Medicare Audit and Appeals: Practical Advice on Preparing for and Responding to RAC, ZPIC, and MAC Audits. February Overview

Transcription

1 Medicare Audit and Appeals: Practical Advice on Preparing for and Responding to RAC, ZPIC, and MAC Audits February 2012 B. Scott McBride Baker & Hostetler LLP Anna M. Grizzle Bass, Berry & Sims PLC Overview Overview of Audit Initiatives RAC ZPIC MAC Preparing for an Audit Responding to an Audit Appealing Unfavorable Results 1

2 RACs Recovery Audit Contractors (RACs) Responsibilities Identify improper Medicare overpayments and underpayments Detect and correct past improper payments Implement actions to prevent future improper payments Paid on contingency fee basis Source: Section 302 of the Tax Relief and Healthcare Act of 2006 (Pub. L ) 2

3 RAC Jurisdictions HealthDataInsights, Inc. CGI Technologies and Solutions, Inc. Diversified Collection Services, Inc. Connolly Consulting Associates, Inc. Claims Review Review claims on post-payment basis Uses same Medicare policies as FIs, Carriers, and MACs including LCDs, NCDs and Medicare Manuals Areas of focus chosen based on data mining techniques, OIG / GAO reports, CERT reports, and experience and knowledge of staff Approved audit issues posted on RAC contractor website Source: Statement of Work for the Recovery Audit Program; available at: 3

4 Automated Review Uses data analysis to determine improper payments Does not involve a review of medical records Consumes less resources than a complex review and conducted more frequently Complex Review Uses medical records to further analyze the claim when data analysis is insufficient Identifies discrepancies between the medical records and the claim Provider has 45 days to submit medical records Review must be completed within 60 days of receipt of medical records Sends the hospital a determination letter with its findings 4

5 Expansion of RAC Program Expands RAC program to Medicare Parts C and D and Medicaid States required to contract with a RAC for review of Medicaid claims by December 31, 2010 RACs paid on contingency basis States required to have appeals process Source: Section 6411 of the Patient Protection and Affordable Care Act (Pub. L ) ZPICs 5

6 Zone Program Integrity Contractors (ZPICs) 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 Source: Chapter 4 Benefit Integrity; Medicare Program Integrity Manual; available at: ZPIC Zones Zone Geographic Area 1 American Samoa, California, Guam, Hawaii, Mariana Islands, Nevada 2 Alaska, Arizona, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming 3 Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, Wisconsin 4 Colorado, New Mexico, Oklahoma, Texas 5 Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia Connecticut, Delaware, District of Columbia, Maine, Maryland, 6 Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont 7 Florida, Puerto Rico, U.S. Virgin Islands 6

7 ZPICs Zone 1 SafeGuard Services, LLC Zone 2 NCI, Inc. (previously AdvanceMed) Zone 3 Cahaba Safeguard Administrators, LLC Zone 4 Health Integrity, LLC Zone 5 NCI, Inc. (previously AdvanceMed) Zone 6 Cahaba Safeguard Administrators, LLC Zone 7 SafeGuard Services, LLC ZPIC Responsibilities Fraud case development Fraud complaint processing Provider education related to fraud investigations Ability to initiate payment suspensions and provider exclusions Source: Chapter 4 Benefit Integrity; Medicare Program Integrity Manual; available at: 7

8 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 Source: Chapter 4 Benefit Integrity; Medicare Program Integrity Manual; available at: Audit Results Referral to law enforcement Baptist Healthcare Systems, Inc. and Hardin County, Kentucky d/b/a Hardin Memorial Hospital 8/2011 Settlement Forward findings to MAC for overpayment recoupment action Provider education Source: Chapter 4 Benefit Integrity; Medicare Program Integrity Manual; available at: 8

9 Use of Statistical Sampling for Overpayment Estimation 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 42 U.S.C. 1395ddd(f)(3) Use of Statistical Sampling for Overpayment Estimation 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 wrongdoing by current or former employees of provider or supplier Audits or evaluations conducted by the OIG Source: Chapter 8 Benefit Integrity; Medicare Program Integrity Manual; available at: 9

10 Use of Statistical Sampling for Overpayment Estimation Additional Factors to Consider Number of claims in universe Dollar values associated with claims Available resources Cost effectiveness of expected sampling results Source: Chapter 8 Benefit Integrity; Medicare Program Integrity Manual; available at: MACs 10

11 Medicare Administrative Contractors (MAC) Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), Pub. Law , Subtitle B, Section 911 (42 USC 1395kk-1) Consolidated Fiscal Intermediaries (FI) and Carriers Medicare Administrative Contractors 11

