Recently, hundreds of dentists across North Carolina received Tentative Notices of Overpayment (TNOs) from Public Consulting Group (PCG) demanding recoupment for reimbursements made to dentists who rendered services on Medicaid for Pregnant Women (MPW) eligible recipients. There was no dispute at this hearing that these women were eligible for MPW according to the Department of Health and Human Services’ (DHHS) portal. There was also no dispute that these woman had delivered their babies prior to the date of dental service. So the question becomes: If DHHS informs a dentist that a woman is MPW eligible on the date of the service, does that dentist have an individual and separate burden to determine whether these women are pregnant. And if so, what is it? Have them pee in a cup prior to dental services? See blog, and blog, and blog.
We do not have a definitive answer to the above-posed question, as the Judge has not rendered his decision. However, he did substantially limit these “nameless audits” or “non-RAC” audits to the RAC program limitations. In an Order on our Motion for Partial Summary Judgment, the Administrative Law Judge (ALJ) found that, even if the State does not agree that an audit is a RAC audit, if the audit conducted falls within the definition of a RAC audit, then the audit is a RAC audit.
The reason this is important is because RAC auditors yield such powerful and overwhelming tools against health care providers, the Affordable Care Act (ACA) limits the RAC auditors’ ability to look-back on older claims. For example, even though a provider is, generally, required to maintain records for six (6) years, the federal regulations only allow RAC auditors to look-back three (3) years, unless credible allegations of fraud exist.
Thus, when an auditor reviews documents over three-years-old, I always argue that the review of claims over 3-years-old violates the statute of limitations and federal law.
During hearings, inevitably, the state argues that this particular audit…the one at issue here…is not a RAC audit. The opposing side could no more identify which acronym this audit happens to be, but this audit is not a RAC. “I don’t know what it is, but I know what it’s not!”
Well, an ALJ looked past the rhetoric and pleas by the State that “this is not a RAC” and held that if it walks like a duck and quacks like a duck, then it is a RAC audit and, subsequently, the RAC audit limitations do apply.
In the case for this dentist, Public Consulting Group (PCG) audited claims going back as far as six years! The Department of Health and Human Services’ argument was that this audit is not a RAC audit. So what is it? What makes it NOT a RAC? Because you say so? We all know that PCG has a contract with DHHS to perform RAC audits. Is this audit somehow outside its contractual purview?
So I filed a Motion for Summary Judgment requesting the Judge to throw out all claims outside the three-year look-back period per the RAC limitations.
Lo, and behold, I was right!! (The good guys win again!)
To understand this fully, it is important to first understand what the RAC program is and its intention. (“It depends on what the definition of “is” is”).
Under 42 U.S.C. § 1396a(a)(42):
the State shall—(i) establish a program under which the State contracts (consistent with State law and in the same manner as the Secretary enters into contracts with recovery audit contractors under section 1893(h), subject to such exceptions or requirements as the Secretary may require for purposes of this title or a particular State) with 1 or more recovery audit contractors for the purpose of identifying underpayments and overpayments and recouping overpayments under the State plan and under any waiver of the State plan with respect to all services for which payment is made to any entity under such plan or waiver.
RAC is defined as an entity that “…will review claims submitted by providers of items and services or other individuals furnishing items and services for which payment has been made under section 1902(a) of the Act or under any waiver of the State Plan to identify underpayments and overpayment and recoup overpayments for the States.” 42 CFR § 455.506(a).
Under this definition, PCG is clearly a recovery audit contractor. And the Judge agreed. If it walks like a duck and quacks like a duck, just because the duck protests it is a donkey, it is still a duck. (Hmmmm..wonder how this logic would carry over to the whole transgender bathroom issue…another topic for another blogger…)
RACs must follow certain limitations as outlined in the Code of Federal Regulations. For example, pursuant to 42 C.F.R. § 455.508(f), a Medicaid RAC “must not review claims that are older than 3 years from the date of the claim, unless it receives approval from the State.”
In this particular case, there were 15 claims at issue. Eleven (11) of those claims were outside the three-year look-back period!! With one fell swoop of an ALJ’s signature, we reduced the claims at issue from 15 to 4. Nice!
In DHHS’ Response to our Motion for Partial Summary Judgment, DHHS argued that, in this case, PCG was not acting as a RAC; therefore, the limitations do not apply. In support of such decision, DHHS supplied an affidavit of a DMA employee. She averred that the audit of this particular dentist was not per the RAC program. No rules were cited. No contract in support of her position was provided. Nothing except an affidavit of a DMA employee.
Obviously, it is my opinion that the ALJ was 100% accurate in ruling that this audit was a RAC audit and was limited in scope to a 3-year look-back period.
