Medicare

Published on: March 6, 2012

CMS Provides List of Providers Sent Notices to Revalidate Their Medicare Enrollment

As part of healthcare reform, Section 6401(a) of the Affordable Care Act requires all providers and suppliers who enrolled in the Medicare program prior to March 25, 2011 to revalidate their provider enrollment under the new screening criteria. Providers and suppliers who enrolled after March 25, 2011 do not need to revalidate at this time as they have already been screened.

Medicare Administrative Contractors (MACs) will be sending revalidation notices to individual providers and suppliers between now and March 23, 2015. Providers and suppliers must complete the enrollment forms within 60 days of receiving the request from the MACs. If a provider fails to submit the provider enrollment forms after receiving the request, it may lead to a suspension of the provider’s Medicare billing privileges.

Providers and suppliers may not revalidate their provider enrollment until they have received a revalidation notice from their MAC. The CMS website provides a list of all the providers and suppliers to whom revalidation notices have been sent (See “download” section). In case a revalidation notice has been sent but never received, every provider is encouraged to check the list to determine whether or not they are currently expected to revalidate. If you are listed, but have not received the request, you should contact your Medicare contractor.
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Published on: February 27, 2012

Zone Program Integrity Contractor (ZPIC) Audits

by Wachler & Associates, P.C.

Zone Program Integrity Contractors (ZPICs) were created by CMS primarily to investigate suspected fraud, waste, and abuse. ZPICs perform similar audit activities as other Medicare contractors, but with a reactive and proactive focus on the identification of possible Medicare fraud. ZPICs employ “innovative” strategies to engage in the early detection of fraud. The strategies include data analysis, pursuing proactive leads from other Medicare contractors or other sources such as the Fraud Investigation Database (FID), law enforcement, news media or the Internet.

Once a ZPIC initiates an audit, it has the authority to conduct prepayment and postpayment medical review, perform announced and/or unannounced onsite audits, interview staff and beneficiaries, and suspend provider payments pursuant to approval from CMS. While any type of Medicare contractor audit can be disruptive to a provider’s business, it is extremely important for a health care professional to recognize when his or her practice is the focus of a ZPIC audit or investigation. This is because ZPICs also have the authority to refer providers and beneficiaries to law enforcement, refer providers for exclusion from the Medicare program, and utilize statistical sampling and extrapolation to determine overpayment amounts. For this reason, it is imperative that Medicare providers aggressively defend against a ZPIC investigation.

There are seven zones in which ZPICs are assigned, and providers should be aware of the ZPIC assigned to their zone. More information on ZPICs and be found on our website.
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Published on: February 14, 2012

RAC Posts First Home Health Issue

by Wachler & Associates, P.C.

Connolly Healthcare, RAC for Region C, has recently added its first home health agency issue to its CMS-approved issues list.

The first posted issue targeting home health agencies is an automatic review that will focus on partial episode payments (PEPs). The Medicare Claims Processing Manual defines a PEP as “a reduced episode payment that may be made based on the number of service days in an episode (always less than 60 days, employed in cases of transfers or discharges with readmissions).” The approved home health issue is described below.

Incorrect billing of home health partial episode payment claims. Incorrect billing of home health PEP claims identified with a discharge status 06 and another home health claim was not billed within 60 days of the claim from date. Additionally, MCO effective dates are not within 60 days of the PEP claim.

Home health agencies should be on high alert for RAC audits. In addition, providers may expect additional home health issues to be added for review in the future, including complex reviews.
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Published on: February 9, 2012

Medical Billing Professional Sentenced to Prison for Defrauding Medicare and Medicaid

by Wachler & Associates, P.C.

