Blog Archives

CMS Initiates Process to Decrease the Medicare Appeal Backlog: But You May Have to Beg!

Last week, (May 22nd) the Center for Medicare and Medicaid Services (CMS) unveiled a new, streamlined appeal process aimed at decreasing the massive Medicare appeal backlog. CMS is hopeful that providers, like you, will choose to settle your Medicare appeal cases instead continuing the litigious dispute. Remember, currently, the backlog at the third level of Medicare appeals, the administrative law judge (ALJ) level, is approximately 5 – 8 years (I will use 8 years for the purpose of this blog). Recoupment can legally begin after level two, so many providers go out of business waiting to be heard at the third level. See blog.

The new “settlement conference facilitation” (SCF) process will allow CMS to make a settlement offer and providers have seven days to accept or proceed with the longer-lasting route. I have a strong sense that, if litigated, a judge would find forcing the decision between accepting a quick settlement versus enduring an 8-year waiting-period to present before an ALJ, coercion. But, for now, it is A choice other than the 8-year wait-period (as long as the provider met the eligibility requirements, see below).

To initiate said SCF process, a provider would have to submit a request in writing to CMS. CMS would then have 15 days to reply. If the agency chooses to take part, a settlement conference would occur within four weeks. Like that underlined part? I read the SCF process as saying, even if the provider qualifies for such process, CMS still has the authority to refuse to participate. Which begs the question, why have a process that does not have to be followed?

The SCF process is directed toward sizable providers with older and more substantial, alleged overpayments. In order to play, you must meet the criteria to enter the game. Here are the eligibility requirements:

2018-05-29 -- Pic of eligibility

The Backlog

In fiscal year (FY) 2016, more than 1.2 billion Medicare fee-for-service claims were processed. Over 119 million claims (or 9.7%) were denied. Of the denied claims, 3.5 million (2.9% of all Medicare denied claims) were appealed. That seems surprisingly low to me. But many claims are denied to Medicare recipients, who would be less inclined to appeal. For example, my grandma would not hire an attorney to appeal a denied claim; it would be fiscally illogical. However, a hospital that is accused of $10 million in alleged overpayments will hire an attorney.

In recent years, the Office of Medicare Hearings and Appeals (OMHA) and the Council have received more appeals than they can process within the statutorily-defined time frames. From FY 2010 through FY 2015, OMHA experienced an overall 442% increase in the number of appeals received annually. As a result, as of the end of FY 2016, 658,307 appeals were waiting to be adjudicated by OMHA. Under current resource levels (and without any additional appeals), it would take eight years for OMHA and ten years for the Council to process their respective backlogs.

The SCF “Fix”

While I do not believe that the creation of the SCF process is a fix, it is a concerted step in the right direction. Being that it was just enacted, we do not have any trial results. So many things on paper look good, but when implemented in real life end so poorly. For example, the Titanic.

Considering that there is a court case that found Health and Human Services (HHS) in violation of federal regulations that require level three Medicare appeals to be adjudicated in 90 days, instead of 8 years and HHS failed to follow the Order, claiming impossibility, at least HHS is making baby steps. See blog. At some point, Congress is going to have to increase funding to hire additional ALJs. I can only assume that the Hospital Association and American Medical Association are lobbying to get this action, but you know what they say about assuming…

As broached above, I do not like the fact that – if you do not accept whatever amount CMS proposes as settlement – BOOM – negotiation is over and you suffer the 8-year backlog time, undergo recoupments (that may not be appropriate), and incur tens of thousands of attorneys’ fees to continue litigation. Literally, CMS has no incentive to settle and you have every reason to settle. The only incentive for CMS to settle that I can fathom is that CMS wants this SCF program to be a success for the jury of public opinion, therefore, will try to get a high rate of success. But do not fool yourself.

You are the beggar and CMS is the King.

 

Medicare Appeal Backlog: Tough Tooties!…Unless…[Think Outside the Box!]

