Audit

Published on: October 1, 2024

Medicare Payment Suspensions: Shortcut to Revocation

The number of Medicare payment suspensions issued by the Centers for Medicare & Medicaid Services (CMS) has grown in recent years. Although generally framed as a temporary and less severe sanction than an outright revocation of Medicare billing privileges, a suspension of Medicare payments can be just as devastating to a Medicare provider or supplier and can in many cases put the provider out of business, leading to significant procedural and due process concerns regarding CMS’ frequent use of payment suspensions.

A Medicare payment suspension is a suspension of a Medicare-enrolled provider or supplier’s ability to receive payment from the Medicare program. Suspensions are usually scheduled to last for 180 days, but they can be extended essentially indefinitely. While a provider may technically continue to treat Medicare patients and submit Medicare claims for payment – the claims simply will not get paid until the suspension ends – for a provider with a high percentage of Medicare patients, a sudden, unforeseen, and indefinite interruption of all Medicare payments can wreak havoc on cash flow and destroy a practice or business as quickly and effectively as any enrollment or licensing sanction. Payment suspensions are also often issued without notice, meaning that a provider’s Medicare payments may abruptly stop, often days before the provider receives a letter informing them of the suspension.

Given the devastating effects of a suspension of Medicare payments, one may think there may be significant procedural, due process, or appeal protections in place for providers. That is not the case. Although federal law only explicitly authorizes CMS to issue payment suspensions where there is a “credible allegation of fraud,” CMS has implemented regulations that also give it the authority to suspend payments any time CMS believes it has “reliable information that an overpayment exists” and that broadly expand the definition of what constitutes a “credible allegation of fraud.” These regulations also give CMS extremely broad authority to issue suspensions without first notifying the provider, while giving the provider very limited appeal rights.

Published on: September 24, 2024

Recent Updates to the OIG Work Plan

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently updated its Work Plan, adding several new audits and reviews. The OIG Work Plan forecasts the projects that the OIG plans to implement over the foreseeable future. These new initiatives are a signal of which areas the OIG views as warranting heightened scrutiny, and providers in these areas should take note of the OIG’s actions.

One of the most notable projects on the OIG Work Plan focuses on auditing Medicare claim lines for which the payment exceeds the actual charge. CMS contracts with various Medicare Administrative Contractors (MACs) to, among other things, process and pay claims submitted by providers for items and services covered under Medicare Part B. Generally, Part B payments are based on a fee schedule, prospective payment system, or some other method, rather than a cost or charge basis. In most cases, a healthcare provider’s billed charges exceed the amount that Medicare pays for Part B items and services. Under this Work Plan item, the OIG is focused on Medicare payments that exceed the billed charges, which can be overpayments. Providers should keep a close watch on their Medicare remittance advices or explanation of benefits to be aware of any payments that exceed the corresponding billed charge.

In terms of specific healthcare services, the OIG is turning its attention to hyaluronic acid injections, commonly used to treat knee osteoarthritis. While these injections are widely used for joint pain, there are ongoing questions about whether they are worth the cost and being used appropriately. The OIG’s audit will review Medicare reimbursements for these treatments and whether providers are following proper billing procedures.

Published on: August 8, 2024

Does Medicare Audit Dentists?

by Wachler & Associates, P.C.

Simply put, Medicare rarely audits dentists because Medicare generally does not cover or pay for dentistry. However, doctors of dental surgery and doctors of dental medicine may perform far more complex surgical procedures than the examinations, cleanings, and fillings that are in the common perception of what a dentist does. Where Medicare does cover and subsequently audits services provided by dentists, the issues raised are generally complex and nuanced. Dentists who bill Medicare should be familiar with the Medicare claims appeal process and some of the issues specific to Medicare coverage of dental services.

The Medicare claims appeal process is a lengthy and complex 5-step process. After the provider receives a determination of claim denials and demand to repay an alleged overpayment, the first appeal step is Redetermination, often before the same Medicare contractor that issues the initial claim denials. Second is Reconsideration before a different Medicare contractor. Third is review by an Administrative Law Judge (ALJ), which may include a hearing – often telephonic – where the provider can present evidence and testimony. Fourth is appeal to the Medicare Appeal Council, the highest adjudicatory body within the Department of Health and Human Services. Fifth is appeal to federal court, which is often limited in scope and may not be appropriate in every case. It can take several months, if not years, for a case to fully work its way through the Medicare claims appeal process, depending on the circumstances.

