While the Coronavirus pandemic is horrible and seems to be getting worse. COVID has forced slight, positive changes in the telehealth arena and, perhaps, in the widening of the ambiguous definition of “medical necessity” or, as I call it – the undefined, definition of “medical necessity.” Medical necessity is the backbone of rendering health care services. Without it, services should not be provided. Yet, medical necessity is the most litigated topic in all of audits.
On September 1, 2020, the Centers for Medicare & Medicaid Services (“CMS”) published a proposed rule that will codify a definition of “medical necessity” for Medicare purposes. So far, the definition of medical necessity varies, depending on the source. The MACs have been given long rein in defining the term on an individual and separate basis, creating disparity in definitions and criteria. The proposed rule’s comment period ended November 2, 2020.
All this to say medical necessity is in the eye of the beholder. Much like beauty. Why then, can RAC and MAC auditors who are not doctors, not firsthand, treating providers, not nurses or LCASs, decide that medical necessity does or does not exist for a patient that they have never seen?
Black’s Law Dictionary (the most prominent legal dictionary) has a super, unhelpful definition of medical necessity: “If not carried out the patient’s situation could worsen. For a patient’s treatment found to be necessary is this specific type of procedure or treatment.”
The American Medical Association (“AMA”), on the other hand, has a more detailed definition, probably unintended to make it all the more confusing:
“Our AMA defines medical necessity as: Health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its symptoms in a manner that is: (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate in terms of type, frequency, extent, site, and duration; and (c) not primarily for the economic benefit of the health plans and purchasers or for the convenience of the patient, treating physician, or other health care provider.”
CMS’ proposed rule codifies a definition of what makes an item or service medically “reasonable and necessary” under the Social Security Act 1861(a)(1)(A). The rule, if finalized, would codify in regulations a definition of “reasonable and necessary” items and services based on a definition currently used by Medicare Administrative Contractors (MACs), with an additional element that potentially would include coverage determinations by commercial insurers as a factor in making Medicare coverage determinations.
The Proposed Definition (To be Codified in 42 CFR 405.201)
“We are proposing to codify the longstanding Program Integrity Manual definition of “reasonable and necessary” into our regulations at 42 CFR 405.201(b), with modification. Under the current definition, an item or service is considered “reasonable and necessary” if it is (1) safe and effective; (2) not experimental or investigational; and (3) appropriate, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it is—
- Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function of a malformed body member;
- Furnished in a setting appropriate to the patient’s medical needs and condition;
- Ordered and furnished by qualified personnel;
- One that meets, but does not exceed, the patient’s medical need; and
- At least as beneficial as an existing and available medically appropriate alternative.” See Proposed Rule.
In addition, CMS adds that it will also utilize commercial payor standards or have an objective panel determine medical necessity if criteria #1 and #2 were met, but not #3. This additional commentary is another example of how subjective and fact-specific determining medical necessity can be. The LCDs will also be consulted.
If adopted, these proposals would arguably lead to the most wide-ranging changes in Medicare’s coverage standards and procedures in decades. The proposal to codify the definition of “reasonable and necessary” applies to all items and services. The inclusion of commercial payor standards may be a wild card.
The definition of medical necessity has not been officially revised – yet. One could imagine that, in the midst of a RAC or MAC audit, auditors and providers will disagree as to the true definition of medical necessity.
Going forward, when you get audited, immediately look and see whether your claim denials were denied due to “lack of medical necessity.” Ask yourself, “Really? Is there no medical necessity in this case…even in the era of COVID?” Because the auditors may be wrong.
Secondly, ensure that the RAC and MAC entity is CMS-certified to review those certain CPT codes for medical necessity. CMS limits audits on medical necessity because of the vagueness of the definition. When auditors find no medical necessity, then providers must push back. And you should push back, legally, of course!
Before the informative article below , I have two announcements!
(1) My blog has been “in publication” for over eight (8) years, this September 2020. Yay! I truly hope that my articles have been educational for the thousands of readers of my blog. Thank you to everyone who follows my blog. And…
Click here: For my new bio and contact information.
Ok – Back to the informative news about the most recent Executive Orders…
My co-panelist on RACMonitor, Matthew Albright, gave a fascinating and informative summary on the recent, flurry of Executive Orders, and, he says, expect many more to come in the near future. He presented the following article on RACMonitor Monitor Monday, August 10, 2020. I found his article important enough to be shared on my blog. Enjoy!!
By Matthew Albright
Original story posted on: August 12, 2020
Presidential Executive Order No. 1 was issued on Oct. 20, 1862 by President Lincoln; it established a wartime court in Louisiana. The most famous executive order was also issued by Lincoln a few years later – the Emancipation Proclamation.
Executive orders are derived from the Constitution, which gives the president the authority to determine how to carry out the laws passed by Congress. The trick here is that executive orders can’t make new laws; they can only establish new – and perhaps creative – approaches to implementing existing laws.
President Trump has signed 18 executive orders and presidential memorandums in the past seven days. That sample of orders and memos are a good illustration of the authority – and the constraints – of presidential powers.
An executive order and a presidential memorandum are basically the same thing; the difference is that a memorandum doesn’t have to cite the specific law passed by Congress that the president is implementing, and a memorandum isn’t published in the Federal Register. In other words, an executive order says “this is what the President is going to do,” and a memorandum says “the President is going to do this too, but it shouldn’t be taken as seriously.”
Executive orders and memorandums often give instructions to federal agencies on what elements of a broader law they should focus on. One good example of this is the executive order signed a week ago by President Trump that provides new support and access to healthcare for rural communities. In that executive order, the President cited the Patient Protection and Affordable Care Act as the broad law he was using to improve access to rural communities.