When you are accused of a $12 million dollar overpayment by Medicare, obviously, you appeal it.But do you expect that appeal to take ten years or longer? Are such long, wait periods allowed by law? That is what Cumberland Community Hospital System, Inc. (Cape Fear) discovered in a 4th Circuit Court of Appeals Decision, on March 7, 2016, denying a Writ of Mandamus from the Court and refusing to order the Secretary of Health and Human Services (HHS) Burwell to immediately adjudicate Cape Fear’s Medicare appeals to be heard within the Congressional requirement that appeals be heard and decided by Administrative Law Judges (ALJs) within 90 days.

According to the Center for Medicare and Medicaid Services‘ (CMS) website, an “ALJ will generally issue a decision within 90 days of receipt of the hearing request. Again, according to CMS’ website, this time frame may be extended for a variety of reasons including, but not limited to:

  • The case being escalated from the reconsideration level
  • The submission of additional evidence not included with the hearing request
  • The request for an in-person hearing
  • The appellant’s failure to send a notice of the hearing request to other parties
  • The initiation of discovery if CMS is a party.”

In Cape Fear’s case, the Secretary admitted that the Medicare appeal backlog equates to more than 800,000 claims and would, likely, take over 10 years to adjudicate all the claims. Even the 4th Circuit Court, which, ultimately, dismissed Cape Fear’s complaint, agrees with Cape Fear and calls the Medicare appeal backlog “incontrovertibly grotesque.”

Generally, the rule is that if the ALJ does not render a decision after 180 days of the filing of the case, then the provider has the right to escalate the case to the Medicare Appeals Council, which is the 4th step of a Medicare appeal. See blog for more details on the appeal process.

Care appeals

What about after 3,650 days? Get a big pie in the face?

The United States Code is even less vague than CMS’ website. Without question 42 U.S.C. states that for a:

“(1)Hearing by administrative law judge; (A)In general

Except as provided in subparagraph (B), an administrative law judge shall conduct and conclude a hearing on a decision of a qualified independent contractor under subsection (c) of this section and render a decision on such hearing by not later than the end of the 90-day period beginning on the date a request for hearing has been timely filed.”

(emphasis added). And, BTW, subsection (B) is irrelevant here. It contemplates when a party moves for or stipulates to an extension past the 90-day period.

So why did Cape Fear lose? How could the hospital lose when federal administrative code specifically spells out mandatory 90-day limit for a decision by an ALJ? Ever heard of a statute with no teeth? [i.e., HIPAA].

No one will be surprised to read that I have my opinions. First, a writ of mandamus was not the legal weapon to wield. It is an antiquated legal theory that rarely makes itself useful in modern law. I remember the one and only time I filed a writ of mandamus in state court in an attempt to hold a State Agency liable for willfully violating a Court’s Order. I appeared before the judge, who asked me, “Do you know how long I have been on this bench?” To which I responded, “Yes, Your Honor, you have been on the bench for X number of years.” He said, “Do you know how many times I have granted a writ of mandamus?” I said, “No, Your Honor.” “Zero,” he said, “Zero.” The point is that writs of mandamus are rare. A party must prove to the court that he/she has a clear and indisputable right to what is being asked of the court.

Secondly, in my mind, Cape Fear made a disastrous mistake in arguing that it has a clear right for its Medicare appeals to be adjudicated immediately. Think about it…there are 800,000+ Medicare appeals pending before the ALJs. What judge would ever order the administrative court to immediately drop all other 799,250 pended claims (Cape Fear had 750 claims pending) and to adjudicate only Cape Fear’s claims? It is the classic slippery slope…if you do this for Cape Fear, then you need to order the same for the rest of the pended claims.

In this instance, it appears that Cape Fear requested too drastic a measure for a federal judge to order. The claims were doomed from the beginning.

However, I cannot fault Cape Fear for trying since the code is crystal clear in requiring a 90-day turnaround time. The question becomes…what is the proper remedy for a gross disregard, even if unwillful, of the 90-day turnaround period?

This would have taken thinking outside the box.