Medicare audits of services provided by dentists nearly always involve the “dental services exclusion.” By law, the Medicare program does not cover services performed in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting the teeth, which is generally considered to include the periodontium. Procedures on other parts of the mandible or maxilla may be covered where they are medically necessary and meet other coverage criteria. Because of the key distinction between procedures in connection with the teeth and structures directly supporting the teeth, dentists who bill Medicare may consider how they document procedures to clearly document procedures which may not be subject to the coverage exclusion. Procedures on the teeth and periodontium may also be covered where they are inextricably linked to a primary covered service. Further, Medicare contractors may mistakenly interpret the statutory coverage exclusion to mean that Medicare never covers any services provided by a dentist, simply because they are performed by a dentist. However, this assertion is generally inconsistent with the Social Security Act and Medicare guidance.

Published on: August 6, 2024

2025 PFS Proposed Rule Includes 6-Month Suspension on the 60-Day Refund Rule

by Wachler & Associates, P.C.

On July 31, 2024, the Centers for Medicare & Medicaid Services (CMS) published the Calendar Year 2025 Physician Fee Schedule (PFS) Proposed Rule. Among other changes, the 2025 PFS Proposed Rule includes additional proposed changes to the so-called “60-day rule” regarding returning identified overpayments. Initially established by the 2010 Affordable Care Act, the 60-day rule requires healthcare providers to report and return Medicare and Medicaid overpayments within 60 days of identifying such overpayments. The potential consequences for failing to comply with the 60-day rule are severe, and can result in the imposition of a civil monetary penalty or an alleged violation of the Federal False Claims Act. Providers should pay close attention to the potential changes to the 60-day rule included in the 2025 PFS Proposed Rule.

The 2025 PFS Proposed Rule is not the first time that CMS has proposed changes to the 60-day rule, and it likely will not be the last. In December 2022, CMS published a proposed rule that would amend the regulations regarding the standard for an “identified overpayment” under the Medicare program. Specifically, the December 2022 Overpayment Proposed Rule proposed to remove the existing “reasonable diligence” standard and adopt by reference the Federal False Claims Act definition of “knowing” and “knowingly.” To date, CMS has not finalized these proposals with respect to identified overpayments under the Medicare program.

In the 2025 PFS Proposed Rule, CMS states that it is retaining the proposals published in the December 2022 Overpayment Proposed Rule, and proposes further changes to revise the regulations regarding the timeframe for reporting and returning overpayments. Currently, the applicable regulations require that an overpayment be reported and returned by the later of: (1) the date which is 60 days after the date on which the overpayment was identified; or (2) the date any corresponding cost report is due, if applicable. However, under the 2025 PFS Proposed Rule, the deadline for returning a reported overpayment would be suspended under specified circumstances. The 2025 PFS Proposed Rule would create an entirely new regulatory provision to suspend the deadline for reporting and returning overpayments for up to 6 months to allow time for providers to investigate and calculate overpayments. Previously, in 2016 rulemaking regarding reporting and returning of overpayments, CMS discussed that under the “reasonable diligence” standard, providers would be allowed a 6-month period in which to conduct a good-faith investigation of credible information of a potential overpayment. At the time of the 2016 rulemaking, CMS had not proposed to implement this 6-month period into the applicable regulations.

Published on: July 15, 2024

Claims Audits and Medical Documentation

by Wachler & Associates, P.C.

Physicians and other clinical providers expend tremendous amounts of time and effort accurately documenting the medical care that they provide to patients. Usually, the documentation is intended to be read and understood by another physician, either the physician who created the record or another treating physician. It may also be intended to be read by billers or coders who are familiar with the practice and the type of documentation at issue. But there is another, sometimes very consequential, audience that reviews medical records: reviewers at government agencies or contractors, or commercial insurance companies that audit claims submitted by the practice.