12 Coming Soon: Consolidated A/B MAC Jurisdictions MACs Are... Responsible for: Provider enrollment Processing claims Auditing providers Authorized to make Local Coverage Determinations (LCD) 42 USC 1395kk-1(a)(4) Re-bid every five (5) years 42 USC 1395kk-1(b)(1)(B) 12

13 MAC Audits Conducting data analysis comparing providers to peers Outliers receiving audit requests High error rates can result in prepayment reviews Preparing for an Audit 13

14 Preparing for an Audit Do you know your contractor jurisdiction? Do you know what to do with an audit letter? Letter will not be on CMS or State letterhead, but on contractor letterhead Letter will be addressed to the individual the State has on file with the provider Preparing for an Audit Establish interdisciplinary committee Designate an employee responsible as the audit point of contact Coordinate the audit Assist contractor in setting up interviews Contact provider s counsel Implement intake and tracking process 14

15 Preparing for An Audit Develop audit policies and procedures Identification of requests Record locations and responsibilities Use of past audit results Requests for interviews Stay up to date on contractors and audit targets Conduct internal audits Responding to an Audit 15

16 Responding to Audits Provide complete documentation Don t rush the process BUT meet deadlines Don t sign statements certifying completeness of records until confirming that all documents have been provided Retain or request a copy of all documents provided to contractor Appealing Unfavorable Results 16

17 Medicare Appeal Process Redetermination from the Intermediary/Carrier Reconsideration from a Qualified Independent Contractor Appeal to an administrative law judge Appeal to the Medicare Departmental Appeals Board Appeal to a federal district court Source: 42 C.F.R. Part 405, Subpart I Redetermination Phase MAC Issues Notice of Initial Determination 120 calendar days Provider Requests Redetermination MAC Issues Notice of Redetermination 17

18 Reconsideration Phase FI/Carrier Issues Notice of Redetermination 180 calendar days Provider Requests Reconsideration Adjudicated by Qualified Independent Contractor 60 calendar days QIC Renders Decision Appeal to an Administrative Law Judge QIC Renders Decision 60 calendar days Provider Requests ALJ Hearing 90 calendar days ALJ Renders Decision 18

19 Appeal to the Medicare Department Appeals Board ALJ Renders Decision 60 calendar days Provider Requests Appeals Council Review 90 calendar days Appeals Council Renders Decision Appeal to a Federal District Court Appeals Council Renders Decision 60 calendar days Appeal to Federal District Court 19

20 Beware of Recoupment Redetermination Reconsideration Subsequent levels of appeal Source: 42 C.F.R. Part 405, Subpart C Tips for Appeals Be prepared to appeal Know appeal timelines and requirements for each appeal level Understand reasons for denial at each level of appeal Look out for contractor participation 20

21 Tips for Appeals Develop multi-disciplinary appeals team Establish tracking system Review EVERY claim for possible appeal Procedural Did the contractor follow rules? Substantive Was claim medically necessary? Tips for Appeals Consider Legal Defenses Provider Without Fault (SSA Section 1870) Waiver of Liability (SSA Section 1879(a)) Treating Physician s Rule Reopening Regulations Constitutional Challenges 21

22 Tips for Appeals If extrapolation is used, consider: Were allowed claims included in overpayment sample calculation? Were calculations performed correctly at each level? Tips for Appeals Challenging Sampling Methodology No administrative or judicial review of determination of high level of payment error BUT determination must be made Failure to follow one or more requirements in Benefit Integrity Manual does not necessarily affect validity Not sufficient to argue better or more precise methods are available 22

23 Tips for Appeals Challenging Sampling Methodology Can challenge validity of sampling methodology based on the actual statistical validity of the sample as drawn and conducted Contractor has burden of establishing sample was in fact random and statistically valid Challenge Validity of Sampling Methodology Is the sample representative? Does the sample base represent the sampling frame? Do the errors in the sample base represent the errors in the sampling frame? Does the sampling frame properly represent the target population to which the sample is being projected? 23

24 Challenge Validity of Sampling Methodology Is the sample statistically significant? Is the sample size reliable? Is the sample within the required precision and confidence levels? Challenge Validity of Sampling Methodology Recent Cases Maxxim Care EMS, Inc. v. Sebelius, 2011 U.S. Dist. LEXIS (S.D. Tex. Nov. 29, 2011) Gentiva Healthcare Corp. v. Sebelius, Civil Action No (D.D.C.), filed Feb. 25, Cross Motions for Summary Judgment pending. 24

25 Tips for Appeals When submitting appeal: Obtain internal and external reviews (medical, coding, statistical) as appropriate Develop position paper with supporting medical records and expert opinions Questions B. Scott McBride Baker & Hostetler LLP Anna M. Grizzle Bass, Berry & Sims PLC 25