CMS’ New “Physician Compare” Website to Report on Provider Performance

(November 15, 2011) Last year, the Centers for Medicare and Medicaid Services (CMS) launched the “Physician Compare” website, a site which allows beneficiaries to research their health care providers. The Affordable Care Act (commonly referred to as “Health Care Reform”) mandated that CMS launch such a website and that it implement physician performance metrics on the site no later than January 1, 2013.  In theory, “Physician Compare” will serve as an invaluable tool for researching Medicare providers in any locality, even allowing for specific criteria searches such as languages spoken, group practice locations, education history, hospital associations and whether a provider accepts the Medicare-approved amount as payment in full on all claims (obviously patients are still responsible for any copayments and deductibles which might be due).  Moreover, by including information from the Physician Quality Reporting System (PQRS), “Physician Compare” has been designed to encourage health care professionals to enhance and improve the quality of care they provide to Medicare beneficiaries.

Since its inception, the “Physician Compare” website has raised  a number of concerns for some health care providers.  Clerical mistakes from the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) could be duplicated on the site, resulting in health professionals not showing up in locality searches.  It could also result in misinformation about current staff members and incorrect Medicare participation status being listed on the website.

Currently, the ”Physician Compare” website only states whether a physician “successfully participated” in the PQRS, but soon the site will be expanded to include actual performance results from the program, ensuring a higher level of scrutiny in physician evaluations.

Why is this important to you?  As a health care provider, your reputation is one of the most important aspects of your business. With this in mind, it is more important than ever to maintain a positive image and relationship with both your patients and the government.  While you can never completely eliminate mistakes, you can work to reduce the likelihood that mistakes may occur.  Compliance initiatives designed to ensure correct information reporting with Medicare, quality documentation and accurate coding and billing serve as an important first step to combating future errors.

Predictive Modeling: The Latest Advances in Sophisticated Data Mining Techniques are Enabling ZPICs and Law Enforcement to Identify Fraud Sooner and Prevent it from Continuing

(April 15, 2011):  Over the last decade, the Centers for Medicare and Medicaid Services (CMS) and its contractors (Zone Program Integrity Contractors (ZPICs), Program Safeguard Contractors (PSCs) and Recovery Audit Contractors (RACs)),  have steadily assembled an extensive database of the coding and billing practices of Medicare providers around the country.  Analyzing this data, contractors have been able to identify the profile of a ”typical” provider for each specialty.  With this information, Medicare contractors are better able to identify changes in the coding and / or billing habits of a particular provider.   Providers whose billing practices are significantly different from those of their peers may also be easily identified.  The purpose of this article is to provide an overview of the government’s current use of  “data mining”  and “predictive modeling”  techniques.

I.         Introduction:

            CMS’ computerized database of claims and services billed to the Medicare program covers a comprehensive record of the bills submitted by health care providers for payment.  Over the years, Medicare contractors and law enforcement have steadily refined their ability to analyze this enormous amount of quantitative data.  In addition to assisting with the government’s efforts to estimate future growth in the size of the Medicare program, this database has enabled  Medicare contractors and law enforcement to employ highly sophisticated data mining techniques, thereby identifying (1) health care providers whose current coding and billing actions appear to have deviated from their prior practices, and (2)  Medicare providers whose coding and / or billing actions are significantly different from those of their peers.  Typical factors considered when using data mining techniques for targeting purposes have included, but are not limited to:

• A Medicare provider’s specific area of practice.
• A Medicare provider’s practice location.
• The types and frequency of health care services or supplies billed to Medicare.
• The relative size of a provider’s practice, clinic or health care related organization (based on the number of Medicare billing providers employed).  

            Through an examination of these factors or data elements, Medicare contractors and law enforcement have been able to identify health care providers whose coding and / or billing practices make them “outliers” when their actions are compared to similarly-situated Medicare providers.  Once a health care provider has been identified as an “outlier,” further action may be taken. 

       Typical “data mining” actions taken by ZPICs, PSCs,, RACs and / or law enforcement have historically included:

• An unannounced site visit by the ZPIC or PSC to the Medicare provider’s practice location.
• Sending a request for supporting documentation related to a limited number of claims (often less than 10, this type of review is generally referred to as a “Probe Audit”).
• Sending a request for supporting documentation related to 30 claims or more (these claims are often then used by the ZPIC or PSC as a “sample” in order to calculate an alleged overpayment based on extrapolated damages).    
• Sending a demand letter for an alleged overpayment based on an “automated” review of the data conducted by a RAC or ZPIC.
• Using “data mining” to identify outlier’s whose billing practices warrant to initiation of an investigation by law enforcement. 

II.         The Use of “Data Mining” to Identify Post-Payment Improper Practices:

            While Medicare contractors such as RACs, PSCs and ZPICs long utilized post-payment data mining to identify providers who appear (based on their assessment of the data) to have likely engaged in improper billing activities, the regular use of data mining by the Department of Justice to identify criminal targets is a fairly recent practice.  As Lanny A. Breuer, Assistant Attorney General of the Department of Justice’s (DOJ’s) Criminal Division indicated last August:

“In 2007, the Criminal Division of the Justice Department refocused our approach to investigating and prosecuting health care fraud cases. Our investigative approach is now data driven: put simply, our analysts and agents review Medicare billing data from across the country; identify patterns of unusual billing conduct; and then deploy our “Strike Force” teams of investigators and prosecutors to those hotspots to investigate, make arrests, and prosecute. And as criminals become more creative and sophisticated, we intend to use our most aggressive investigative techniques to be right at their heels.” (emphasis added).

