You’ve got to be kidding. . . more Medicare audits on the way?

(March 11, 2010): According to the White House, President Obama has announced that he intends to back bipartisan plans to stamp out waste in government-run medical programs for the elderly and needy.  The White House said the new effort to root out improper payments in the Medicare and Medicaid programs could double taxpayer savings over the next three years to at least $2 billion.

“We cannot afford nor should we tolerate this waste of taxpayer dollars,” the White House said.   The government believes that approximately $54 billion was lost through improper Medicare and Medicaid payments in 2009. Medicare is the government-run program covering elderly Americans and Medicaid is for the country’s poorest.

President Obama is seeking to crack down on waste and fraud as his administration strives to secure an overhaul of the $2.5 trillion healthcare system to contain costs and expand coverage to tens of millions of more Americans.  The action endorses Republican-backed proposals on alleged health care wrongdoers.

The plan will offer private auditors a share of the money that they recoup in order to encourage them to work harder to uncover improper payments under Medicare and Medicaid.   President Obama is also expected to back bipartisan legislation to expand the ability of government agencies to undertake these so-called payment recapture audits by providing more funds.

As many health care providers will readily attest, over the past year, it appears that there has been a marked increase in PSC and ZPIC audits, almost all of which are accompanied by demands for extrapolated damages.  Once again, this points to the importance of sefl-assessment and an effective compliance strategy.  Asked to comment on this new “risk” to health care providers, Robert W. Liles, Esq., Managing Partner at Liles Parker, Attorneys and Counselors at Law, responded:

 ”Our firm has represented a number of health care proviers around the country.  We have aggressively fought to have improper claims denial overturned.  This new risk will increase the likelihood that providers who have not been subjected to RAC audits in the past may now find themselves being examined by RAC-like auditors in the future.  Coupled with existing PSC and ZPIC audits, sole practitioners, small practice groups and clinics will find their coding and billing practice under the spotlight.  Unfortunately, based on recent cases we have handled, it appears that PSCs and ZPICs are increasingly imposing their own views regarding what is required, well beyond the four corners of CMS-authorized provisions set out under LCDs and LMRPs covering the services at issue.  Fortunately, when faced with the facts, ALJs have applied a reasonable approach and most of the claims at issue have been found to be payable.  We recommend that health care proviers carefully review their documentation practices to lessen the likelihood that ZPICs, PSCs, RACs and these new third-party reviewers can succesfully argue that the claims don’t qualify for coverage.”

Should you have any questions regarding these issues, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.

Hang on tight — 2010 could be rough . . .

(March 1, 2010):  The number of auditors, reviewers, investigators and prosecutors going after health care providers is increasing and signals an alarming, unprecedented effort by the government to uncover and recover alleged overpayments to health care providers.

 Health care providers now face not only simple repayment demands, but also civil False Claims Act cases and criminal Medicare / Medicaid fraud claims identified by various new government contractors. Regrettably, we have seen unintentional mistakes, incomplete documentation and technical errors cited as the basis for seeking the repayment of millions of dollars, representing Medicare services rendered long ago, in some cases as many seven years before the demand letter was sent.  Perhaps most troubling is the fact that no one, including the ZPIC and / or PSC conducting the medical review, doubts that the medical services were rendered and in most cases, the Medicare beneficiary benefited from the care and treatment provided.  Today, every health care provider must beware of:

•  “RACs” or Recovery Audit Contractors.
• “ZPICs” or Zone Program Integrity Contractors.
• “MICs” Medicaid Integrity Contractors.
• “MCFU” Medicaid Fraud Control Unit.
• “HHS-OIG” Department of Health and Human Services, Office of Inspector General.
• “DOJ” U.S. Department of Justice, and
• “HEAT” Healthcare Fraud Prevention & Enforcement Task Force (in a number of U.S. Attorney’s Offices around the country).

 RACs and the havoc they are expected to wreak is old news, quite frankly. The newest players in town, ZPICs, MICs and HEAT Teams should be at the top of your current list of concerns.  As you will recall,   CMS consolidated functions of all Program Safeguard Contractors (PSCs) and Medicare Prescription Drug Integrity Control (MEDIC) contracts into ZPIC contracts.  ZPICs are designed to combine claims data (FIs, Regional Home Health Intermediary, Carrier, DMERC) and other data to create a platform for documenting complex data analysis.  While RACs (until recently) have focused solely on recovering money, ZIPCs also look for fraud.

