Blog Archives

RAC Audits Expected During the COVID Pandemic

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 The physician whose Medicare enrollment was revoked due to a computer error or an error on the part of CMS.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.

RAC Audits: Alternatives to Litigation

Understanding why there’s a need for auditing the auditors.

I frequently encounter complaints by healthcare providers that when they are undergoing Recovery Audit Contractor (RAC), Medicare Administrative Contractor (MAC), and, more recently, the Targeted Probe-and-Educate (TPE) audits, the auditors are getting it wrong. That’s as in, during a RAC audit, the auditor finds claims noncompliant, for example, for not having medical necessity – but the provider knows unequivocally that the determination is dead wrong. So the question that I get from the providers is whether they have any legal recourse against the RAC or MAC finding noncompliance, besides going through the tedious administrative action, which we all know can take upwards of 5-7 years before reaching the third administrative level.

To which, now, upon a recent discovery in one of my cases, I would have responded that the only other option for relief would be obtaining a preliminary injunction in federal court. To prove a preliminary injunction in federal court, you must prove: a) a likelihood of success on the merits; and b) that irreparable harm would be incurred without the injunction; i.e., that your company would be financially devastated, or even threatened with extinction.

The conundrum of being on the brink of financial ruin is that you cannot afford a legal defense if you are about to lose everything.

This past month, I had a completely different legal strategy, with a different result. I am not saying that this result would be reached by all healthcare providers that disagree with the results of their RAC or MAC or TPE audit, but I now believe that in certain extreme circumstances, this alternative route could work, as it did in my case.

When this particular client hired me, I quickly realized that the impact of the MAC’s decision to rescind the client’s Medicare contract was going to do more than the average catastrophic outcomes resulting from a rescission of a Medicare contract. First, this provider was the only provider in the area with the ability to perform certain surgeries. Secondly, his practice consisted of 90 percent of Medicare. An immediate suspension of Medicare would have been devastating to his practice. Thirdly, the consequence of these Medicaid patients not undergoing this particular and highly specialized surgery was dire. This trifecta sparked a situation in which, I believed, that even a Centers for Medicare & Medicaid Services (CMS) employee (who probably truly believed that the negative findings cited by the RAC or MAC were accurate) may be swayed by the exigent circumstances.

I contacted opposing counsel, who was the attorney for CMS. Prior to this situation, I had automatically assumed that non-litigious strategies would never work. Opposing counsel listened to the facts. She asked that I draft a detailed explanation as to the circumstances. Now, concurrently, I also drafted this provider’s Medicare appeal, because we did not want to lose the right to appeal. The letter was definitely detailed and took a lot of time to create.

In the end, CMS surprised me and we got the Medicare contract termination overturned within months, not years, and without expensive litigation.

(Originally published on RACMonitor)

CMS’ Feeble Attempt to Decrease Medicare Appeal Backlog Will, At Least, Benefit Providers

On August 1, 2015, the Center for Medicare and Medicaid Services (CMS) clarified (limited) the scope of Medicare auditors in a published article entitled, “Limiting the Scope of Review on Redeterminations and Reconsiderations of Certain Claims.” (MLN Matters® Number: SE1521).

The limitations apply to Medicare Audit Contractors (MACs) and Qualified Independent Contractors (QICs). This new instruction will apply to audits conducted on or after August 1, 2015, and will not be applied retroactively. Important to note: this instruction does not apply to prepayment review, only post payment reviews.

MLN Matters® Number: SE1521 was published in response to the overwhelming, increasingly, mushroomed backlog of Medicare appeals at the Administrative Law Judge (ALJ) level. Six years ago, prior to the Affordable Care Act (ACA), the number of Medicare appeals at the ALJ level was sustainable. Six years later, in 2015, the Medicare appeal backlog has skyrocketed to numbers beyond the comprehension of any adversely affected health care provider, i.e., over 547 days for adjudication!

So in order to combat these overwhelming, bottle-necked and “anything but speedy Medicare appeals,” CMS attempted to rectify the situation by setting new limitations (among other measures) as to the scope of authority that MACs and QICs may present on an audit.  However, these new limitations remind me of the hole that is in my front yard. Yes, a hole. The title of this story is “Inertia: What is Easy to Keep Going, Is Impossible to Pull Back” or “I love my husband’s intentions, but the result looks like the Medicare backlog.”

