(January 21, 2013): Medicare appeals of denied claims for services are somewhat common. In years past, both health care providers and members of their staff have represented themselves or their practice in the administrative process. While the rules of participation are quite lenient, the process has significantly changed over the last decade. Moreover, in recent years, contractors working for the Centers for Medicare and Medicaid Services (CMS) have assumed a much greater role in the Medicare appeals process. Hearings conducted in today’s administrative appeals of alleged Medicare overpayments are likely to be quite different from those conducted even a few years ago. Should you decide to represent yourself in a hearing before an Administrative Law Judge (ALJ), you must be prepared to respond to a number of relatively new challenges. As set out below, the current administrative process is really the result of several consecutive legislative changes to the Medicare appeals process.
I. The Enactment of “BIPA” Was the First of Many Changes to the Medicare Appeals Process:
The “Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000″ (also referred to as “BIPA” )amended Section 1869 of the “Social Security Act” (Act), resulting in a number of changes. Several of the changes implemented under BIPA included:
The legislation established a consistent, uniform process for handling both Medicare Part A and Part B administrative appeals;
BIPA introduced a new level of appeal for Part A claims, making it so that it now tracked the Part B claims appeals process;
The legislation revised the appeal deadlines for filing Part A and Part B claims appeals and also applied the same deadlines to both Part A and Part B claims;
The legislation identified ”deadlines” for CMS contractors at the first level of appeal (Medicare Administrative Contractors, or “MACs”) to issue a “Redetermination’’ appeal decision;
BIPA also created a second level of appeal which would be heard by a type of CMS contractor known as a Qualified Independent Contractor (QIC) to conduct a “Reconsideration’’ of the MAC’s previously issued redetermination decision;
BIPA established a uniform “amount in controversy threshold” which must be met in order for a health care provider or supplier to appeal a reconsideration denial decision to the Administrative Law Judge (ALJ) level;
Required that each level of appeal conduct a de novo review of the evidence.
II. The MMA Further Refined the Medicare Appeals Process:
Medicare appeals were further changed with the passage of the “Medicare Prescription Drug, Improvement, and Modernization Act of 2003″ (MMA). Several of the refinements made to the Medicare appeals process under the MMA included, but were not limited to:
Under the MMA, the ALJ hearing process was transferred from the Social Security Administration (SSA) to an agency reporting directly to the Secretary, HHS, known as the “Office of Medicare Hearings and Appeals” (OMHA).
The legislation established a process for a health care provider to seek and “expedited” judicial review;
The MMA required that health care providers present their evidence to be considered early in the appeals process so that it could be considered at the second level of appeals.
Under the MMA, health care providers could not seek an administrative or judicial review of a determination by the Secretary of a “sustained or high levels of payment errors”; and
These revisions, along with a number of other changes, have dramatically changed the way that Medicare appeals are conducted. Equally significant, CMS contractors (including Zone Program Integrity Contractors (ZPICs), Recovery Audit Contractors (RACs) and even representative of the QIC now routinely show up at ALJ hearings (as a “participant” not as a “party”)in order to present their reasoning for denying the claims.
While the proceeding is technically “non-adversarial” in nature. The participation in the ALJ hearing of medical and statistical experts working for ZPIC can greatly complicate your handling of a Medicare appeal.
Over the years, our attorneys have represented a wide variety of Part A and Part B providers and suppliers in Medicare hearings before an ALJ. There are no guarantees in litigation. Nevertheless, if you want to maximize your chances of presenting a persuasive case, we recommend that you retain experienced legal counsel to represent you as early in the process as possible.
Robert W. Liles, Esq. serves as Managing Partner at Liles Partner, PLLC. Robert and the firm’s other attorneys have years of experience representing health care providers in the Medicare appeals process. Should you have a question, call Robert for a free consultation: 1 (800) 475-1906.
Be Prepared — ZPIC and QIC Representatives Are Increasing their Participation in ALJ Appeal Hearings.
(February 12, 2011): Over the last year, we have noted an important trend when representing Medicare providers in post-payment overpayment cases at the Administrative Law Judge (ALJ) level of appeal. Medicare contractors are actively attending and participating in many ALJ hearings. The virtual “Courtroom” where ALJ hearings are typically held (most ALJ hearings are now held by teleconference or video-teleconference — few are conducted in person) are no longer attended by only a provider, its attorney and the Judge. Instead, it is now relatively crowded, requiring the scheduling of experts and the testimony of various clinical specialists — representing not only the provider, but also one or more government Medicare contractors. Although mostly limited to “big-box” cases where the amount at issue ranges from $100,000 to several million dollars, we have even had Medicare contractors attend ALJ hearings involving alleged overpayments of only a few thousand dollars.