            As law enforcement has readily acknowledged, post-payment billing data is being effectively utilized to “identify patterns of unusual billing conduct.”   Using data mining as a targeting tool, the government is able to quickly focus its investigative and audit resources on specific providers whose coding / billing practices fall outside the scope of what would normally be expected.    

III.        The Use of Predictive Modeling to Minimize Wrongdoing:

            While identifying improper billing practices after-the-fact has proven enormously helpful, law enforcement has also taken  steps to identify problem providers much sooner in the process, thereby minimizing the amount of improper billing that may be submitted to Medicare for payment.  As HHS Secretary Kathleen Sebelius stated on March 15, 2011, during the joint HHS / DOJ “Detroit Fraud Prevention Summit,” HHS is moving away from the “old pay and chase model.”  According to Secretary Sebelius:

“. . . Instead of the old ‘pay and chase’ model, we’re getting proactive.

Late last year we issued a solicitation for state-of-the-art analytic tools to help predict and identify fraudulent claims as soon as they are submitted, so we can stop payment before it goes out the door.

These are the same type of predictive modeling tools that banks and insurance companies use to identify potential fraud before it occurs. They are how your credit card company can raise the alarm if they see a dozen flat-screen televisions charged to your card in one day. . ..” (emphasis added).

            While post-payment claims data analyses will likely play a role in identifying overpayments, the government is serious about stopping health care fraud as soon possible in the process.  While the government cannot “predict” wrongdoing before it happens, based on a complex analysis of various factors, it can effectively identify wrongdoers so quickly that the amount of improper claims paid by the government can be dramatically reduced. 

IV:       Provider Concerns:  

            Many providers are concerned that the government’s heavy reliance on predictive measures such as data mining to identify targets may subject a provider to an unjustified audit or investigation.  Moreover, there is a concern that data mining might create an unwarranted presumption that a Medicare provider has engaged in improper billing practices.  Unfortunately, even if ultimately shown to be incorrect, a provider can spend an enormous amount of money defending itself in connection with a post-payment claims audit.  Providers placed on pre-payment review as a result of data mining can be especially hard-hit.  It is not at all unusaul for providers to remain on pre-payment review for six to twelve months (or even longer).  During this time period, cash-flow is interrupted and many providers find it almost impossible to remain in business.

V.        How to Avoid Being a Target: 

            In today’s environment of sophisticated data mining, it is essential that Medicare providers have a clear picture of how their coding and billing practices compare to those of their peers.  To be clear, both Medicare contractors and law enforcement recognize that a provider’s practices may differ in one aspect or another from those of their peers.  Moreover, those differences can result in billing practices which might make a provider appear to be an “outlier.”   There are a number of companies who publish benchmarking charts which make it relatively easy for a physician or other provider to compare their billing practices to that of their peers. 

            To be clear, just because a provider’s coding and billing practices differ from those of their peers (in the same specialty area), does not necessarily mean that a provider’s practices are improper. In recent years, we have seen providers who were targeted by a PSC or ZPIC precisely because their utilization rates of certain codes exceeded those of their peers.   In at least one case, we found that a provider was recognized as an “expert” by his peers and often received highly-complex referrals by other Medicare providers. As a result, the number of highly complex Evaluation and Management (E/M) reviews conducted exceeded those of similarly-situated providers.  Having said that, if a provider were to find that its billing practices did not match of its peers, it could conceivably find that its understanding of the coding requirements was incorrect and that remedial training was immediately needed.

         In either case, the bottom line is clear – all providers have an obligation to try and ensure that services billed to Medicare meet applicable statutory and regulatory requirements governing coverage and medical necessity.  If your organization is subjected to an audit, it is essential that you determine whether your billing practices fully comply with the rules.  If so, you must be prepared to explain to Medicare contractors or law enforcement why the anomalies identified through data mining or predictive modeling are not evidence of fraud or overpayment.  Providers facing this situation should work with experienced legal counsel to ensure that the arguments to be presented fully address the government’s concerns.  Failure to do so may result in an expansion of the government’s audit.

Liles Parker attorneys and staff have extensive experience representing health care providers in connection with Medicare contractor audits and / or investigations.  Should you find that your organization is facing a ZPIC, PSC or RAC audit, please give us a call for a complimentary consultation regarding your case.  You may contact us at: 1 (800) 475-1906.         

 

AdvanceMed, the ZPIC Responsible for Zone 2 and Zone 5 has Reportedly Been Acquired by NCI

(April 10, 2011):  Last week, it was announced that NCI, Inc., one of the nation’s most successful information technology companies had acquired the outstanding capital stock of AdvanceMed Corporation (AdvanceMed), an affiliate of CSC.  While the acquisition went largely unnoticed by the health care provider community, the transaction may, in fact, be quite significant.

           With this acquisition by NCI, a recognized powerhouse in information technology, Medicare and Medicaid providers should expect AdvanceMed’s expertise in data mining and investigations to continue to grow.  Medicare and Medicaid providers have an affirmative obligation to ensure that operations, coding and billing activities fully comply with applicable statutory and regulatory requirements.  As AdvanceMed continues to fine-tune its data mining efforts and further expands its ability to conduct “Predictive Modeling,” providers will likely find their actions under the microscope like never before.  It is therefore imperative that all health care providers immediately implement an effective Compliance Plan (if they have not already done so) or further enhance their current compliance efforts.   The purpose of this article is to briefly report on NCI’s recent acquisition of AdvanceMed.  An overview of the current ZPIC environment is also provided.

