AHLA. RR. Part B Claims Substantive and Sampling. Lester J. Perling Broad and Cassel Fort Lauderdale, FL

Transcription

1 AHLA RR. Part B Claims Substantive and Sampling Lester J. Perling Broad and Cassel Fort Lauderdale, FL Andrew Wachler Wachler & Associates PC Royal Oak, MI Institute on Medicare and Medicaid Payment Issues March 26-28, 2014

2 Part B Claims Substantive and Sampling American Health Lawyers Association Institute on Medicare and Medicaid Payment Issues March 28, 2014 Lester J. Perling, Esq., CHC Broad and Cassel Fort Lauderdale, Florida Andrew B. Wachler, Esq. Wachler & Associates Royal Oak, MI OIG Work Plan: New Areas of Focus Hospital services billed at new patient rate Hospitals must identify patients as either a new patient or an established patient (Established means the patient has been a registered inpatient or outpatient of the hospital within the past 3 years) Nationwide review of cardiac catheterization and heart biopsies Review Medicare payments for right heart catheterizations and heart biopsies billed during same operative session Bone marrow and stem cell transplants Whether the required diagnoses are present Indirect medical education payments Ensuring payments were properly calculated 2 1

3 2014 OIG Work Plan: New Areas of Focus DME Equipment and Supplies Scrutiny on face to face exam payments Nebulizer machines and related drugs Medical necessity in compliance with utilization guidelines and documentation requirements Chiropractic services Medical necessity and documentation issues; maintenance therapy Portable X Ray devices Transportation costs and non covered services 3 RAC Announcements Outpatient hospitals must report appropriate HCPCS codes for separately payable drugs Medical documentation will be reviewed, medical necessity review excluded for the time being Home health visits are NOT separately payable during an inpatient hospital or SNF stay Blood glucose monitor device bundling Certain supplies are included in allowance for monitor device and are not separately payable E/M CPT codes meant only for an inpatient hospital setting that are used for patients in an outpatient setting inappropriately Inappropriate use of anesthesia code modifier to indicate at what point anesthesia was terminated during the procedure Multiple drug class screenings may only be reported once per patient encounter (effective Jan. 1, 2011) 4 2

4 Jimmo v. Sebelius U.S. District Court for the District of Vermont Rule of thumb Improvement Standard was being used by Medicare contractors in making claim determinations for coverage of skilled care Improvement Standard: lack of restoration potential Skilled care: SNF, HHA and outpatient therapy CMS denied establishing rule of thumb Improvement Standard Court never ruled on validity of allegations Case was settled 5 Jimmo v. Sebelius Medicare coverage clarified, not expanded Medicare policy recognizes instances where no improvement is expected Skilled care required in order to prevent or slow deterioration and maintain maximum practicable level of function Lack of restoration potential cannot serve as the sole basis for denying coverage However, coverage is not available when care needs can be safely and effectively addressed by non skilled personnel Coverage depends on whether skilled care is required Must be supported by medical documentation 6 3

5 Jimmo v. Sebelius Settlement agreement Revise relevant CMS program manuals (revised 1/14/2014) HHA: Medicare Benefit Policy Manual, Chapter 7, SNF: Medicare Benefit Policy Manual, Chapter 8, 30.3 Therapy: Medicare Benefit Policy Manual, Chapter 15, Educational Campaign Program Transmittal MLN article Updated1 800 MEDICARE scripts National conference calls First call held on 12/19/2013 Claims Review Review random sample of coverage decisions Review individual claim determinations 7 Jimmo v. Sebelius Relevant CMS program manual revisions for outpatient therapy (See Benefit Policy Manual, Chapter 15, 220.2) Skilled therapy services may be necessary to improve a patient s current condition, to maintain the patient s current condition, or to prevent or slow further deterioration of the patient s condition. ( A). Medicare coverage does not turn on the presence or absence of a beneficiary s potential for improvement from the therapy, but rather on the beneficiary s need for skilled care. ( B) EXAMPLE: A patient with Parkinson s disease is nearing the end of a rehabilitative physical therapy program and requires the services of a therapist during the last week(s) of treatment to determine what type of exercises will contribute the most to maintain function or to prevent or slow further deterioration of the patient s present functional level following cessation of treatment. In such situations, the establishment of a maintenance program appropriate to the capacity and tolerance of the patient by the qualified therapist, the instruction of the patient or family members in carrying out the program, and such reassessments and/or reevaluations as may be required may constitute covered therapy because of the need for the skills of a qualified therapist. ( D) 8 4

