Blog Archives

RAC Audits: How to Deal with Concurrent, Overpayment Accusations in Multiple Jurisdictions

You are a Medicare health care provider. You perform health care services across the country. Maybe you are a durable medical equipment (DME) provider with a website that allows patients to order physician-prescribed, DME supplies from all 50 states. Maybe you perform telemedicine to multiple states. Maybe you are a large health care provider with offices in multiple states.

Regardless, imagine that you receive 25, 35, or 45 notifications of alleged overpayments from 5 separate “jurisdictions” (the 5th being Region 5 (DME/HHH – Performant Recovery, Inc.). You get one notice dated January 1, 2018, for $65,000 from Region 1. January 2, 2018, you receive a notice of alleged overpayment from Region 2 in the amount of $210.35. January 3, 2018, is a big day. You receive notices of alleged overpayments in the amounts of $5 million from Region 4, $120,000 from Region 3, and two other Region 1 notices in the amount of $345.00 and $65,000. This continues for three weeks. In the end, you have 20 different notices of alleged overpayments from 5 different regions, and you are terrified and confused. But you know you need legal representation.

 

Screen Shot 2018-01-22 at 5.19.57 PM

Do you appeal all the notices? Even the notice for $345.00? Obviously, the cost of attorneys’ fees to appeal the $345.00 will way outweigh the amount of the alleged overpayment.

Here are my two cents:

Appeal everything – and this is why – it is a compelling argument of harassment/undue burden/complete confusion to a judge to demonstrate the fact that you received 20 different notices of overpayment from 5 different MACs. I mean, you need a freaking XL spreadsheet to keep track of your notices. Never mind that an appeal in Medicare takes 5 levels and each appeal will be at a separate and distinct status than the others. Judges are humans, and humans understand chaos and the fact that humans have a hard time with chaos. For example, I have contractors in my house. It is chaos. I cannot handle it.

While 20 distinct notices of alleged overpayment is tedious, it is worth it once you get to the third level, before an unbiased administrative law judge (ALJ), when you can consolidate the separate appeals to show the judge the madness.

Legally, the MACs cannot withhold or recoup funds while you appeal, although this is not always followed. In the case that the MACs recoup/withhold during your appeal, if it will cause irreparable harm to your company, then you need to get an injunction in court to suspend the recoupment/withhold.

According to multiple sources, the appeal success rate at the first and second levels are low, approximately 20%. This is to be expected since the first level is before the entity that determined that you owe money and the second level is not much better. The third level, however, is before an impartial ALJ. The success rate at that level is upwards of 75-80%. In the gambling game of life, those are good odds.

 

Federal Court Orders HHS to Eliminate Medicare Appeal Backlog!

When you have a Medicare appeal, it is not uncommon for the appeal process to last years and years – up to 3-6 years in some cases. There has been a backlog of approximately 800,000+ Medicare appeals (almost 1 million), which, with no change, would take 11 years to vet.

A Federal Court Judge says – that is not good enough!

Judge James Boasburg Ordered that the Medicare appeal backlog be eliminated in the following stages:

  • 30% reduction from the current backlog by Dec. 31, 2017 (approximately a 300,000 case reduction within 1 year);
  • 60% reduction from the current backlog by Dec. 31, 2018;
  • 90% reduction from the current backlog by Dec. 31, 2019; and
  • Elimination of the backlog of cases by Dec. 31, 2020;

A Medicare appeal has 5 steps. See blog. The backlog is at the Administrative Law Judge (ALJ) level – or, Level 3.

This backlog is largely attributable to the Medicare Recovery Audit Contractor (RAC) programs. In 2010, the federal government implemented the RAC program to recoup allegedly improper Medicare reimbursement payments. The RAC program (for both Medicare and Medicaid) has been criticized for being overly broad and burdensome and “nit picking,” insignificant paperwork errors. See blog.

While the RAC program has recovered a substantial sum of alleged overpayments, concurrently, it has cost health care providers an infinite amount of money to defend the allegations and has left Health and Human Services (HHS) with little funds to adjudicate the number of Medicare appeals, which increase every year. The number of Medicare appeals filed in fiscal year 2011 was 59,600. In fiscal year 2013, that number boomed to more than 384,000. Today, close to 1 million Medicare appeals stand in wait. The statutory adjudication deadline for appeals at the ALJ level is 90 days, yet the average Medicare appeal can last over 546 days.

The American Hospital Association (AHA) said – enough is enough!

AHA sued HHS’ Secretary Sylvia Burwell in 2014, but the case was dismissed. AHA appealed the District Court’s Decision to the Court of Appeals, which reversed the dismissal and gave the District Court guidance on how the backlog could be remedied.

Finally, last week, on December 5, 2016, the District Court published its Opinion and set forth the above referenced mandated dates for eliminating the Medicare appeal backlog.

While, administratively, the case was dismissed, the District Court┬áretained “jurisdiction in order to review the required status reports and rule on any challenges to unmet deadlines.”

