Category Archives: Appeal Rights

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.

TPE and Prepay Audits: Speak Softly, But Carry a Big Stick

Audits have now resumed to 100% capacity – or even 150% capacity. All audits that were suspended during COVID are reinstated. As you all know, RAC and MAC audits were reinstated back in August. CMS announced that Targeted Probe and Educate (TPE) audits would resume on Sept. 1, 2021. Unlike RAC audits, the stated goal of TPE audits is to help providers reduce claim denials and appeals with one-on-one education, focused on the documentation and coding of the services they provide. However, do not let the stated mission fool you. Failing a TPE audit can result in onerous actions such as 100 percent prepay review, extrapolation, referral to a RAC, or other action, a carefully crafted response to a TPE audit is critical. TPEs can be prepay or post-pay.

Speaking of prepayments, these bad babies are back in full swing. CareSource is one of the companies contracted with CMS to conduct prepayment reviews and urgent care centers seem to be a target. Prepayment review is technically and legally not a penalty; therefore being placed on prepayment review is not appealable. But do not believe these legalities – prepay is Draconian in nature and puts many providers out of business, especially if they fail to seek legal counsel immediately and believe that they will pass without any problem. When it comes to prepay, believing that everything will be ok, is a death trap. Instead get a big stick.

            42 CFR §447.45 requires 90% of clean claims to be paid to a provider within 30 days of receipt. 99% must be paid within 90 days. The same regulations mandate the agency to conduct prepayment review of claims to ensure that the claims are not duplicative, the consumer is eligible for Medicare, or that the number of visits and services delivered are logically consistent with the beneficiary’s characteristics and circumstances, such as type of illness, age, sex, and service location. This standard prepayment review is dissimilar from a true prepayment review.

            Chapter 3 of the Medicare Program Integrity Manual lays out the rules for a prepayment review audit. The Manual states that MACs shall deal with serious problems using the most substantial administrative actions available, such as 100 percent prepayment review of claims. Minor or isolated inappropriate billing shall be remediated through provider notification or feedback with reevaluation after notification. The new prepay review rules comments closed 9/13/21, so it will take effect soon.

            If a 100% prepay is considered the most substantial administrative action, then why is it not considered an appealable sanction? I have, however, been successful in obtaining an injunction enjoining the suspension of payments without appealing being placed on prepay.

When requesting documentation for prepayment review, the MACs and UPICs shall notify providers when they expect documentation to be received. It is normally 30-days. The Manual does not allow for time extensions to providers who need more time to comply with the request. Reviewers shall deny claims when the requested documentation to support payment is not received by the expected timeframe. Any audit, but especially prepay audits can lead to termination under 42 CFR §424.535. You may choose to speak softly, but always carry a big stick.

Medicare Appeals: Time Is of the Essence!

Timing is everything. Missing a deadline germane to any type of Medicare or Medicaid audit is deadly. Miss an appeal deadline by one, single day, and you lose your right to appeal an overpayment.

 If anyone has watched Schitt’s Creek, then you know that when Johnny and Moira Rose missed their deadline to file for and pay taxes, they lost their mansion, their money, and way of life. The same catastrophic loss can occur if a provider misses an appeal deadline. Then that provider will be up Schitt’s Creek.

Importantly, when it comes to Medicare appeals, your appeal is due 60 days after the reconsideration review decision. 42 CFR § 405.1014 – Request for an ALJ hearing or a review of a QIC dismissal. A third-level, Medicare provider appeal is considered “filed” upon receipt of the complete appeal at the Office of Medicare Hearings and Appeals, instead of the normal standard acceptance that an appeal is filed upon the mailing stamped date. As in, once you mail your appeal, it will be retroactively filed per the date of mailing. Not true for the third-level, Medicare provider appeal. It is considered filed the date of receipt.

Also, the regulatory clock starts ticking 5 days after the date the of the reconsideration review decision, because, the thought is that the U.S. Post Office will not take more than 5 days to deliver correspondence. Well, that assumption nowadays is inaccurate. The Post Office is a mess, and that’s an understatement. My friend, Dr. Ronald Hirsh told me that his overnighted packages have been received weeks later. More times than not, mail is received weeks after it was mailed, which makes the date of delivery imperative. Yet this regulation forces you to rely on the U.S. Post Office; it makes no logical sense.