I.        Background:

          NCI first announced its plans to acquire AdvanceMed last February.  As NCI’s February 25th News Release noted (in part):

“The Obama Administration has emphasized reducing fraud, waste, and abuse in Federal entitlements. AdvanceMed is ideally positioned to support the program integrity initiatives of CMS and other Federal Government agencies. . . We are extremely pleased to have AdvanceMed join NCI and believe that this acquisition will provide NCI an outstanding platform to address this rapidly growing market opportunity.”  (A complete account of NCI’s announcement can be found at the above link). 

          In recent years, AdvanceMed has positioned itself to where it now has multiple contracts with the Federal government.  In addition to serving as a Zone Program Integrity Contractor (ZPIC) for Zone 2 and Zone 5, the contractor also serves as Program Safeguard Contractor (PSC) in areas not yet converted to the ZPIC system of contractor review.  Additionally, the contractor also serves as a Comprehensive Error Rate Testing (CERT) contractor.  On the Medicaid side, AdvanceMed also serves as a Medicaid Integrity Contractor (MIC).  While a host of other contractors have been awarded contracts covering other zones and program areas, AdvanceMed’s growth has been undeniably impressive.  As NCI announced as part of April 4^th “News Release” covering the acquisition:

“AdvanceMed is a premier provider of healthcare program integrity services focused on the detection and prevention of fraud, waste, and abuse in healthcare programs, providing investigative services to the Centers for Medicare and Medicaid Services (CMS). Serving CMS since 1999, AdvanceMed has grown rapidly, demonstrating the value and return on investment of the Federal Government’s integrity program activities.

AdvanceMed employs a strong and experienced professional staff, which leverages sophisticated information technology, data mining, and data analytical tools, to provide a full range of investigative services directed to the identification and recovery of inappropriate Medicare and Medicaid funds. AdvanceMed supports healthcare programs in 38 states with a staff of more than 450 professionals, including information specialists, nurses, physicians, statisticians, investigators, and other healthcare professionals.

AdvanceMed has multiple contracts with CMS under the Zone Program Integrity (ZPIC), Program Safeguard (PSC), Comprehensive Error Rate Testing (CERT), and Medicaid Integrity (MIC) programs. All of these programs are executed under cost plus contract vehicles. The largest contracts-ZPIC Zone 5 and ZPIC Zone 2-were awarded in late 2009 and 2010 and have five-year periods of performance.

The acquisition price was $62 million. Included within the price is a recently completed, state-of-the-art data center to support the ZPIC Zone 5 and ZPIC Zone 2 contracts. Additionally, NCI will make a 338(h)(10) election, enabling a tax deduction, which is expected to result in a tax benefit with an estimated net present value of approximately $6 million to $8 million. NCI expects the transaction to be slightly accretive to 2011 earnings.

As of the end of March 2011, AdvanceMed has a revenue backlog of approximately $300 million with approximately $51 million of that amount being currently funded. Revenue for the trailing 12 months ending March 31, 2011, is estimated to be approximately $51 million, all of which was generated from Federal Government contracts, and 99% of the work performed as a prime contractor. NCI’s AdvanceMed 2011 revenue, covering the nine-month period of April 2, 2011, to December 31, 2011, is estimated to be in the range of $43 million to $47 million (the equivalent of $57 million to $63 million on a full 12-month basis), with the midpoint reflecting a full-year growth of approximately 16%. . . “   (A complete account of NCI’s statement can be found at the link indicated above).

II.      Overview of the ZPIC Program:

          The following comments are intended to provide an overview of the ZPIC program and is not focused on any ZPIC in particular.

         Under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), CMS was required to take a number of steps intended to streamline the claims processing and review process:

•  Using competitive measures, CMS was required to replace the current Medicare Fiscal Intermediaries (Part A) and Carriers (Part B) contractors with Medicare Administrative Contractors (MACs).
• After setting up the new MAC regions, CMS created new entities, called Zone Program Integrity Contractors (ZPICs).
•  These actions were intended to consolidate the existing program integrity efforts.  Over the last 2 — 3 years, ZPICs have been taking over PSC audit and enforcement activities around the country.

           At the time of transition, there were twelve PSCs that had been awarded umbrella contracts by CMS. As these contracts have expired, CMS has transferred the PSCs’ fraud detection and deterrence functions over to ZPICs.   Of the seven ZPIC zones established in the MMA, CMS has awarded contracts for a number of the zones. CMS is still working to issue awards for the final ZPIC zones.  The seven ZPIC zones include the following states and / or territories:

• Zone 1 – CA, NV, American Samoa, Guam, HI and the Mariana Islands.
• Zone 2 – AdvanceMed: AK, WA, OR, MT, ID, WY, UT, AZ, ND, SD, NE, KS, IA, MO.
• Zone 3 – MN, WI, IL, IN, MI, OH and KY.
• Zone 4 – Health Integrity: CO, NM, OK, TX. 
• Zone 5 – AdvanceMed: AL, AR, GA, LA, MS, NC, SC, TN, VA and WV.
• Zone 6 – PA, NY, MD, DC, DE and ME, MA, NJ, CT, RI, NH and VT.
• Zone 7 – SafeGuard Services: FL, PR and VI.