6 Woodfill v. Secretary of Health and Human Services Case No (6 th Cir. Feb. 27, 2014) Coverage denied for implantable infusion pump Plaintiff previously had spinal cord stimulator installed Coverage denied based on a limitation contained in a National Coverage Determination ( NCD ) Limitation: pump is contraindicated for patients with other implanted programmable devises since crosstalk between devices may inadvertently change the prescription Plaintiff argued the NCD limitation did not apply to her because the pump did not present any risk of crosstalk 9 Woodfill v. Secretary of Health and Human Services 6 th Circuit Court upheld coverage denial The Secretary has categorically barred implantable infusion pumps from coverage where a patient has already received an implanted electronic device. Plaintiff did not challenge the interpretation of the categorical bar Only challenged the bar did not apply to her Secretary did not abuse her discretion in applying the bar The facts suggest the categorical bar may deserve further consideration However, the Appeals Council is not the proper forum 10 5

7 Strand Analytical Laboratories v. Sebelius U.S. District Court for the Southern District of Indiana Administrative Law Judge found DSPA test was medically necessary and a covered service payable under Medicare DSPA testing is reimbursable by Medicare as a diagnostic test that is used in the diagnosis and treatment of prostate cancer. Medicare Appeals Council reversed the ALJ Three substantively identical cases pending in the United States District Court for the Southern District of Indiana appealing the Appeals Council decision 11 Strand Analytical Laboratories v. Sebelius Administrative record contained expert testimony, physician statements, and documentation that treating physicians used DSPA testing as part of the testing cycle for prostate cancer. DSPA testing is the only test that can eliminate occult provenance error. This error, if undetected, can lead to misdiagnosis and inappropriate treatment. Strand performed the test upon a physician order only for putatively positive cancer specimens. 12 6

8 Strand Analytical Laboratories v. Sebelius Is DSPA testing a medically necessary service? No payment may be made under Part B for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. Section 1862(1)(A) of the Social Security Act. Is DSPA testing a covered diagnostic service? Section 1861(s)(3) of the Social Security Act defines medical and other health services to include diagnostic laboratory tests Section 1833 and 1861 of the Act provides for payment of clinical laboratory services under Medicare Part B. Clinical laboratory services involve the biological, microbiological, serological, chemical, immunohematological, hematological, biophysical, cytological, pathological, or other examination of materials derived from the human body for the diagnosis, prevention, or treatment of a disease or assessment of a medical condition. Medicare Benefit Policy Manual, Chapter 15, 80. Did the Appeals Council exceed its authority under the Medicare Act by inappropriately re weighing the factual record? Was the administrative record improperly expanded? Was the appropriate standard used by the Appeals Council to review the ALJ decision? 13 Appeals Council: Waiver of Liability Waiver of Liability Section 1879(a) of the Social Security Act Under waiver of liability, even if a service is determined not to be reasonable and necessary, payment may be rendered if the provider or supplier did not know, and could not reasonably have been expected to know, that payment would not be made. Appeals Council consistently finding that that a provider has actual or constructive knowledge of non coverage through CMS notices, including: Program manuals Bulletins Other written guides or directives from Medicare contractors See In the Case of Barnes Healthcare Services, 2013 WL (H.H.S); In the Case of Apria Healthcare, 2013 WL (H.H.S.). 14 7

9 ALJ Appeals: Request Requirements 42 C.F.R (a) 1. Beneficiary name, address and HICN 2. Name and address of appellant (if not beneficiary) 3. Name and address of designated representatives (if appropriate) 4. Medicare Appeal Number (assigned by QIC) 5. Date(s) of service 6. Reasons for disagreement with QIC s decision 7. Statement of any additional evidence to be submitted and the date it will be submitted 15 ALJ Appeals: Beneficiary Notice The appellant must also send a copy of the request for hearing to the other parties. Failure to do so will toll the ALJ's 90 calendar day adjudication deadline until all parties to the QIC reconsideration receive notice of the requested ALJ hearing. 42 C.F.R (b). An ALJ may dismiss a request for hearing when the appellant abandons the request for hearing. An ALJ may conclude that an appellant has abandoned a request for hearing when the ALJ hearing office attempts to schedule a hearing and is unable to contact the appellant after making reasonable efforts to do so. 42 C.F.R (b). The dismissal of a request for hearing is binding, unless it is vacated by the MAC. 42 C.F.R (b). 16 8