We actually had a case in which the ALJ dismissed our appeal because the Post Office delivered the appeal on the 61st day after the reconsideration review decision, including the 5 days window. Literally, the 61st day. The reason that the appeal was received on the 61st day is because the 60th day fell on a holiday, a weekend, or a closure due to COVID – I cannot recall – but OMHA was closed. The mail delivery person had to return the next day to deliver the appeal. Yet, our appeal was dismissed based on the US Post Office! We filed a Motion to Reconsider, but the ALJ denied it. Our only chance at presenting to the ALJ was squashed – due to the Post Office.

We appealed the ALJ’s denial to the Medicare Appeals Council with hope of reasonableness. We have no decision yet. It certainly makes me want to say: Eww, David!

Ewww, David!

Medicare Provider Appeals: “Get Thee to an ALJ!”

Get thee to a nunnery!” screamed Hamlet to Ophelia in frustration of his mother marrying Claudius so quickly after his father’s death. Similarly any provider who has undergone a Medicare appeal understands the frustration of getting the appeal to the administrative law judge level (the 3rd level). It takes years to do so, and it is the imperative step instead of the lower level rubber stamps. “Get thee to an ALJ!”

Per regulation, once you appeal an alleged Medicare overpayment, no recoupment of the disputed funds occurs until after you receive the second level review, which is usually the QIC upholding the overpayment. It is no secret that the Medicare provider appeals’ level one and two are basically an automatic approval process of the decision to recoup. “Something is rotten in the state of Denmark.” Hence, the importance of the ALJ level.

There are 5 levels of Medicare appeals available to providers:

  • Redetermination
  • Reconsideration
  • Administrative Law Judge (ALJ)
  • Departmental Appeals Board (DAB) Review
  • Federal Court (Judicial) Review

The third level is the level in which you present your case to an ALJ, who is an impartial independent tribunal. Unfortunately, right now, it takes about five years between levels two and three, although with CMS hiring 70 new ALJs, the Office of Medicare Hearings and Appeals (OMHA) is optimistic that the backlog will quickly dissipate. Last week, I attended an ALJ hearing for a client based on an audit conducted in 2016. Five years later, we finally presented to the ALJ. When the ALJ was presented with our evidence which clearly demonstrated that the provider should not pay anything, he actually said, “I’m shocked this issue got this far.” As in, this should have been reversed before this level. “O what a noble mind is here o’erthrown!”

In many cases, a premature recoupment of funds in dispute will financially destroy the health care provider, which should not be the purpose of any overpayment nor the consequence of any fraud, waste, and abuse program. We are talking about documentation nit-picking. Not fraud. Such as services notes signed late, according to best practices. Or quibbles about medical necessity or the definition of in patient and the two-midnight rule.

You have all probably read my blogs about the Family Rehab case that came out in TX in 2019. A Court found that Family Rehab, a health care facility, which faced a $7 million alleged overpayment required an injunction. The Judge Ordered that CMS be enjoined from prematurely recouping Medicare reimbursements from Family Rehab. Now, be mindful, the Judge did not enjoin CMS the first time Family Rehab requested an injunction; Superior Court initially dismissed the case for lack of jurisdiction based on failure to exhaust its administrative remedies. But instead of giving up, which is what most providers would do when faced with a dismissed injunction request due to emotional turmoil and finances. “To be, or not to be: that is the question:” Instead, Family Rehab appealed the dismissal to the Court of Appeals and won. The 5th Circuit held that Superior Court does have jurisdiction to hear a collateral challenge on both procedural due process grounds as well as an ultra vires action. On remand, Family Rehab successfully obtained a permanent injunction.

The clinical issues supposedly in support of the overpayment are silly. In Family Rehab’s case, the ZPIC claims homebound criteria was not met when it is clearly met by a reasonable review of the documents.

Homebound is defined as:

Criteria One:

The patient must either:

  • Because of illness or injury, need the aid of supportive devices such as crutches, canes, wheelchairs, and walkers; the use of special transportation; or the assistance of another person in order to leave their place of residence

OR

  • Have a condition such that leaving his or her home is medically contraindicated.

If the patient meets one of the Criteria One conditions, then the patient must ALSO meet two additional requirements in Criteria Two below:

Criteria Two:

  • There must exist a normal inability to leave home;

AND

  • Leaving home must require a considerable and taxing effort.

