Blog Archives
Post-COVID Medicare and Medicaid Provider Audits Are Here!
My esteemed colleagues with curious minds, today we embark on a journey into the complex world of Medicare and Medicaid provider audits, specifically orchestrated by the enigmatic entities known as Recovery Audit Contractors, or RACs. The dates of service (DOS) during COVID are specifically being targeted, and I’ve seen an uptick. With the plethora of exceptions, you need a specialized attorney.
Picture this: You’re a healthcare provider, diligently navigating the seas of Medicare and Medicaid reimbursement. All of a sudden, a tempest approaches – the Recovery Audit Contractors or RACs. These are the bounty hunters of the healthcare world, commissioned to recoup improper payments and ensure the ship of government healthcare funding stays afloat. And paid by contingency creating a financial incentive that some may call bias. The RACs even have the authority to extrapolate, making alleged overpayments to skyrocket, increasing its profit.
Now, you might wonder, “How do these RACs operate, and what laws govern their actions?” Well, let me shed some light on that. The Medicare RAC program was born out of the Tax Relief and Health Care Act of 2006, a legislative “masterpiece” that empowered RACs to review Medicare and Medicaid payments and, when necessary, claw back funds. It’s like having financial watchdogs on the prowl, ensuring taxpayer dollars are spent wisely.
A hospital client of mine provided outpatient services and billed Medicare for reimbursement during COVID. A RAC, armed with their legal authority, started scrutinizing these claims. Suddenly, the RAC believes that the hospital has been billing for services that don’t meet the necessary criteria. I love how RAC auditors without medical licenses purport to determine medical necessity for physicians. I hope you hear the sarcasm. The RAC alleged “upcoding” – alleging services were billed at a higher complexity than they actually were. The RACs, acting within the confines of the law, swoop in to recover those overpayments, ensuring the taxpayer’s purse strings are untangled.
We all know RACs are not infallible. Hopefully, you know this if you are a longtime reader. RACs mistakenly identify an overpayment or misinterpret complex healthcare regulations. That’s where the appeal process becomes crucial. The Medicare appeals process, defined under the Social Security Act, provides a right for providers to challenge RAC decisions. It’s a legal battleground where the provider can present evidence, argue their case, and seek justice against the RAC’s findings.
Now, let’s consider the Medicaid realm. The Medicaid RAC program, established by the Affordable Care Act in 2010, mirrors its Medicare counterpart. These RACs operate at the state level, conducting audits to identify and recover improper Medicaid payments. It’s like a dual-front war on wasteful spending, both federally and within individual states. Again, DOS during COVID are at issue.
For a concrete example, let’s imagine a nursing home submitting claims to Medicaid for resident services. The state-level Medicaid RAC, acting under the Affordable Care Act’s provisions, reviews these claims. If they discover discrepancies – perhaps services billed without proper documentation or purportedly unsupported by medical necessity – the RAC, wielding its legal mandate, initiates the recovery process.
The RACs, armed with the legislative might of the Tax Relief and Health Care Act and the Affordable Care Act, play a crucial role in safeguarding the integrity of Medicare and Medicaid reimbursements. While their actions may feel like storms to providers, it’s essential to recognize the checks and balances in place, including the appeals process, to ensure fairness and accuracy in the audit battlefield. As we navigate the seas of healthcare reimbursement, may our compass be true, our documentation impeccable, and our understanding of the law unwavering.
RAC Audits Are BOO-Very Scary, and, Sometimes, Are DEAD wrong!
For Monitor Monday, today, October 30, 2023, I dressed up as a RAC auditor. BOO!!! I get a spooky 13.5% commission for overzealous auditing tactics. RAC auditors come in every shape and size, color or gender.
In my experience, RACs are garishly incorrect in their assessments. I will reveal three, real life examples where these audit contractors accused healthcare providers of owing money but were found to be dead wrong:
Example 1 – Medical Necessity quibbles:
In a haunting case involving a hospital, the RAC alleged that certain cardiac procedures were billed inappropriately, citing concerns about the medical necessity of these services. They claimed the hospital should refund a repugnant amount for these procedures. However, upon closer examination and an appeal process, it was revealed that the services were indeed medically necessary and aligned with the standard protocols. The ghastly RAC’s accusation was disproven, and the hospital was not required to return any funds. Spine-tingling!