10 ALJ Appeals: Beneficiary Notice 28% rate of dismissal at the ALJ level of appeal ALJ s instructions for providing notice to the beneficiary you must submit written proof that you have [provided a copy of the hearing request] by sending the ALJ evidence demonstrating that you have, in fact, sent a copy of the request for hearing to each beneficiary, along with documentation showing the date you forwarded the copy of the request. For example, send the ALJ a copy of a letter or Request for Hearing that you sent to the beneficiary, along with one of the following: 1. A copy of a signed certified mail receipt; 2. A copy of a signed delivery confirmation ticket; or 3. A statement with the name and address of the beneficiary, along with documentation showing the date you forwarded a copy of the appeal request to the beneficiary 17 ALJ Appeals: OMHA Appellant Forum s Best Practices Prominently list Medicare Appeal Number on your request Ensure beneficiary information matches Medicare Appeal Number List beneficiary s full HICN Include first page of QIC decision or prominently list full name of QIC Document Proof of Service to other parties Do not submit courtesy copy to QIC Submit only one request per Medicare Appeal Number Mail request via tracked mail to OMHA Central Operations Do not submitted evidence already submitted to lower level Do not attach evidentiary submissions or submit additional filings to OMHA Central Operations Wait until an ALJ is assigned and submit directly to ALJ 18 9

11 Appeals Council: Beneficiary Notice In the case of Mat Su Regional Medical Center Vacated ALJ dismissal Complied with the ALJ s instructions by submitting a letter to the beneficiary, a U.S. Postal Service receipt showing delivery of the letter to the beneficiary s address, and a facsimile confirmation showing that the appellant transmitted copies of these documents In order to fully comply with the beneficiary notice requirement, an appellant is required to provide a copy of the full request to each party, including any briefs and new evidence submitted. 19 Appeals Council: Beneficiary Notice In the case of St. Camillus Health & Rehabilitation Center Upheld ALJ dismissal Although the Appeals Council acknowledged that the response letter included an enclosure, the Appeals Council could not ascertain what was enclosed (i.e., whether the request for hearing was enclosed such that the appellant complied with the ALJ s instructions). It is the appellants burden to provide the required notice to the other parties; therefore, it must demonstrate in some way that it sent a copy of the Request for Hearing to the beneficiary, either with the initial filing, or in response to a subsequent instructions by the ALJ 20 10

12 Appeals Council: Beneficiary Notice In the case of Laurence of Oakland Appellant faxed to the ALJ: A copy of Attachment A to the ALJ s instructions; A copy of a spreadsheet identifying the beneficiaries, the HICNs, dates of service, ALJ appeal numbers and the dates the ALJ received the request for hearing; and Copies of the certified mail receipts addressed to each of the beneficiaries listed in the spreadsheet. Upheld ALJ dismissal Appellant did not show proof that a copy of the actual request for hearing was sent to the beneficiaries The request for hearing explains the bases for the appeal 21 Appeals Council: Beneficiary Notice In the case of Oakwood Hospital and Medical Center Appellant submitted to the beneficiary and to the ALJ a generic dear beneficiary Letter did not identify the beneficiary by name or designate an address where the letter was sent Upheld ALJ dismissal Letter was insufficient because it did not list the beneficiary s name or address No evidence was provided to the ALJ showing proof of mailing (e.g., certified mail receipt, delivery confirmation, etc.) In the case of Presbyterian Medical Center Appellant provided to the ALJ copies of three generic dear beneficiary letters indicating that the respective QIC decision was enclosed Upheld ALJ dismissal Proof of deliver is not required by rule or regulation However, no proof that a copy of the hearing request was sent to the beneficiaries 22 11

13 Appeals Council: Beneficiary Notice In the case of Virtua West Jersey Hospital Voorhees ALJ dismissed the case due to abandonment Pursuant to 42 C.F.R (a)(7), an ALJ may dismiss a request for hearing due to abandonment Abandonment can be construed as a failure to demonstrate compliance with appeal regulations following a request by an ALJ Failure to provide proof that appellant sent copies of the hearing request to the beneficiaries constituted abandonment Upheld ALJ dismissal Despite appellant s contention that notice was sent to the beneficiaries, the administrative record contained no evidence that appellant ever responded to the ALJ s letters or actually sent the beneficiaries a copy of the request 23 Medicare Requirements for Statistical Sampling Contractors use statistical sampling in retroactive audits to determine overpayments Prerequisite under the Medicare Act, Regulations and Guidance: A Medicare contractor may not use extrapolation to determine an overpayment unless documented educational intervention has failed to correct the payment error, or there is a sustained or high level of payment error