In one of the claims that the ZPIC found no homebound status, the consumer was legally blind and in a wheelchair! The injunction hinged on the Court’s finding that because the ALJ stage is critical in decreasing the risk of erroneous deprivation, an injunction was necessary. I look forward to the ALJ hearing. “The rest is silence.”

Provider Medicaid Contract Termination Reversed in Court!

First and foremost, important, health care news:

The Medicare Administrative Contractors (MACs) have full authority to renew post-payments reviews of dates of service (DOS) during the COVID pandemic. The COVID pause is entirely off. It is going to be a mess to wade through the thousands of exceptions. RAC audits of COVID DOS will be, at best, placing a finger on a piece of mercury. I hope that the auditors remember that everyone was scrambling to do their best during the past year and a half. In the upcoming weeks, I will keep you posted.

I am especially excited today. Last week, I won a permanent injunction for a health care facility that but for this injunction, the facility would be closed, its 300 staff unemployed, and its 600 Medicare and Medicaid consumers without access to their mental health and substance abuse providers, their primary care physicians, and the Suboxone clinic. The Judge’s clerk emailed us on Friday. The email was terse although the clerk signified that the email was important by clicking the little, red, exclamation point. It simply stated: After speaking with Judge X, she is dismissing the government’s MTD and granting Petitioner’s permanent injunction. Petitioner’s counsel can send a proposed decision within 10 days. Such a simple email affected so many lives!

We hear Ellen Fink-Samnick MSW, ACSW, LCSW, CCM, CRP, speak about social determinants of health (SDoH) on RACMonitor. Well, this company is minority-owned and the mass percentage of staff and consumers are minorities.

Why was this company on the brink of closing down? The managed care organization (MCO) terminated the company’s Medicaid contract. Medicaid comprised the majority of its revenue. The MCO’s reason was that the company violated 42 CFR §455.106, which states:

“Information that must be disclosed. Before the Medicaid agency enters into or renews a provider agreement, or at any time upon written request by the Medicaid agency, the provider must disclose to the Medicaid agency the identity of any person who:

(1) Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and

(2) Has been convicted of a criminal offense related to that person‘s involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs.”

The former CEO – for years – he relied on professional tax accountants for the company’s taxes and his own personal family’s taxes. His wife, who is a physician, relied on her husband to do their personal taxes as one of his “honey-do” tasks. CEO relied on a sub-par accountant for a couple years and pled guilty to failing to pay personal taxes for two years. The plea ended up in the newspaper and the MCO terminated the facility.

We argued that the company, as an entity, was bigger than just the CEO. Quickly, we filed for a TRO to keep the company open. Concurrently, we transitioned the company from the CEO to Dr. wife. Dr became CEO in a seamless transition. A long-time executive stepped up as HR management.

Yet, according to testimony, the MCO terminated the company’s contract when the newspaper published the article about CEO’s guilty plea. The article was published in a local paper on April 9 and the termination notice was sent out April 19th. It was a quick decision.

We argued that 42 CFR §455.106 didn’t apply because CEO’s guilty plea was:

  1. Personal and not related to Medicare or Medicaid; and
  2. Not a conviction but a voluntary plea agreement.

The Judge agreed. We won the TRO for immediate relief. After a four-day hearing and 22 witnesses for Petitioner, we won the preliminary injunction. At this point, the MCO hired outside counsel with our tax dollars, which I did bring up in the final hearing on the merits.

New outside counsel was super excited to be involved. He immediately propounded a ton of discovery asking for things that he already had and for criminal documents that we had no access to because, by law, the government has possession of and CEO never had. Well, new lawyer was really excited, so he filed motions to compel us to produce these unobtainable documents. He filed for sanctions. We filed for sanctions back.

It grew more litigious as the final hearing on the merits approached.

Finally, we presented our case for a permanent injunction, emphasizing the importance of the company and the smooth transition to the new, Dr. CEO. We won! Because we won, the company is open and providing medically necessary services to our most needy population.

And…I get to draft the proposed decision.

