Medicaid

Published on: January 28, 2015

CMS Announces New RAC Contract for DME, Home Health and Hospice Claims

On December 30, 2014, the Centers for Medicare & Medicaid Services (CMS) announced that they had awarded the Region 5 Recovery Audit Contract (RAC) to Connolly, LLC. CMS contracts with RACs to identify and correct improper payments. Connolly, which has been the RAC for Region C, was awarded the Region 5 contract which covers claims for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS), home healthcare and hospice providers. With the awarding of the new RAC contract focused on DME, home health and hospice providers, these provider types can expect increased scrutiny of their Medicare claims.

CMS also outlined a number of “improvements” to the RAC program that will take effect with each new RAC contract awarded, beginning with the Region 5 contract awarded on December 30, 2014.

One of the “improvements” brought by the new RAC program is that the CMS has reduced the RAC look-back period to 6 months from the date of service for patient status reviews where hospitals submitted the claim within 3 months of the date of service. Previously, the look-back period for RACs was from 3 years and hospitals had to submit a claim within one year from the date of service in order to comply with the timely filing rules, leaving hospitals with the inability to rebill denials from patient status reviews. Another improvement is that the CMS has established new Additional Documentation Request (ADR) limits based on a provider’s compliance with Medicare rules. Specifically, the ADR limits will align with providers’ denial rates (i.e., providers with low denial rates will have lower ADR limits), and ADR limits will be adjusted as a providers’ denial rates decrease.

Published on: September 15, 2014

CMS Holds Conference Call on 68% Settlement Offer

by Wachler & Associates, P.C.

On Tuesday, September 9, the Medicare Learning Network (MLN) hosted a Conference Call regarding the newly revealed 68% settlement offer from the Centers for Medicare & Medicaid Services (CMS) for short-stay inpatient status claims. In an effort to ‘more quickly reduce the volume of inpatient status claims’ pending in the appeals process, CMS offered an administrative agreement to any hospital willing to withdraw all of their pending short-stay inpatient status claim denial appeals in exchange for partial payment of 68% of the net allowable amount as long as the date of admission was prior to October 1, 2013 and the claim is either pending appeal or the appeal has been filed and is pending review. In its release, CMS further noted that only acute care hospitals and critical access hospitals are eligible to submit a settlement request; psychiatric hospitals, inpatient rehabilitation facilities, long-term care hospitals, cancer hospitals, and children’s hospitals are not permitted to submit a settlement request.

The purpose of the Conference Call was to provide interested stakeholders an opportunity to speak with CMS representatives in order to ask questions and obtain a better understanding of how this settlement process will work. Wachler & Associates healthcare attorneys participated in the Conference Call and came away with a deeper understanding of how this process works, but there are still unanswered questions. First and foremost, submissions for settlement are due by October 31, 2014. If your entity cannot meet this deadline, you may ask CMS for an extension. Additionally, short-stay inpatient status claims pending at any level of the appeals process are eligible to be submitted for settlement.

In sum, eligible claims must also meet four requirements: (1) they must be pending in the appeals process or within the timeframe to appeal; (2) the date of admission for the claim must have been prior to October 1, 2013; (3) the denial must be based on a patient status review; and (4) the claim must not have been previously withdrawn or re-billed for payment under Part B. During the Conference Call participants requested clarification of whether the rebill for Part B must not have been submitted or whether it must not have been paid. CMS indicated that it would provider further clarification on this issue through the Frequently Asked Question (FAQ) page on CMS’ website for hospitals. In agreeing to settle all claims for the 68%, the entity agrees to the dismissal of all associated claims (the entity may not pick and choose which ones to settle) and agrees that the settlement will serve as the final administrative and legal resolution of all eligible claims. However, this resolution does not resolve any potential False Claims Act reviews by the Department of Justice. Additionally, eligible claims include claims from any Medicare contractor so long as the denial was based on a patient status review.

Published on: September 8, 2014

CMS Announces Settlement Offer to Hospitals

by Wachler & Associates, P.C.

In an effort to reduce the amount of cases currently pending appeal, specifically the backlog at the Administrative Law Judge (ALJ) level of appeal, the Centers for Medicare & Medicaid Services (CMS) announced an offer to hospital appellants to settle their patient status claim denials currently pending appeal. In exchange for hospitals’ withdrawal of their pending appeals, CMS has offered to pay hospitals 68% of the net payable amount of the claims.

