Category Archives: Appeal Rights
Federal Court Vacates Two, Medicare ALJ Decisions with Extrapolations
Today is April Fool’s Day, but the story I am going to tell you today is no prank. On 03/25/2024, the U.S. District Court of the Southern District of Florida rendered its Decision on MedEnvios Healthcare, Inc. v. Xavier Becerra, in his official capacity as Secretary USDHHS. 2024 WL 1252264. The federal Court vacated two, ALJ Decisions upholding two, separate, extrapolated audits. This example highlights the importance of appealing ALJ Decisions to federal court, which will uphold the law versus CMS Rules.
MedEnvios is a durable medical equipment provider (DME). It was the target of two Medicare audits and both audits were extrapolated. MedEnvios’ argument is two-fold: (1) that its due process rights were violated because HHS failed to comply with the procedures set forth in statute, regulation, and “sub-regulatory guidance” that mandate “certain due process minimum protections be provided to health care suppliers in the statistical sampling and extrapolation process.” (Pl.’s Resp. at 9.) Specifically, MedEnvios objects to the Defendant’s exclusion of claims for which the Department never made a payment to MedEnvios from the sampling frame. Obviously if the zero-claims are not removed the number will be inflated or maybe even surpass what was actually paid to the provider during the specific timeframe. And (2) MedEnvios argues that the Defendant failed to provide sufficient documentation to support overpayments recalculated following partially favorable appellate decisions, allegedly depriving MedEnvios of notice. Following partially favorable decisions on appeal, the relevant contractor must “effectuate” the decision by recalculating the extrapolated overpayment amount to be recouped from the supplier based upon the revised decisions on individual sampled Medicare claims. The contractor then sends the supplier a revised demand letter reflecting the new overpayment amount. Without the underlying documentation showing how the contractor arrived at the new amount, MedEnvios claims that it lacked “the information necessary to mount a meaningful challenge to those recalculations.”
I bet that many readers today have felt the pain of having to defend themselves from an audit and knew the auditor was withholding data or documents, yet felt powerless. This Decision says it is not ok to not give all the information. The Court held that MedEnvios was and is prejudiced by the unavailability of the recalculation worksheets because MedEnvios did not receive three of the four relevant recalculation worksheets within enough time to satisfy its procedural due process rights by recreating the recalculations to verify the revised extrapolated amounts.
The Court held that the prejudice to MedEnvios in having to mount appeals without reviewing the contractors’ effectuation work easily outweighs any administrative difficulty of timely providing the worksheets. Provision of this information should be a negligible burden on the Department and its contractors. The MPIM already instructs that “[d]ocumentation shall be kept in sufficient detail so that the sampling frame can be re-created should the methodology be challenged. The contractor shall keep an electronic copy of the sampling frame.” MPIM § 8.4.4.4.1. Thus, contractors are already required to maintain this information, and the added burden of providing the information on request would be minimal. The Court therefore concludes that the Department has run afoul of MedEnvios’s procedural due process rights by failing to provide the documentation supporting the recalculated overpayment amounts.
So, what is the remedy for the Department’s failure to timely provide documents showing how the revised overpayment demands were calculated?
This Court vacated both ALJ Decisions upholding the two extrapolated amounts. This is a perfect example of why providers MUST appeal ALJ Decisions to federal court. The difference in the law and CMS’ Rules is vast. Not enough providers continue their appeal to federal court because of money. Litigation is expensive. However, in this case, attorneys’ fees were, most likely, much less than what CMS was alleging MedEnvios owed.
Have a great April Fool’s Day. Play a prank on a colleague. At the office, put tape under a coworker’s computer mouse, and watch them try to figure out why it’s not working!
In Medicare Provider Audits, the Best Defense Is a Good Offense
Today I want to discuss upcoming 2024 audits. It has been almost four years since the world shut down due to COVID. Life has been divided into “before COVID” and “after COVID.” Before COVID, the Centers for Medicare and Medicaid Services (CMS) aggressively pursued audits against durable medical equipment suppliers, home health, hospice, behavioral health, long term care facilities and hospitals. When COVID hit, most audits were paused. But not for long. As you know, CMS resumed its audit activities as early as August 2020. However, in the world of COVID, there were exceptions to every rule, many of which were state specific. Even exceptions had exceptions. It is imperative that you maintain for your type of health care service every policy, exceptions, bulletins, advisory opinions from 2020 through the present. If you have not assigned this task to someone in your facility, do it today.