MICs are just now revving up around the country.  Unburdened by many of the restrictions placed on RACs, providers with a heavy Medicaid beneficiary base should diligently review their Medicaid coding and billing efforts to better ensure compliance with applicable statutory and regulatory requirements. 

 HEAT Teams are made up of top level law enforcement and professional staff from DOJ and HHS.  HEAT was implemented to prevent fraud and enforce current anti-fraud laws and prevent waste that focuses on improving data and information sharing between the Center for Medicare & Medicaid Services and law enforcement agencies.  HEAT is working to strengthen program integrity activities to monitor and ensure compliance and enforcement.  HEAT’s tools to identify fraud include hotlines and web sites for healthcare workers and ordinary citizens.  Furthermore, HEAT officials are helping state Medicaid officials conduct better audits and provide better monitoring to detect fraudulent activities.

How should you respond?  The best response is to follow the rules.  If you don’t already have an effective Compliance Plan in place, we recommend you take steps to immediately implement one. 

Liles Parker attorneys represent health care providers around the country in complex Medicare overpayment appeals cases.  Should you have any questions regarding your case, give us a call.  We can you our initial assessment and provide client references.  You may call us for a complimentary consultation at:  1 (800) 475-1906.

Final Rule Outlining Recoupment Limitations and the Impact on Ongoing Medicare Overpayment Appeals Cases

(February 1, 2010):  Last September, the Centers for Medicare and Medicaid Services (CMS) published its Final Rule addressing limitations on the recoupment of alleged overpayments by its Medicare contractors (e.g. Medicare Administrative Contractors and Qualified Independent Contractors).  This Final Rule finalizes how Medicare contractors are to proceed when pursuing recoupment actions of alleged overpayments owed by a health care provider.   “Recoupment” is defined as the recovery of a Medicare overpayment by reducing present or future Medicare payments and applying the amount withheld against the debt.

Under existing regulations, health care providers may postpone recoupment by engaging in the administrative appeals process.  Prior to passage of the Medicare Modernization Act (MMA), CMS could recoup overpayments, regardless of whether the provider or supplier had filed an appeal challenging an alleged overpayment.  With CMS’ Final Rule in place, limitations have been set on the ability of its Medicare contractors to pursue a recoupment action.  As the Federal Register states:

“This final rule defines the overpayments to which the limitation on recoupment applies, how the limitation works in concert with the appeals process, and sets time limits for recouping overpayments, specifically providing 41 days for a provider or supplier to file the first level of appeal before the contractor can begin recoupment and providing the provider or supplier 60 days to appeal at the second level before the contractor can begin recoupment” (74 Fed. Reg. 47458, 47458 (Sept. 16, 2009)).

Notably, a Medicare contractor may freely initiate recoupment on an overpayment once a reconsideration decision has been rendered, regardless if an Administrative Law Judge (ALJ) appeal has been filed or is going to be filed.

Should a provider elect to delay recoupment, the amount owed will be subject to the Medicare interest rate. This amount varies but is generally quite high. For example, as of January 25, 2010, the interest rate has been set at 11.25 percent.  As such, it is especially important that providers consider the following:

(1) If an overpayment determination is overturned past the reconsideration level of appeals, CMS is liable for interest on recouped overpayments that has accrued.

(2) If a health care provider or supplier takes advantage of the limitation on recoupment and ultimately loses an administrative appeal, the provider is liable for all interest accrued since the original determination, along with the overpayment which remains after going through the administrative appeals process.

While the Medicare interest rate is quite high, it is essential that health providers understand the nuances of the administrative appeals process before rushing to postpone recoupment.  For example, to avoid recoupment after a redetermination appeal decision has been issued, a provider (or its representative) must file for  reconsideration appeal within 60 days.  Should they choose to do so, they will be forfeiting the statutory right to avail themselves of the full 180 period that is permitted to file for reconsideration appeal – merely to avoid the initiation of recoupment.  In some cases, a provider would be better off taking the necessary time (up to 180 days) to ensure that its files are complete and its arguments in support of payment are fully developed prior to filing their appeal.  Filing an incomplete appeal within the 60 day deadline may ultimately harm, rather than help a provider’s chances of prevailing on appeal.

Ultimately, CMS’ Final Rule makes it more important than ever that health care providers undergoing overpayment review get qualified, experienced legal advice to help guide them through the administrative appeals process.

Should you have any questions regarding these issues, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.

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