Example 2 – Improper Coding of Diagnosis:
A healthcare provider, particularly a large physician group, was accused by the RAC of using suspicious, improper diagnostic codes, leading to overbilling for certain services provided to Medicare and Medicaid beneficiaries. After a thorough internal audit, it was determined that the codes used were accurate and supported by the patient’s medical records. The RAC’s allegations were unfounded, and no repayment was required. Suspicious. A haunting reminder to spook audits.
Example 3 – Alleged Duplicate Billing:
In a murderous case involving a nursing facility, the RAC identified what they believed were instances of duplicate billing for certain procedures and services. Upon further review, it was revealed that the billing discrepancies were due to the RAC’s misunderstanding of the facility’s billing processes. Mysterious. The facility provided evidence showcasing that the billed services were distinct and not duplicates. Consequently, the RAC’s claim was refuted, and no repayment was deemed necessary. Suspicious.
These examples underscore the critical need for providers to have robust internal compliance measures in place. While RACs serve a vital purpose in identifying billing errors, they are not infallible. Providers need to be equipped to challenge these audit findings, ensuring they are based on accurate and comprehensive information.
It’s crucial for healthcare providers to engage in a proactive approach by conducting their internal audits, maintaining accurate documentation, and being prepared to challenge RAC determinations when necessary. These efforts not only protect providers from unwarranted financial obligations but also ensure that Medicare and Medicaid funds are appropriately allocated.
In conclusion, the relationship between RACs, healthcare providers, and government healthcare programs is complex. The examples provided demonstrate that while RACs play a critical role in safeguarding the integrity of Medicare and Medicaid, their findings are not always accurate. Providers must be diligent in ensuring their billing practices align with regulations and be prepared to contest any erroneous audit findings to maintain fiscal stability and fair reimbursement for services rendered.
Happy Halloween!!!!
RAC Audits: If It Walks Like a Duck and Quacks Like a Duck, It Is a Duck!
Today, I am going to talk about RAC audits. I know what you are thinking…don’t you always talk about RACs? Of course, you are going to talk about RAC audits. No. Today, I’m taking this blog in a different direction.
I want to talk about secret, hidden RAC audits. As you are aware, the federal regulations limit RACs from going back more than 3 years to audit claims. Juxtapose the UPICs, TPEs, SMRCs, MACs, OIG, and even State Medicaid agencies. Everyone, but the RACs are allowed more than a 3-year lookback period. Some, like OIG, have long lookback periods. Coincidentally, when a company responds to an RFP or a request for proposal from CMS to act as CMS’ vendor to conduct Medicare audits on America’s Medicare providers, a clause in the proposed contract between CMS and the vendor is highly argued or negotiated. Which clause in the vendor’s contract is most negotiated? I will tell you. The clause that states that the vendor is a RAC is most negotiated. Because if the vendor is called a UPIC instead of a RAC, the vendor has a longer lookback period. Being called a UPIC, suddenly, becomes a commodity. There are no laws mandating UPICs to a 3-year lookback period. All of a sudden, it is not hip to be a RAC.
Look into it. Do your research. The contracts are public record. Ask for Cotiviti’s contracts with CMS. Notice I said contracts, not contract. What I have realized over time is that a vendor may be hired by CMS to be a RAC auditor, but, once the vendor realizes the limit of 3 years, it goes back to CMS and asks if it can be considered an UPIC. Why? A UPIC can do everything that a RAC does; however, it gets an additional 3 years to lookback at claims and that means money. Cha-ching! Even Dr. Ron Hirsh commented today on RACMonitor about this story, which I presented this morning at 10:00am, as I present every Monday morning, live, on the national podcast RACMonitor , hosted by Chuck Buck and produced by MedLearn. If you want to listen to the podcast, click the following link: Nelson Mullins – Monitor Mondays Podcast Featuring Knicole Emanuel; Defeating Statistical Extrapolations, Expansion of Medicaid RACs, IPPS Final Rule, Smart Hospitals, and Physician Advisors Episodes
The podcast is also on video, but I don’t know how to view that. If you do, you would see my baby duck Biscuit on the screen. He joined me this morning to talk about, “What Walks Like a Duck and Quacks Like a Duck, Must be a Duck.” Dr. Hirsh commented that companies like Cotiviti have many, many contracts deeming Cotiviti many different acronyms. If you get a letter from Cotiviti, do not assume it is acting as a RAC. Instead, ask for the contract which allows Cotiviti to do what it purports to want to do.