We have seen an uptick in increased audit activity with pneumonic compression devices (PCDs). PCDs were not listed in the top error rates for the 2021 Improper Payment Report, but in the 2023 report, PCD’s have the second highest error rate behind oral cancer drugs at 78.9%. With an error rate that high, PCD’s will be a focal point of audits. Other items identified in the 2023 improper payment report for having high error rates include urological supplies, parenteral and enteral nutrition, manual wheelchairs, and various orthoses. These items will all see increased audit activity in the upcoming year. Basically, as long as the error rates remain high, audit activity will continue.
Surgical dressings have also been consistently audited. Surgical dressings are relatively a complex product to bill. DME suppliers of surgical dressings and physicians who order surgical dressings are seeing an uptick in denials. The 2021 Medicare fee for service supplemental improper payment report covering claims from July 1st, 2019, through June 30th 2020, listed surgical dressings as having the highest improper payment rate at 69.7%, followed closely by therapeutic shoes with an error rate of 67.9%. Since then, there has not been much improvement. The 2023 Improper Payment Report covering claims submitted between July 1st, 2021, and June 30th, 2022, shows the improper payment rate for surgical dressings is still at 62.1%. Therapeutic shoes did show some improvement with an improper payment rate of 51.4%, but this is still significant. For the 2023 reporting period, insufficient documentation accounted for 82.4% of improper payments for surgical dressings. Other types of errors for surgical dressings were no documentation at 1.9%, medical necessity at 1.7%, incorrect coding at 1.9% and other at 12.2%.
Targeted Probe and Educate (TPE) were some of the first audits resumed by CMS. Recovery Audit Contractor (RAC) audits are also increasing. I consider RACs to be the bounty-hunters of Medicare and Medicaid. Audits of skilled nursing providers are going to see a hike this year, with a growing number of federal and state recovery audits adding to specialized compliance reviews announced last year. In 2023, regulators instituted audits of facilities using potentially inappropriate diagnosis of schizophrenia as well as a new, 5-claim audit of every US nursing home that was specifically meant to root out improper payments. CMS came under additional pressure this past summer. That’s when the Government Accountability Office said the agency needs to do a better job of recouping overpayments. What do we think CMS will do in light of the GAO instructing the agency to do a better job recouping? The answer is: audit more. But, as they say in football, the defense is a good offense. The same is true in Medicare and Medicaid provider appeals. Be prepared.
Knicole Emanuel Presents Webinar January 25, 2024!
A Guide to the RAT-STATS Statistical Software in Medicare and Medicaid
Hosted by: Lorman
Click here to register for the webinar on January 25, 2024, from 1:00pm-2:30pm!
Join Nelson Mullins Raleigh partner Knicole Emanuel for a webinar hosted by Lorman on Jan. 25., 2024. Emanuel will be a speaker at the session entitled “A Guide to the RAT-STATS Statistical Software,” where attendees will learn about key considerations in interpreting sample size results for how to interpret and critically assess key factors influencing the extrapolation process, how to apply theoretical knowledge through practical exercises using RAT-STATS, how to develop a critical mindset for evaluating the reliability and replicability of results; and informed decision-making.
This webinar is available to attend live with available credits for ACHE, HFMA, AHIMA, and NASBA. There will also be an OnDemand Course for this presentation available.
Family Practice Doctors: Is It CPT 1995 or 1997 Guidance?
Right now, CMS allows physicians to pick to follow the 1995 or 1997 guidelines for determining whether an evaluation and management (“e/m”) visit qualifies for a 99214 versus a 99213. The biggest difference between the two policies is that the 1995 guideline allows you to check by systems, rather than individual organs. Starting January 1, 2023, there are a lot of revisions, including a 2021 guidance that will be used. But, for dates of service before 2021, physicians can pick between 1995 and 1997 guidance.
Why is this an issue?
If you are a family practitioner and get audited by Medicare, Medicaid, or private pay, you better be sure that your auditor audits with the right policy.
According to CPT, 99214 is indicated for an “office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a detailed history, a detailed examination and medical decision making of moderate complexity.”
Think 99214 in any of the following situations:
- If the patient has a new complaint with a potential for significant morbidity if untreated or misdiagnosed,
- If the patient has three or more old problems,
- If the patient has a new problem that requires a prescription,
- If the patient has three stable problems that require medication refills, or one stable problem and one inadequately controlled problem that requires medication refills or adjustments.
The above is simplified and shorthand, so read the 1995 and 1997 guidance carefully.