Executive orders also often illustrate the limits of presidential authority, a good example being the series of executive orders and memorandums that the president signed this past Saturday, intended to provide Americans financial relief during the pandemic.
One of the memorandums signed on Saturday delayed the due date for employers to submit payroll taxes. The idea was that companies would in turn decide to stop taking those taxes out of employees’ paychecks, at least until December.
By looking at the language in the memorandum and seeing what it does not try to do, we can learn a lot about presidential limits.
The memorandum does not give employers or employees a tax break. That power rests unquestionably with Congress. The order only delays when the taxes will be collected. Like the grim reaper, the tax man will come to your door someday, even if you can delay when that “someday” is.
Also, the tax delay is only for employers, and – again, another illustration of the limits of presidential power – it doesn’t tell employers how they should manage this extra time they have to pay the tax. That is, companies could decide to continue to take taxes out of people’s paychecks, knowing that the taxes will still have to be paid someday.
Another memorandum that the president signed on Saturday concerned unemployment benefits. That order illustrates the division in powers between the federal Executive Branch and the authority of the states.
The memorandum provides an extra $400 in unemployment benefits, but in order for it to work, the states would have to put up one-fourth of the money. The memorandum doesn’t require states to put up the money; it “calls on” them to do it, because the President, unless authorized by Congress, can’t make states pay for something they don’t want.
Executive orders and memorandums are reflective of my current position as the father of two pre-teen girls. I can declare the direction the household should go, I can “call on them” to play less Fortnite and eat more fruit, but my orders and their subsequent implementation often just serve to illustrate the limits – both perceived and real –of my paternal power.
Programming Note: Matthew Albright is a permanent panelist on Monitor Mondays (with me:) ). Listen to his legislative update sponsored by Zelis, Mondays at 10 a.m. EST.
Even though the public health emergency (“PHE”) for the COVID pandemic is scheduled to expire July 24, 2020, all evidence indicates that the PHE will be renewed. I cannot imagine a scenario in which the PHE is not extended, especially with the sudden uptick of COVID.
Center for Medicare and Medicaid Services (CMS) has given guidance that the voluminous number of exceptions that CMS has granted during this period of the PHE may be extended to Dec. 1, 2020. However, there is no indication of the RAC, and MAC audits being suspended until December 2020. In fact, we expect the audits to begin again any day. There will be confusion when audits resume and COVID exceptions are revoked on a rolling basis.
Remember the emergency-room physician whom I spoke about on the June 29 on Monitor Mondays? The physician whose Medicare enrollment was revoked due to a computer error or an error on the part of CMS. What normally would have been an easy fix, because of COVID, became more difficult. Because of COVID, he was unable to work for three months. He is back up and running now. The point is that COVID really messed up so many aspects of our lives.
The extension of PHE, technically, has no bearing on RAC and MAC audits coming back. Word on the street is that RAC and MAC audits are returning August 2020.
This month, July 2020, CMS released, “Coronavirus Disease 2019 (COVID-19) Provider Burden Relief Frequently Asked Questions (FAQs).” (herein afterward referred as “CMS July 2020 FAQs”).
The question was posed to CMS: “Is CMS suspending most Medicare-Fee-for-Service (FFS) medical review during the PHE for the COVID-19 pandemic? The answer is, according to CMS, “As states reopen, and given the importance of medical review activities to CMS’ program integrity efforts, CMS expects to discontinue exercising enforcement discretion beginning on Aug. 3, 2020, regardless of the status of the public health emergency. If selected for review, providers should discuss with their contractor any COVID-19-related hardships they are experiencing that could affect audit response timeliness. CMS notes that all reviews will be conducted in accordance with statutory and regulatory provisions, as well as related billing and coding requirements. Waivers and flexibilities in place at the time of the dates of service of any claims potentially selected for review will also be applied.” See CMS July 2020 FAQs.
Monday, July 13, 2020, we began our fourth “COVID-virtual trial.” The Judges with whom I have had interaction have taken a hard stance to not “force” someone to appear in person. It appears, at least to me, that virtual trials are the wave of the future. This is the guidance that conveys to me that RAC and MAC audits will begin again in August. Virtual audits may even be the best thing that ever happened to RAC and MAC audits. Maybe now the auditors will actually read the documents that the provider gives them.
Another specific issue addressed in the CMS’ July 2020 FAQs is that given the nature of the pandemic and the inability to collect signatures during this time, CMS will not be enforcing the signature requirement. Typically, Part B drugs and certain Durable Medical Equipment (DME) covered by Medicare require proof of delivery and/or a beneficiary’s signature. Suppliers should document in the medical record the appropriate date of delivery and that a signature was not able to be obtained because of COVID-19. This exception may or may not extend until Dec. 31, 2020.
The upshot is that no one really knows how the next few months will unfold in the healthcare industry. Some hospitals and healthcare systems are going under due to COVID. Big and small hospital systems are in financial despair. A RAC or MAC audit hitting in the wake of the COVID pandemic could cripple most providers. I will reiterate my recommendation: In the re-arranged words of Roosevelt, “Speak loudly, and carry a big stick.”
Programming Note: Knicole Emanuel is a permanent panelist on Monitor Mondays. Listen to her live reporting every Monday at 10 a.m. EST.
As of now, the public health emergency (PHE) for the COVID-19 pandemic will expire July 24, 2020, unless it is renewed. Fellow contributor David Glaser and I have both reported on the potential end date of the PHE. Recent intel from Dr. Ronald Hirsh is that the Centers for Medicare & Medicaid Services (CMS) may renew the PHE period. Each time the PHE period is renewed, it is effective for another 90 days. Recent news about the uptick in COVID cases may have already alerted you that the PHE period will probably be prolonged.