          In many instances, these changes have been more of a “name change” rather than a substantive change in the way claims will be audited. ZPIC responsibilities are generally the same as those currently exercised by PSCs. While ZPIC overpayment review duties have not appreciably changed, the number of civil and criminal referrals appear to be increasing. In our opinion, ZPICs clearly view their role differently than that of their PSC predecessors.  ZPICs clearly view themselves as an integral part of the law enforcement team, despite the fact that they are for-profit contractors.  In consideration of their ability to recommend to CMS that a provider be suspended or have their Medicare number revoked, and / or refer a provider to law enforcement for civil and / or criminal investigation, providers should take these contractors quite seriously.

          Both ZPICs and PSCs have traditionally asserted that unlike their RAC counterparts, they are not “bounty hunters.”  ZPICs are not paid contingency fees like RACs but instead directly by CMS on a contractual basis.  Nevertheless, common sense tells us that if ZPICs aren’t successful at identifying alleged overpayments, the chances of a ZPIC’s contract with CMS being renewed are likely diminished.  Additionally, experience has shown us that despite the fact that ZPICs are expected to adhere to applicable Medicare coverage guidelines, a ZPIC’s interpretation and application of these coverage requirements may greatly differ from your understanding of the same provisions.

           In recent years, ZPICs have been aggressively pursuing a wide variety of actions, including but not limited to:

• Pre-Payment Audit.  After conducting a probe audit of a provider’s Medicare claims, the ZPIC may place a provider on “Pre-payment Audit” (also commonly referred to as “Pre-Payment Review”).  Unlike a post-payment audit, there is no administrative appeals process that may be utilized by a provider for relief.  Having said that, there are strategies that may be utilized by a provider which may assist in keeping the time period on pre-payment review at a minimum.
• Post-Payment Audit.  Audits conducted by ZPICs primarily involve Medicare claims that have already been paid by the government.  After reviewing these claims, it is not uncommon for a ZPIC to find that the audited provider has been overpaid.  Having said that, the ZPICs we have dealt with appear to apply a strict application of the coverage requirements, regardless of whether a provider’s deviation from the rules is “de minimus” in nature.  In doing so, it is not unusual to find that a provider has failed to fully comply with each and every requirement.  Depending on the nature of the initial sample drawn, a ZPIC may extrapolate the damages in a case, significantly increasing the alleged overpayment.  In doing so, the ZPIC is effectively claiming that the “sample” of claims audited are representative of the universe of claims at issue in an audit.
• Suspension.  While the number of suspension actions taken by ZPICs has steadily increased in recent years,  Medicare providers should expect to see this number continue to grow.  Under the Affordable Care Act (often informally referred to as the “Health Care Reform” Act), CMS’ suspension authority has greatly expanded.   
• Revocation.  As with suspensions, we have seen a sharp increase in the number of Medicare revocation actions taken over the last year. The reasons for revocation have varied but have typically been associated with alleged violations of their participation agreement. In some cases, the ZPIC contractors found that the provider has moved addresses and did not properly notified Medicare. In other cases, a provider was alleged to have been uncooperative during a site visit. Finally, there were a number of instances where the provider allegedly did not meet the “core” requirements necessary for their facility to remain certified.
• Referrals for Civil and Criminal Enforcement.  ZPICs are actively referring providers to HHS-OIG (which can in turn refer the case to the U.S. Department of Justice for possible civil and / or criminal enforcement) when a case appears to entail more that a mere overpayment. However, just because a referral is made doesn’t mean that it will prosecuted. In many instances, HHS-OIG (and / or DOJ) will decline to open a case due to a variety of reasons, such as lack of evidence, insufficient damages, etc.).

 III.        Steps Providers Can Take Now, Before They are Subjected to a ZPIC Audit:

          In responding to a ZPIC audit, it is important to remember that although they may not technically be “bounty hunters,” it is arguably to their benefit to find that an overpayment has occurred. These overpayments are often based on overlapping “technical” (such as an incorrect place of service code) and “substantive” (such as lack of medical necessity) reasons for denial. In recent years, the level of expertise exercised by ZPICs is often quite high — noting multiple reasons for denial and concern.

          Unfortunately, the reality is that most (if not all) Medicare providers will find themselves the subject of a ZPIC, CERT, RAC or other type of claims audit at some point in the future.  In our opinion, the single most effective step you can take to prepare for a contractor audit is to ensure that your organization has implemented and is adhering to an effective Compliance Plan.  A comprehensive assessment of an organization’s coding and billing practices is one element of an effective plan.  Several general points to consider also include:

Keep in mind your experiences with PSCs and other contractors.  The lessons you have learned responding to PSC, CERT and RAC audits can be invaluable when appealing ZPIC overpayments.  As you will recall, the appeals rules to be followed are virtually the same.

Monitor HHS-OIG’s Work Plan.  While often cryptic, it can be invaluable in identifying areas of government concern.  Are any of the services or procedures your organization currently provides a focus of HHS-OIG’s audit or investigative?

Keep an eye on RAC activities.  Review the service-specific findings set out in annual RAC reports.  Review targeted areas carefully to ascertain whether claims meet Medicare’s coding and medical necessity policies.

You never realize how bad your documentation is until your facility is audited. While many providers start out “over-documenting” services (to the extent that there is such a thing), a provider’s documentation practices often become more relaxed as time goes on – especially when the provider has not been audited for an extended period of time.  In such situations, both physicians and their staff may fail to fully document the services provided.  Moreover, the care taken to ensure that all supporting documentation has been properly secured may have also lapsed over the years.

