffing. This rating takes into account the average hours of RN care per resident day as well as total staffing hours (RN, LPN, and CNA) based on resident needs.
- Quality measures. This rating is based on 15 different physical and clinical measures to test how well nursing homes are meeting resident needs.
- Retention. This rating measures the amount of turnover at a facility and rewards employers who retain employees for longer periods of time.
Emphasize time and attendance
In 2019, the CMS tightened their quality rating restrictions, reducing the number of days facilities could go without having an on-site nurse. This and other changes resulted in over one-third (37%) of skilled nursing facilities losing one or more stars. It’s impossible to predict what other changes may come in the future, but needless to say, time and attendance will continue to be crucial.
Your facility may not be able to recruit enough new nurses to fill your roster completely, which is why prioritizing timeliness is an important part of maintaining your rating. Make it a point to reward staff who clock in and out on time and stay on top of missed days and late arrivals.
Focus on Retention
In July 2022, CMS announced that staffing and turnover data would be used in assessing star ratings for facilities. As CMS administrator Chiquita Brooks-LaSure stated, “research and experience tell us that staffing levels and staff turnover can substantially affect quality of care and health outcomes for people living in nursing homes.” My BFF DeeDee Murphy is GC for Principal Long-Term Care, which owns hundreds of SNFs. Staff turnover is a huge problem, especially since COVID, according to her.
Retention has long been a practical concern for long-term care facilities, but now the issue is increasingly under the spotlight. Focus on your retention by offering creative and enticing benefits, such as flexible scheduling and flexible benefits. Also, focus on creating career opportunities for your employees, so they stay within the facility instead of seeking career growth elsewhere.
Types of Nursing Home Audits
As an administrator, you’ll likely oversee many different types of audits. Here are some of the most common ones.
- Resident Assessment Instrument (RAI)
The Resident Assessment Instrument is a comprehensive assessment tool used to evaluate the needs of nursing home residents. RAI audits focus on the accuracy and completeness of resident assessments, including the collection and documentation of information related to the resident’s physical, mental, and psychosocial health. These audits aim to ensure that residents’ care plans are individualized and based on accurate and up-to-date assessments.
2. Falls Risk Assessment
Falls are a significant concern in nursing homes, as they can lead to serious injuries and complications. Falls risk assessment audits evaluate the nursing home’s procedures for identifying residents at risk of falling and implementing appropriate interventions to prevent falls. These audits assess whether fall risk assessments are conducted regularly, documented properly, and used to develop personalized care plans to minimize the risk of falls.
3. Medication Management Audit
Medication management audits focus on the safe and effective administration of medications to nursing home residents. These audits assess whether medication orders are properly documented, medications are stored securely, and administration procedures follow established protocols. They also evaluate medication reconciliation processes, medication error reporting, and staff training related to medication management.
4. Infection Control Audit
Infection control audits are conducted to assess the nursing home’s adherence to infection prevention and control practices. These audits evaluate hand hygiene practices, proper use of personal protective equipment (PPE), cleaning and disinfection procedures, and compliance with isolation precautions. The goal is to identify areas where infection control pracctices can be improved to minimize the risk of healthcare-associated infections among residents and staff.
5. Staffing Audit
Staffing audits focus on evaluating the nursing home’s staffing levels and skill mix to ensure adequate staffing for resident care needs. These audits assess compliance with staffing requirements set by regulatory agencies, review staff qualifications and training, and evaluate the nursing home’s processes for monitoring and maintaining appropriate staffing levels. The goal is to ensure that there are enough qualified staff members available to provide safe and quality care to residents.
As you help prepare your facility for potential audits and inspections, it’s also a good idea to take a closer look at your system for storing and submitting documentation. Your personnel records may be up-to-date, but are they as accessible as they could be?
Many HR departments still handle paperwork manually, with paper folders and filing cabinets rather than a centralized system. And while this may still work for some, it can get tricky if you’re juggling multiple review requests or multiple facilities.