An insurance company audited a client of mine and clearly used the 1997 guidance. On the audit report, the 1997 guidance was checked as being used. In fact, according to the audit report, the auditors used BOTH the 1997 and 1995 guidance, which, logically, would make a harder, more stringent standard for a 99214 than using one policy.
Now the insurance company claims my client owes money. However, if the insurance company merely applied the 1995 guidance only, then, we believe, that he wouldn’t owe a dime. Now he has to hire me, defend himself to the insurance company, and possibly litigate if the insurance company stands its ground.
Sadly, the above story is not an anomaly. I see auditors misapply policies by using the wrong years all the time, almost daily. Always appeal. Never roll over.
Sometimes it is a smart decision to hire an independent expert to verify that the physician is right, and the auditors are wrong. If the audit is extrapolated, then it is wise to hire an expert statistician. See blog. And blog. The extrapolation rules were recently revised…well, in the last two or three years, so be sure you know the rules, as well. See blog.
NC Medicaid Reform … Part 5,439-ish
I hope everyone had a Merry Christmas or Happy Hanukkah! As 2023 approaches, NC Medicaid is being overhauled…again! Medicaid reform is never smooth, despite the State. NC is no different. When NC Medicaid reformed in 2013, I brought a class action lawsuit against Computer Science Corporation, which created NCTracks, and DHHS, NC’s “single state entity” charged with managing Medicaid. See blog.
The new start date for NC Medicaid Tailored Plans is April 1, 2023. Tailored Plans, originally scheduled to launch Dec. 1, 2022, will provide the same services as Standard Plans in Medicaid Managed Care and will also provide additional specialized services for individuals with significant behavioral health conditions, Intellectual/Developmental Disabilities and traumatic brain injury.
While the start of Tailored Plans will be delayed, specific new services did go live Dec. 1, 2022.
The following organizations will serve as regional Behavioral Health I/DD Tailored Plans beginning April 1, 2023:
- Alliance Healthalliancehealthplan.org
- Member phone numbers: 800-510-9132, TTY: 711 or 800-735-2962
- Eastpointeeastpointe.net
- Member phone numbers: 800-913-6109, TTY: 888-819-5112
- Partners Health Managementpartnersbhm.org
- Member phone numbers: 888-235-4673, TTY: English: 800-735-2962, TTY: Spanish: 888-825-6570
- Sandhills Centersandhillscenter.org
- Member phone numbers: 800-256-2452, TTY: 711 or 866-518-6778
- Trillium Health Resourcestrilliumhealthresources.org
- Member phone numbers: 877-685-2415, TTY: 711
- Vaya Healthvayahealth.com
- Member phone numbers: 800-962-9003, TTY: 711
Aetna is a managed-care provider, one of eight entities who submitted proposals for Medicaid managed-care services. The Committee issued its recommendations on January 24, 2019, which identified four statewide contracts for Medicaid managed care services to be awarded. On February 4, 2019, DHHS awarded contracts to WellCare of North Carolina, Inc. (“Wellcare”), Blue Cross and Blue Shield of North Carolina (“BCBS”), AmeriHealth Caritas of North Carolina (“AmeriHealth”), and UnitedHealthcare of North Carolina, Inc. (“United Healthcare”). DHHS also awarded a regional contract to Carolina Complete Health, Inc.
See below:
However, two private insurance failed to get awarded NC contracts.
Aetna, along with the two other entities who were not awarded contracts, protested DHHS’ contract by filing contested case petitions in the Office of Administrative Hearings (“OAH”). Aetna filed its contested case petition and motion for preliminary injunction on April 16, 2019. The Administrative Law Judge (“ALJ”) denied Aetna’s motion for preliminary injunction on June 26, 2019. The ALJ consolidated all three petitions on July 26, 2019. It rose to the Court of Appeals, where it was thrown out on a technicality; i.e., failure to timely serve Defendants. Aetna Better Health of N. Carolina, Inc. v. N. Carolina Dep’t of Health & Hum. Servs., 2021-NCCOA-486, ¶ 4, 279 N.C. App. 261, 263, 866 S.E.2d 265, 267.
The Court stated, “Here, Aetna failed to timely serve DHHS or any other party within the “10 days after the petition is filed” as is mandated by N.C. Gen. Stat. § 150B-46. Prior to serving DHHS, Aetna amended its Petition on 12 October 2020 and served its amended Petition the same day. Aetna argues “the relation-back provision of Rule 15(c) allows the service of an amended pleading where the original pleading was not properly served.” What a silly and mundane reason to have their Complaint dismissed due to the oversight of an attorney or paralegal…and a great law firm at that. Just goes to show you that technical, legal mistakes are easily done. This career in law in the Medicare/Medicaid realm is not simple.