On January 19, 2012, the Fifth Circuit Court of Appeals upheld the conviction and sentence of a medical billing professional for defrauding Medicare and Medicaid. Sylvia Delgado, a medical billing expert with thirty years of medical coding and billing experience, was the medical director of a group psychotherapy company that performed counseling to the elderly. Delgado formed the company (Synergy) in 2002 with Dr. Rafael Solis, a licensed psychiatrist who works primarily at his office in San Antonio, and Robert Rael, a Licensed Master Social Worker. Dr. Solis performed initial evaluations of patients, prescribed medication, and conducted individual counseling sessions. Thereafter, Dr. Solis would refer his patients to Synergy for group psychotherapy. Dr. Solis did not conduct or supervise the group session, but rather the sessions were conducted by Rael. However, Delgado, who performed all of the billing, would bill the group sessions under Dr. Solis’ Medicare and Medicaid numbers because Rael was not authorized under Texas law to have his own billing numbers. The Medicare and Medicaid reimbursement proceeds were split between Delagado and Rael; Delgado received thirty percent and Rael received seventy percent. Additionally, Synergy began paying Dr. Solis $2,000 per month in January 2005. Between 2002 and 2005, the total amount that Medicare and Medicaid paid to Synergy for the therapy was $1.4 million.

While group psychotherapy can be billed to Medicare and Medicare, the sessions conducted by synergy did not meet the requirements necessary for proper billing. For instance, a provider is typically not allowed to bill multiple sessions for one patient in one day, and the use of more than one group therapy code will be rejected in most circumstances. However, Delgado was able to get around this problem after discovering a billing technique which involved attaching a modifier to the billing code. The modifier was used by Delgado to bill up to six sessions per day per patient.

Another group psychotherapy requirement that Synergy failed to satisfy was that which requires the therapy to be conducted by one of the designated healthcare professional listed in the regulations. Rael was not qualified to conduct the therapy, and even though a non-physician may conduct the therapy so long as the regulation’s supervision requirements are met, Dr. Solis had admitted to investigators that he did not supervise the therapy. Furthermore, there was evidence that Delgado had been informed that Rael was not authorized to conduct the group psychotherapy sessions that took place at Synergy. Moreover, it was also discovered that Rael was not even the one who conducted most of the therapy sessions. The majority sessions were actually conducted by Robert Martinez, who has a sixth grade education.

Finally, the therapy sessions were conducted in a manner that consisted of watching television, eating meals, socializing, being read to, playing loteria, and celebrating birthdays. Despite the fact that the regulations prohibit describing these activities as group therapy, Delgado billed Medicare and Medicaid up to six group psychotherapy sessions per day per patient. In addition, Delgado also billed for group psychotherapy when both Dr. Solis and Rael were out of town.
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Published on: February 6, 2012

CMS Announces New Start Date for Prior Authorization of PMDs and Recovery Audit Prepayment Review Demonstration Programs

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) has announced that the Prior Authorization of Power Mobility Devices (PMDs) and the Recovery Audit Prepayment Review Demonstration Programs are expected to move forward on or after June 1, 2012. On December 30, 2011, the two demonstrations were delayed from their initial January 1, 2012 start date. Although CMS initially announced the demonstration programs in November 2011, CMS decided to delay the programs’ implementations after receiving considerable feedback from the provider communities affected by the programs.

In its most recent announcement, CMS stated that the demonstrations programs will begin once they receive Paperwork Reduction Act (PRA) Office of Management and Budget control numbers.

The Prior Authorization of PMDs demonstration program will be initiated in California, Illinois, Michigan, New York, North Carolina, Florida, and Texas. These are all states with high populations of fraud- and error- prone providers. The demonstration will implement a prior authorization process for scooters and power wheelchairs.

As a result of comments CMS received from providers and suppliers, significant modifications have been made to the Prior Authorization of PMDs demonstration program. Most importantly for suppliers, the 100% pre-payment review phase has been removed. Many interested parties had raised the concern that suppliers would be adversely financially impacted by the 100% pre-payment review phase, thus CMS eliminated it and the demonstration will begin immediately with the prior authorization phase. There was also concern regarding the inconsistency of suppliers in some states experiencing 100% pre-payment review, while suppliers in other states were required to receive prior authorizations. The pre-payment review phase was planned to last from between three to nine months for each state, so while one state might only be in that phase for three months, another state might be for nine. As a result, all demonstration states will start prior authorization at approximately the same time instead of the staggered start times as originally planned.