Medicare Appeal Backlog Dissolves and SMRC Audits Escalate

I have good news and bad news today. I have chosen to begin with the good news. The ALJ backlog will soon be no more. Yes, the 4-6 years waiting period between the second and third level will, by sometime in 2021, be back to 90 days, with is the statutory requirement. What precipitated this drastic improvement? Money. This past year, CMS’ budget increased exponentially, mostly due to the Medicare appeals backlog. OMHA was given enough dough to hire 70 additional ALJs and to open six additional locations. That brings the number of ALJs ruling over provider Medicare appeals to over 100. OMHA now has the capability to hear and render decisions for approximately 300,000 appeals per year. This number is drastically higher than the number of Medicare appeals being filed. The backlog will soon be nonexistent. This is fantastic for all providers because, while CMS will continue to recoup the alleged overpayment after the 2nd level, the providers will be able to have its case adjudicated by an ALJ much speedier.

Now the bad news. Remember when the RAC program was first implemented and the RACs were zealously auditing, which is the reason that the backlog exists in the first place. RACs were given free rein to audit whichever types of service providers they chose to target. Once the backlog was out of hand, CMS restricted the RACs. They only allowed a 3 year lookback period when other auditors can go back 6 years, like the SMRC audits. CMS also mandated that the RACs slow down their number of audits and put other restrictions on RACs. Now that OMHA has the capacity to adjudicate 300,000 Medicare appeals per year, expect that those reins that have been holding the RACs back will by 2021 or 2022 be fully loosened for a full gallop.

Switching gears: Two of the lesser known audits that are exclusive to the CMS are the Supplemental Medical Review Contractor (“SMRC”) and the Targeted Probe and Educate (“TPE”) audits. Exclusivity to CMS just means that Medicare claims are reviewed, not Medicaid.

The SMRCs, in particular, create confusion. We have seen DME SMRC audits on ventilator claims, which are extremely document intensive. You can imagine the high amounts of money at issue because, for ventilators, many people require them for long periods of time. Sometimes there can 3000 claim lines for a ventilator claim. These SMRC audits are not extrapolated, but the amount in controversy is still high. SMRCs normally request the documents for 20-40 claims. It is a one-time review. It’s a post payment review audit. It doesn’t sound that bad until you receive the request for documents of 20-40 claims, all of which contain 3000 claim lines and you have 45 days to comply.

Lastly, in a rare act, CMS has inquired as whether provider prefer TPE audits or continue with post payment review audits for the remainder of the pandemic. If you have a strong opinion one way or the other, be sure to contact CMS.

Beware the Ides of March! And Medicare Provider Audits!

Hello! And beware the Ides of March, which is today! I am going to write today about the state of audits today. When I say Medicare and Medicaid audits, I mean, RACs, MACs, ZPICs, UPICs, CERTs, TPEs, and OIG investigations from credible allegations of fraud. Without question, the new Biden administration will be concentrating even more on fraud, waste, and abuse germane to Medicare and Medicaid. This means that auditing companies, like Public Consulting Group (“PCG”) and National Government Services (“NGS”) will be busy trying to line their pockets with Medicare dollars. As for the Ides, it is especially troubling in March, especially if you are Julius Caesar. “Et tu, Brute?”

One of the government’s most powerful tool is the federal government’s zealous use of 42 CFR 455.23, which states that “The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part.” (emphasis added). That word – “must” – was revised from “may” in 2011, part of the Affordable Care Act (“ACA”).

A “credible allegation” is defined as an indicia of reliability, which is a low bar. Very low.

Remember back in 2013 when Ed Roche and I were reporting on the New Mexico behavioral health care cluster? To remind you, the State of NM accused 15 BH health care providers, which constituted 87.5% of the BH providers in NM, of credible allegations of fraud after the assistant AG, at the time, Larry Heyeck, had just published a legal article re “Credible Allegations of Fraud.” See blog and blog. Unsurprisingly, the suicide rate and substance abuse skyrocketed. There was even a documentary “The Shake-Up” about the catastrophic events in NM set off by the findings of PCG.

This is another example of a PCG allegation of overpayment over $700k, which was reduced to $336.84.

I was the lawyer for the three, largest entities and litigated four administrative appeals. If you recall, for Teambuilders, PCG claimed it owed over $12 million. After litigation, an ALJ decided that Teambuilders owed $836.35. Hilariously, we appealed. While at the time, PCG’s accusations put the company out of business, it has re-opened its doors finally – 8 years later. This is how devastating a regulatory audit can be. But congratulations, Teambuilders, for re-opening.

