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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.

Alphabet Soup: RACs, MICs, MFCUs, CERTs, ZPICs, PERMs and Their Respective Look Back Periods

I have a dental client, who was subject to a post payment review by Public Consulting Group (PCG). During the audit, PCG reviewed claims that were 5 years old.  In communication with the state, I pointed out that PCG surpassed its allowable look back period of 3 years.  To which the Assistant Attorney General (AG) said, “This was not a RAC audit.”  I said, “Huh. Then what type of audit is it? MIC? ZPIC? CERT?” Because the audit has to be one of the known acronyms, otherwise, where is PCG’s authority to conduct the audit?

There has to be a federal and state regulation applicable to every audit.  If there is not, the audit is not allowable.

So, with the state claiming that this post payment review is not a RAC audit, I looked into what it could be.

In order to address health care fraud, waste, and abuse (FWA), Congress and CMS developed a variety of approaches over the past several years to audit Medicare and Medicaid claims. For all the different approaches, the feds created rules and different acronyms.  For example, a ZPIC audit varies from a CERT audit, which differs from a RAC audit, etc. The rules regulating the audit differ vastly and impact the provider’s audit results greatly. It can be as varied as hockey and football; both have the same purpose of scoring points, but the equipment, method of scoring, and ways to defend against an opponent scoring are as polar opposite as oil and water. It can be confusing and overwhelming to figure out which entity has which rule and which entity has exceeded its scope in an audit.

It can seem that we are caught swimming in a bowl of alphabet soup. We have RACs, ZPICs, MICs, CERTs, and PERMs!!

alphabet soup

What are these acronyms??

This blog will shed some light on the different types of agencies auditing your Medicare and Medicaid claims and what restrictions are imposed on such agencies, as well as provide you with useful tips while undergoing an audit and defending the results.

First, what do the acronyms stand for?

  • Medicare Recovery Audit Contractors (RACs)
  • Medicaid RACs
  • Medicaid Integrity Contractors (MICs)
  • Zone Program Integrity Contractors (ZPICs)
  • State Medicaid Fraud Control Units (MFCUs)
  • Comprehensive Error Rate Testing (CERT)
  • Payment Error Rate Measurement (PERM)

Second, what are the allowable scope, players, and look back periods for each type of audit? I have comprised the following chart for a quick “cheat sheet” when it comes to the various types of audits. When an auditor knocks on your door, ask them, “What type of audit is this?” This can be invaluable information when it comes to defending the alleged overpayment.

SCOPE, AUDITOR, AND LOOK-BACK PERIOD
Name Scope Auditor Look-back period
Medicare RACs

Focus:

Medicare zaqoverpayments and underpayments

Medicare RACs are nationwide. The companies bid for federal contracts. They use post payment reviews to seek over and under payments and are paid on a contingency basis. Region A:  Performant Recovery

Region B:  CGI Federal, Inc.

Region C:  Connolly, Inc.

Region D:  HealthDataInsights, Inc.

Three years after the date the claim was filed.
Medicaid RACs

Focus:

Medicaid overpayments and underpayments

Medicaid RACs operate nationwide on a state-by-state basis. States choose the companies to perform RAC functions, determine the areas to target without informing the public, and pay on a contingency fee basis. Each state contracts with a private company that operates as a Medicaid RAC.

In NC, we use PCG and HMS.

Three years after the date the claim was filed, unless the Medicaid RAC has approval from the state.
MICs

Focus:

Medicaid overpayments and education

MICs review all Medicaid providers to identify high-risk areas, overpayments, and areas for improvement. CMS divided the U.S. into five MIC jurisdictions.

New York (CMS Regions I & II) – Thomson Reuters (R) and IPRO (A) • Atlanta (CMS Regions III & IV) – Thomson Reuters (R) and Health Integrity (A) • Chicago (CMS Regions V & VII) – AdvanceMed (R) and Health Integrity (A) • Dallas (CMS Regions VI & VIII) – AdvanceMed (R) and HMS (A) • San Francisco (CMS Regions IX & X) – AdvanceMed (R) and HMS (A)

MICs are not paid on a contingency fee basis.

MICs  may review a claim as far back as permitted under the laws of the respective states (generally a five-year look-back period).
ZPICs

Focus:

Medicare fraud, waste, and abuse

ZPICs investigate potential Medicare FWA and refer these cases to other entities.

Not random.

CMS, which has divided the U.S. into seven ZPICs jurisdictions.

Only investigate potential fraud.

ZPICs are not paid on a contingency fee basis.

ZPICs have no specified look-back period.
MFCUs

Focus:

Medicaid fraud, waste, and abuse

MFCUs investigate and prosecute (or refer for prosecution) criminal and civil Medicaid fraud cases. Each state, except North Dakota, has an MFCU.

Contact info for NC’s:

Medicaid Fraud Control Unit of North Carolina
Office of the Attorney General
5505 Creedmoor Rd
Suite 300
Raleigh, NC   27612

Phone: (919) 881-2320

website

MFCUs have no stated look-back period.
CERT

Focus:

Medicare improper payment rate

CERT companies indicate the rate of improper payments in the Medicare program in an annual report. CMS runs the CERT program using two private contractors (which I am yet to track down, but I will). The look back period is the current fiscal year (October 1 to September 30).
PERM

Focus:

Medicaid improper payment rate

PERM companies research improper payments in Medicaid and the Children’s Health Insurance Program. They extrapolate a national error rate. CMS runs the PERM program using two private contractors(which I am yet to track down, but I will). The look back period is the current fiscal year (the complete measurement cycle is 22 to 28 months).

 As you can see, the soup is flooded with letters of the alphabet. But which letters are attached to which audit company determines which rules are followed.

It is imperative to know, when audited, exactly which acronym those auditors are

Which brings me back to my original story of my dental provider, who was audited by a “non-RAC” entity for claims 5 years old.

What entity could be performing this audit, since PCG was not acting as its capacity as a RAC auditor? Let’s review:

  • RAC: AG claims no.
  • MIC: This is a state audit, not federal. No.
  • MFCU: No prosecutor involved. No.
  • ZPIC: This is a state audit, not federal. No allegation of fraud. No.
  • CERT:This is a state audit, not federal. No.
  • PERM: This is a state audit, not federal. No.

Hmmmm….

If it walks like a duck, talks like a duck, and acts like a duck, it must be a duck, right?

Or, in this case, a RAC.