Medicare providers have some rights. I discuss those rights frequently on this blog. But the population that the courts inevitably want to insulate from “David and Goliath situations” are the recipients. Unlike the perceived, “big, strong, and well-attorneyed” hospital, recipients often find themselves lacking legal representation to defend their statutorily-given right to choose their provider and exercise their right to access to care.

Had Cape Fear approached the same problem from a different perspective and argued violations of law on behalf of the beneficiaries of Cape Fear’s quality health care services, a different result may have occurred.

Another way Cape Fear could have approached the same problem, could have been a request for the Court to Cape Fear’s funds owed for service rendered to be released pending the litigation.

As always, there is more than one way to skin a cat. I humbly suggest that when you have such an important case to bring…BRING IT ALL!!

“A Modest Proposal for the ACA Employer Mandate”

We all know about the ACA employer mandate. It placed a tremendous burden on employers, many of whom will only feel this burden weighing them down as we ring in the new year because, starting in 2016, companies with over 50 employees must offer health insurance to full time employees (those who work over 30 hours per week).

So how much does it cost you, as an employer, to hire an employee? Are there exceptions? Are there loopholes?

We will get to the first question in a second. The answer to the last two questions is a “yes,” which will be discussed further in this blog.

Cost of an employee

Employers have to pay Social Security tax, Medicare tax, state unemployment insurance, and, now in 2016, health care insurance benefits (if the company has 50+ employees).

Social Security tax is 6.2%. Medicare tax is 1.45%. State unemployment tax differs from state to state, but it can range from 0% to 12.27% (Massachusetts). For the sake of clarity, we will use 5%.

Health insurance benefits also can vary greatly depending on the plan. According to the Kaiser Family Foundation/Health Research & Education Trust 2015 Employer Health Benefits Survey, annual premiums for employer-sponsored family health coverage reached $17,545 this year, up 4 percent from last year, with workers on average paying $4,955 towards the cost of their coverage.

This means that the employer, on average, is paying $12,490 per year per employee for health care benefits.

Assuming a base salary of $70,000, an employer would spend:

Social Security tax: $4,340

Medicare tax: $1,015

State unemployment tax: $350

Health care insurance benefits: $12,490

For a whopping total of $18,195 per year.

Think about this…if you offer your employee a salary of $70,000/year, he/she has to produce revenue for that company of, at least, $88,195 per year in order for you to break even. As you well know, successful companies are not in the business of breaking even, so you will expect your employee to create, at least, over $90,000 of profit in order to be paid a salary of $70,000.

None of the above contemplate a 401K plan. If you’re in a position to offer your employees a 401K plan, they will need to be that much more profitable.

So how can you, as the employer of a home health company, a long term care facility, a dentist practice, or other health care provider decrease the amount of money spent on health care benefits?

“A Modest Proposal for the ACA Employer Mandate”

Before we begin our journey of “A Modest Proposal for the ACA Employer Mandate,” I would like to give a bit of an English lesson on satire, lest one of you miss it. Satire is defined as, “the use of humor, irony, exaggeration, or ridicule to expose and criticize people’s stupidity or vices, particularly in the context of contemporary politics and other topical issues.” It is burlesque. And so I write this blog in the vein of Jonathon Swift’s “A Modest Proposal” (for those of you who have not heard of it, I suggest you click on the link above). For the faint of heart, those easily offended, or those too lazy to click on the link, I suggest not reading further.

Below is my “A Modest Proposal for the ACA Employer Mandate.”

  1. Hire childless singles.

Childless singles are cheaper to insure. So screen your potential employees. Ask whether they intend to have children and warn them that you operate a non-child company. Explain that if you discover that any employee has a dependent child it will result in immediate termination. Bonuses for those who undergo voluntary hysterectomies or vasectomies.

2. Hire old people.

People over 65 are eligible for Medicare. They’re loyal; they don’t talk back. The only things they complain about are their ailments. Many expect little pay because they, or their parents, went through the Great Depression. You can be sure that they will not spend their time on Facebook, Twitter, Instagram, or other social media because they don’t know how. If the position involves driving, you can sure they will get no speeding tickets. Best of all, you know that you are not undertaking a long-term commitment.