I’ve noticed this trend in real life, but only for 10-20 individual cases, maybe 30. I have not had the time to draft a FOYIA request, and, quite frankly, my name on a FOYIA request nowadays result in a response that says, something to the effect of, use discovery instead. Even though my personal experiences should not be extrapolated across the country because that would be inappropriate and judgmental, I will give an example and you may extrapolate or not. There is a company that has been doing RAC audits in NC for the last 5-8 years. It is called Public Consulting Group (“PCG”). PCG and I go way back. If you are a longtime listener of RACMonitor, you will recall that Ed Roche and I presented numerous podcasts about the debacle in NM in 2013. The State of NM put 15 Medicaid providers who constituted 87.6% of the BH providers in NM at the time. The consequences were catastrophic; thousands were out of BH services overnight. There is even a documentary about the unraveling of BH in NM in 2013. The reason that these 15 BH providers were put out of business overnight was because of a NM vendor called PCG. PCG issued a report to NM after conducting Medicaid audits on these 15 BH facilities, which accused the 15 facilities of fraud. In 2013, PCG was considered a RAC per contract. Today, when I have a case against PCG and make the 3-year lookback period argument, I get a retort that it’s not a RAC. Instead it’s a UPIC.
To which I say, if it walks like a duck and talks like a duck, it is a duck.
E/M Codes and When You Should NOT Fire Your Attorney!
Lately, I have been inundated with Medicare and Medicaid health care providers getting audited for E/M codes. I know Dr. Hirsh has spoken often about the perils of e/m codes. The thing about e/m codes is that everyone uses them. Hospitals, family physicians, urgent care centers, specialists, like cardiologists. Obviously, for a specialist, like cardiology, the higher level codes will be more common. A 99214 will be common compared to a generalist like a primary care physician, where a 99213 may be more common.
Here’s a little secret: the difference between a 99214 and 99213 is subjective. It’s so subjective that I have seen auditors who are hired by private companies to audit on behalf of CMS and are financially incentivized to find fault find 100% error rates. Who finds a 100% error rate? Not one claim out of 150 was compliant. Then, I come in and hire the best independent auditors or coders. There are generally two companies that I always use. The independent auditors are so good. Most importantly, they come in and find a much more probable error rate of almost zero.
Hiring an independent, expert coder to ensure that the RAC, MAC, UPIC, or TPE audits accurately is always part of my defense.
Recently, I learned what I should have known a long time ago, but is essential for our listeners to know. If your medical malpractice is with The Doctors Company, for free, you get $25k of – what TDC calls – Medi-Guard or regulatory compliance protection. In other words, you get audited by a UPIC and are informed that you owe an alleged $5 million, extrapolated, of course, you get $25k to pay an attorney for defense. Sadly, $25k will not come close to paying your whole defense, but it’s a start. No one scoffs at “free” money.
When accused of an alleged overpayment, placed on prepayment review, or accused of a credible allegation of fraud, your reimbursements could be in imminent danger of being suspended or recouped. It is imperative for the health care provider to stay apprised of what penalties they are facing. You want to know: “best case scenario and worst case scenario.”
And, providers, be cognizant of the gravity of your situation. Infringement of the false claims act can result in high penalties or jail, depending on the circumstances and the provider’s attorney. I had a client, who is an M.D. psychiatrist. She asked me what is the worst penalty possible. I am blunt and honest, apparently to a fault. I didn’t miss a beat. “Jail,” I said. She was horrified, called her insurance company, and requested a new attorney. TDC refused to fire me, so the doctor said that she will draft the self-disclosure herself. She also said that she submitted the falsified documents to the UPIC, so she was confident that the UPIC would not notice, but see below, time stamps are a bitch.