Review your documentation.  Imagine you are an outside third-party reviewer.  Can an outsider fully appreciate the patient’s clinical status and the medical necessity of treatment?  Are the notes legible and written is a clear fashion?  Compare your E/M services to the 1995 or 1997 Evaluation and Management (E/M) Guidelines – have you fully and completely documented the services you provided?  If dealing with skilled services, have you fully listed and discussed both the need for skilled services and the specific skilled services provided?

IV.        Closing Thoughts:

          Imagine a ZPIC hands you a claims analysis rife with alleged errors, an indecipherable list of statistical formulas, and an extrapolated recovery demand that will cripple your practice or clinic. What steps should you take to analyze their work? Based on our experience, providers can and should carefully assess the contractor’s actions, particularly the use of formulas and application of the RAT-STATS program when selecting a statistical sample and extrapolating the alleged damages based on the sample.  To be clear, not all statistical extrapolations will be flawed.  Denpending on the steps taken by the ZPIC’s statistician,  to the Over the years, we have challenged the extrapolation of damages conducted by Medicare contractors around the country, including tens of thousands of claims. Regardless of whether you are a Skilled Nursing Facility providing skilled nursing and skilled therapy services, an M.D. or D.O. providing E/M services, a Home Health company or a Durable Medical Equipment (DME) company, it is imperative that you work with experienced legal counsel and statistical experts to analyze the actions take by a ZPIC.

Liles Parker attorneys and staff have extensive experience representing a wide range of Medicare providers in audits by ZPICs, PSCs and other contractors.  Should you have questions regarding an inquiry from a ZPIC, PSC or RAC that you have received, please feel free to give us a call for a complimentary consultation.  We can be reached at:  1 (800) 475-1906.

 

 

 

 

Are Medicare ALJ’s Truly Independent Fact Finders, Free From the Informal Pressures of CMS and its ZPIC / PSC / RAC / QIC Contractors?

(February 20, 2011):  Over the years, we have represented a wide variety of health care providers in the administrative appeals process.  Our duties have regularly included representation before Administrative Law Judges (ALJs) presiding out of the Western, Southern, Midwestern and Mid-Atlantic Field Offices of the Office of Medicare Hearings and Appeals.  (OMHA). 

In the course of our work, we have routinely been asked by our health care provider clients for our opinion regarding the “independence” of ALJs from the pressures exerted by the Centers for Medicare and Medicaid Services (CMS) and its contractors (including, but not limited to the Qualified Independent Contractors (QICs), Zone Program Integrity Contractors (ZPICs) and Program Safeguard Contractors (PSCs)).  The purpose of this brief article is to examine this issue in more detail.

Background:  As many of you will recall, prior to the passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Medicare administrative appeals were heard by Judges working for the Social Security Administration’s (SSA’s) Office of Hearings and Appeals.  For much of that time, the SSA was an agency of the Department of Health and Human Services (HHS).  In 1994, the SSA was officially separated from HHS and was made an independent agency.  Although the SSA was no longer part of HHS, its Judges continued to hear Medicare administrative appeals.

Despite the fact that SSA used to a part of HHS (and for a short period was independent of HHS), in our opinion, SSA Judges were generally thought to be “independent” adjudicators of the facts, not impacted by, or bowing to, the effects of outside agency pressures.

With the enactment of the MMA, the responsibility for hearing Medicare administrative appeals was transferred over to HHS, with OMHA reporting solely to the Secretary, HHS.  In doing so, the OMHA was placed completely outside of CMS’ organizational structure, ostensibly free from any agency pressures that CMS might informally care to exert.  This also placed the OMHA independent of the various contractors working for CMS.  As a review of the Congressional Record reflects, the issue of independence was carefully considered by Congress and the separation of the OMHA from CMS was consistent with their concerns. (See Congressional Record, V. 149, Pt. 22, November 20, 2003 to November 23, 2003, Page 30400). As set out in the June 23, 2005 issuance of the Federal Register (70 Fed.Reg. 36386), titled “Office of Medicare Hearings and Appeals; Statement of Organization, Functions, and Delegations of Authority,” the OMHA is under the direction of a Chief Administrative Law Judge who reports directly to the Secretary, HHS.  This organizational structure was specifically intended to meet the “independence” requirements of the Section 931(b)(2) of the MMA. 

What Can You Expect:

In terms of functional authority, ALJs are comparable in many respects, to that of an Article III Judge, who is appointed by the President and confirmed by the Senate.  While ALJ’s are not Article III Judges, it has been our experience that they are strongly independent, adjudicating over Medicare proceedings in a formal, professional fashion, similar to what you would expect to encounter in a Federal District Court proceeding.

Pursuant to 42 C.F.R. § 405.1026, ALJs cannot even conduct a hearing if they are prejudiced or partial to any party, or if they have an interest in the matter pending for resolution.  To date, we have not seen an ALJ that has been “prejudiced or partial to any party.”

To be clear, health care providers do not always prevail — every case stands or falls based on its merits.  Moreover, just because you have experienced a positive outcome with a particular ALJ on one occasion does not mean that you should expect a similar result when you are next in front of the same judge.  ALJs are trained to weigh the facts and the evidence.  While in past years it was rare for CMS or its contractors to participate in a hearing, it is now commonplace for representatives of the Zone Program Integrity Contractor (ZPIC) or the Program Safeguard Contractor (PSC) to now attend the hearing and seek to provide support for their initial denial actions.  As a result, the job of ALJ is now more complicated than ever.