3. Hire poor people.

People below the poverty line are eligible for Medicaid. They rarely talk on the phone to friends. Many even only talk to themselves, which is fantastic (and not creepy at all) in the workplace. They are never late with excuses of bad traffic; and their homes are, most likely, going to be very near by (and maybe right out front). They never try to “one-up” the Joneses’. You will never see them bragging about their new Iphones, Louis Vuitton bag, or Mercedes Benz.

5. Hire lazy people.

People who work under 30 hours per week do not get offered health care coverage. Hire employees who enjoy video games too excess. All the better if they own Assassin’s Creed: Victory, Battlefield: Hardline, and Dying Light. It’s an office party every day – no need to worry about them working over 30 hours per week – they like vodka, bourbon, and gin. It’s even better if they enjoy the occasional (daily) marijuana. Embrace a drug-friendly environment.

If you follow the above hiring tips, you too can avoid paying the ACA employer mandate. Remember, the key to success is to only hire childless singles, and old, poor, and lazy people.

And you’ve struck gold if you hire a childless, old, lazy, poor, single person….Goldmine!

Proposed Federal Legislation Will Provide Relief to Hospitals and Medicare Patients in Need of Post-Acute Care

The Center for Medicare and Medicaid (CMS) announced that the new RAC contracts in North Carolina should be ready by the end of the year.  This means that, next year, RAC audits on hospitals and other providers will significantly increase in number. Get prepared, providers!!

However, there is proposed federal legislation that could protect hospitals and Medicare patients if passed.

Hypothetical: You present yourself to a hospital. The hospital keeps you in observation for 1 day. You are then formally admitted to the hospital as an inpatient for 2 more days. Under Medicare rules, will Medicare now cover your post-acute care in a skilled nursing facility (SNF)?

Answer: No. Observation days in hospitals do not count toward the Medicare 3-day requirement.

On November 19, 2014, Congressman Kevin Brady introduced draft legislation that would allow hospital observation stays to count toward establishing Medicare eligibility for post-acute services, as well as improve and supervise the RAC program.

You are probably wondering…Why would a hospital keep me in observation for a full day without admitting me as an inpatient when hospitals are reimbursed at a significantly higher rate for inpatient versus outpatient?

Answer: To avoid RAC recoupments.

In recent years, recovery audit contractors (RACs) have been exceedingly aggressive in post payment review audits in challenging hospital claims for short, inpatient stays. The RACs are motivated by money, and all of the RACs are compensated on a contingency basis, which leads to overzealous, sometimes, inaccurate audits. Here in North Carolina, Public Consulting Group (PCG) retains 11.5% of collected audits, and Health Management Systems (HMS) retains 9.75%.  See my blog: “NC Medicaid Extrapolation Audits: How Does $100 Become $100,000? Check for Clusters!”

Why have RACs targeted short-stay admissions in hospitals? As mentioned, one-day inpatient stays are paid significantly more than similar outpatient stays. Because of the financial incentives, RACs often focus audits on whether the short-stay is appropriate because this focus will yield a larger overpayment. As a result, hospitals become hesitant to admit patients as an “inpatient” status and, instead, keep the patient in outpatient observation for longer periods of time.

Keeping a person in observation status rather than admitting the person could impact the person’s health and well-being, but it will also impact whether a Medicare patient can receive post-acute care in a SNF (or, rather, whether Medicare will pay for it).

In order for a Medicare patient to receive covered, skilled nursing care after a hospital stay, Medicare requires a 3-day inpatient stay.  With the onslaught of RAC audits, hospitals become leery to admit a person as an inpatient.  When hospitals are tentative about admitting people, it can adversely affect a person’s post-acute care services.

To give you an idea of how overzealous these RACs are when it comes to auditing Medicare providers, there are over 800,000 pending Medicare appeals. That means that, across the country, RACs and other auditing companies have determined that over 800,000 providers and hospitals that accept Medicare were improperly overpaid for services rendered due to billing errors, etc. Over 800,000 providers and hospitals disagree with the audit results and are appealing. Now, obviously, all 800,000 appeals are hospitals appealing audits findings short-stay admissions not meeting criteria, but enough of them exist to warrant Congressman Brady’s proposed bill.