When I told the doctor that we needed to self-disclose to OIG because she had some Medicare claims, she screamed, “No! No! NO!” It was a video call and my sound wasn’t up loud, and I just watch her on the screen with her face all contorted and her mouth getting really big, then contract, then get really big, then contract, then get really big and then even bigger. The expert certified coder was present for the call, and he called me afterward asking me: “What was that?” And his wife, who overheard, said, “OMG. I would have lashed out.” I kept my cool. Honestly, I just felt bad for her because I can see the writing on the wall.
Obviously, a new attorney is not going to change the outcome. She falsified 17 dates of service because she wanted the service notes to be “perfect.” Well, providers, there is no such thing as perfect and changing diagnoses and CPT codes and adding details to the notes that, supposedly, you remember from a month ago is not ok.
I did feel bad for her for leaving me. I could have gotten her off without any penalties.
You see, English is not her first language. She misinterpreted an email from the UPIC and thought it said that you can fix any errors before submitting the documents. She fabricated 17 claims before I was hired instructed her to stop. I had a solid defense prepared. I was going to hire an independent auditor to audit her 147 claims with the 17 falsified claims. I would have hoped for a low error rate. Then, I would have conducted a self-audit and self-disclosed the fabrications to the UPIC with the explanation that it was a nonintentional harmless error that we are admitting. Self-disclosure can, sometimes, save you from penalties! However, if she doesn’t self-disclose, she will be caught. Unbeknownst to her, on page 6 of the service notes, it is time and date stamped. It revealed on what day she changed the data and what data she changed. Those of you who would also terminate your attorney because you think you can get by with the fraud without anyone noticing, think hard about whether you would like to suffer the worst penalty – jail – or have your attorney be honest and upfront and get you off without penalties by following the rules and self-disclosing any problems uncovered.
I have no idea what will happen to the doctor, but had she stayed with me, she would have escaped without penalty. When not to fire your attorney!
Texas Judge Poo Poos the ACA Preventable Services Mandate!
In March, the U.S District Court in the Northern District of Texas vacated the requirement that ACA-compliant health plans cover certain U.S. Preventive Services Task Force (USPSTF) recommended preventive services without cost sharing.
The DOJ argued the lower-court ruling from a federal judge in Texas “has no legal justification and threatens the public health.” The Health and Human Services Department estimates the ACA covered preventive services for more than 150 million people in 2020.
I am not taking a stance on the ACA. As a lawyer, I can tell you that to obtain an injunction, you have to prove:
- Likelihood of success on the merits;
- Irreprepable harm;
- Balancing the equities;
- Public interest.
Those standards come from a Supreme Court case called Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008).
I understand that the Texas case vacating that the ACA-compliant health plans cover preventive services has become highly polarizing in politics. Obviously, the Republicans are Plaintiffs in this case and fighting against Obamacare. But I do not care about the politics. My contention with this case is if the government is mandating (well, was mandating before this TX judge’s decision) preventive care to be free, how is that not forcing doctor’s to work for whatever the government deems to be fair. Will they get paid Medicare or Medicaid prices? They should be so lucky. I don’t want to go out on a limb and compare mandating doctors to provide services for Medicare and Medicaid prices, regardless whether that physician is even enrolled in Medicare or Medicaid to slavery, but if the shoe fits…
On another note, the Recovery Audit Contractors (RACs) added hospice to the list of CMS approved audit targets. The review will determine if Hospice General Inpatient Care (GIP) was reasonable and necessary to achieve pain control or acute or chronic symptom management which could not be managed in any other setting. Claims that do not meet the indications of coverage and/or medical necessity will be recoded to Routine Hospice Care 0651 and result in an overpayment.” The affected code will be REV code 0656.
On March 31, CMS issued the FY 2024 proposed rule which includes a 2.8% rate increase and the FY 2024 cap of $33,396.55. The proposed rule also includes updates on the Hospice Outcomes & Patient Evaluation (HOPE) tool, CAHPS® tool, the Hospice Special Focus Program, and a proposed addition of hospice physicians to the Medicare enrollment process. For a full analysis of the proposed rule, view NHPCO’s regulatory alert from April 4. Comments are due by May 30, 2023.