In summary, the current administrative appeals system has been specifically designed to insulate ALJs from the actual and / or implied pressures which could conceivably be exerted by CMS and its various contractors.  When appearing before an ALJ, it is important to remember that the process has become significantly more complicated now that CMS contractors are now regularly attending and participating in the process.  In light of these changes, it is recommended that you engage experienced legal counsel to represent your interests in an ALJ hearing.  Although the system and its Judges are set up to provide a fair opportunity for you to present your case and be heard, it is much more difficult to prevail when up to three representatives of the ZPIC (a lawyer, a statistician and a clinician) are also participating in the proceedings, providing support and explanations for their prior Medicare claim denial decisions.

Liles Parker attorneys have extensive experience representing a wide variety of Part A and Part B providers in the administrative appeals process, including the ALJ hearing stage.  Please feel free to contact us for a complimentary consultation.  We can be reached at 1 (800) 475-1906.

 

 

 

 

ZPICs and PSCs Will Now Be on the Lookout for “Date Stamps” Used by Home Health and Hospice Providers.

(February 19, 2011):  While the use of “signature” stamps has been prohibited for quite some time, a wide variety of health care providers have continued to use “date” stamps or some other method of memorializing when a document was signed by an ordering or treating physician.  While the Centers for Medicare and Medicaid Services (CMS) has not announced a total ban on such practices, they have recently prohibited home health and hospice agencies from continuing to use “date” stamps.

 Background:      Late last year, CMS notified its Medicare contractors that physicians must sign and date hospice certifications and home health plans of care, verbal orders, and certifications.  A number of Medicare contractors then notified hospice and home health providers of this change, noting that it would become effective for all documents signed on or after January 1, 2011.

 Basis for this Requirement:   Characterized by at least one Medicare contractor as a “clarification,” this change was based on the following CMS references:

 Home Health

Medicare General Information, Eligibility and Entitlement Manual (Pub. 100-01), Chapter 4, section 30.1 which states: ”The attending physician signs and dates the POC/certification prior to the claim being submitted for payment.”

The manual requirement is also addressed in 42 CFR 424.22(D)2 effective 1/11/11, and states “The certification of need for home health services must be obtained at the time the plan of care is established or as soon thereafter as possible and must be signed and dated by the physician who establishes the plan.”  The instructions for recertification are found in the same Part and restates that it “must be signed and dated by the physician who reviews the plan of care.”  

Hospice

 Medicare General Information, Eligibility and Entitlement Manual (Pub. 100-01), Chapter 4, section 60 states:  “Certification statements must be dated and signed by the physician.”

 The manual requirement is also addressed in 42 CFR 418.22(b)(5) effective 1/11/11 and states: “All certifications are recertifications must be signed and dated by the physician(s).”

Other Considerations:

 In reviewing this clarification, it is somewhat confusing (if not inconsistent) in light of CMS’ recent guidance in the Federal Register titled “Medicare Program; Home Health Prospective Payment System Rate Update for Calendar Year 2011; Changes in Certification Requirements for Home Health Agencies and Hospices; Final Rule.”  As the Final Rules reflect, the use of “date stamps” was expressly addressed at approximately the same time CMS sent out its clarification to Medicare contractors.  As the Final Rule reflects:

 Comment: A commenter recommended that CMS continue to accept the hospice date stamp on POCs returned to the agency by physicians who forget or fail to date their signature on this document.

Response: At this time, there is nothing to preclude a hospice from using a date stamp if a physician fails to date his or her signature on the POC.

To be clear, technically the clarification guidance is not inconsistent with CMS’ response in the Final Rule.  When discussing the change for hospices, the clarification focused on certifications and recertifications while the Final Rule focused on plans of care.  Nevertheless, from a compliance standpoint, the message is quite clear – “date stamps” should not be used.   

Compliance Recommendations:

From a compliance standpoint, it is imperative that both physicians and staff are educated and understand that “date stamps” are no longer acceptable.  Although CMS’ clarification was directed at home health and hospice providers, the best practice would be for all providers to discontinue the use of date stamps in connection with all documents, not merely those documents identified above. Like signature stamps, the use of date stamps will likely ultimately be prohibited for all Medicare providers.

It is equally important to recognize that orders, certifications, recertifications and plans of care and other documents must be signed in a timely fashion. They should not be backdated or signed by anyone other than the physician responsible for ordering the certification or establishing the plan of care.

If a home health or hospice provider receives a signed order or certification from a physician who has not dated the document, it should immediately be sent back to him to be properly dated.  

From a “program integrity” standpoint, Zone Program Integrity Contractors (ZPICs) and Program Safeguard Contractors (PSCs) will now be including this issue in its list of technical audit issues.  Health care providers should add this issue to their list of compliance “risks.” 

Liles Parker attorneys represent home health and hospice providers in connection with ZPIC audits, compliance counseling and business transactions.  Should you have questions, please feel free contact us for a free consultation.  We can be reached at 1 (800) 475-1906.    

  

Keeping an Eye on Medicare’s AdQIC:

(December 29, 2010): At the outset, it is important to keep in mind that the following observations are merely our opinion, nothing more.  These observations are based on our experiences dealing with health care provider Medicare overpayments and alleged false claims, over many years.  