My wonderful husband and I purchased a small farm at the beginning of the year. If you have been following my blog over the past year, you will know that we have horses, peacocks, a micro pig, two dogs, and a 10-year-old. It is a whirlwind of fun.

Well, included in our purchase was a very shallow, very mosquito-ridden pond. It was about 4-5 inches deep and I never really thought about it. It was a pond. It was not beautiful, but it was not ugly. It was just there.

My husband tells me one day that he is going to “clean out the pond.”

BEFORE (except he already tore up the grass, so I do not have a true before picture):

smallpond

Every day, for three months, I come home to a deeper and deeper pond.

“I’m bound to hit a spring,” he would say. Or “Leroy says that there is a lot of water under our ground.” How Leroy came to this conclusion, I do not know. But, slowly, and almost unperceptively, each day the hole grows wider and deeper.

Until, one day, I come home to this:

AFTER:

hole

It would be funny if it were in your yard. (BTW: For scale, check out the horses (one is white, one is brown) in the top left corner.)

“I love my husband’s intentions, but the result looks like the Medicare backlog.”

You cannot undo digging a hole in your front yard that could swallow an elephant..or maybe two or three elephants. Just like you cannot undo a Medicare appeal backlog that could, potentially, fill my hole with its paperwork. You just have to make do, sit on your front porch, and admire the meteor-like hole that resides in your front lawn.

We (He) have (has) high hopes that our hole will become a lake or a swimming hole. In order to help the cause, I spit in it every time I walk by it. In the alternative, we sometimes aim the sprinkler toward the hole and let it run for a few hours. These are examples of our attempts of reconciling our hole into a beautiful swimming hole.

Similarly, when CMS created these MACs and QICs for Medicare audits, at first, it seemed that the MACs and QICs had no limits as to their scopes of authority to audit. Due to these overzealous and, sometimes, overreaching audits, the appeal backlog increased in number, then multiplied. Similar to the construction of my hole, the appeal backlog grew slowly, at first, then exponentially until the backlog is out of hand and uncontrollable. See blog.

One example of the seemingly limitless authority that the MACs and QICs wielded was that the auditors would provide reasons why claims were noncompliant, the defect could be cured, and the MACs and/or QICs would deny the claim for an entirely different reason.

The auditor would, in essence, be moving the goalposts after you kicked the ball. And the appeal backlog continued to swell.

The ability for the auditors to expand the review of claims beyond which was initially reviewed contributed the massive backlog of Medicare appeals at the ALJ level because more providers appeal an audit with which they disagree (common sense). Just like my hole in my front yard, the backlog of appeals grew, then ballooned until the number of Medicare appeals stuck in the backlog could possibly fill my hole. See blog for the Medicare appeal process and appeal deadlines.

According to the most current statistics available, there is a Medicare appeal backlog of approximately 870,000 appeals.  The average processing time for appeals decided in fiscal year 2015 is 547.1 days.

average time

Look at the balloon effect of “average processing time by fiscal year.” In 2009, the average processing time was 94.9 days (a little over 3 months). Now it is over 540 days (almost a year and a half)!!

“I love my husband’s intentions, but the result looks like the Medicare backlog.”

In an attempt to clear the backlog, CMS released MLN Matters® Number: SE1521, on August 1, 2015, in which “CMS has instructed MACs and QICs to limit their review to the reason(s) the claim or line item at issue was initially denied.” (emphasis added).

An exception, however, is if claims are denied for insufficient documentation and the provider submits documents, the claim may still be denied for lack of medical necessity if the documents submitted do not support medical necessity.

This new instruction found in MLN Matters No. SE1521 is an attempt by CMS to reconcile the huge backlog of Medicare appeals at the ALJ level. It is a small gesture. Quite frankly, this instruction should be self-evident as it is inherently unfair to providers to move the goalposts during an audit. I liken this gesture to my husband aiming the sprinkler toward the hole.

sprinkler

In other words, in my opinion, this feeble gesture alone, will not solve the problem. But, in the meantime, it will benefit providers who have been suffering from the goalposts being moved during an audit.

Once something is so big…

“I love my husband’s intentions, but the result looks like the Medicare backlog.”

Maybe the backlog will be fixed when my hole has transformed to a swimming hole.