The upcoming transformation in Medicaid will probably not be smooth; it never is. But we shall see if Medicaid reform 2023 works better than 2013 reform. We can hope!
Nursing Homes Face Higher Scrutiny and Increased Penalties
Some nursing homes are facing tougher penalties, including the loss of federal funding. In an effort to increase quality of care in nursing homes, the Biden administration implemented revisions to the Special Focus Facility (“SFF”) program, which targets the “worst” nursing homes in each State. Nursing homes are selected for the program by the “single State agency” using a point system based on the number and severity of deficiencies cited during their past 3 inspections.
CMS released a revised SFF Program policy memo QS0-23-01-NH and these revisions are meant to increase: (A) the requirements for “graduation” of the SFF program; and (B) the enforcement for facilities that do not demonstrate improvement. A high-level overview of key changes made in the revised memo are as follows:
- Staffing levels is a consideration for SFF selection: CMS has directed states to consider a facility’s staffing level when selecting facilities for the SFF program. CMS recommends if a State is considering two candidates with a similar compliance history, it should select the facility with lower staffing ratios/rating as the SFF.
- Criteria for Graduation of the Program Escalated: CMS has added a threshold that prevents a facility from exiting based on the total number of deficiencies cited. To graduate from the program, facilities must complete two consecutive standard health surveys, with no intervening complaint, LSC, or EP surveys with 13 or more total deficiencies, or any deficiencies cited at scope and severity of “F” or higher.
- Involuntary Termination Enforced: SFFs with deficiencies cited at immediate Jeopardy (“IJ”) on any two surveys (standard health, complaint, LSC, or EP) while in the SFF program, will now be considered for discretionary termination.
- Enforcement Actions Increased: CMS will impose immediate sanctions on an SFF that fails to achieve and maintain significant improvement in correcting deficiencies on the first and each subsequent standard health, complaint and LSC/EP survey after a facility becomes an SFF. Enforcement sanctions will be of increasing severity for SFFs demonstrating continued noncompliance and failure to demonstrate good faith efforts to improve performance.
- Sustainable Improvements Incentivized: CMS will closely monitor graduates from the SFF program for a period of three years to ensure improvements are sustained. For SFFs that graduate but continue to demonstrate poor compliance identified on any survey (e.g., actual harm, substandard quality of care, or IJ deficiencies), CMS may use its authority to impose enhanced enforcement options, up to, and including discretionary termination from the Medicare and/or Medicaid programs.
It is imperative to note that your past alleged violations will work against you. This means that if you are cited with a deficiency, it is of the utmost importance, if you disagree with the assessment, to appeal the alleged deficiency. If you merely pay the penalty and roll over like an old dog, your lack of appealing can aid toward your demise. You are basically being held to a giant, bell curve against the other nursing homes in your State.
Once in the SFF program, nursing homes are inspected at least every six months rather than annually. State inspectors apply progressive enforcement—penalties, fines, withholding of payments—until the facilities significantly improve or are terminated from Medicaid and/or Medicare.
Nationally, 88 nursing homes participate in the SFF program, about 0.5% of all nursing homes. It is mandatory if chosen.
The facilities with the most points in a state then become candidates for the SFF program. The number of nursing homes on the candidate list is based on five candidates for each SFF slot, with a minimum candidate pool of five nursing homes and a maximum of 30 per State. State Agencies (“SAs”) use this list to select nursing homes to fill the SFF slot(s) in their State. Additionally, since a facility’s staffing (staffing levels and turnover) is very important to residents’ care, CMS recommends that SAs consider a facility’s staffing information when selecting SFFs from the SFF candidate list. See the list of current candidates in Table D, current as of December 7, 2022. For example, NC has 10 facilities on the proposed list for participation in the SFF program. Each State is allotted a number of SFFs the State may allot. See below.
Once a State selects a facility as an SFF, the SA, on CMS’s behalf, conducts a full, onsite inspection of all Medicare health and safety requirements every six months, and recommends progressive enforcement (e.g., civil money penalty, denial of Medicare payment, etc.) until the nursing home either: (1) graduates from the SFF program; or (2) is terminated from the Medicare and/or Medicaid program(s). While in the SFF program, CMS expects facilities to take meaningful actions to address the underlying and systemic issues leading to poor quality.