Many health care providers are familiar with the revised administrative appeals process for contesting denied Medicare claims.  In exercising their appeal rights, many providers (or their legal counsel) have appealed denied claims through the second level of appeal, submitting their claims and arguments in support of payment to the Qualified Independent Contractor (QIC) responsible for hearing reconsideration appeals. Q2 Administrators (Q2A) is one of the contractors selected by the Centers for Medicare and Medicaid Services (CMS) to serve as a QIC. 

Notably, Q2A has also been awarded the first task order to serve as Administrative Qualified Independent Contractor (AdQIC). Q2A’s responsibilities as AdQIC are separate and distinct from its responsibilities as one of the general QICs chosen by CMS to serve as the reconsideration reviewer of denied Medicare claims.   

The role played by Q2A as AdQIC is often misunderstood by many health care providers.  Officially, Q2A performs its AdQIC duties out of its headquarters in Columbia, South Carolina.  As Q2A’s reflects, in its role as AdQIC, is responsible for performing a number of essential administrative appeal functions.  As AdQIC, QA2 notes that the unit is responsible for:

• Developing training and standard work protocols.
• Analyzing appeal outcomes.
• Recommending improvements to the appeals process.
• Managing case files.

Sounds fairly innocuous doesn’t it?  Unfortunately, the current AdQIC system represents a major challenge for prevailing providers to overcome.  Rather than merely “analyzing appeal outcomes,” as Q2A’s website reflects, the AdQIC appears to primarily serve as CMS’ appellate counsel, challenging favorable decisions by Administrative Law Judges (ALJs) with which it disagrees.   To be clear, we have seen no evidence that the AdQIC serves as an impartial reviewer of ALJ decisions.  Instead, our review of the cases referred to the Medicare Appeals Council (MAC) by the AdQIC suggests that unit is only interested in cases where the presiding ALJ has ruled in favor of the provider.

 So what does as AdQIC really do?

As Q2A’s website reflects, the company’s stated mission is to:

“[P]rovide support and services to the Federal government and other customers that reflect our ideal of ‘Quality to the Next Level.’ Q2A delivers consistent, quality outcomes and solutions for our customers by utilizing sound processes and a stringent quality assurance program. (emphasis added).

On its face, Q2A’s mission expressly reflects where its interests lie – the company’s focus is on delivering “consistent, quality outcomes and solutions” for its “customers.”  In the case, the customer is CMS, not health care providers.  As the “Frequently Asked Questions” section Q2A’s website reflects: 

Question:  What happens after I receive a favorable (emphasis added) ALJ Decision? 

Answer:  Favorable rulings by an Administrative Law Judge (ALJ) do not result in immediate payment of claims.

Once an ALJ rules favorably on an appeal, the Office of Medicare Hearings and Appeals (OMHA) forwards the decision and case file to the Administrative Qualified Independent Contractor (AdQIC).

The AdQIC subsequently has 10 days to update the appeals tracking system and to decide whether the case requires further review by the Medicare Appeal Council or is sent to the Medicare contractor for payment. The AdQIC’s review cannot begin until it receives the case file. Regulations do not require the OMHA to forward case files within a given amount of time.

If the AdQIC refers the case to the Medicare Appeals Council, the Medicare contractor that processed the original claim is notified. Effectuations (payment of claims) made by the contractor are then contingent upon the Medicare Appeal Council’s decision.

For ALJ decisions that require no further review, the AdQIC sends an effectuation notice to the contractor, who must then pay specified claim amounts within 30 days. Effectuations in which the contractor must calculate the amount may take up to 60 days.

While an AdQIC doesn’t have the authority to appeal a favorable ALJ decision to the MAC, it can (and often will) refer a case (where the provider prevailed) to the MAC and ask that the council review the decision.  Two primary points of contention have been typically been argued by the AdQIC:

(1)   Cases where the ALJ has overturned an extrapolation of damages.

(2)   Cases where the ALJ has held that a provider is not liable for alleged overpayments associated with one or more claims under Section 1870 of the Social Security Act.

In many (but not all) cases, the MAC will, in fact, open and review an ALJ’s favorable decision.  The MAC may then remand the case back to the presiding ALJ for reconsideration of the contested points. 

Don’t go into this process alone – retain experienced legal counsel:  

As Medicare claims audit and assessment efforts increase (through CMS’ use of ZPICs, RACs and PSCs), health care providers will be under increasing pressure to ensure that statutory and regulatory coding and billing requirements are met.  Despite your best efforts to remain compliant, you may find that your practice or clinic is subjected to review.  Should that occur, we strongly recommend that you retain qualified, experienced legal counsel to represent your interests.  In a number of cases, we have been retained by other law firms to assist with administrative appeals.  When working with other law firms, the level of our involvement has varied from case to case.

When is a “win” truly a “win”?

Unfortunately, it is becoming more and more difficult each year to rely on a favorable ALJ ruling.  Over the past year, the AdQIC has become more aggressive than ever in challenging holdings with which it disagrees.  As a result, it is important that your counsel plan for beyond the ALJ level when asserting defenses to the government’s arguments.  While a number of arguments may be persuasive to an ALJ, the same arguments may also automatically generate a referral by an AdQIC to the MAC. When hiring an attorney to handle your Medicare claims case, be sure and ask prospective counsel the following:

• How much of your law practice is devoted to health law issues?
• Please describe the extent of your experience handling large, complex administrative appeals of denied Medicare claims.
• How often have you responded to AdQIC appeals of favorable ALJ decisions?
• How often have you handled MAC appeals?
• Can you provide provider references?