CMS has given guidance that the exceptions that it has granted during this period of the PHE may be extended to Dec. 1, 2020. There is no indication of the Recovery Audit Contractor (RAC) and Medicare Administrative Contractor (MAC) audits being suspended until December 2020. In fact, we expect the audits to begin again any day. There will be confusion when audits resume and COVID exceptions are revoked on a rolling basis.
I witnessed some interesting developments as a health care attorney during this ongoing pandemic. Three of my physician clients were erroneously placed on the Medicare exclusion lists. One would think that during the pandemic, CMS would move mountains to allow a Harvard-trained ER doctor to work in an ER. Because of the lack of staff, it was actually difficult to achieve an easy fix. This doctor was suspended from Medicare based on an accidental and inadvertent omission of a substance abuse issue more than 10 years ago. He disclosed everything except an 11-year-old misdemeanor. He did not omit the misdemeanor purposely. Instead, this ER physician relies on other hospital staff to submit his Medicare re-credentialing every year, as he should. It just happened that this year, the year of COVID, this doctor got caught up in a mistake that in normal times would have been a phone call away from fixing. We cleared up his issue, but not until he was unable to work for over two months, during the midst of the PHE.
At the time of the announcement of the public health emergency, another company, a home health provider, was placed on prepayment review. I am not sure how many of you are familiar with prepayment review, but this is a Draconian measure that all States and the federal government may wield against health care providers. When you are on prepayment review, you cannot get paid until another independent contracted entity reviews your claims “objectively.” I say objectively in quotes because I have yet to meet a prepayment review audit with which I agreed.
Mostly because of COVID, we were forced to argue for a preliminary injunction, allowing this home heath provider to continue to provide services and get paid for services rendered during the PHE. We were successful. That was our first lawsuit during COVID. I believe we went to trial in April 2020. We had another trial in May 2020, for which we have not received the result, although we have high hopes. I may be able to let you know the outcome eventually. But for now, because of COVID, with a shortage of court reporters willing to work, we will not receive the transcript from the trial until over four weeks after the trial.
Tomorrow, Tuesday, we begin our third COVID trial. For the first time since COVID, it will not be virtual. This is the guidance that conveys to me that RAC and MAC audits will begin again soon. If a civil judge is ordering the parties to appear in person, then the COVID stay-at-home orders must be decreasing. I cannot say I am happy about this most recent development (although audits may be easier if they are conducted virtually).
The upshot is that no one really knows how the next few months will unfold in the healthcare industry. Some hospitals and healthcare systems are going under due to COVID. Big and small hospital systems are in financial despair. A RAC or MAC audit hitting in the wake of the COVID pandemic could cripple most providers. In the rearranged words of Roosevelt, “speak loudly, and carry a big stick.”
I posted/wrote the below blog in 2017. I re-read my February 10, 2017, blog, which was entitled “NC DHHS’ New Secretary – Yay or Nay?” with the new perspective of COVID-19 being such a hot potato topic and sparking so much controversy. Interestingly, at least to me, I still stand by what I wrote. You have to remember that viruses are not political. Viruses spread despite your bank account, age, or location. Sure, variables matter. For example, I am statistically safer from COVID because I live on a small, horse farm in North Carolina rather than an apartment in Manhattan.
The facts are the facts. Viruses and facts are not political.
I was surprised that more people did not react to my February 10, 2017, blog, which is re-posted below – exactly as it was first posted. For some reason (COVID-19), people are re-reading it.
Our newly appointed DHHS Secretary comes with a fancy and distinguished curriculum vitae. Dr. Mandy Cohen, DHHS’ newly appointed Secretary by Gov. Roy Cooper, is trained as an internal medicine physician. She is 38 (younger than I am) and has no known ties to North Carolina. She grew up in New York; her mother was a nurse practitioner. She is also a sharp contrast from our former, appointed, DHHS Secretary Aldona Wos. See blog.
Prior to the appointment as our DHHS Secretary, Dr. Cohen was the Chief Operating Officer (COO) and Chief of Staff at the Centers for Medicare and Medicaid Services (CMS). Prior to acting as the COO of CMS, she was Principal Deputy Director of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS where she oversaw the Health Insurance Marketplace and private insurance market regulation. Prior to her work at CCIIO, she served as a Senior Advisor to the Administrator coordinating Affordable Care Act implementation activities.
Did she ever practice medicine?
Prior to acting as Senior Advisor to the Administrator, Dr. Cohen was the Director of Stakeholder Engagement for the CMS Innovation Center, where she investigated new payment and care delivery models.
Dr. Cohen received her Bachelor’s degree in policy analysis and management from Cornell University, 2000. She obtained her Master’s degree in health administration from Harvard University School of Public Health, 2004, and her Medical degree from Yale University School of Medicine, 2005.
She started as a resident physician at Massachusetts General Hospital from 2005 through 2008, then was deputy director for comprehensive women’s health services at the Department of Veterans Affairs from July 2008 through July 2009. From 2009 through 2011, she was executive director of the Doctors for America, a group that promoted the idea that any federal health reform proposal ought to include a government-run “public option” health insurance program for the uninsured.
Again, I was perplexed. Did she ever practice medicine? Does she even have a current medical license?
This is what I found:
It appears that Dr. Cohen was issued a medical license in 2007, but allowed it to expire in 2012 – most likely, because she was no longer providing medical services and was climbing the regulatory and political ladder.
From what I could find, Dr. Cohen practiced medicine (with a fully-certified license) from June 20, 2007, through July 2009 (assuming that she practiced medicine while acting as the deputy director for comprehensive women’s health services at the Department of Veterans Affairs).