The proposed bill will significantly impact RAC audits of short-stay admissions in hospitals.  But the proposed bill will also extend the current short moratorium on RAC audits on short-stay admissions in hospitals.  Basically, the RACs became so overzealous and the Medicare appeals backlog became so large that Congress placed a short moratorium on RACs auditing short-stay admissions under the two-midnight rule through the end of March 2015.   The proposed bill will lengthen the moratorium just in time for NC’s new RACs to begin additional hospital audits.

The moral of the story is…you get too greedy, you get nothing…

Remember “The Goose That Laid the Golden Eggs?”

A man and his wife owned a very special goose. Every day the goose would lay a golden egg, which made the couple very rich.  “Just think,” said the man’s wife, “If we could have all the golden eggs that are inside the goose, we could be richer much faster.”  “You’re right,” said her husband, “We wouldn’t have to wait for the goose to lay her egg every day.”  So, the couple killed the goose and cut her open, only to find that she was just like every other goose. She had no golden eggs inside of her at all, and they had no more golden eggs.

Too much greed results in nothing.

Similar to the husband and wife who killed the goose who laid the golden eggs, overzealous and inaccurate audits cause Congress to propose a temporary moratorium on RACs conducting audits on short-term hospital stays until the reimbursement rates are implemented within the same proposed bill (which, in essence will lengthen the moratorium until the rates within the bill are implemented, which also includes additional methods to settle RAC disputes).

The proposed bill, entitled, “The Hospitals Improvements for Payment Act of 2014,” (HIP) would revamp the way in which short hospital stays are reimbursed and how observation days are counted toward Medicare’s 3-day rule for post-acute care; thereby alleviating these painful hospital audits for short inpatient stays. Remember my blog: “Medicare Appeals to OMHA Reaches 15,000 Per Week, Yet Decisions Take Years; Hospital Association Sues Over Medicare Backlog.”

HIP would create a new payment model called the Hospital Prospective Payment System (HPPS) that would apply to short-term hospital stays.

What is a “short stay?” According to the proposed bill, a short stay is a: (1) stay that is less than 3 days; (2) stay that has a national average length of stay less than 3 days; or (3) stay that is “among the most highly ranked discharges that have been denied for reasons of medical necessity.”

Proposed HIP would also require the Department of Health and Human Services (HHS) to establish a new base rate of payment, which will be calculated by blending the base operating rate for short stays and an equivalent base operating rate for overnight hospital outpatient services.

The draft bill would also repeal the 0.2 percent ($200 million per year) reduction that CMS implemented with the two-midnight rule, which is the standard that presumes hospital stays are reasonable if the stay covers two midnights.

The proposed bill also mandates more government supervision as to the RACs.

This proposed bill comes on the cusp of an increased amount of RAC audits in NC on hospitals. As previously discussed, our new RAC contracts will be awarded before the end of this year. So our new RACs will come in with the new year…

The moral of the story?

Expect hospital RAC audits to increase dramatically in the next year, unless this bill is passed.

“Dr. Fata and His Shadow:” Fata’s Attempt at Multiple Medicare Bones Results in Zero

Recently a Michigan physician was arrested for committing over $35 million in Medicare fraud. (Probably some Medicaid fraud too, but Medicaid payments have not been reviewed).  I have always said in this blog that I am against fraud.  When someone is committing Medicare or Medicaid fraud, I say, prosecute to the highest degree allowable by law!

Here is one of many articles: link.

Providers who commit fraud are making good providers undergo  harassing audits, harsh recoupments, and needless attorneys’ fees to fight the injustices. 

Dear DHHS, This (the below-referenced story) is what Medicare/caid fraud looks like. It is obvious. It is disgusting.  Fraud is NOT forgetting to date a service note.  Fraud is NOT inadvertently inserting the incorrect billing code.  Stop focusing on documentation nit-picking and find the REAL fraud! From, Me.

But, this Michigan physician…of all the possible fraudulent Medicare/Medicaid schemes….this man takes the cake.