If it walks like a duck, quacks like a duck, it is not a donkey. No matter how much it pleads that it is, in fact, a donkey!
Remember the Super Bowl Ad of the Puppy, Baby, Monkey?:
That is so NOT ok!
“It is one thing to believe in witches, and quite another to believe in witch-smellers.” G.K. Chesterton
Similarly to the Salem witch trials in Salem, Massachusetts between February 1692 and May 1693, there has become a sort of mass hysteria surrounding Medicaid fraud. While, obviously, Medicaid fraud needs to be found and fully prosecuted, who is to determine whether document noncompliance is fraud? Or harmless and inadvertent error? The witch-smellers? Good gracious, who can honestly tell me that they understand every aspect of Medicaid billing, including all of the federal statutes germane to Medicaid, and all the terms within DMA Polices and what exactly the terms mean? Medicaid is esoteric stuff. Surely, providers deserve some leniency as to inadvertent errors.
Fraud is an intentional deception made for personal gain or to damage another individual or entity. How can an inadvertent error constitute fraud? If I accidentally write the wrong date on a legal bill, can my client point out the error and refuse to pay due to document noncompliance? (The answer is NO, people)
Yet it seems as though the North Carolina RACs auditors are of the mindset that any error, however small and insignificant, causes noncompliance and the reimbursement for services rendered must be recouped. According to the AHIMA website, the RAC Program’s purpose is to reduce improper Medicare/Medicaid payments and implement actions to prevent future improper payments. But who defines “improper?” Is there an element of intent?
I guess I would also be of the mindset that all errors constitute noncompliance if I were paid 12.8% of what I recouped, too.
So what defenses do providers have? Back in Salem in 1692-1693, the accused witches would plea, “No. I am not a witch.” Providers are claiming, “No. My documents are compliant.” But when the accusor has more power than the accused, the accused plea of, “I did not do it,” falls on deaf ears.
I have found a number of defenses for the health care provider. One such defense is the provider “without fault” defense. The provider “without fault” defense is just one of many defenses, and all defenses should be used, but here is an explanation of the provider “without fault” defense:
42 U.S.C. 1395pp states, in pertinent part,
Conditions prerequisite to payment for items and services notwithstanding determination of disallowance:
2) both such individual and such provider of services or such other person, as the case may be, did not know, and could not reasonably have been expected to know, that payment would not be made for such items or services under such part A or part B of this subchapter
then to the extent permitted by this subchapter, payment shall, notwithstanding such determination, be made for such items or services (and for such period of time as the Secretary finds will carry out the objectives of this subchapter), as though section 1395y(a)(1) and section 1395y(a)(9) of this title did not apply and as though the coverage denial described in subsection (g) of this section had not occurred. (emphasis added)
The U.S. Court of Appeals described 42 U.S.C. 1395pp as “the statutory section [that] allows a [health care provider] to obtain a waiver of liability for overpayment receipt when coverage is later denied and the individual beneficiary of the [health care provider] “did not know, and could not reasonably have been expected to know, that payment would not have been made for such [services]”…” MacKenzie Med. Supply, Inc. v. Leavitt, 506 F.3d 341, (4th Cir. 2007).
The MacKenzie case dealt with a durable medical equipment provider. The case actually did not end well for the DME provider based on the provider relying on Certificates of Medical Necessity as a sole basis for medical necessity.
There has not been a ton of case law in which the provider asserted this “no fault” defense, so we really do not know the limitations or breadth of the defense. But, the “no fault” defense should definitely be in the arsenal of defenses for the providers undergoing recoupment actions. Let’s say, one arrow in the quiver of defenses.
Going back to the original quote:
“It is one thing to believe in witches, and quite another to believe in witch-smellers.” G.K. Chesterton
I am sure that the witch-smellers back in 1692-1693 had a personal investment in finding witches. I mean, who wants to live in the same community with a witch that could possibly put a spell on you? Similarly the RACs have personal investments in the way of monetary incentives to cite noncompliance.
One way in which the citizens of Salem determined whether someone was a witch was the “Touch Test.” If the accused witch touched the victim while the victim was having a fit, and the fit then stopped, that meant the accused was the person who had afflicted the victim. Yet as ridiculous and asinine as the Touch Test sounds, people believed the witch-smellers. Even lawyers and judges believed the witch-smellers.
But because of the mass hysteria of the witch hunts, the witch-smellers were believed.
Today’s mass hysteria of Medicaid fraud is allowing the RACs to be overinclusive when determining noncompliance. The state has asserted that, if there is grey area, the state errs on the side of the provider.
From what I have seen, I believe that the state errs on the side of the providers as much as I believe in the “Touch Test” to determine witchcraft.