Let me be crystal clear: It is not my contention that Dr. Cohen is not qualified to act as our Secretary to DHHS because she seemingly only practiced medicine (fully-licensed) for two years. Her political and policy experience is impressive. I am only saying that, to the extent that Dr. Cohen is being touted as a perfect fit for our new Secretary because of her medical experience, let’s not make much ado of her practicing medicine for two years.
That said, regardless Dr. Cohen’s practical medical experience, anyone who has been the COO of CMS must have intricate knowledge of Medicare and Medicaid and the essential understanding of the relationship between NC DHHS and the federal government. In this regard, Cooper hit a homerun with this appointment.
Herein lies the conundrum with Dr. Cohen’s appointment as DHHS Secretary:
Is there a conflict of interest?
During Cooper’s first week in office, our new Governor sought permission, unilaterally, from the federal government to expand Medicaid as outlined in the Affordable Care Act. This was on January 6, 2017.
To which agency does Gov. Cooper’s request to expand Medicaid go? Answer: CMS. Who was the COO of CMS on January 6, 2017? Answer: Cohen. When did Cohen resign from CMS? January 12, 2017.
On January 14, 2017, a federal judge stayed any action to expand Medicaid pending a determination of Cooper’s legal authority to do so. But Gov. Cooper had already announced his appointment of Dr. Cohen as Secretary of DHHS, who is and has been a strong proponent of the ACA. You can read one of Dr. Cohen’s statements on the ACA here.
In fact, regardless your political stance on Medicaid expansion, Gov. Cooper’s unilateral request to expand Medicaid without the General Assembly is a violation of NC S.L. 2013-5, which states:
SECTION 3. The State will not expand the State’s Medicaid eligibility under the Medicaid expansion provided in the Affordable Care Act, P.L. 111-148, as amended, for which the enforcement was ruled unconstitutional by the U.S. Supreme Court in National Federation of Independent Business, et al. v. Sebelius, Secretary of Health and Human Services, et al., 132 S. Ct. 2566 (2012). No department, agency, or institution of this State shall attempt to expand the Medicaid eligibility standards provided in S.L. 2011-145, as amended, or elsewhere in State law, unless directed to do so by the General Assembly.
Obviously, if Gov. Cooper’s tactic were to somehow circumvent S.L. 2013-5 and reach CMS before January 20, 2017, when the Trump administration took over, the federal judge blockaded that from happening with its stay on January 14, 2017.
But is it a bit sticky that Gov. Cooper appointed the COO of CMS, while she was still COO of CMS, to act as our Secretary of DHHS, and requested CMS for Medicaid expansion (in violation of NC law) while Cohen was acting COO?
You tell me.
I did find an uplifting quotation from Dr. Cohen from a 2009 interview with a National Journal reporter:
“There’s a lot of uncompensated work going on, so there has to be a component that goes beyond just fee-for service… But you don’t want a situation where doctors have to be the one to take on all the risk of taking care of a patient. Asking someone to take on financial risk in a small practice is very concerning.” -Dr. Mandy Cohen
To listen, please click here.
Highlights of this episode include:
- Background on why CMS will forego all audits unrelated to the coronavirus.
- What types of audits will CMS continue during the coronavirus pandemic?
- What providers need to know about complying with current audits, such as TPE audits.
- How providers can protect themselves by documenting exceptions such as two-day admissions.
- And more…
Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance Podcast®.
As a result of the COVID-19 crisis, the government has suspended most auditing activities for providers. To sort out what that means for hospitals, I’m joined by Knicole Emanuel. Knicole is an attorney at Potomac Law Group in Raleigh, North Carolina, where she concentrates on Medicare and Medicaid regulatory compliance litigation. Knicole, welcome to the show.
Knicole Emanuel: Thank you and thank you for having me.
Mike: Knicole, the government announced that it is suspending survey activities. Practically what does that mean for providers?
Knicole: Well, so right now because of the Coronavirus, CMS has decided to forego audits that are unrelated to the coronavirus. So actually effective April 3, 2020. The only audits that will be conducted will be those audits that are germane to all immediate Jeopardy complaints. Those kind of cases that represent a situation in which an entities non-compliance has placed the health and safety of recipients in its care at risk for serious injury. So we’re talking about potential serious injury or serious harm.
Another audit that’s going to continue would be complaints alleging infection control concerns because that would obviously be impacted by the coronavirus. Any sort of statutorily required recertification surveys are going to be conducted. I would assume that they’re going to be conducted telephonically. They’re not going to be going on-site and revisits necessary to resolve current enforcement actions. That’s important because when this Coronavirus all came about, there were hundreds and hundreds and hundreds, perhaps thousands upon thousands of healthcare providers already in the middle of TPE audits or RAC audits or MAC audit. And they’d already had on-site visits, they’d already had maybe perhaps a lower accuracy rating. And they’re going to be stuck in this cycle of being stuck in the audit until they can get a resurvey because with this coronavirus the penalties that they’re enduring, whether it’s a suspension of admission, or whether it’s a monetary penalty. These penalties are being administered even if they cannot have a secondary or a revisit of the audit to get them off of the penalty that they’re currently on. So it’s really important that people who are in the middle of audit and when all this came down to get them off of the audit cycle so they can go back to providing care.
Mike: So essentially, there are a number of activities that are suspended. But it’s important for providers to know that there is a subset of activities that will continue even during this period.
Knicole: Correct. But they’re all going to be activities that are of the utmost importance. The items that take lower priority are going to be pushed down.
Mike: Okay, and you mentioned the TPE audits a second ago. So that’s the targeted probe and education. Are they going to continue during this time period as far as you know?