Other CMS approved audit targets for 2023 and 2024 are : Ambulance Providers, Ambulatory Surgery Center (ASC), Outpatient Hospital, Inpatient Hospital, Inpatient Hospital, Inpatient Psychiatric Facility, Inpatient, Outpatient, ASC, Physician, IP, OP, SNF, OP Clinics, ORF, CORF, OPH, OP Non-Hospital, SNF, ORF, CORF, Physician, Physician/Non-physician Practitioner (NPP), Physician/NPP, Professional Services (Physician/Non-Physician), and Radiologists/Part B providers.
To name a few.
The Horror Story of 99214 and Insurance to Assist
99214. Is that Jean Valjean’s number? No. It is an E/M code of moderate complexity. Few CPT codes cause goosebumps, chilly air, and a pit in your stomach besides 99214. As I said, 99214 is an E/M code of moderate level of complexity. For a low complexity visit, the code decreases to 99213. Even lower is a 99212, which is considered a straightforward visit. The code goes as high as a 99215, which denotes high complexity. Generally, physicians are good at spotting the 99215s and 99212s; the lowest and highest complexities seem simple to spot. However, the middle complexity codes are a bit subjective. Auditors frequently find 99214s that the auditor thinks should have been a 99213. I am talking about the RACs, MACs, TPEs, UPICs, and other contractors paid with our tax dollars on behalf of CMS. I recently had a BCBS audit, which found that an urgent care center had a 97% error rate. Out of 30 claims, only one claim was considered 99214; 29 claims should have been down coded to a 99213, according to BCBS. Well, my urgent care center disagreed and hired an independent auditor to review the same claims that were audited. The independent audit resulted in vastly different results. According to the independent audit, only 4 of the 30 claims should have been down coded to 99213.
One should ask, how could two separate auditors audit the same documents and issue such disparate results? One reason is that the difference between 99213 and 99214 is subjective. However, subjectiveness was not the only reason for two polar opposite results.
You see, before 2021, facilities had the choice to follow either the 1995 guidelines or the 1997 guidelines for these CPT codes. And, there is a difference between the two guidelines. Instead of choosing either the 1995 or 1997 guidelines, BCBS applied both the 1997 and 1995 guidelines, which falsely created a more stringent criteria for a 99214.
The urgent care center had been verbose about the fact that they use the 1995 guidelines, not the 1997 guidelines. When the independent contractor audited the records, it used the 1995 guidelines only.
All in all, for an accusation of owing $180k, it cost the urgent care center almost $100k to defend itself against what was obviously a faulty audit. So, I’m thinking why in the world is there insurance for physicians for making a mistake in surgery – medical malpractice, but no insurance for False Claims allegations. I mean, med mal allegations mean there is a victim. But you can be accused of false claims unexpectantly and your practice is changed forever.
Recently, I learned of an insurance company that insures doctors and facilities if they are accused of billing Medicare or Medicaid for false claims. Unlike med mal, an accusation of false claims does not yield a victim (unless you see our tax dollars as people); however, an accusation of billing a False Claim can cost a doctor, facility, a hospital hundreds of thousands of dollars. Which, knowing all things are relative, is pennies on the dollar of the penalties under the FCA.
The company’s name is Curi. That is C-U-R-I. Personally, I had never heard of this company. I googled it after I was placed on the panel. This is an insurance company that pays for attorneys’ fees if you are accused of false claims or an overpayment. Personally, I think every listener should procure this insurance directly after RACMonitor. After 23 years of litigating, I have realized the worst part about defending yourself against accusations that you owe the government money is the huge price tag associated with it.
When I presented this story on RACMonitor, David Glaser made a comment about my segment that I would be remiss to omit. SOME med mal insurance policies cover the legal fees for attorneys for regulatory audits. Please review your policy to see whether your insurance company covers the attorneys’ fees for defense of regulatory audits before purchasing more insurance.
Knicole Partners-Up with Nelson Mullins and Questions NC Partial Hospitalization!