Digitizing files in a central location can help you avoid unnecessary compliance violations and simplify employee management. With access to all files at once, your facility can stay organized, prepare ahead of time, and have all the documentation you need at your fingertips, just in case.
Tips for Audit and Inspection Preparation
You want your facility to look good. My best friend is general counsel you can help your facility prepare for whatever comes their way and increase their rating at the same time.
Here are a few ways your team can improve compliance and maintain your SNF’s quality rating:
- Educate staff about documentation
All nursing home facility staff should be on the same page when it comes to documenting and reporting care. Consider holding a staff meeting to go over the main points of documentation with your attending physician or RN in charge. During this meeting, emphasize the importance of documenting elements like:
- History of reticent care and behavior towards care
- The skilled services provided
- Need for services based on resident’s condition and situation
- Resident’s response to services
- Future care plans
All documentation should be legible (although legibility is NOT a law, just a suggestion or best practices) and report care clearly and accurately. And make sure everyone knows to check state regulations for reporting and documenting COVID-19 procedures and care.
Improve Employee Satisfaction
Satisfied employees mean a better work environment and fewer complaints from residents, which can negatively impact your quality rating. Positive work cultures have been linked to better work attendance and performance, workforce retention, and mental health. It pays to ensure that your RNs, LPNs, CNAs, and other staff members are happy, healthy, and able to attend fully to their work.
Work with your staff to ensure that they’re getting what they need, whether that means flexible scheduling or healthy food on late-night shifts. Check in about their mental health and ask what resources you can provide to help them combat burnout.
RAC Audits Are BOO-Very Scary, and, Sometimes, Are DEAD wrong!
For Monitor Monday, today, October 30, 2023, I dressed up as a RAC auditor. BOO!!! I get a spooky 13.5% commission for overzealous auditing tactics. RAC auditors come in every shape and size, color or gender.
In my experience, RACs are garishly incorrect in their assessments. I will reveal three, real life examples where these audit contractors accused healthcare providers of owing money but were found to be dead wrong:
Example 1 – Medical Necessity quibbles:
In a haunting case involving a hospital, the RAC alleged that certain cardiac procedures were billed inappropriately, citing concerns about the medical necessity of these services. They claimed the hospital should refund a repugnant amount for these procedures. However, upon closer examination and an appeal process, it was revealed that the services were indeed medically necessary and aligned with the standard protocols. The ghastly RAC’s accusation was disproven, and the hospital was not required to return any funds. Spine-tingling!
Example 2 – Improper Coding of Diagnosis:
A healthcare provider, particularly a large physician group, was accused by the RAC of using suspicious, improper diagnostic codes, leading to overbilling for certain services provided to Medicare and Medicaid beneficiaries. After a thorough internal audit, it was determined that the codes used were accurate and supported by the patient’s medical records. The RAC’s allegations were unfounded, and no repayment was required. Suspicious. A haunting reminder to spook audits.
Example 3 – Alleged Duplicate Billing:
In a murderous case involving a nursing facility, the RAC identified what they believed were instances of duplicate billing for certain procedures and services. Upon further review, it was revealed that the billing discrepancies were due to the RAC’s misunderstanding of the facility’s billing processes. Mysterious. The facility provided evidence showcasing that the billed services were distinct and not duplicates. Consequently, the RAC’s claim was refuted, and no repayment was deemed necessary. Suspicious.
These examples underscore the critical need for providers to have robust internal compliance measures in place. While RACs serve a vital purpose in identifying billing errors, they are not infallible. Providers need to be equipped to challenge these audit findings, ensuring they are based on accurate and comprehensive information.
It’s crucial for healthcare providers to engage in a proactive approach by conducting their internal audits, maintaining accurate documentation, and being prepared to challenge RAC determinations when necessary. These efforts not only protect providers from unwarranted financial obligations but also ensure that Medicare and Medicaid funds are appropriately allocated.