Once an SFF graduates or is terminated, each SA then selects a new SFF from a monthly list of candidates. CMS also informs candidate nursing homes of their inclusion on the SFF candidate list in the monthly preview of the Five-Star Quality Rating System. The facility will graduate from the SFF program once it has had two consecutive standard health surveys with 12 or fewer deficiencies cited at S/S of “E” or less on each survey (these surveys must have occurred after the facility has been selected as an SFF). To avoid situations where a facility remains an SFF for a prolonged period of time, CMS is establishing criteria that could result in the facility’s termination from the Medicare and/or Medicaid programs. SFFs with deficiencies cited at Immediate Jeopardy on any two surveys while in the SFF program, will be considered for discretionary termination.
While the initial SFF designation is not appealable, the facility does have some appeal rights. Federal regulations allow for dispute resolution and to appeal a finding of noncompliance determined under an SFF survey that results in an enforcement remedy.
If you find yourself on the SFF list, you must hire a lawyer with expertise. Your lawyer should be able to help you “graduate” from the SFF list without termination or closure. Your lawyer can help negotiate Systems Improvement Agreements (“SIAs”) with SAs and CMS to provide additional time for nursing homes to improve their internal systems and the quality of care they provide.
Warning for Acute Care Hospitals: You’re a Target for Overpayment Audits
Today I want to talk about upcoming Medicare audits targeted toward Acute Care Hospitals.
In September 2022, OIG reported that “Medicare Part B Overpaid Critical Access Hospitals and Docs for Same Services.” OIG Reports are blinking signs that flash the future Medicare audits to come. This is a brief blog so be sure to tune in on December 8th for the RACMonitor webinar: Warning for Acute Care Hospitals: You’re a Target for Overpayment Audits. I will be presenting on this topic in much more depth. It is a 60-minute webinar.
For OIG’s report regarding the ACHs, OIG audited 40,026 Medicare Part B claims, with half submitted by critical access hospitals and the rest submitted by health care practitioners for the same services provided to beneficiaries on the same dates of service (“DOS”). OIG studied claims from March 1, 2018, to Feb. 28, 2021, and found almost 100% noncompliance, which constituted almost $1million in overpayments to providers.
According to the OIG Report, CMS didn’t have a system to edit claims to prevent and detect any duplicate claims, as in the services billed by an acute hospital and by a physician elsewhere. Even if the physician reassigned his/her rights to reimbursement to the ACH.
As you know, a critical access hospital cannot bill Part B for any outpatient services delivered by a health care practitioner unless that provider reassigns the claim to the facility, which then bills Part B. However, OIG’s audit found that providers billed and got reimbursed for services they did perform but reassigned their billing rights to the critical access hospital.
The question is – why did the physicians get reimbursed even if they assigned their rights to reimbursement away? At some point, CMS needs to take responsibility as to the lack having a system to catch these alleged overpayments. If the physicians were reimbursed and had no reason to know that they were getting reimbursed for services that they assigned to an ACH, there is an equitable argument that CMS cannot take back money based on its own error and no intent by the physician.
On a different note, I wanted to give a shout out to ASMAC, which is the American Society of Medical Association Counsel; Attorneys Advocating for America’s Physicians. It is comprised of general counsels (GCs) of health care entities and presidents of State Medical Societies. ASMAC’s topics at conferences are cutting-edge in our industry of defending health care providers, interesting, and on-point by experts in the fields. I was to present there last week in Hawaii on extrapolations in Medicare and Medicaid provider audits. Thankfully, all their conferences are not in Hawaii; that is too far of a trip for someone on the East Coast. But you should look into the association, if ASMAC sounds like it would benefit you or you could benefit them, join.
A Medicare Mistake: Your Missing Contract
-written by Todd Yoho, my paralegal, who has worked closely with me for over a decade. He knows more about Medicare and Medicaid than he probably cares to, but no one could contest that he doesn’t know his stuff!
There is a film almost everyone in the legal field has seen at least once. A comedic drama from 1973 titled, The Paper Chase. It follows the journey of a first year law student at Harvard Law School, and his particular frustrations with his Contracts course and professor. Contracts are one of the first things a law student studies, and some attorneys spend their career reviewing, drafting, revising, and negotiating contracts. They are that important.