Knicole: Well, so as far as I know, they are not going to continue as in they’re not going to start new TPE audit. Now the question then becomes, “Well, I received a document request a month ago for a TPE audit. Do I need to comply now?” And the conservative safe answer is to go ahead and keep complying with these document requests. Although the deadlines for these document requests, those are going to be extended. I’m sure you’ll be able to get extensions for trying to comply with those. And in reality, if you contact the people who are conducting the audit, you may find that the entire audit in general is put on pause. But don’t assume it’s put on pause. Try to make sure you comply, unless you find out it’s on pause. And if you get something over the email or over a phone that says that your TPE audit is paused currently, follow up with an email and get it in writing. Because future audit, they’re not going to remember that your particular audit was with pause during the coronavirus.
Mike: That’s great advice, Knicole. Do you have any other recommendations for providers as they’re navigating through this time?
Knicole: Yes, I do. There are a number of providers right now that are asking for exceptions, and I can give examples. So for example, in the hospital setting, there are hospitals that are asking for waivers for the inpatient admission standards or the two-day admission, or the moon rules. All those kind of things are asking for exceptions, and a lot of the hospital, A lot of the providers are getting the exceptions they need to allow people to have to stay longer in their hospitals because they have nowhere to discharge them. They can’t go back to their nursing homes where the coronavirus may or may not be. And so, because they’re getting all these exceptions, five years from now when you’re undergoing an audit, no one is going to remember that you had this exception that this particular consumer can stay in my hospital for two extra days or five extra days. And five years from now, you may get audited and say, “Well, you got to recoup all this money because you let them stay in for too long of a time.” When in reality, you are given an exception, write all the exceptions down. Keep one place, keep a computer program, keep a hard copy, whatever you want to do, and notebook, if that you want to get down to not having any technology involved. But keep track of all of these exceptions that you get as little as they may be because if you’re getting an exception for one person, and that one person can stay longer than the two-day allowance for the outpatient stays, and you multiply that by, okay, well, now you’ve got to take that exception and extrapolate it again, 200 people over the course of a year, that’s a lot of money we’re talking about. So you need to make sure you keep track of all the exceptions, no matter how small. And keep track of them somewhere that you’re not going to lose them. If your attrition rate is high with executives, you need to make sure that the next people in line had that knowledge so that in future audit, you can explain that you did not abide by the regulations for good reason. You had an exception, but no one’s keeping track of all these exceptions.
Mike: And so, it’s great advice, Knicole. And I know you’ve got a great blog of your own that people can follow. If people wanted to read more about what’s going on here on that blog or get in touch with you, how can they do that?
Knicole: Well, you’re more than welcome to go onto my blog, which is Medicare and Medicaid law. It is at medicaidlawnc.com. You can also contact me at any time. I’m at Potomac Law Group. I help providers across the country and not only in North Carolina, but in 33 states. And so, I am pretty well versed on all the exceptions that I’m seeing. It’s really fast-paced right now. It’s scary. It’s surreal. But it is really important to make sure that everything is written down because in the future– I mean, that old saying that old adage for nurses, if it’s not written, it doesn’t exist, is really going to matter in the future years.
Mike: Knicole, thanks for adding some clarity around this very complex issue. We appreciate you coming back to the show today.
Knicole: Absolutely. Thank you.
Effective immediately, survey activity is limited to the following (in Priority Order):
- All immediate jeopardy complaints (cases that represents a situation in which entity noncompliance has placed the health and safety of recipients in its care at risk for serious injury, serious harm, serious impairment or death or harm) and allegations of abuse and neglect;
- Complaints alleging infection control concerns, including facilities with potential COVID-19 or other respiratory illnesses;
- Statutorily required recertification surveys (Nursing Home, Home Health, Hospice, and ICF/IID facilities);
- Any re-visits necessary to resolve current enforcement actions;
- Initial certifications;
- Surveys of facilities/hospitals that have a history of infection control deficiencies at the immediate jeopardy level in the last three years;
- Surveys of facilities/hospitals/dialysis centers that have a history of infection control deficiencies at lower levels than immediate jeopardy.
See CMS QSO-20-12-ALL.
Obviously, there are so many questions. Providers across the country are asking whether they need to comply with document requests. Are TPE audits continuing? Do they need to comply with ongoing ADRs?
Every bulletin that CMS publishes instigates more detailed and complex questions. With all these relaxed guidelines, won’t RACs, etc. have a field day when this is all over? Of course they will.
- Be proactive.
- Document everything.
- Deadlines will be extended.
- Exceptions will be made.
- Keep all email correspondence.
- Maintain copies of everything that you submit. (Do not rely on electronic computer software programs).
- Keep track of CMS updates.
Email me questions, and I will try to respond.
Also, feel free to reach out to the government: QSOG_EmergencyPrep@cms.hhs.gov.
Effective date: 30 days from the memo, which equals April 3, 2020.
FACT SHEET: EXPANSION OF THE ACCELERATED AND ADVANCE PAYMENTS PROGRAM FOR PROVIDERS AND SUPPLIERS DURING COVID-19 EMERGENCY
CMS published the below fact sheet for providers yesterday (March 28, 2020).
In order to increase cash flow to providers of services and suppliers impacted by the 2019 Novel Coronavirus (COVID-19) pandemic, the Centers for Medicare & Medicaid Services (CMS) has expanded our current Accelerated and Advance Payment Program to a broader group of Medicare Part A providers and Part B suppliers. The expansion of this program is only for the duration of the public health emergency. Details on the eligibility, and the request process are outlined below.
The information below reflects the passage of the CARES Act (P.L. 116-136).