All payors periodically audit claims submitted to them by providers. Medicare and Medicaid generally use outside contractors to perform medical review of the documentation created by providers, but may perform some review in-house, Commercial insurance companies may use a mix of contracted and in-house medical review. Generally, the payor or their contractor will request that the provider submit the medical records or other documentation that supports claims submitted by the provider, review the documentation, and issue findings, usually accompanied by a demand that the provider repay some alleged overpayment based on a deficiency that the payor will claim to have identified in the medical documentation.

The medical records review itself is often performed by nurses, coders, or others that may have a very different level of education, training, and clinical experience than the physician who created the record. Even where the reviewers are ostensibly supervised by physicians, these supervisors often have very high caseloads and rarely have the practical ability to exercise more than cursory supervision of the reviewers. It is therefore relatively common for medical reviewers to misunderstand or misinterpret the documentation they review. Extensive use of abbreviations, specialized shorthand, or clinical jargon with little context are often ripe for this type of reviewer mistake. For example, does “PCA” in a progress note mean “posterior cortical atrophy syndrome” or “posterior cerebral artery stroke”? Does a nurse reviewer with no training or experience in vascular procedures know the difference between Rutherford 3 and Rutherford III? Documentation conventions or usages that would be easily understood by another specialized clinician may not be understood by a contracted nurse reviewer with little to no training or experience in a particular specialty. More often than not, a medical reviewer that does not understand documentation will lead to claim denials.

Published on: May 14, 2024

OIG to Scrutinize Peripheral Vascular Procedures

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently announced that it intends to increase scrutiny of fee-for-service peripheral vascular procedures billed to the Medicare program. Although OIG did not describe the specific actions in intends to take, it appears likely that OIG will conduct data analysis of Medicare claims for vascular services, especially atherectomies and angioplasties; conduct audits of specific providers, likely those with high utilization of vascular services or those with prior audit denials or accusations of improper billing; and also review the program integrity measures that CMS and its contractors have taken to address fraud, waste, and abuse in these procedures.

In explaining the motivation for its review, OIG noted that the use of peripheral vascular procedures in the Medicare population has increased over the past decade. In 2022, Medicare paid more than $600 million for atherectomies and angioplasties with and without a stent in peripheral arteries. These minimally invasive surgeries aim to improve blood flow when arteries narrow or become blocked because of peripheral arterial disease but are recommended only after patients have tried medical and exercise therapy, and have lifestyle-limiting symptoms. OIG also asserted that CMS and whistleblower fraud investigations have identified these surgeries as vulnerable to improper payments.

Our firm has significant experience in representing physician groups and other providers in the defense of Medicare audits of vascular procedures. We have seen many instances in which Medicare contractors have misunderstood clinical terminology or other documentation elements relating to vascular procedures and have inappropriately denied claims or even alleged that the provider has committed fraud based only on the contractor’s own mistaken interpretation of the provider’s medical records. Providers who are audited by the Unified Program Integrity Contractors (UPICs), such as CoventBridge Group, should be particularly vigilant in reviewing any findings or claim denials issued by the UPICs. Such denials are generally appealable through the Medicare claims appeal process and may be partially or fully overturned on appeal. Even where a provider prevails on appeal, a contractor’s spurious fraud allegations can have significant detrimental impacts, including delays in payment, Medicare payment suspensions, and further audits from both Medicare and other payors.

Published on: April 15, 2024

MDHHS Awards New Medicaid Health Plan Contracts

by Wachler & Associates, P.C.

Earlier this month, the Michigan Department of Health and Human Services (MDHHS) awarded Comprehensive Health Care Program contracts for Michigan’s Medicaid health plans. Health plans administered under Michigan Medicaid provide access to healthcare services to nearly 2 million Michigan residents. In this recent award of health plan contracts, nine health plans submitted proposals. The awarded Medicaid contracts are expected to go into effect in October 2024 and carry terms of five years, with three, one-year optional extensions.

The Medicaid health plan contracts were awarded based on Michigan’s 10 Prosperity Regions as follows:

Region 1 – Upper Peninsula Prosperity Alliance: Upper Peninsula Health Plan, LLC.

Published on: April 11, 2024

Senators Request Audit of CMS Internal Oversight Processes

by Wachler & Associates, P.C.