In conclusion, the relationship between RACs, healthcare providers, and government healthcare programs is complex. The examples provided demonstrate that while RACs play a critical role in safeguarding the integrity of Medicare and Medicaid, their findings are not always accurate. Providers must be diligent in ensuring their billing practices align with regulations and be prepared to contest any erroneous audit findings to maintain fiscal stability and fair reimbursement for services rendered.
Happy Halloween!!!!
Amidst Medicaid Expansion, Provider Shortages Skyrocket!
From February 2020 through March 2023, enrollment in Medicaid increased by 35.3 percent, or over 22 million individuals. Enrollment in Medicaid increased in every State during COVID. Concurrently, many States report a shortage of providers willing to accept Medicaid. Today NC will be announcing its Medicaid expansion, so the nationwide numbers will rise in the near future. However, as we are introducing over 22 million Americans to Medicaid, the number of physicians, oral surgeons, BH providers, or any health care provider type who accept Medicaid is not increasing. In many places, providers who accept Medicaid is shrinking. See blog.
For example, Arkansas expanded Medicaid in 2014, leading to a surge in Medicaid enrollees. While the expansion successfully reduced the state’s uninsured rate, it also highlighted the shortage of healthcare providers, especially in rural areas. Many residents in these underserved regions face long wait times to see a doctor, limiting their access to timely care.
Nationwide, access to mental health services has been a concern. Medicaid expansion aimed to provide mental health coverage to more people, but there has been a shortage of mental health professionals to meet the growing demand. In many states, there are waitlists regardless the crisis.
Providers continue to face insurmountable challenges. Such challenge is the burden of audits conducted by Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), and Targeted Probe and Educate (TPE) programs. These audits are designed to ensure that healthcare providers comply with the complex web of regulations governing reimbursement and patient care. However, the reality is that these audits often impose an overwhelming burden on providers and their attorneys, making compliance a Herculean task.
The healthcare industry in the United States is governed by a myriad of rules, regulations, and guidelines. From Medicare and Medicaid requirements to state-specific laws, providers must navigate a complex regulatory maze to ensure compliance. RACs, MACs, and TPE programs scrutinize providers’ billing practices, medical necessity of services, and documentation to identify overpayments and potential fraud or abuse.
Healthcare providers, from hospitals to individual practitioners, must allocate significant resources to respond to audits and maintain compliance. The burden starts with the anticipation of an audit, as providers are often left in the dark about when and how they will be audited. This uncertainty can be paralyzing, as it requires providers to divert time, personnel, and financial resources away from patient care to prepare for an audit that may or may not occur.
Once an audit is initiated, providers are faced with a deluge of demands. They must gather and submit an extensive amount of documentation, which can include patient records, billing records, and other relevant materials. The process is not only time-consuming but also disruptive to day-to-day operations. Smaller practices, in particular, may struggle to allocate the necessary personnel and resources to meet these demands, potentially affecting patient care quality.
One of the most significant challenges faced by healthcare providers and their attorneys is the ever-changing nature of healthcare regulations. Keeping up with the latest rules and guidelines is a daunting task, and providers must constantly adapt their practices to remain compliant. The complex interplay between federal and state regulations further complicates matters, as what is compliant at one level may not be at another.
Healthcare attorneys play a critical role in assisting providers through the audit process. However, we too are challenged by the intricate nature of healthcare regulations and the constant need to stay abreast of updates and changes. David would concur, I believe, in my statement that, being a health care regulatory attorney is not a laid-back, calm career choice. We have to continue to educate ourselves at quite a fast pace. Think about how often laws and rules change federally and in 50 States. Tomorrow I am going to Baltimore Maryland for the Fraud and Abuse Conference by the American Health Law Association. I will let you know if I learn anything mind-blowing.