CMS also received many concerns about the ordering physician possibly not being in the best position to submit the prior authorization request. Under the modified demonstration, the physician/treating practitioner or supplier, on behalf of the physician/treating practitioner, may perform the administrative function of submitting the prior authorization request.

The Pre-Payment Review Demonstration Program did not receive any significant changes and will be implemented as proposed in November.

Published on: January 30, 2012

CMS’ Q4 Audit Program Activity: $353.7 Million in Improper Payments, Increased Focus on Medical Necessity Claims

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) publishes quarterly reports identifying improper payment figures and the top audit issues by region. The most recent “Q4” report, covering July 1, 2011 to September 30, 2011, demonstrates a 22% increase in the total correction amount from the previous quarter.

During this period, CMS identified $277.1 million in overpayments and $76.6 million in underpayments, for a total correction amount of $353.7 million. This figure represents a dramatic increase from the two previous quarterly improper payment totals of $208.9 million (Q2) and $289.3 million (Q3). The boost, which is consistent across all regions, indicates that individual recovery auditors nationwide are increasing their efforts to identify incorrect payments, and further supports the industry-wide belief that audits are expanding.

The Q4 recovery audit program update also demonstrates that auditors are increasingly targeting “medical necessity” claims, with a focus on supporting documentation and the setting in which these services are provided. The Q4 update highlighted the following “top issues per region” of the recovery audit program:

Region A – Renal and Urinary Tract Disorders: (Medical Necessity) Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients with renal and urinary tract disorders needs to be complete and support all services provided.

Region B – Surgical Cardiovascular Procedures: (Medical Necessity) Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients with surgical cardiovascular procedures needs to be complete and support all services provided.

Region C – Acute Inpatient Admission Neurological Disorders: (Medical Necessity) Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation for patients admitted with neurological disorders needs to be complete and support all services provided.

Region D – Minor Surgery and other treatment billed as Inpatient: (Medical Necessity) When beneficiaries with known diagnoses enter a hospital for a specific minor surgical procedure or other treatment that is expected to keep them in the hospital for less than 24 hours, they are considered outpatient for coverage purposes regardless of the hour they presented to the hospital, whether a bed was used, and whether they remained in the hospital after midnight.

Published on: January 27, 2012

CMS Clarifies Procedure for MAC Claims Against DMEPOS Suppliers’ Surety Bonds

by Wachler & Associates, P.C.

All Medicare suppliers of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) must obtain and maintain a surety bond of at least $50,000 to participate in the Medicare program. A Centers for Medicare and Medicaid Services (CMS) recent transmittal, effective February 21, clarifies this requirement and describes the procedures that DME Medicare Administrative Contractors (MACs) must follow when making claims against a provider’s surety bond.

Under 42 CFR § 424.57(d)(5)(i), a surety is liable to CMS for 1) the amount of any unpaid claim, plus accrued interest, for which the supplier of DMEPOS is responsible, and 2) the amount of any unpaid claim, civil monetary penalty (CMP) or assessment imposed by CMS or the Office of Inspector General (OIG) on the DMEPOS supplier, plus interest.

First, the DME MACs will notify the surety that payment of a claim must be made to CMS within 30 days. The letter must 1) identify the specific amount to be paid, 2) be accompanied by “sufficient evidence” of the unpaid claim, 3) state that payment shall be made via check or money order and that the Payee shall be the DME MAC, and 4) identify the address to which payment shall be sent. The DME MAC will notify the supplier when payment has been made.

DMEPOS suppliers must then obtain an additional surety bond within 30 calendar days of that letter, and submit to the National Supplier Clearinghouse (NSC) additional coverage of an amount that equals or, in the case of a final adverse action, exceeds $50,000. Suppliers must be aware that failure to submit such additional surety bond coverage within 30 days may result in the NSC revoking the supplier’s Medicare billing privileges.