This proverbial ”sea change” in how the government and its contractors view their role in working to help ensure that alleged overpayments stay in place demands that providers reconsider their decision to represent themselves in ALJ appeals hearings. While many health care providers feel comfortable handling an ALJ hearing on their own when the only parties on the teleconference or on the video-teleconference are the Judge and the Medicare providers themselves, it is a completely different situation when one or more contractors elects to participate in the hearing and present their denial reasons to the ALJ. The purpose of this article to examine this trend and discuss a number of considerations that Medicare providers should be taking into account when deciding whether or not to represent themselves at ALJ hearing, without an attorney.
I. Rights / limitations of a ZPIC or other contractor when acting as a “participant” in an ALJ hearing.
Pursuant to 42 C.F.R. § 405.1010, both representatives from the Centers for Medicare and Medicaid Services (CMS) and its contractors may participate in an ALJ hearing. Moreover, an ALJ may request that CMS or its contractors participate in a hearing. As the regulatory provisions provide:
“(a) An ALJ may request, but may not require, CMS and/or one or more of its contractors to participate in any proceedings before the ALJ, including the oral hearing, if any. CMS and/or one or more of its contractors may also elect to participate in the hearing process.
(b) If CMS or one or more of its contractors elects to participate, it advises the ALJ, the appellant, and all other parties identified in the notice of hearing of its intent to participate no later than 10 calendar days after receiving the notice of hearing.
(c) Participation may include filing position papers or providing testimony to clarify factual or policy issues in a case, but it does not include calling witnesses or cross-examining the witnesses of a party to the hearing. (emphasis added).
(d) When CMS or its contractor participates in an ALJ hearing, the agency or its contractor may not be called as a witness during the hearing.
(e) CMS or its contractor must submit any position papers within the time frame designated by the ALJ.
(f) The ALJ cannot draw any adverse inferences if CMS or a contractor decides not to participate in any proceedings before an ALJ, including the hearing.”
While ZPICs and other contractors may not “cross-examine” a Medicare provider or its witnesses during an ALJ hearing, contractors have easily worked around this regulatory obstacle. Rather than confront a provider directly, a contractor will merely point out their concerns or make a specific point to the Judge. The presiding ALJ will often then merely ask the provider the same questions first raised by the ZPIC. As a result, a Medicare contractor never has to cross-examine the provider but his points and questions are still ultimately answered. For instance, the following very simple exchange might occur during an ALJ hearing:
“ALJ: I would like to hear the Medicare contractor’s views regarding the medical necessity of this E/M claim.
ZPIC: Your honor, the 1997 E/M Guidelines clearly reflect the types of situations which would qualify as “High Complexity.” We don’t believe that the facts here represented that level of complexity. Additionally, the physician is now alleging that the patient suffered from multiple serious co-morbities which complicated the medical decision-making required. Where is there proof that the patient had these conditions?
ALJ: Dr. Smith, can you point out where these medical conditions are documented in the medical records submitted?”
In most instances, a provider should expect the ZPIC’s challenge to be much more pointed that the example cited above. In any event, the bottom line is simple, under the current rules, it remains quite easy for a ZPIC to point out weaknesses in the provider’s case. ALJ’s are seeking to determine the facts and decide whether the claims at issue qualify for coverage and payment. When a ZPIC raises a concern, most ALJ’s will want to follow-up with the provider in order to obtain an answer regarding the points raised.
Over the last year, we have also seen a marked increase in the number of cases where a ZPIC has chosen to file a post-hearing brief with the Court. This can be especially problematic for providers who choose to represent themselves at hearing because the ZPICs have used this as an opportunity to present new evidence and/or new arguments that were never introduced at lower levels of the case or at ALJ hearing. As a result, the provider is often placed in the position of trying to respond to new arguments, never before presented by the ZPIC or other contractors, at the last minute in the ALJ hearing process.