14 Medicare Requirements for Statistical Sampling, cont'd. A sustained or high level of payment error may be determined to exist through a variety of means, including, but not limited to: Error rate determinations by Medical Review ( MR ) unit, Program Safeguard Contractor ( PSC ), Zone Program Integrity Contractor ( ZPIC ) or other area; Probe samples; Data analysis; Provider/Supplier history; Information from law enforcement investigations; Allegations of wrongdoing by current or former employees of a provider or supplier; Audits or evaluations conducted by the OIG. 25 CMS Guidelines for Statistical Sampling Medicare Program Integrity Manual, Pub General Purpose: These instructions are provided to ensure that a statistically valid sample is drawn and that statistically valid methods are used to project an overpayment where the results of the review indicate that overpayment have been made. Failure by the PSC or the ZPIC BI unit or the contractor MR unit to follow one or more of the requirements contained herein does not necessarily affect the validity of the statistical sampling that was conducted or the projection of the overpayment. An appeal challenging the validity of the sampling methodology must be predicated on the actual statistical validity of the sample as drawn and conducted

15 CMS Guidelines for Statistical Sampling, Cont'd. Basic Requirements Probability Sampling: Regardless of the method of sample selection used, the PSC or ZPIC BI unit or the contractor shall follow a procedure that results in a probability sample If a particular probability sample is properly executed, then assertions that the sample and its resulting estimates are 'not statistically valid' cannot legitimately be made. Probability sample and its results are always 'valid' 27 Major Steps in Sampling Selecting the provider or supplier; Selecting the period to be reviewed; Defining the universe, the sampling unit and the sampling frame: Sampling units elements that are selected Sampling frame listing of all the possible sampling units Designing the sampling plan and selecting the sample Neither possible, nor desirable, to specify a minimum sample size that applies to all situations 28 14

16 Major Steps in Sampling, cont'd. Auditing the sample Estimating the overpayment Lower limit of 90% confidence interval shall be used as the amount of overpayment to be demanded in most situations Information retained Maintain complete documentation of the sampling methodology that was followed Sufficient documentation shall be kept so that the sampling frame can be re created, should the methodology be challenged 29 Statistical Sampling Issues Subject to Review: Sample Size The MAC and federal courts have accepted CMS's position that while sample size may affect the precision of the overpayment, there are other factors that must be considered, including "real world economic constraints" of the Medicare contractor's available resources John Balko and Associates (Appellant)(Beneficiary) Safeguard Services, LLC (Contractor) Claim for Part B Benefits, 2012 WL Docket No. M (March 1, 2012) Stating that the fact that the contractor selected a sample size that another statistician may not prefer or which may not result in the most precise point estimate, does not provide a basis for invalidating the sampling or extrapolation as drawn and conducted in this case. Upheld on appeal to the Third Circuit (2014 WL ) 30 15

17 Statistical Sampling Issues Subject to Review: Representativeness of Sample Place for Achieving Total Health (Appellant) (Beneficiary) National Government Services (Contractor) Claim for Part B Benefits, 2010 WL , Docket No. M (Mar. 3, 2010) The appellant does not argue that the statistical sample was not representative, but rather that the PSC failed to show that the sample was indeed representative. 31 Statistical Sampling Issues Subject to Review: Randomness of Sample The MAC and federal courts have been responsive to CMS's argument that the sample was random because it was drawn using the RAT STATS program developed by the Office of Inspector General See Angel v. Sebelius, 912 F. Supp. 2d 4 (E.D.N.Y. 2012) 32 16

18 Statistical Sampling Issues Subject to Review: Documentation Provided The MAC has set aside and/or remanded extrapolations if there is insufficient documentation provided by CMS and/or the contractor that does not allow the provider/supplier to recreate the methodology. Global Home Care (Appellant) (Beneficiaries) National Government Services (Contractor) Claim for Part A Benefits, 2001 WL (Docket No. M ) (Jan. 11, 2011) ALJ did not err in setting aside extrapolation of overpayment when CMS or its contractors have not produced documentation necessary to recreate the sampling frame. DAB also finds that contractors had adequate notice that statistical sampling and extrapolation were at issue in this case. 33 Statistical Sampling Issues Subject to Review: Precision of Overpayment Both the MAC and federal courts have been reluctant to set aside a statistical sampling and extrapolation in response to a supplier/provider s claim that the overpayment was imprecise in the absence of a showing that the imprecision rendered the overpayment arbitrary and capricious, particularly in those cases wherein the demand amount is the lower limit of a confidence interval

