Transcript Medicare Audits and Appeals

Medicare Audits and Appeals
Scott McBride, Partner
Baker & Hostetler
Jason Pinkall, Senior Counsel
Tenet Healthcare Corporation
Payment Demands
• We’re here for the money . . .
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Recovery Audit Contractors
• RACs are paid a contingency fee for identifying
Medicare overpayments and underpayments
• RACs started as a demonstration project in
California, Florida, and New York in 2005
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Recovery Audit Contractors
• Some stats
– Over 3 years, over $1 billion recovered
– 96% of improper payments were overpayments
– 22.5% of overpayment determinations were appealed
– 7.6% of overpayment determinations were reversed
– 85% of overpayment recoveries were from inpatient
hospital services
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Recovery Audit Contractors
• Concerns raised over the RACs
– Qualifications of the reviewers
– Caps on number of records requested
– Decisions inconsistent with Medicare policies
– Payment incentive to RACs even if recovery is later
overturned
• CMS made some adjustments
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Recovery Audit Contractors
• Rollout of permanent program by 2010
– CMS split the country into four regions and
selected one RAC to be responsible for each
region
 Diversified Collections Services, Inc. (Region A)
 CGI Technologist and Solutions, Inc. (Region B)
 Connolly Consulting Associates, Inc. (Region C)
 HealthDataInsights, Inc. (Region D)
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RAC Jurisdictions
HealthDataInsights, Inc.
Diversified Collection
Services, Inc.
CGI Technologies and
Solutions, Inc.
Connolly Consulting
Associates, Inc.
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Recovery Audit Contractors
• Types of review
– Automated Review

Data mining to find inaccurate payments
(e.g., duplicate services)
– Complex Review

Medical record review to determine if payment is
accurate (e.g., medical necessity)
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Recovery Audit Contractors
• Areas of review
– One-day stays
– Level of care (inpatient rehabilitation)
– Units of services
– DRG groups
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Zone Program Integrity Contractors
• Consolidation of PSCs and MEDICs
• Coordination of claims processing and benefit
integrity activities
• Ensure integrity of ALL Medicare-related claims
– Parts A, B, C, D, Home Health, DME, Hospice and
coordination of Medi-Medi data matches
• Use “innovative data analysis methodologies” for
early fraud detection and prevention
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Zone Program Integrity Contractors
• Zone 1 – SafeGuard Services
• Zone 2 – NCI, Inc. (previously AdvanceMed)
• Zone 3 – Cahaba Safeguard Administrators
• Zone 4 – Health Integrity
• Zone 5 – NCI, Inc. (previously AdvanceMed)
• Zone 6 – Cahaba Safeguard Administrators
• Zone 7 – SafeGuard Services
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Zone Program Integrity Contractors
• Activities
– Performing data analysis and data mining
– Conducting medical reviews in support of benefit
integrity
– Supporting law enforcement and answering
complaints
– Investigating fraud and abuse
– Recommending recovery of federal funds through
administrative action
– Referring cases to law enforcement
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ZPIC Audits
• Unannounced or limited notice
• Review of claims
– Prepayment or post payment

Potential for payment suspension
– Probe sample or statistical sampling and
extrapolation
• Employee or beneficiary interviews
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ZPIC Audits
• Referral to law enforcement
• Referral to overpayment recoupment
• Provider education
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Statistical Sampling
• A Medicare contractor may not use
extrapolation to determine overpayment
amounts…unless…
– There is a sustained or high level of payment
error; or
– Documented educational intervention has
failed to correct the payment error
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Statistical Sampling
• Sustained or high level of payment error can be
determined by:
– Error rate determinations by MR unit, PSC, ZPIC
– Probe samples
– Data analysis
– Provider / supplier history
– Information from law enforcement investigations
– Allegations of wrong-doing by current or former employees
of provider or supplier
– Audits or evaluations conducted by the OIG
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Statistical Sampling
• Additional factors to consider
– Number of claims in universe
– Dollar values associated with claims
– Available resources
– Cost effectiveness of expected sampling results
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Medicare Administrative Contractors
• Medicare Prescription Drug, Improvement,
and Modernization Act of 2003
• Consolidated Fiscal Intermediaries (FI) and
Carriers
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Statistical Sampling
• Conducting data analyses comparing providers
to peers
• Outliers receiving audit requests
• High error rates can result in prepayment
reviews
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Managing the Payment Dispute
Plan Ahead
• Develop a plan of action before a demand is
made or an investigation begins
• Train and instruct employees and personnel
• Establish a team
• Designate person as audit point of contact
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Managing the Payment Dispute
Plan Ahead
• Develop audit policies and procedures
• Monitor audit targets
• Know who receives audit letters
• Conduct internal audits
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Managing the Payment Dispute
Do your due diligence
• Determine the scope of the issues
• Conduct factual due diligence
• Understand the regulatory/reimbursement
scheme
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Appeals
Appeals Process
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Medicare Claims Appeals Process
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Medicare Claims Appeal
Level 1 – Redetermination
• To the MAC
• On the record
• 120 days to appeal
• Only 30 days to stop recoupment
• Interest accrues
• Decision within 60 days
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Medicare Claims Appeal
Level 2 – Reconsideration
• To the Qualified Independent Contractor
• On the record
• 180 days to appeal
• Only 60 days to stop recoupment
• Interest accrues
• Decision within 60 days
• All evidence must be submitted
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Medicare Claims Appeal
Level 3 – Administrative Law Judge
• To an ALJ
• In person, video, or phone
• 60 days to appeal
• Cannot stop recoupment
• Amount in controversy requirement
• Decision within 90 days
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Medicare Claims Appeal
Level 4 – Medicare Appeals Council
• To the MAC
• Can request a hearing and briefing
• 60 days to appeal
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Medicare Claims Appeal
Level 5 – Federal Court
• To Federal District Court
• Briefing and request for hearing
• 60 days to appeal
• Amount in controversy requirement
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Managing the Payment Dispute
Manage the appeal
• Be prepared to appeal
• Understand reasons for denial
• Interest
• Recoupment
• Sampling issues
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Managing the Payment Dispute
Manage the appeal
• Internal and external reviews
• Position papers
• Contractor participation
• Evidentiary issues
• Involvement of legal counsel
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Managing the Payment Dispute
Consider legal defenses
• Without fault
• Limitation of liability
• Treating physician rule
• Reopening rules
• Constitutional challenges
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Managing the Payment Dispute
Manage the appeal
• Track payment disputes and appeals
• Cost benefit analysis
• Corrective action
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Case Example
• Medicare claims appeal process
– Provider received notice by PSC that all
claims in audit were not medically
necessary
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Questions?
Scott McBride, Baker & Hostetler
[email protected]
Jason Pinkall, Tenet Healthcare Corporation
[email protected]
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