II. Who will show up from the ZPIC’s or PSC’s office?
Medicare providers should keep in mind that both ZPICs and Program Safeguard Contractors (PSCs) are quite sophisticated and are becoming more and more active in the ALJ hearing process, often replying to arguments presented to the Judge by a Medicare provider. Moreover, it is not uncommon for a ZPIC to send as many as three professionals to participate in an ALJ hearing — all of whom may ultimately defend the ZPIC’s initial denial of the provider’s Medicare claims. One of the ZPIC representatives very well may be an attorney. A ZPIC contractor against whom we regularly litigate often sends a licensed attorney to respond to pro-provider arguments that the claims qualify for payment because they were not reopened in a timely fashion or that even if the claims do not meet all of the applicable coverage requirements, any overpayment would still qualify for “waiver.” The ZPIC’s attorney may also respond to a number of limited arguments presented by a provider when trying to get a statistical extrapolation declared invalid by an ALJ. It has been our experience that the ZPIC’s attorney is typically polished, smart and prepared. When facing an unrepresented physician, the ZPIC’s lawyer would likely easily address any non-medical arguments presented by a Medicare provider. A second ZPIC or PSC representative likely to participate in an ALJ hearing is the contractor’s statistician. He is responsible for defending the legitimacy of the statistical sampling and extrapololation methodology employed by the ZPIC or PSC when extrapolating the damages in a case. While a significant number of physicians and other health care providers are knowledgeable in statistics and mathematics, few know or understand the regulatory requirements which must be met before a contractor may engage in statistical sampling and seek to extrapolate damages. As a result, few unrepresented providers have been able to convince an ALJ that an extrapolation is invalid. While the additional cost of engaging a statistical expert to review a ZPICs extrapolation actions can be costly, it is likely required if a provider hopes to have a reasonable chance of challenging an extrapolation. Finally, it is quite common for a ZPIC to send a third representative (typically a Registered Nurse) to provide clinical testimony in support of the ZPIC’s decision not to cover and pay certain claims, often citing the ZPIC’s own unique interpretation of LCD and LMRP requirements (an interpetation withwhich we often disagree). Overall, an unrepresented provider is often unprepared to address and respond to the many legal, statistical and clinical arguments presented by the various ZPIC participants in an ALJ hearing.
While ZPIC and PSC representatives are now regularly participating in ALJ hearings, they are not the only contractors who are prepared to rise to the challenge. Representatives of the Qualified Independent Contractor (QIC) have also been participating in some ALJ hearings. In cases we are aware of, the QIC representative has been an attorney working for the contractor. Nevertheless, there is nothing to prevent a clinician working for the QIC from attending the ALJ hearing and presenting the QIC’s arguments why certain claims did not qualify for coverage and payment. Additionally, in at least one fairly recent case we handled on behalf of a provider, a Medicare Administrative Contractor (MAC) clinical reviewer chose to participate in the ALJ hearing.
III. What are the differences between a “party” to a hearing and a “participant” in a hearing?
As 42 C.F.R. § 405.1010(c) reflects, there are significant differences between a “party” to an ALJ hearing and a “participant” in an ALJ hearing. As we previously discussed, a “participant” does not have the right to call witnesses or cross-examine parties or their witnesses. Additionlly, participants do not have the right to object to the issues described in the ALJ’s “Notice of Hearing.” As CMS has argued, these elements are “cornerstones” of the adversarial process. In the absence of these cornerstones, a proceeding is not considered to be adversarial, even though multiple Medicare contractor representatives may participate in an ALJ hearing. As a result, since the proceeding was not adversarial in nature, a provider will be precluded from seeking to have its attorney’s fees paid under the “Equal Access to Justice Act,” even though it ultimately prevailed at hearing. While perhaps technically correct, the idea that ALJ hearings are truly “non-adversarial” when Medicare contractors choose to join as a “participant” is flatly untrue. ZPIC lawyers, clinical reviewers and expert statisticians have proven themselves to be highly capable and effective when arguing their positions, despite the fact that their role in the hearing was considered to be “non-adversarial” in nature. To their credit, even though both sides may be passionate about their position on the issues, all of the ALJs we have practiced before have kept a strict rein on the proceedings.
IV. Depending on the specifics of a case, many providers would be better off engaging experienced legal counsel to represent their interests in an ALJ appeal.
When faced with an administrative overpayment case that is highly complex, involves a significant alleged overpayment or is based on a statistical extrapolation of damages, we recommend that a Medicare provider retain experienced legal counsel to represent the provider’s interests. While it is possible for an experienced attorney to step in and handle a case at a later level of administrative appeal (such as the QIC and ALJ levels), it becomes more and more difficult to do so in an effective fashion as the case progresses. We have seen a number of cases where a provider has failed to properly establish the record in a case and important supportive documentation stood the chance of not being admitted in the record because the provider failed to introduce it at lower levels of appeal. An experienced attorney can help ensure that the record is properly constructed and no important legal defenses or payment arguments have been left out of the case. Additionally, legal counsel will be able to assess the coverage requirements, identify possible holes in the provider’s case and work with the provider to identify witnesses and obtain supportive evidence to hopefully fill any gaps in the provider’s case.