19 Statistical Sampling to Determine Overpayments Threshold Determination Not Subject to Review There shall be no administrative or judicial review under section 1395ff of this title, section 1395oo of this title, or otherwise, of determinations by the Secretary of sustained or high levels of payment errors under this paragraph. 42 U.S.C. 1395ddd(f)(3) Burden of Proof Provider/supplier must set forth specific arguments that demonstrate that the flaws in the methodology were so significant as to render the overpayment arbitrary and capricious MAC has repeatedly acknowledged CMS Ruling 86 1, which states that the use of statistical sampling 'creates a presumption of validity as to the amount of an overpayment which may be used as the basis for recoupment' Burden shifts to provider to take next step 35 Statistical Sampling to Determine Overpayments, cont d. No generally accepted principles of statistical sampling: Medicare Appeals Council of the Departmental Appeals Board ( MAC ) and federal courts have held that there is no formal recognition of generally accepted statistical principles and procedures Transyd Enterprises, L.L.C. v. Sebelius, 2012 WL (S.D. Tex.) Does not prescribe sample size, precision, or sampling design and requires the contractor to consider real world economic constraints when choosing a sampling methodology 36 18

20 Statistical Sampling: The Seminal Case Chaves County Home Health Servs. V. Sullivan the Court affords the agency deference in its interpretation of an ambiguous governing statute In light of the fairly low risk of error so long as the extrapolation is made from a representative sample and is statistically significant, the government interest predominates. See also Ratanasen v. Cal. Dept. of Health Servs. 37 Statistical Sampling: Recent Cases Recent case: Schuldt Chiropractic Wellness Center v. Sebelius, 2014 WL (D. Neb. 2014) The Center appealed the ZPIC finding of an overpayment on the basis of the extrapolation from the actual overpayment The ZPIC, Wisconsin Physicians Service, conducted a postpayment medical review of chiropractic claims furnished to Medicare beneficiaries. Review used a sampling of 214 claims out of 5,098 services billed. The ZPIC concluded there was a percent error rate with an actual overpayment of $11, Using that data, it then projected a total overpayment of $126,

21 Statistical Sampling: Recent Cases The Center appealed the alleged overpayment amount, which the ZPIC reaffirmed in a redetermination, which used the same statistical sampling method The ALJ found the sampling method, extrapolation and results were unreliable. The MAC (in a de novo review) found that the method was valid and noted it was required to give substantial deference to manual instructions. The District Court found the ALJ s method to be thorough and wellreasoned. But, the Court cited the seminal case on the issue, Chaves, in holding that the sampling method was valid The sampling method was based on a stratified random sample design, consistent with MPIM [Medicare Program Integrity Manual] guidance. The court noted it might have had a different outcome if the review had 39 been de novo Statistical Sampling: Recent Cases Anghel v. Sebelius, 912 F. Supp. 2d 4 (E.D.N.Y. 2012) Substantial evidence supported the Secretary's determination that provider was overpaid "The random nature of the claims that were chosen was done using an established software program entitled RATSTATS. This methodology demonstrates that the sample was drawn as representative of the universe of claims." ALJ not required to consider the provider's expert if the expert's opinion is based on evidence not in the administrative record "Court agrees that the determination of a sustained or high level of payment error is not subject to administrative or judicial review" 40 20

22 Statistical Sampling: Recent Cases In the Case of Bruce McLeod, D.C. (Appellant) (Beneficiary) Wisconsin Physician Services Insurance Corp (Contractor) Claim for Part B Benefits, 2013 WL Docket No. M (January 11, 2013) The determination that a high level of payment error exists is not in and of itself subject to being appealed 41 Appeals Backlog & Options Office of Medicare Hearings and Appeals (OMHA) received an exponential increase in Medicare appeals between 2012 (117,371 appeals) and 2013 (350,629 appeals) OMHA is considering alternative adjudication models Statistical sampling to adjudicate appeals Mediation of claims Attorney case reviews New regulations to increase efficiency in adjudication New initiative coming in Spring 2014: online public access to appeal status information 42 21

23 Appeals Backlog & Options, cont'd. May government contractors use statistical sampling to adjudicate appeals pre or post payment claims given the huge burden of reviewing individual claims? Do statutes, regulations or guidance mandate individual review? "A party dissatisfied with an initial determination may request that the contractor review its determination It is a second look at the claim and supporting documentation and is made by an employee that did not take part in the initial determination." CMS Claims Processing Manual Ch Questions? 44 22