On March 12, 2024, several senators wrote a letter to the Government Accountability Office (GAO) Comptroller General, requesting an investigation into the policies and procedures CMS has in place to prevent Medicare fraud, waste, and abuse. The senators noted that in 2022, GAO estimated there were $47 billion in improper Medicare payments with $1.7 billion being reclaimed, representing a 2.8% recovery rate.

The senators’ letter was likely prompted by a recent investigation from the National Association of Accountable Care Organizations (NAACOS), which uncovered an alleged fraudulent urinary catheter scheme. NAACOS discovered that ten medical device companies went from billing 15 patients for catheters to over 500,000 patients for catheters within a period of two years. This alleged scheme has been estimated to cost CMS over $2 billion and has garnered significant media attention. Of particular concern to the senators is the fact that NAACOS publicly commented on this issue prior to any announcements from CMS.

The senators noted that this alleged scheme highlights “critical vulnerabilities” within CMS’ fraud, waste, and abuse policies. To this point, they requested that the fraud prevention measures of the Medicare Fraud Strike Force, a team with representatives from the Department of Health and Human Services (HHS), Office of Inspector General (OIG), and Federal Bureau of Investigation (FBI), should be investigated by GAO in order to identify weaknesses and areas for improvement.

Published on: April 9, 2024

Providers Continue to be Subject to Wound Care Audits

by Wachler & Associates, P.C.

As we noted previously, Medicare providers of wound care services continue to be the target of audits by Medicare contractors. Wound care services typically involve the application of allografts, skin substitutes, and related products to promote healing and support recovery. Due to the generally high reimbursement rates and need for frequent reapplication of these types of products, the Medicare program views such products as a high risk for improper payments or alleged fraud. Providers who utilize these products for wound care services or who are subjected to audit should understand the contours of an audit and be aware of their rights in responding to an audit.

The Medicare Unified Program Integrity Contractors (UPICs), such as the CoventBridge Group or Qlarant, typically perform these audits. UPICs are charged with the primary goal of investigating instances of suspected fraud, waste, and abuse in Medicare or Medicaid claims. Historically, UPICs are quick to allege that a provider has committed fraud and deny claims for any supposed non-compliance with coverage or documentation requirements, regardless of how minor the perceived deficiency. Providers should be cognizant that a UPIC’s allegation of fraud or non-compliance may bring about significant adverse consequences, especially when such allegations are not disputed. These allegations may be addressed by a timely and well-developed appeal of claims denied by the UPIC.

Wound care services involving skin substitutes and similar products subject to audit are generally denied for reasons such as the following:

Published on: March 26, 2024

OIG Continues to Audit PRF Recipients

by Wachler & Associates, P.C.

A recent report by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) may signal even more scrutiny of healthcare providers who received funds from the Provider Relief Fund (PRF). As we have long predicted, while the PRF was intended as a financial lifeline for the country’s healthcare providers during the height of the COVID-19 pandemic, as the pandemic has cooled, it has become a minefield of compliance issues for healthcare providers and fertile ground for government auditors to demand repayments.

The PRF is a $178 billion fund created by Congress through the CARES Act to provide financial relief to healthcare providers during the COVID-19 pandemic. HHS subdivided the PRF into various general and targeted distributions and assigned the Health Resources and Services Administration (HRSA) to administer the PRF. These distributions were paid to providers in several waves between April 2020 and the present. While this infusion of cash was likely a welcome relief at the time, it came with strings attached. Some of these strings included restrictions on which providers were eligible to receive funds, restrictions on how providers could use the funds, and requirements to report on the use of the funds.

The recent OIG investigation looked at PRF payments made to 150 providers during the PRF Phase 2 General Distributions. The Phase 2 General Distributions required providers to apply for payments and submit documentation. HRSA reviewed these applications and calculated the payment amount to make to provider, mostly based on the provider’s patient care revenue as documented in the application. OIG asserted that, for 17 of the 150 providers it reviewed, HRSA had miscalculated amounts due and had overpaid the providers. OIG recommended that HRSA demand these providers return these funds and that HRSA review all other Phase 2 General Distributions for similar errors HRSA may have made.