I have an announcement! I have the pleasure of joining Nelson Mullins as a partner. You may have heard of Nelson Mullins; it is a nationwide firm, and its health care team is “spot on.” Instead of spinning my own wheels trying to figure out the health care law; I now will be able to collaborate with colleagues and like-minded, health care, geeks. Yes, I will be doing the same thing – Medicare and Medicaid provider appeals and fighting terminations, suspensions, and penalties for long-term care facilities, home health, DME, hospitals, dentists…basically anyone who receives an adverse decision from any state or the federal government or a contracted vendor, such as RACs, MACs, TPE, UPICs, etc.
Now to my blog… Today I want to talk about partial hospitalization and billing to Medicare and Medicaid. One of my clients has been not getting paid for services rendered, which is always a problem. The 3rd party payor claims that substance abuse treatment is not partial hospitalization. 49 States consider substance abuse intensive outpatient services (“SAIOP”) and substance abuse comprehensive outpatient treatment (“SACOT”) partial hospitalization. Do you agree? Because, apparently, NC is the sole State that refuses to identify SAIOP and SACOT as partial hospitalization.
Partial hospitalization is defined as a structured mental health treatment program that runs for several hours each day, three to five days per week. Clients participate in the scheduled treatment sessions during the day and return home at night. This program is a step down from 24-hour care in a psychiatric hospital setting (inpatient treatment). It can also be used to prevent the need for an inpatient hospital stay. In reality, partial hospitalization saves massive amounts of tax dollars by not taking up a bed in an actual hospital.
In NC, partial hospitalization is codified in 10A NCAC 27G.1101, which states “A partial hospitalization facility is a day/night facility which provides a broad range of intensive and therapeutic approaches which may include group, individual, occupational, activity and recreational therapies, training in community living and specific coping skills, and medical services as needed primarily for acutely mentally-ill individuals. This facility provides services to: (1) prevent hospitalization; or (2) to serve as an interim step for those leaving an inpatient hospital. This facility provides a medical component in a less restrictive setting than a hospital or a rehabilitation facility.”
So, why does this 3rd party payor believe that SAIOP and SACOT are not partial hospitalization? I believe this payor’s stance is wrong. I spoke about their wrongness on RACMoniter, and I hope it may give me some “sway.”
Partial hospitalization is considered a short-term treatment. It is supposed to last 2-3 weeks. However, as many of you know substance abuse is not wiped away in 2-3 weeks. It is a long term process to overcome substance abuse issues. States’ Medicaid programs will question why consumers bounce from SAIOP AND SACOT over and over. In fact, another one of clients is being investigated by the Medicaid Investigative Division (“MID”) for having consumers in SAIOP and SACOT too long or too many times.
Substance abuse services are audited a lot. In fact, Medicare and Medicaid audits occur most often in behavioral health care, home health, and hospice. On January 24, 2023, the New York State Comptroller announced it found $22 million in alleged improper payments. I say alleged because, I would say, 90% of alleged overpayments accusations are inaccurate. The poor provider receives a letter saying you owe $12 million dollars, and their hearts drop. They imagine themselves going out of business. Then they hire a lawyer and it turns out that they owe $896.36. I give that example as a real-life example. I actually had a client accused of owing $12 million dollars and after a 2-week trial, the judge decided that this company owed $896.36. A big difference, right? We appealed nonetheless. 🙂
Medicare Auditors Fail to Follow the Jimmo Settlement
Auditors are not lawyers. Some auditors do not even possess the clinical background of the services they are auditing. In this blog, I am concentrating on the lack of legal licenses. Because the standards to which auditors need to hold providers to are not only found in the Medicare Provider Manuals, regulations, NCDs and LCDs. Oh, no… To add even more spice to the spice cabinet, common law court cases also create and amend Medicare and Medicaid policies.
For example, the Jimmo v. Selebius settlement agreement dictates the standards for skilled nursing and skilled therapy in skilled nursing facilities, home health, and outpatient therapy settings and importantly holds that coverage does not turn on the presence or absence of a beneficiary’s potential for improvement.