Federal law mandates that during the appeal of a Medicare audit at the first two levels: the redetermination and reconsideration, that no recoupment occur. However, after the 2nd level and you appeal to the ALJ level, the third level, the government can and will recoup unless you present before a judge and obtain an injunction.

Always expect bumps along the road. I have two chiropractor clients in Indiana. They both received notices of alleged overpayments. They are running a parallel appeal. Whatever we do for one we have to do for the other. You would think that their attorneys’ fees would be similar. But for one company, NGS has preemptively tried to recoup THREE times. We have had to contact NGS’ attorney multiple times to stop the withholds. It’s a computer glitch supposedly. Or it’s the Ides of March!

“Credible Allegations of Fraud”: Immediate Medicare Payment Suspension!

If you are accused of Medicare fraud, your Medicare reimbursements will be immediately cut off without any due process or ability to defend yourself against the allegations. If you accept Medicare and Medicaid then you are held to strict regulations, some of which are highly, Draconian in nature without much recourse, legally, for providers. Many, many a provider have gone bankrupt and been forced out of business due to “credible allegations of fraud.” You see, legally, “credible allegations of fraud” is a low standard to meet. The definition of “credible” is “an indicia of reliability.” “Indicia” is defined as “signs, indications, circumstances which tend to show or indicate that something is probable. It is used in the form of “indicia of title,” or “indicia of partnership,” particularly when the “signs” are items like letters, certificates, or other things that one would not have unless the facts were as the possessor claimed. It can be a disgruntled worker. I am sure that none of the listeners here today have ever dealt with a disgruntled employee. Yes, that is sarcasm.

42 CFR § 405.372 is the regulation outlining the requirements for suspending Medicare payments. 42 CFR § 455.23 is the regulation mandating suspension of Medicaid payments upon credible allegations of fraud.

Pursuant to Medicare regulations, CMS must suspend Medicare reimbursements to a healthcare provider “in whole or in part” if it has been “determined that a credible allegation of fraud exists against a provider or supplier.” 42 C.F.R. § 405.371(a)(2). A credible allegation of fraud is “an allegation from any source, including … civil fraud claims cases, and law enforcement investigations.” 42 C.F.R. § 405.370(a). The decision to suspend Medicare payment or continue a payment suspension is made at the discretion of CMS – not the MAC. If you receive a letter from a MAC alleging fraud, be sure to check whether the letter states that the decision was made in collaboration with CMS. The MACs do not have the authority.

The suspension, however, is not indefinite, although the length is normally a year, which is financially devastating. The regulations allow CMS to maintain the suspension until a “legal action is terminated by settlement, judgment, or dismissal, or when the case is closed or dropped because of insufficient evidence to support allegations of fraud.” 42 C.F.R. §§ 405.370(a) and .372(d)(3); see also § 405.371(b)(3)(ii) (CMS may extend the suspension of payment if the Department of Justice submits a written request that “suspension of payments be continued based on the ongoing investigation and anticipated filing of criminal or civil action or both or based on a pending criminal or civil action or both.”).

When you receive a fraud accusation of any type – it is imperative to send it to your counsel. If you opt to litigate the suspension by asking the Court to enjoin the suspension, your first legal obstacle will be to argue that you do not have to exhaust your administrative remedies before appearing for the injunction. Cases have been decided both in the favor of providers and their suspensions have been lifted and against the providers. These cases usually win or lose on the argument that the suspension of reimbursements is an ancillary subject from the actual investigation of fraud. It is a jurisdictional argument.

It is my opinion that the federal regulations that allow for suspension of payments upon credible allegations of fraud need to be revised. Any of you with lobbyists, we need to revise the regulations to require due process – notice and an opportunity to be heard – prior to the government suspending Medicare and Medicaid reimbursements based on a spurious accusation from an anonymous source.

Back in 2015, I am sure that you all recall the case in New Mexico where NM accused 15 BH care provider of credible allegations of fraud. The providers constituted 87.5% of the BH in NM. I was one of the attorneys representing the larger BH cos. Prior to my involvement, all 15 providers requested good cause. All were denied. Lawmakers think that the good cause exception written into the regulation is enough defense for providers. But when the good cause is almost always denied, it isn’t much help. Write to your congress people. Amend the regulations to require due process.