In the health care, provider world, contracts are the lifeblood of your company. Contracts are how you secure work, ensure rates for revenue, and contain vital information should someone act contrary to the contract. If you have a dispute with an entity, your first act should be to consult an attorney and provide them with a copy of your contract. There should be a section about dispute resolution, which you should carefully scrutinize before signing any contract. It may be mandatory arbitration, it may stipulate a particular venue, or it may cite specific rules and statutes that, if you are not an attorney, may read like obtuse, dense, “word salad” put together by people who do not have to live and operate under the very laws they enact.
But, what if you don’t have a copy of your contract? You signed it years ago, your business has moved several times, or it just disappeared in the hectic daily life of daily operations. Your recourse is that you have to ask the very entity you have a dispute with to provide you with a copy. We’ve seen providers in situations like this, and sometimes the other entity complies immediately. Other times they say it will take 30 days, or 60 days, and you are already on your heels. Without a copy of that contract, you and your attorney may not know what your first step towards resolution will be. Worse if you are on a time limit you don’t know exists.
So, what do you do to avoid this kind of situation? You need to have a document retention policy. Know how long you are required to keep documents, Create an important document archive in a secure location that you update every time you execute a business related document. And make a copy to be kept in a separate, secure location. Then make another copy. It used to be this could be a notebook, a folder, or a file box in your CEO’s office, manager’s office, or with another person trusted with corporate responsibility. A copy could be kept at the CEO’s home in a locked file cabinet. And it still could be. There’s nothing wrong with keeping a hard copy archive, but this is the digital era.
Because we are in the digital era, you should absolutely keep your archive backed up to the cloud. Cloud data services can be cheap, and will pay enormous dividends if you suffer a catastrophic document loss. But, you have to preserve them first. Don’t let them get misplaced. Much like your important family documents, your important business documents are vital pieces of information. You may not need them every day, but the day you do need them, you want to have them quickly and easily available. They are that important. You don’t want to find yourself at an inopportune moment chasing paper.
Some helpful links include the following:
https://www.uschamber.com/co/start/strategy/how-long-to-keep-business-document
https://www.uschamber.com/co/run/technology/cloud-storage-security
Knicole here. Sorry for the duplicative links. I don’t know how to delete them.
Questions Answered about RAC Provider Audits
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:
Absent Auditors in Medicare Provider Appeals
(On a personal note, I apologize for how long since it has been my last blog. I was in an accident and spent 3 days in the ICU.)
I’d like to write today about the sheer absurdity about how these RAC, ZPIC, MAC, and other types of audits are being held against health care providers. When an auditor requests documents from a provider and opines that the provider owes a million dollars in alleged overpayments, I would expect that the auditor will show up before an independent tribunal to defend its findings. However, for so many of these Medicare provider appeals, the auditor doesn’t appear to defend its findings.
In my opinion, if the entity claiming that you owe money back to the government does not appear at the hearing, the provider should automatically prevail. A basic legal concept is that the accused should be able to confront its accuser.
I had depositions the last two weeks for a case that involved an opiate treatment program. The two main accusers were Optum and ID Medicaid. When Optum was deposed, they testified that Optum did not conduct the audit of the facility. When ID Medicaid was deposed, it contended that Optum did conduct the audit at issue.
When not one person can vouch for the veracity of an audit, it is ludicrous to force the provider to pay back anything. Auditors cannot hide behind smoke and mirrors. Auditors need to testify to the veracity of their audits.
To poke holes in Medicare audits, you need to know the rules. You wouldn’t play chess without knowing the rules. Various auditor have disparate look-back period, which is the time frame the auditor is allowed to look back and review a claim. For example, RACs may only look back 3 years. Whereas ZPICs have no specific look back period, although I would argue that the older the claim, the less likely it is to be recouped. There is also the federal 48-month limit to look backs absent accusations of fraud.
When appealing the outcome of a MAC or RAC audit, it is necessary for providers to have a specific reason for challenging the auditors’ determinations. Simply being dissatisfied or having generalized complaints about the process is not enough. Some examples of potential grounds for challenging a MAC or RAC determination on appeal include:
- Application if inapplicable Medicare billing rules
- Misinterpretation of applicable Medicare billing rules
- Reliance on unsound auditing methodologies
- Failure to seek an expert opinion
- Ignoring relevant information disclosed by the provider
- Exceeding the MAC’s or RAC’s scope of authority
It is imperative that you arm yourself in defending a Medicare audit, but if the auditor fails to appear at any stage in litigation, then you should call foul and win on a “absent” technicality.