Dr. Farid Fata, an oncologist, falsely diagnosed people WITHOUT cancer (healthy adults) as having cancer, subjecting these healthy adults to chemotherapy, and reaping the monetary benefit of expensive procedures.  In my mind, Dr. Farid Fata should spend the rest of his life behind bars.  And, if possible, throw a little radiation in his cell every now and then.

faridfata

If greed is the inordinate desire to possess wealth far beyond the dictates of basic survival and comfort and to the detriment of anyone else, Dr. Farat exemplifies greed.

Remember the moral: “It is not wise to be too greedy.” –Aesop.

This moral comes from “A Dog and its Shadow,” in which a dog crosses over a river with a bone in his mouth.  He sees his own shadow in the water, but shadow’s bone is twice the size of the bone in his mouth.  (Obviously, an optical illusion).  In an effort to snatch the bigger bone, the dog lets go of his own bone, and attacks the other dog (shadow), to get the bigger bone.  The dog loses both bones – the shadow-bone, because it is a shadow; and his own, because the stream sweeps it away.

Dr. Fata wanted his own bone, as well as any other bone he could possibly swipe.

In the meantime, Dr. Fata, in complete opposition of his Hippocratic Oath, injured hundreds of patients by subjecting them to unnecessary treatments. 

In the end, Dr. Fata loses all bones. 

What treatments did Dr. Farat perform?

  • Chemotherapy treatments to healthy adults;
  • Positron Emission Tomograph (PET) scans and a variety of cancer and hematology treatments for patients who did not need them;
  • The administration of unnecessary chemotherapy to patients in remission;
  • Deliberate misdiagnosis of patients as having cancer to justify unnecessary cancer treatment;
  • Administration of chemotherapy to end-of-life patients who will not benefit from the treatment;
  • Deliberate misdiagnosis of patients without cancer to justify expensive testing;
  • Fabrication of other diagnoses such as anemia and fatigue to justify unnecessary hematology treatments; and
  • Distribution of controlled substances to patients without medical necessity or are administered at dangerous levels.

Prosecutors say Fata was motivated by money, billing Medicare for false claims, all the while, living here:

Fata House

That is quite a bone!!!!

Dr. Fata faced a federal magistrate.  He was arraigned Monday on a federal health care fraud indictment.  Dr. Fata is being held at Wayne County Jail on a $9 million bond.

Dr. Fata became a naturalized American citizen in 2009.  He was a prominent oncologist.  Dr. Fata could very well had done well in his life with his wife with his own bones that collected.  Apparently, an oncologist-sized bone was not good enough for Dr. Fata.  Oh no, he wanted his oncologist-sized bone SUPER-SIZED.

And super-sized he will get!  He faces:

  • 20 years in jail;
  • Deportation (if any crimes occurred prior to 2009);
  • Possible bankruptcy;
  • Possible fines
  • Loss of his medical license;
  • Potential loss of family (If my husband intentionally committed these acts, I doubt I could ever stay with him…of course, my husband never would!!!)
  • Inevitable civil suits (If Dr. Fata diagnosed my with cancer and I discovered he purposely diagnosed me with a terminal disease to benefit monetarily….a very, large civil lawsuit would be filed immediately.  In fact, I am sure plaintiffs’ lawyers all over are salivating).

Yet, personally, I do not think the 20 years, even including all the incidental consequences, is enough punishment.  Think of the people who believed they suffered from cancer, underwent chemo, became ill (when they would otherwise have been healthy)…

The Italian poet, Durante degli Alighieri, simply referred to as “Dante,” in “Purgatory,” reserved the fourth circle of Purgatory for the greedy.  Also, some of the greedy were bound and laid face down on the ground for having concentrated too much on earthly thoughts.

In my mind, 20 years is not nearly long enough for Dr. Fata. 

Maybe, as Dante wrote, Dr. Fata should be bound and laid face down for 20 years.  Or, perhaps, he should  be forced to undergo years of chemotherapy…one year for every healthy adult he forced to undergo unneccessary chemotherapy.