As a final point, it essential to remember that the trier of fact, the ALJ responsible for presiding over the provider’s case, is a lawyer, not a clinician. Arguably, an experienced defense lawyer — rather than a clinician — is uniquely trained to analyze the legal issues presented, organize the provider’s facts and present the relevant evidence to the ALJ (another attorney). Together, a supporting clinician and a skilled attorney can be a formidable team when presenting a Medicare provider’s case. Moreover, this team is best equipped to respond to any arguments raised by participating ZPIC representatives during the overpayment hearing.
Robert W. Liles and other Liles Parker attorneys in the Firm’s Health Law Practice have extensive experience representing Part A and Part B health care providers and suppliers around the country in ZPIC, PSC and RAC overpayment appeals cases . Should you have any questions about your case or the overpayment appeals process, please feel free to call Roberts for a complimentary consultation. He can be reached at 1 (800) 475-1906.
(June 28, 2010): In Part I of this series, we reacquainted you with the design and purpose of the now permanent Recovery Audit Contractor (RAC) Program. Although RACs largely focused on inpatient care during CMS’ demonstration program, RACs are a real threat to small providers that don’t have the intensive compliance programs in place that most hospitals do. In this Part II, we will look at how physicians, home health, hospice, and durable medical equipment (DME) suppliers can prepare for and respond to RAC audits.
Even if no demands are issued, the RAC audit process exposes providers to substantial risks and administrative costs. Fortunately, both can be managed with thoughtful implementation of effective compliance measures and a well-planned response to an audit.
I. How Should Physicians and Other Small Providers Prepare for a RAC Audit?
It is essential that the preparation for a RAC audit begins before the RAC ever knocks on the door. Deadlines are tight and so physicians without effective compliance programs in place run the risk of claims being denied simply because they can’t show that they crossed all the “T’s” and dotted the “I’s” in time.
Physicians, home health, hospice, and DME suppliers can begin to target their compliance efforts by examining the reasons for denials issued during the recently concluded RAC demonstration program. During the course of that program, of improper payments identified,
- 35% were the result of incorrect coding;
- 8% were the result of insufficient documentation (including failure to submit information on time or to submit enough information); and
- 17% were the result of other issues, such as basing claim payments on outdated fee schedules or duplicate claims. Meanwhile,
- 40% were deemed medically unnecessary.
In other words, 60% of denied claims had nothing to do with patient care. No one goes into health care to spend their time creating and perfecting paper trails but long experience with Medicare tells us that doing so cannot be avoided.
Thus, to prepare for a RAC audit, as a provider you can:
- Implement and continuously review your compliance plan;
- Review the documentation requirements for each item or service you provide;
- Maintain your files thoroughly and consistently;
- Do NOT rely on other suppliers or providers for record-keeping; and
- Make sure all your documentation is legible.
II. How Should Physicians and Other Small Providers Respond to a RAC Audit?
The RAC audit process starts with a request for records, upon which the provider has a strictly enforced 45 days (plus mail time) to respond. Upon receiving a request for records, providers can take several steps to protect yourselves:
- Take care before conducting an internal review of the claims requested. While an internal analysis can be invaluable, you want to avoid creating a non-privileged paper trail of identified problems that could later be referred to law enforcement if a RAC makes a fraud referral.
- Review past claims audits and evaluations to determine whether the requested claims have been previously evaluated.
- Remember that filing deadlines are strictly enforced so calculate early on when appeals must be filed and begin to gather supporting documentation.
- Consider retaining an expert in extrapolation.
- Do NOT assume the contractor’s arguments are meritorious. Carefully review Medicare policy to see if the RAC cited it correctly.
- Retain duplicates of any information that you submit to the RAC.
III. Is Anything Different in the Permanent Program?
Small providers with experience being audited in the demonstration program should be on the lookout for the several changes implemented under the permanent program that may help protect them. For instance,
- RACs’ Contractor Medical Directors are now required to speak with a provider regarding a claim denial, if requested, and a reviewer must provide credentials upon request.
- The reason for the review must be listed on a request for records letters and overpayment letters.
- The look-back period is reduced to 3 years from 4.
- CMS has set uniform limits on the number of records that can be requested in a 45 day period (sliding scale).
More details concerning these and other changes to the permanent program can be found in the CMS RAC Demonstration Evaluation Report, available at https://www.cms.gov/RAC/02_ExpansionStrategy.asp.
Robert W. Liles and other Liles Parker attorneys have extensive experience handling complex Medicare appeals cases. We represent health care providers in the administrative appeals process. Are you being audited? Call us for a complementary consultation regarding your case. We can be reached at: 1 (800) 475-1906.