The burden of RAC, MAC, and TPE audits in healthcare is undeniable. While these audits are essential to protect the integrity of the healthcare system, the complex regulatory landscape, coupled with the uncertainty and resource-intensive nature of the audit process, places an overwhelming burden on providers and their attorneys. Healthcare providers are in a constant struggle to balance compliance with the delivery of quality patient care, and their legal representatives are similarly tasked with navigating an ever-changing regulatory maze.
Addressing this burden requires a collaborative effort among stakeholders, including government agencies, healthcare providers, and legal experts. Streamlining audit processes, providing clearer guidance, and ensuring that audits are conducted fairly and transparently can go a long way in alleviating the burden on providers. In the end, the goal should be to strike a balance between safeguarding taxpayer dollars and allowing healthcare providers to focus on what they do best – caring for patients. Or maybe we just need a computer program for audits that is NOT Excel.
RAC Audits: If It Walks Like a Duck and Quacks Like a Duck, It Is a Duck!
Today, I am going to talk about RAC audits. I know what you are thinking…don’t you always talk about RACs? Of course, you are going to talk about RAC audits. No. Today, I’m taking this blog in a different direction.
I want to talk about secret, hidden RAC audits. As you are aware, the federal regulations limit RACs from going back more than 3 years to audit claims. Juxtapose the UPICs, TPEs, SMRCs, MACs, OIG, and even State Medicaid agencies. Everyone, but the RACs are allowed more than a 3-year lookback period. Some, like OIG, have long lookback periods. Coincidentally, when a company responds to an RFP or a request for proposal from CMS to act as CMS’ vendor to conduct Medicare audits on America’s Medicare providers, a clause in the proposed contract between CMS and the vendor is highly argued or negotiated. Which clause in the vendor’s contract is most negotiated? I will tell you. The clause that states that the vendor is a RAC is most negotiated. Because if the vendor is called a UPIC instead of a RAC, the vendor has a longer lookback period. Being called a UPIC, suddenly, becomes a commodity. There are no laws mandating UPICs to a 3-year lookback period. All of a sudden, it is not hip to be a RAC.
Look into it. Do your research. The contracts are public record. Ask for Cotiviti’s contracts with CMS. Notice I said contracts, not contract. What I have realized over time is that a vendor may be hired by CMS to be a RAC auditor, but, once the vendor realizes the limit of 3 years, it goes back to CMS and asks if it can be considered an UPIC. Why? A UPIC can do everything that a RAC does; however, it gets an additional 3 years to lookback at claims and that means money. Cha-ching! Even Dr. Ron Hirsh commented today on RACMonitor about this story, which I presented this morning at 10:00am, as I present every Monday morning, live, on the national podcast RACMonitor , hosted by Chuck Buck and produced by MedLearn. If you want to listen to the podcast, click the following link: Nelson Mullins – Monitor Mondays Podcast Featuring Knicole Emanuel; Defeating Statistical Extrapolations, Expansion of Medicaid RACs, IPPS Final Rule, Smart Hospitals, and Physician Advisors Episodes
The podcast is also on video, but I don’t know how to view that. If you do, you would see my baby duck Biscuit on the screen. He joined me this morning to talk about, “What Walks Like a Duck and Quacks Like a Duck, Must be a Duck.” Dr. Hirsh commented that companies like Cotiviti have many, many contracts deeming Cotiviti many different acronyms. If you get a letter from Cotiviti, do not assume it is acting as a RAC. Instead, ask for the contract which allows Cotiviti to do what it purports to want to do.