In its announcement, CMS lists a number of conditions that must be met for a hospital to be eligible for settlement, including:

The provider must be either (1) an Acute Care Hospital, including those paid via Prospective Payment System, Periodic Interim Payments, and Maryland waiver, or (2) Critical Access Hospitals (CAH). Those entities which are not eligible for the settlement include: psychiatric hospitals paid under the Inpatient Psychiatric Facilities Prospective Payment System, Inpatient Rehabilitation Facilities (IRFs), long-term care hospitals (LTCHs), cancer hospitals and children’s hospitals.
The claim was not provided to a Medicare Part C (i.e., Medicare Advantage) enrollee.
The claim was denied upon review by a CMS audit contractor (e.g., Recovery Audit Contractor (RAC), Medicare Administrative Contractor (MAC), Zone Program Integrity Contractor (ZPIC) or Comprehensive Error Rate Testing Contractor (CERT)).
The claim was denied was based on the CMS contractor’s finding that the patient was inappropriately treated as an inpatient as opposed to outpatient.
The first day of the inpatient admission was before October 1, 2013.
The claim denial was timely appealed, or the provider has not yet exhausted their appeal rights.
The provider did not subsequently rebill and receive payment for the claim under Medicare Part B.

For those hospitals with eligible claims, CMS has provided instructions on its website detailing the process for hospitals to participate in the settlement offer. In order to take advantage of the settlement offer, hospitals must submit their settlement requests by October 31, 2014.

Published on: June 19, 2014

Michigan Medicaid Audit Reveals $160 Million in Overpayments for Home Care Services – Should Providers be Worried?

by Wachler & Associates, P.C.

The results of an audit conducted by the state of Michigan were released on Tuesday, June 17, 2014. The audit found that the state Medicaid program improperly spent $160 million over a three-year period – from October 2010 through August 2013 – on home care services under the Medicaid Home Help Program.

Home care services provide assistance to those residents with disabilities or cognitive impairments who wish to remain in their own homes instead of a care facility. Some services provided include assistance with eating, bathing, and dressing. The overpayments were the result of state administrators of the Medicaid Home Help program failing to obtain invoices and other required documents from service providers. Home care services differ from home health services in that home health services provide continuous medical treatment that a beneficiary would normally receive in an outpatient or inpatient setting, in the home, over extended periods of time. In order to be reimbursed for home health services, home health providers must also meet numerous requirements that home care providers are not subject to (e.g., the face-to-face requirements under the Affordable Care Act).

The Medicaid Home Help Program serves about 67,000 people per year and expenditures from the program account for about 18 percent of all joint federal-state Medicare spending in the state of Michigan. What is particularly important that providers should take note of – and keep a watchful eye out for – is that the state of Michigan may be required to pay back nearly $100 million to the Federal government under regulations governing the matching of state Medicaid expenditures with Federal dollars. If such a repayment is required, the state will likely seek to recoup part, if not all, of the funds from providers who were improperly paid. In fact, the director of the Department of Human Services (DHS) – one of the state agencies responsible for administering the program – says it has already begun the process of recouping payments from some providers. However, DHS notes that it does question the estimated amount of improper payments, challenging it on the basis that it was extrapolated from a small sample size.

Published on: June 13, 2014

Physicians Nationwide Face Terminations as Insurance Plans Move to Narrow Networks

by Wachler & Associates, P.C.

In the past year, thousands of health care providers across the country have been excluded without cause from their insurance plan’s provider networks. The proliferation of narrow networks – defined as health insurance plans that limit the doctors and hospitals available to their subscribers – has caused a backlash amongst providers, who claim the insurers’ terminations will squeeze beneficiaries on access to care, and disrupt longstanding patient-physician relationship, emergency department care, and referral networks.

Although the Affordable Care Act did not create narrow networks, the reform law accelerated the trend by limiting insurer’s ability to continually lower benefits and exclude unhealthy individuals. Without other ways to compete, controlling providers and limiting choice is the insurers’ best way to lower premiums and thus compete on the exchanges. Insurers claim that narrow networks control costs and allow for higher quality, better coordinated care.

In most cases, however, patients choose insurance plans based on the plan’s access to a specific provider network. Patients subscribe and re-subscribe to one-year commitments with the primary intent to access their long-term primary care physicians or other regularly seen providers. Patients often build relationships with these providers over several years, even decades. Now, without notice or the ability to switch their plan, the patients’ physician is suddenly out-of-network and cost-prohibitive.