If the DMEPOS supplier successfully appeals, CMS will notify the surety via letter and repay the surety within 30 days. Although a supplier may want to avoid the necessity of securing an additional surety bond, the DMEPOS appeals process may take longer than 30 days and prudent DMEPOS suppliers should obtain additional coverage to ensure continued Medicare billing privileges.

Published on: January 25, 2012

CMS Publishes Important Reminder to Providers and Suppliers Regarding Referred or Ordered Services and Items

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) recently published an important reminder for all providers and suppliers who provide services and items ordered or referred by other providers and suppliers. The reminder states that Medicare will only pay for items or services for Medicare beneficiaries that have been ordered by a physician or eligible profession enrolled in the Medicare program, and that the individual National Provider Identifier (NPI) of the referring provider or supplier must be included in any claim to Medicare.

CMS also emphasizes that providers and suppliers must ensure that any items or services submitted in Medicare claims were referred by Medicare-enrolled providers of a specialty type authorized to order or refer such services. Further, Medicare will only reimburse for specific items or services ordered or referred by providers or suppliers that are authorized by statute and regulation. Specifically, CMS highlighted that:

Chiropractors are not eligible to order or refer supplies or services of Medicare beneficiaries. Consequently, all services ordered or referred by a chiropractor will be denied.

Home Health Agency (HHA) services may only be ordered or referred by a Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.) or Doctor of Podiatric Medicine (DPM). Thus, claims for HHA services ordered by any other practitioner specialty will be denied.

Portable X-Ray services may only be ordered by a Doctor of Medicine or Doctor of Osteopathy. Portable X-Ray services ordered by any other practitioners will be denied.

Through this “important reminder,” CMS emphasizes the necessary standards and documentation for healthcare providers and suppliers to successfully bill for providing referred services or items. The reminder demonstrates CMS’ continued focus on ensuring proper referral arrangements and supporting documentation.

Published on: December 30, 2011

CMS Announces Delay of Power Mobility Device Demonstration Program

by Wachler & Associates, P.C.

On December 29, the Centers for Medicare and Medicaid Services (CMS) announced that it would delay the start of the Prepayment Review and Prior Authorization of Power Mobility Devices (PMDs) Demonstration Program. CMS originally announced the demonstration program on November 15 and followed the announcement with special Open Door Forums explaining the program’s implications for providers and suppliers. During the Open Door Forums suppliers expressed their concerns that the program would have dire consequences for suppliers of power mobility devices. Some suppliers also questioned CMS’ failure to consult with industry leaders prior to announcing the demonstration program.

The industry’s pressure was effective. CMS’ decision to delay the start of the program was a result of “intensive collaboration” between CMS and AAHomecare. Industry leaders also obtained support from a number of members of Congress who wrote a letter to Marilyn Tavenner, the Acting Administrator of CMS, to delay the implementation of the program and work with industry leaders. In a press release, AAHomecare’s Vice President of Government Affairs, Walt Gorski stated, “we are pleased that CMS has taken a deep breath to understand the power mobility sector and the impact that any widespread prepayment review would have on Medicare beneficiaries and homecare providers.”

It is unclear at this time how long the start of the program will be delayed. CMS stated that it will review the comments and suggestions provided by industry stakeholders and will provide at least 30 days’ notice prior to the demonstration program implementation date.

Published on: December 23, 2011

Ten Highlights from the Proposed Physician Payment Sunshine Act Rule

by Wachler & Associates, P.C.

In the December 19, 2011 Federal Register, CMS published a Proposed Rule to implement the “Physician Payment Sunshine Act” portion of Patient Protection and Affordable Care Act (PPACA), or health care reform, which requires drug, medical device, biological and medical supply manufacturers to track and report payments made to physicians and teaching hospitals. The Proposed Rule clarifies several components of the Physician Payment Sunshine Act, including the following:

1. Applicable manufacturers must report the required information to CMS in an electronic format by March 31, 2013 and on the 90^th day of each calendar year thereafter.

2. The Physician Payment Sunshine Act will apply to any manufacturer whose products are sold or distributed in the United States regardless of where they are manufactured.