I’ve noticed this trend in real life, but only for 10-20 individual cases, maybe 30. I have not had the time to draft a FOYIA request, and, quite frankly, my name on a FOYIA request nowadays result in a response that says, something to the effect of, use discovery instead. Even though my personal experiences should not be extrapolated across the country because that would be inappropriate and judgmental, I will give an example and you may extrapolate or not. There is a company that has been doing RAC audits in NC for the last 5-8 years. It is called Public Consulting Group (“PCG”). PCG and I go way back. If you are a longtime listener of RACMonitor, you will recall that Ed Roche and I presented numerous podcasts about the debacle in NM in 2013. The State of NM put 15 Medicaid providers who constituted 87.6% of the BH providers in NM at the time. The consequences were catastrophic; thousands were out of BH services overnight. There is even a documentary about the unraveling of BH in NM in 2013. The reason that these 15 BH providers were put out of business overnight was because of a NM vendor called PCG. PCG issued a report to NM after conducting Medicaid audits on these 15 BH facilities, which accused the 15 facilities of fraud. In 2013, PCG was considered a RAC per contract. Today, when I have a case against PCG and make the 3-year lookback period argument, I get a retort that it’s not a RAC. Instead it’s a UPIC.
To which I say, if it walks like a duck and talks like a duck, it is a duck.
Laboratories Are Under Scrutiny by OIG and State Medicaid!
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!
What To Do When Your Doctor Fails To Doctor?
Not everyone loves their job. Not everyone has a job. Not everyone does their job. And that includes doctors and lawyers. Not all doctors and lawyers do their jobs well. When a doctor fails to doctor, where does the liability lie? On the facility? On the hospital?
That is exactly what happened in one of my cases. My client, an inpatient substance abuse facility, hired a physician. Upon hire, the doctor signed an employment agreement that stated that he or she would perform the role as a doctor/medical director for the facility. Years passed. There were no complaints, so the executive committee was under the impression that the doctor was fulfilling his duties. The members certainly had no reason to suspect that the doctor was not doctoring according to the employment contract. No, they assumed that a doctor would doctor.
Then a RAC audit happened. As you are well aware, RAC audits go back three years. The facility received a Tentative Notice of Overpayment from the RAC alleging the facility owed almost $10 million. I was hired, and I conducted a review of the facility, its policies, and interviewed all staff. It came to light that the doctor did not review the results of urinalysis tests. Remember, this is a substance abuse facility. Urine tests are essential. The Medicaid recipients provided the samples; they peed in a cup. The labs were ordered. The doctor has a standing order for definitive and presumptive urinalysis tests. The doctor has sole access to the test results electronically. We discovered, much to our horror, that the doctor never looked at the results. For the past three years, she has never informed any patient that they were or were not positive or negative for any substance. In my mind, reviewing the urinalysis results goes hand in hand with substance abuse therapy.
Here, we discovered a breakdown in the facility, but that breakdown was one person not doing his or her job. Sadly for him or her, we – the facility – were able to use the doctor’s failure to doctor to our advantage. We appealed the $10 million alleged overpayment. Our primary defense was throwing the doctor under the bus, and we had every right to do so. Who would have expected your medical director failing to direct or review pertinent tests. In the world of law, respondeat superior, normally, is the general rule. In Latin, respondeat superior means that the superior or the boss or the owner is responsible for those underneath them. In this case, the facility is the superior and the doctor is the inferior, so you would expect the facility to bear any liability of its employees. But, not here. Not in this case. The doctor failed to meet expectations of the job. By not reviewing urinalysis test results, the doctor veered enough off the track to relieve liability from the facility. The doctor’s inactions were the direct cause of the accusation of owing $10 million. The administrative law judge (“ALJ”) agreed. After terminating the doctor, we contemplated suing the physician for damages. However, since we won the alleged overpayment case, we did not do so.
SNFs Are on the Medicare Chopping Block! Caveat!
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?
The reviews will be conducted on a prepayment basis unless the provider requests post-payment review due to a financial burden. Holy cow! See blog, blog, and blog.
“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.
E/M Codes and When You Should NOT Fire Your Attorney!
Lately, I have been inundated with Medicare and Medicaid health care providers getting audited for E/M codes. I know Dr. Hirsh has spoken often about the perils of e/m codes. The thing about e/m codes is that everyone uses them. Hospitals, family physicians, urgent care centers, specialists, like cardiologists. Obviously, for a specialist, like cardiology, the higher level codes will be more common. A 99214 will be common compared to a generalist like a primary care physician, where a 99213 may be more common.