The Jimmo settlement dictates that:
“Specifically, in accordance with the settlement agreement, the manual revisions clarify that coverage of skilled nursing and skilled therapy services in the skilled nursing facility (SNF), home health (HH), and outpatient therapy (OPT) settings “…does not turn on the presence or absence of a beneficiary’s potential for improvement, but rather on the beneficiary’s need for skilled care.” Skilled care may be necessary to improve a patient’s current condition, to maintain the patient’s current condition, or to prevent or slow further deterioration of the patient’s condition.”
This Jimmo standard – not requiring a potential for improvement – is essential for diseases that are lifelong and debilitating, like Multiple Sclerosis (“MS”). For beneficiaries suffering from MS, skilled therapy is essential to prevent regression.
I have reviewed numerous audits by UPICs, in particular, which have failed to follow the Jimmo settlement standard and denied 100% of my provider-client’s claims. 100%. All for failure to demonstrate potential for improvement for MS patients. It’s ludicrous until you stop and remember that auditors are not lawyers. This Jimmo standard is found in a settlement agreement from January 2013. While we will win on appeal, it costs providers money valuable money when auditors apply the wrong standards.
The amounts in controversy are generally high due to extrapolations, which is when the UPIC samples a low number of claims, determines an error rate and extrapolates that error rate across the universe. When the error rate is falsely 100%, the extrapolation tends to be high.
While an expectation of improvement could be a reasonable criterion to consider when evaluating, for example, a claim in which the goal of treatment is restoring a prior capability, Medicare policy has long recognized that there may also be specific instances where no improvement is expected but skilled care is, nevertheless, required in order to prevent or slow deterioration and maintain a beneficiary at the maximum practicable level of function. For example, in the regulations at 42 CFR 409.32(c), the level of care criteria for SNF coverage specify that the “. . . restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.” The auditors should understand this and be trained on the proper standards. The Medicare statute and regulations have never supported the imposition of an “Improvement Standard” rule-of-thumb in determining whether skilled care is required to prevent or slow deterioration in a patient’s condition.
When you are audited by an auditor whether it be a RAC, MAC or UPIC, make sure the auditors are applying the correct standards. Remember, the auditors aren’t attorneys or doctors.
The Ugly Truth about Medicare Provider Appeals
Extrapolated audits are the worst.
These audits under sample and over extrapolate – almost to the point that some audits allege that you owe more than you were paid. How is that fair in our judicial system? I mean, our country was founded on “due process.” That means you have a right to life, liberty, and the pursuit of happiness. If the government attempts to pursue your reimbursements at all, much less a greater amount than what you received, you are required notice and a hearing.
Not to mention that OIG conducted a Report back in 2020 that identified numerous mistakes in the extrapolations. The Report stated: “CMS did not always provide sufficient guidance and oversight to ensure that these reviews were performed in a consistent manner.” I don’t know about you, but that is disconcerting to me. It also stated that “The test was associated with at least $42 million in extrapolated overpayments that were overturned in fiscal years 2017 and 2018. If CMS did not intend that the contractors use this procedure, these extrapolations should not have been overturned. Conversely, if CMS intended that contractors use this procedure, it is possible that other extrapolations should have been overturned but were not.“
I have undergone hundreds of Medicare and Medicaid audits with extrapolations. You defend against these audits twofold: 1) by hiring an expert statistician to debunk the extrapolation; and 2) by using the provider as an expert clinician to discredit the denials. However, I am always dismayed…maybe that’s not the right word…flabbergasted that no one ever shows up on the other side. It is as if CMS via whatever contractor conducted the extrapolated audit believes that their audit needs no one to prove its veracity. As if we attorneys and providers should just accept their findings as truth, and they get the benefit of NOT hiring a lawyer and NOT showing up to ALJ trials.
In the above picture, the side with the money is CMS. The empty side is the provider.
In normal trials, as you know, there are two opposing sides: a Plaintiff and a Defendant, although in administrative law it’s called a Petitioner and a Respondent. Medicaid provider appeals also have two opponents. However, in Medicare provider appeals, there is only one side: YOU. An ALJ will appear, but no auditor to defend the merits of the alleged overpayment that you, as a provider, are accused of owing.