In non-legalese, the Court said “The case is over, but we will be watching you and can enforce this Decision should it be violated.”

This is a win for all health care providers that accept Medicare.

Congressman McDermott Calls on Sec. Sebelius to Fix the Medicare Appeal Purgatory

Throughout my career I have seen more people confuse Medicare and Medicaid than any other two items in my line of work.  If I am about to give a presentation on Medicaid, without question, someone will comment, “Oh, that’s important!  We will all be on Medicaid someday.”  Hmmmm? Really? (I hope not).

It’s confusing. I get it.  They sound the same and both are heavily regulated with esoteric rules and regulations.

For the record, MediCARE covers those who qualify for Medicare and are 65 years of age or older.  MediCAID serves low-income parents, children, seniors, and people with disabilities. 

By providers, I am asked frequently, “What is the difference between a Medicaid audit appeal and a Medicare audit appeal?”

The easy “Audit 101” answer  is that Medicaid audit appeals are quicker (although in the legal world, nothing is truly fast) than Medicare audits and that the Medicaid administrative appeal process is easier (or has fewer steps) than the Medicare appeal process.

In Medicaid you have an informal appeal, an appeal to the Office of Administrative Hearings (OAH), and, if you are so inclined, judicial review to the Superior Courts.  Obviously you can appeal the judicial review, but most appeals stop at the OAH level.

So, with Medicaid audit appeals, you have 2 levels…maybe 3.

In Medicare audits appeals, there are 5 levels.  You have more of a Dante-ish order of events.

In the “Divine Comedy,” Dante writes of three levels of afterlife: (1) Inferno (2) Purgatorio; and (3) Paradiso.

If Dante stopped at those 3 levels, the “Divine Comedy” would be more similar to Medicaid audit appeals, not Medicare audit appeals.  But Dante does not stop at 3 levels.

Purgatory, which is the place that the human soul must purge its sins and climb up to be worthy of Heaven, is divided into three sections: (1) Antepurgatory; (2) Purgatory proper; and (3) the Earthly Paradise. (I am giving the Cliff’s Notes version for the purpose of this blog.  Obviously, there were other mountains symbolizing the 7 deadly sins and other layers, but I will leave that for English class).

In recent times, Purgatory has come to mean a state of suffering or torment that is meant to be temporary.

Regardless, the “Divine Comedy” and its multi-layers to achieve Paradiso is more akin to the Medicare appeal audit process.

Here are the levels in a Medicare audit appeal process:

1. Redetermination

2. Reconsideration

(Purgatory)

3. Hearing before an Administrative Law Judge (ALJ)

4. Review by the Appeals Council

5. Judicial Review

Nowadays many providers undergoing Medicare audits are getting stuck waiting for #3 to occur.  Purgatory.

So long is the hold up before step #3 that Congressman Jim McDermott, 7th District, Washington, wrote a letter to Secretary Kathleen Sebelius expressing concerns.

In a letter dated March 18, 2014, Congressman McDermott writes that he is concerned with the backlog of appeals pending in the Office of Medicare Hearings and Appeals (OMHA).

According to Congressman McDermott, 357,000 Medicare appeals are pending at OMHA.  If OMHA decided to set a one-year deadline to hear the pending actions and not counting new actions that would be filed, OMHA would have to preside over 1,027.4 hearings a day, including weekends and holidays.

For as long as I know, OMHA has expedited Medicare recipients appeals.  However, while Congressman McDermott commends OMHA for the expeditions, he states that the expeditions are not fast enough, even for Medicare recipients.

Congressman McDermott makes several suggestions as to how to decrease the current workload on OMHA.

First, he asks that the “two midnights policy” not be implemented.  Instead, he suggests to revamp the recovery audit contractor (RAC) program.  Congressman McDermott states that too many issues are still not resolved for the Policy to be implemented and that the implementation will only add to OMHA’s workload.

Second, Congressman McDermott suggests more accountability for the RACs.  He states that there is no associated penalty if a RAC collects money from a provider and the decision is overturned on appeal.

To this suggestion, I say, “Bravo, Congressman McDermott!”  My suggestion is that the RACs to pay the provider’s attorneys’ fees if overturned on appeal.  It seems only fair that the provider not have to pay legal fees if the provider shows that the RAC was incorrect in its assessment.

Thirdly, Congressman McDermott suggests to ensure the newly instated pause  on document requests corrects the problems.  CMS has recognized inherent problems with the RAC program and has issued a pause of document requests.  Well, Congressman McDermott says make sure you fix the problem before lifting the pause.  Logical.

Without question, the backlog at OMHA needs to be addressed.  Some Medicare providers have complained of not having their cases heard for years.  Imagine waiting to be heard in front of a judge for years….not knowing…

It is hard enough for providers to go through a Medicare audit.  Much less appeal and then…………………………………………….wait in Purgatory.