An accelerated/advance payment is a payment intended to provide necessary funds when there is a disruption in claims submission and/or claims processing. These expedited payments can also be offered in circumstances such as national emergencies, or natural disasters in order to accelerate cash flow to the impacted health care providers and suppliers.
CMS is authorized to provide accelerated or advance payments during the period of the public health emergency to any Medicare provider/supplier who submits a request to the appropriate Medicare Administrative Contractor (MAC) and meets the required qualifications.
Eligibility & Process
Eligibility: To qualify for advance/accelerated payments the provider/supplier must:
1. Have billed Medicare for claims within 180 days immediately prior to the date of signature on the provider’s/supplier’s request form
2. Not be in bankruptcy,
3. Not be under active medical review or program integrity investigation, and
4. Not have any outstanding delinquent Medicare overpayments.
Amount of Payment: Qualified providers/suppliers will be asked to request a specific amount using an Accelerated or Advance Payment Request form provided on each MAC’s website. Most providers and suppliers will be able to request up to 100% of the Medicare payment amount for a three-month period. Inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals are able to request up to 100% of the Medicare payment amount for a six-month period. Critical access hospitals (CAH) can request up to 125% of their payment amount for a six-month period.
Processing Time: Each MAC will work to review and issue payments within seven (7) calendar days of receiving the request.
Repayment: CMS has extended the repayment of these accelerated/advance payments to begin 120 days after the date of issuance of the payment. The repayment timeline is broken out by provider type below:
o Inpatient acute care hospitals, children’s hospitals, certain cancer hospitals, and Critical Access Hospitals (CAH) have up to one year from the date the accelerated payment was made to repay the balance.
o All other Part A providers and Part B suppliers will have 210 days from the date of the accelerated or advance payment was made to repay the balance. The payments will be recovered according to the process described in number 7 below. •
Recoupment and Reconciliation: o The provider/supplier can continue to submit claims as usual after the issuance of the accelerated or advance payment; however, recoupment will not begin for 120 days. Providers/ suppliers will receive full payments for their claims during the 120-day delay period. At the end of the 120-day period, the recoupment process will begin and every claim submitted by the provider/supplier will be offset from the new claims to repay the accelerated/advanced payment. Thus, instead of receiving payment for newly submitted claims, the provider’s/supplier’s outstanding accelerated/advance payment balance is reduced by the claim payment amount. This process is automatic. o The majority of hospitals including inpatient acute care hospitals, children’s hospitals, certain cancer hospitals, and critical access hospitals will have up to one year from the date the accelerated payment was made to repay the balance. That means after one year from the accelerated payment, the MACs will perform a manual check to determine if there is a balance remaining, and if so, the MACs will send a request for repayment of the remaining balance, which is collected by direct payment. All other Part A providers not listed above and Part B suppliers will have up to 210 days for the reconciliation process to begin. o For the small subset of Part A providers who receive Period Interim Payment (PIP), the accelerated payment reconciliation process will happen at the final cost report process (180 days after the fiscal year closes). A step by step application guide can be found below. More information on this process will also be available on your MAC’s website.
Step-by-Step Guide on How to Request Accelerated or Advance Payment
1. Complete and submit a request form: Accelerated/Advance Payment Request forms vary by contractor and can be found on each individual MAC’s website. Complete an Accelerated/Advance Payment Request form and submit it to your servicing MAC via mail or email. CMS has established COVID-19 hotlines at each MAC that are operational Monday – Friday to assist you with accelerated payment requests. You can contact the MAC that services your geographic area.
To locate your designated MAC, refer to https://www.cms.gov/Medicare/Medicare-Contracting/Medicare-AdministrativeContractors/Downloads/MACs-by-State-June-2019.pdf.
CGS Administrators, LLC (CGS) – Jurisdiction 15 (KY, OH, and home health and hospice claims for the following states: DE, DC, CO, IA, KS, MD, MO, MT, NE, ND, PA, SD, UT, VA, WV, and WY) The toll-free Hotline Telephone Number: 1-855-769-9920 Hours of Operation: 7:00 am – 4:00 pm CT The toll-free Hotline Telephone Number for Home Health and Hospice Claims: 1-877-299- 4500 Hours of Operation: 8:00 am – 4:30 pm CT for main customer service and 7:00 am – 4:00 pm CT for the Electronic Data Interchange (EDI) Department
First Coast Service Options Inc. (FCSO) – Jurisdiction N (FL, PR, US VI) The toll-free Hotline Telephone Number: 1-855-247-8428 Hours of Operation: 8:30 AM – 4:00 PM ET
National Government Services (NGS) – Jurisdiction 6 & Jurisdiction K (CT, IL, ME, MA, MN, NY, NH, RI, VT, WI, and home health and hospice claims for the following states: AK, AS, AZ, CA, CT, GU, HI, ID, MA, ME, MI, MN, NH, NV, NJ, NY, MP, OR, PR, RI, US VI, VT, WI, and WA) The toll-free Hotline Telephone Number: 1-888-802-3898 Hours of Operation: 8:00 am – 4:00 pm CT
Novitas Solutions, Inc. – Jurisdiction H & Jurisdiction L (AR, CO, DE, DC, LA, MS, MD, NJ, NM, OK, PA, TX, (includes Part B for counties of Arlington and Fairfax in VA and the city of Alexandria in VA)) The toll-free Hotline Telephone Number: 1-855-247-8428 Hours of Operation: 8:30 AM – 4:00 PM ET