In normal trials, if a party fails to appear, the Judge will almost automatically rule against the non-appearing party. Why isn’t it the same for Medicare provider appeals? If a Medicare provider appears to dispute an alleged audit, the Judge does not rule automatically in favor of the provider. Quite the opposite quite frankly. The CMS Rules, which apply to all venues under the purview of CMS, which includes the ALJ level and the Medicare Appeals Council level, are crafted against providers, it seems. Regardless the Rules create a procedure in which providers, not the auditors, are forced to retain counsel, which costs money, retain a statistician in cases of extrapolations, which costs money, go through years of appeals through 5 levels, all of which the CMS Rules apply. Real law doesn’t apply until the district court level, which is a 6th level – and 8 years later.
Any providers reading, who retain lobbyists, this Medicare appeal process needs to change legislatively.
Licensure Penalties, Plans of Corrections, and Summary Suspensions, Oh My!!
Most of you know that I also appear on RACMonitor every Monday morning at 10:00am eastern. I present a 3-minute segment on RACMonitor, which is a national, syndicated podcast that focuses on RAC audits and the casualties they leave in their wakes. I am joined on that podcast with nation Medicare and Medicaid experts, such as Dr. Ronald Hirsh, health care attorneys David Glaser and me, Tiffany Ferguson, who speaks on the social determinants of health and Matthew Albright, who presents on legislative matters. Other experts join in a rotating fashion, such as Mary Inman, a whistleblower attorney who resides in London, England, Ed Roche, an attorney and statistical wizard who debunks extrapolations, and it is hosted by my friend and producer, Chuck Buck and Clark Anthony and Chyann and others….
But there are other audits that wield similar dire results: OTHER THAN RAC, TPE, MAC, and ZPICs. Licensure audits, for example, can cause monetary penalties, plans of corrections, or even summary suspensions…OH MY!!! (A reference to The Wizard of Oz, obviously).
For hospitals and other health facilities, the licensure laws typically cover issues such as professional and non-professional staffing; physical plant requirements; required clinical services; administrative capabilities; and a vast array of other requirements. In most states, in addition to hospital licensure, full-service hospitals require other licenses and permits, such as laboratory permits, permits relating to hazardous wastes, food service permits, and transportation licenses for hospital-affiliated ambulances. Other residential healthcare facilities, such as nursing homes or behavioral health homes, are typically subject to similar requirements.
Penalties are brandished once audits ensue. Licensure audits do not possess the same financial incentives as RAC audits. In NC the entity that conducts licensure audits is DHSR, the Department of Health Service Regulation. DHSR is still under the umbrella of DHHS, which is the single state entity charged with managing Medicaid. Every State has a DHHS although it may be named something else. In New Mexico, the single state entity is called HSD or Health Services Department. In CA, the single state entity is called DHCS or Department of Health Care Services.
The entity in your State that conducts licensure audits will be under the umbrella of your State’s single State entity that manages Medicaid.
Penalties can be severe.
Summary suspensions occur in all 50 States. A summary suspension is an action in administrative law in which a judge suspends a provider’s license upon the receipt of allegations and prior to a full hearing on the matter. In general, the summary suspension is based on a finding that the suspension is necessary, given the allegations, to protect safety or public health. The summary suspension is a temporary, emergency ruling pending a full hearing on the allegations. For example, in Washington State WAC 170-03-0300(1)(a), permits summary suspension of a child care license by the Department where “conditions in the licensed facility constitute an imminent danger to a child or children in care.”
Imminent dangers can be alleged in hospitals, nursing homes, or residential facilities. I say “alleged” because an allegation is all it takes for a summary suspension to be bestowed. Allegations, unfortunately, must be defended.
Appeal! Appeal! Appeal! Be like Dorothy and get to the Wizard of Oz – no matter what, even if she has to defeat the Wicked Witch of the West!
Last year I had two residential facilities receive summary suspensions at the same time. What do you do if your facility receives a summary suspension?
PANIC.
Kidding. Do not panic. Contact your Medicaid attorney immediately.
Ultimately, we went to trial and defended these two facilities successfully.