Here’s a little secret: the difference between a 99214 and 99213 is subjective. It’s so subjective that I have seen auditors who are hired by private companies to audit on behalf of CMS and are financially incentivized to find fault find 100% error rates. Who finds a 100% error rate? Not one claim out of 150 was compliant. Then, I come in and hire the best independent auditors or coders. There are generally two companies that I always use. The independent auditors are so good. Most importantly, they come in and find a much more probable error rate of almost zero.
Hiring an independent, expert coder to ensure that the RAC, MAC, UPIC, or TPE audits accurately is always part of my defense.
Recently, I learned what I should have known a long time ago, but is essential for our listeners to know. If your medical malpractice is with The Doctors Company, for free, you get $25k of – what TDC calls – Medi-Guard or regulatory compliance protection. In other words, you get audited by a UPIC and are informed that you owe an alleged $5 million, extrapolated, of course, you get $25k to pay an attorney for defense. Sadly, $25k will not come close to paying your whole defense, but it’s a start. No one scoffs at “free” money.
When accused of an alleged overpayment, placed on prepayment review, or accused of a credible allegation of fraud, your reimbursements could be in imminent danger of being suspended or recouped. It is imperative for the health care provider to stay apprised of what penalties they are facing. You want to know: “best case scenario and worst case scenario.”
And, providers, be cognizant of the gravity of your situation. Infringement of the false claims act can result in high penalties or jail, depending on the circumstances and the provider’s attorney. I had a client, who is an M.D. psychiatrist. She asked me what is the worst penalty possible. I am blunt and honest, apparently to a fault. I didn’t miss a beat. “Jail,” I said. She was horrified, called her insurance company, and requested a new attorney. TDC refused to fire me, so the doctor said that she will draft the self-disclosure herself. She also said that she submitted the falsified documents to the UPIC, so she was confident that the UPIC would not notice, but see below, time stamps are a bitch.
When I told the doctor that we needed to self-disclose to OIG because she had some Medicare claims, she screamed, “No! No! NO!” It was a video call and my sound wasn’t up loud, and I just watch her on the screen with her face all contorted and her mouth getting really big, then contract, then get really big, then contract, then get really big and then even bigger. The expert certified coder was present for the call, and he called me afterward asking me: “What was that?” And his wife, who overheard, said, “OMG. I would have lashed out.” I kept my cool. Honestly, I just felt bad for her because I can see the writing on the wall.
Obviously, a new attorney is not going to change the outcome. She falsified 17 dates of service because she wanted the service notes to be “perfect.” Well, providers, there is no such thing as perfect and changing diagnoses and CPT codes and adding details to the notes that, supposedly, you remember from a month ago is not ok.
I did feel bad for her for leaving me. I could have gotten her off without any penalties.
You see, English is not her first language. She misinterpreted an email from the UPIC and thought it said that you can fix any errors before submitting the documents. She fabricated 17 claims before I was hired instructed her to stop. I had a solid defense prepared. I was going to hire an independent auditor to audit her 147 claims with the 17 falsified claims. I would have hoped for a low error rate. Then, I would have conducted a self-audit and self-disclosed the fabrications to the UPIC with the explanation that it was a nonintentional harmless error that we are admitting. Self-disclosure can, sometimes, save you from penalties! However, if she doesn’t self-disclose, she will be caught. Unbeknownst to her, on page 6 of the service notes, it is time and date stamped. It revealed on what day she changed the data and what data she changed. Those of you who would also terminate your attorney because you think you can get by with the fraud without anyone noticing, think hard about whether you would like to suffer the worst penalty – jail – or have your attorney be honest and upfront and get you off without penalties by following the rules and self-disclosing any problems uncovered.
I have no idea what will happen to the doctor, but had she stayed with me, she would have escaped without penalty. When not to fire your attorney!