Noridian Healthcare Solutions – Jurisdiction E & Jurisdiction F (AK, AZ, CA, HI, ID, MT, ND, NV, OR, SD, UT, WA, WY, AS, GU, MP) The toll-free Hotline Telephone Number: 1-866-575-4067 Hours of Operation: 8:00 am – 6:00 pm CT
Palmetto GBA – Jurisdiction J & Jurisdiction M (AL, GA, NC, SC, TN, VA (excludes Part B for the counties of Arlington and Fairfax in VA and the city of Alexandria in VA), WV, and home health and hospice claims for the following states: AL, AR, FL, GA, IL, IN, KY, LA, MS, NM, NC, OH, OK, SC, TN, and TX) The toll-free Hotline Telephone Number: 1-833-820-6138 Hours of Operation: 8:30 am – 5:00 pm ET
Wisconsin Physician Services (WPS) – Jurisdiction 5 & Jurisdiction 8 (IN, MI, IA, KS, MO, NE) The toll-free Hotline Telephone Number: 1-844-209-2567 Hours of Operation: 7:00 am – 4:00 pm CT 4 | Page Noridian Healthcare Solutions, LLC – DME A & D (CT, DE, DC, ME, MD, MA, NH, NJ, NY, PA, RI, VT, AK, AZ, CA, HI, ID, IA, KS, MO, MT, NE, NV, ND, OR, SD, UT, WA, WY, AS, GU, MP) The toll-free Hotline Telephone Numbers: A: 1-866-419-9458; D: 1-877-320-0390 Hours of Operation: 8:00 am – 6:00 pm CT CGS Administrators, LLC – DME B & C (AL, AR, CO, FL, GA, IL, IN, KY, LA, MI, MN, MS, NM, NC, OH, OK, SC, TN, TX, VA, WI, WV, PR, US VI) The toll-free Hotline Telephone Numbers: B: 866-590-6727; C: 866-270-4909 Hours of Operation: 7:00 am – 4:00 pm CT
2. What to include in the request form: Incomplete forms cannot be reviewed or processed, so it is vital that all required information is included with the initial submission. The provider/supplier must complete the entire form, including the following:
- Provider/supplier identification information:
- Legal Business Name/ Legal Name;
- Correspondence Address;
- National Provider Identifier (NPI);
- Other information as required by the MAC.
- Amount requested based on your need.
Most providers and suppliers will be able to request up to 100% of the Medicare payment amount for a three-month period. However, inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals are able to request up to 100% of the Medicare payment amount for a six-month period. Critical access hospitals (CAH) can now request up to 125% of their payment amount for a six-month period.
7. Reason for request: i. Please check box 2 (“Delay in provider/supplier billing process of an isolated temporary nature beyond the provider’s/supplier’s normal billing cycle and not attributable to other third party payers or private patients.”); and ii. State that the request is for an accelerated/advance payment due to the COVID19 pandemic.
3. Who must sign the request form? The form must be signed by an authorized representative of the provider/supplier.
4. How to submit the request form: While electronic submission will significantly reduce the processing time, requests can be submitted to the appropriate MAC by fax, email, or mail. You can also contact the MAC provider/supplier helplines listed above.
5. What review does the MAC perform? Requests for accelerated/advance payments will be reviewed by the provider or supplier’s servicing MAC. The MAC will perform a validation of the following eligibility criteria:
- Has billed Medicare for claims within 180 days immediately prior to the date of signature on the provider’s or supplier’s request form,
- Is not in bankruptcy,
- Is not under active medical review or program integrity investigation,
- Does not have any outstanding delinquent Medicare overpayments.
6. When should you expect payment? The MAC will notify the provider/supplier as to whether the request is approved or denied via email or mail (based on the provider’s/supplier’s preference). If the request is approved, the payment will be issued by the MAC within 7 calendar days from the request.
7. When will the provider/supplier be required to begin repayment of the accelerated/ advanced payments? Accelerated/advance payments will be recovered from the receiving provider or supplier by one of two methods:
- For the small subset of Part A providers who receive Period Interim Payment (PIP), the accelerated payment will be included in the reconciliation and settlement of the final cost report.
- All other providers and suppliers will begin repayment of the accelerated/advance payment 120 calendar days after payment is issued.
8. Do provider/suppliers have any appeal rights? Providers/suppliers do not have administrative appeal rights related to these payments. However, administrative appeal rights would apply to the extent CMS issued overpayment determinations to recover any unpaid balances on accelerated or advance payments.
Accused of an alleged overpayment? Scrutinize the Department’s procedure to determine that alleged overpayment. One step out of line (in violation of any pertinent rule) by the Department and the overpayment is dismissed.
Ask yourself: Did the State follow Medicare State Plan Agreement? (The Plan germane in your State).
In a Mississippi Supreme Court case, the Mississippi Department of Medicaid (“DOM”) alleged that a hospital owed $1.2226 million in overpayments. However, the Court found that DOM failed to follow proper procedure in assessing the alleged overpayment. Since the DOM failed to follow the rules, the $1.2226 million alleged overpayment was thrown out.
The Court determined that the DOM, the single state agency charged with managing Medicare and Medicaid, must follow all pertinent rules otherwise an alleged overpayment will be thrown out.
Two cases premised on the notion that the DOM must follow all pertinent rules were decided in MS – with polar opposite endings.
- Crossgates River Oaks Hosp. v. Mississippi Div. of Medicaid, 240 So. 3d 385, 388 (Miss. 2018); and
- Cent. Mississippi Med. Ctr. v. Mississippi Div. of Medicaid, No. 2018-SA-01410-SCT, 2020 WL 728806, at *2–3 (Miss. Feb. 13, 2020).
In Crossgates, the hospitals prevailed because the DOM had failed to adhere to the Medicare State Plan Agreement. Applying the same legal principles in Cent. MS Med. Ctr, the DOM prevailed because the DOM adhered to the Medicaid State Plan.
It is as simple as the childhood game, “Simon Says.” Do what Simon (State Plan) says or you will be eliminated.
In the 2018 MS Supreme Court case, the Court found that the MS Department failed to follow the Medicare State Plan Agreement in determining an overpayment for a provider, which meant that the overpayment alleged was arbitrary. The thinking is as follows: had the Department followed the rules, then there may not be an overpayment or the alleged overpayment would be a different amount. Since the Department messed up procedurally, the provider got the whole alleged overpayment dismissed from Court. It is the “fruit of the poisonous tree” theory. See Crossgates River Oaks Hosp. v. Miss. Div. of Medicaid, 240 So. 3d 385 (Miss. 2018).
While Courts generally afford great deference to an agency’s interpretation of its regulations, once the agency violates a procedural rule, it is not entitled to that deference. The Court found that the DOM’s interpretation of Attachment 4.19–B of the State Plan was inconsistent with the relevant regulation. Crossgates River Oaks Hosp. v. Mississippi Div. of Medicaid, 240 So. 3d 385, 388 (Miss. 2018).
Throughout these proceedings, the DOM never articulated an explanation for its failure to exclude the radiology and laboratory charges or for its use of a blended rate in place of actual costs, absent altering or amending the State Plan. The clear language of the State Plan establishes that DOM’s choice to reduce payments to the Hospitals was arbitrary, capricious, and not supported by substantial evidence.
Central MS Medical Center
Juxtapose the Central Mississippi Medical Center case, which, by the way has not been released for publication. Atop the header for the case is the following warning:
With that caveat, the MS Supreme Court held that Medicaid State Plans that are accepted by CMS reign supreme and must be followed. In this case, the MS State Plan required the DOM to use the Medicare Notice of Program Reimbursement (NPR) to establish the final reimbursement.
According to the Supreme Court, the agency followed the rules. Thus, the agency’s adverse determination was upheld. It does not matter what the adverse determination was – you can insert any adverse determination into the equation. But the equation remains stedfast. The State must follow the State Plan in order to validate any adverse decision.
Effective Jan. 2, 2019, the Centers for Medicare & Medicaid Services (CMS) radically changed its guidance on the use of extrapolation in audits by Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), Unified Program Integrity Contractors (UPICs), and the Supplemental Medical Review Contractor (SMRC).
Extrapolation is a veritable tsunami in Medicare/Medicaid audits. The auditor collects a small sample of claims to review for compliance, then determines the “error rate” of the sample. For example, if 500 claims are reviewed and one is found to be noncompliant for a total of $100, then the error rate is set at 20 percent. That error rate is applied to the universe, which is generally a three-year time period. It is assumed that the random sample is indicative of all your billings, regardless of whether you changed your billing system during that time period or maybe hired a different biller. In order to extrapolate an error rate, contractors must use a “statistically valid random sample” and then apply that error rate on a broader universe of claims, using “statistically valid methods.”
With extrapolated results, auditors allege millions of dollars of overpayments against healthcare providers – sometimes a sum of more than the provider even made during the relevant time period. It is an overwhelming impact that can put a provider and its company out of business.
Prior to this recent change to extrapolation procedure, the Program Integrity Manual (PIM) offered little guidance regarding the proper method for extrapolation.
Prior to 2019, CMS offered broad strokes with few details. Its guidance was limited to generally identifying the steps contractors should take: “a) selecting the provider or supplier; b) selecting the period to be reviewed; c) defining the universe, the sampling unit, and the sampling frame; d) designing the sampling plan and selecting the sample; e) reviewing each of the sampling units and determining if there was an overpayment or an underpayment; and, as applicable, f) estimating the overpayment.”
Well, Change Request 10067 overhauled extrapolation in a huge way.
The first modification to the extrapolation rules is that the PIM now dictates when extrapolation should be used.
Under the new guidance, a contractor “shall use statistical sampling when it has been determined that a sustained or high level of payment error exists. The use of statistical sampling may be used after a documented educational intervention has failed to correct the payment error.” This guidance now creates a three-tier structure:
- Extrapolation shall be used when a sustained or high level of payment error exists.
- Extrapolation may be used after documented educational intervention (such as in the Targeted Probe-and-Educate (TPE) program).
- It follows that extrapolation should not be used if there is not a sustained or high level of payment error or evidence that documented educational intervention has failed.
“High level of payment error” is defined as 50 percent or greater. The PIM also states that the contractor may review the provider’s past noncompliance for the same or similar billing issues or a historical pattern of noncompliant billing practice. This is critical because so many times providers simply pay the alleged overpayment amount if the amount is low or moderate in order to avoid costly litigation. Now, those past times that you simply paid the alleged amounts will be held against you.
Another monumental modification to RAC audits is that the RAC auditor now must receive authorization from CMS to go forward in recovering from the provider if the alleged overpayment exceeds $500,000 or is an amount that is greater than 25 percent of the provider’s Medicare revenue received within the previous 12 months.
The identification of the claims universe was also redefined. Even CMS admitted in the change request that, on occasion, “the universe may include items that are not utilized in the construction of the sample frame. This can happen for a number of reasons, including, but not limited to: a) some claims/claim lines are discovered to have been subject to a prior review; b) the definitions of the sample unit necessitate eliminating some claims/claim lines; or c) some claims/claim lines are attributed to sample units for which there was no payment.”
How many of you have been involved in an alleged overpayment in which the auditor misplaced or lost documents? I know I have. The new rule also states that the auditors must be able to recreate the sample and maintain all documentation pertinent to the calculation of an alleged overpayment.
High-volume providers should face a lower risk of extrapolation if their audited error rate is less than 50 percent and they do not have a history of noncompliance for the same or similar billing issues, or a historical pattern of noncompliant billing practice.