Hopefully, your practice will not face a large administrative appeal of denied Medicare claims.  However, should such an event occur, you need to be ready to respond to the contractor’s audit.  While there are no guarantees in this business, knowledge of the rules and experience handling administrative appeals may prove essential to increasing the likelihood of your success.

Liles Parker attorneys have extensive experience handling complex Medicare administrative appeals.  Our attorneys have represented Home Health Agencies, Hospice Companies, CMHCs, Ambulance Companies, Chiropractic Clinics, Physical / Occupational / Speech Therapy Clinics, Nursing Homes, Physian Practices (E/M Claims), Psychology Practices, DME Companies and a wide variety of other Medicare Part A and Part B providers.  Should your practice or clinic be audited by a ZPIC, RAC or PSC, give us a call for a free consultation.  We can be reached at: 1 (800) 475-1906. 

CMS Authorizes Medicare Contractors to Accept Administrative Appeals by Facsimile and Secured Internet Transmission but Many Contractors have Yet to Implement this Change

(November 21, 2010):  Earlier this year, the Centers for Medicare and Medicaid Services (CMS) issued Change Request (CR) 6958, titled “Guidelines to Allow Contractors to Develop and Utilize Procedures for Accepting and Processing Appeals Via Facsimile and/or Via a Secure Internet Portal/Application.”  Health care providers and their counsel welcomed the guidance, anticipating that this change would make it easier when filing requests for redetermination and reconsideration. 

To its credit, CMS authorized Part A and Part B Medicare Administrative Contractors (MACs), Durable Medical Equipment MACs, Fiscal Intermediaries, Carriers and Regional Home Health Intermediaries (RHHIs) to accept administrative appeals by facsimile and / or secured internet transmission.  However, CMS made this change optional — at the discretion of the contractor.  CMS did not require (at least for now) that contractors implement this change.  Nor did CMS provide additional funding for contractors desiring to allow providers to file administrative appeals in this fashion.  

Many health care providers around the country have experienced difficulty quickly and appropriately responding to pre-payment review actions and extrapolated post-payment audits conducted by Zone Program Integrity Contractors (ZPICs). As Recovery Audit Contractors (RACs) work their way down the provider chain, these pressures will undoubtedly increase.  The option to file an administrative appeal by facsimile or secured internet transmission would significantly assist health care providers, by both reducing filing costs (e.g. FedEx / USPS expenses) and by providing providers with options for handling appeals that must be immediately filed in order to meet applicable deadlines.

To date, few contractors have chosen to allow health care providers to file administrative appeals by facsimile or secured internet transmission. For example, TrailBlazer serves as the Part A and Part B MAC for providers in Texas.  Over the last year, providers in South Texas have been increasingly subjected to site visits, Medicare number revocation actions, pre-payment reviews and post-payment audits. Earlier this month, TrailBlazer released updated guidance covering the administrative appeals process for use by providers in its MAC region. Unfortunately, TrailBlazer confirmed its position in this regard, expressly stating “At this time, redeterminations may not be faxed to TrailBlazer.”  Hopefully, the filing of appeals by facsimile and secured e-mail will be permitted by TrailBlazer in the near future.

 As set out in CR 6958, CMS requires that contractors choosing to accept administrative appeals by facsimile and secured e-mail abide by a number of requirements covering the handling of appeals filed in this fashion.

Liles Parker attorneys represent a wide variety of health care providers in Medicare administrative overpayment cases around the country.  Should you have questions regarding a Medicare audit of your Physician Practice, Clinic, Home Health Agency, Hospice, Community Mental Health Center or DME Company, give us a call for a complimentary consultation.  Mr. Liles can be reached at 1 (800) 475-1906.

Existing Home Health Agencies are Considered a “Moderate” Risk According to CMS for Screening Purposes Under its Recent Proposed Rule

(October 5, 2010): late last month, the Centers for Medicare & Medicaid Services (CMS) published a Proposed Rule entitled “Medicare, Medicaid, and Children’s Health Insurance Programs; Additional Screening Requirements, Application Fees, Temporary Enrollment Moratoria, Payment Suspensions and Compliance.” 

As set out in the Proposed Rule, the Health Care Reform Act passed last March:

 “. . . makes a number of changes to the Medicare and Medicaid programs and CHIP that enhance the provider and supplier enrollment process to improve the integrity of the programs to reduce fraud, waste, and abuse in the programs.” 

 Among these various changes mandated by the legislation, the Secretary, HHS, is required to determine the level of screening applicable to providers and suppliers according to the risk of fraud, waste, and abuse the Secretary determines is posed by particular categories of providers and suppliers.  As set out in the Proposed Rule, CMS intends to categorize health care providers and suppliers by the “Level of Risk” generally associated with that type of provider or supplier.  Three levels of risk have been identified, “Limited,” “Moderate,” and “High.”  The types of screening tools to which a provider will be subjected vary depending on the level of risk assigned to a specific type of provider or supplier by CMS. The types of screening tools to be used at each level of risk include the following: 

Category of Risk and Required Screening for Medicare Physicians, Non-Physician Practitioners, Providers, and Suppliers 

Type of Screening Required	Limited	Moderate	High
Verification of any provider/supplier-specific requirements established by Medicare	X	X	X
Conduct license verifications, (may include licensure checks across States)	X	X	X
Database Checks (to verify Social Security Number (SSN), the National Provider Identifier (NPI), the National Practitioner Data Bank (NPDB) licensure, an OIG exclusion, taxpayer identification number, tax delinquency, death of individual practitioner, owner, authorized official, delegated official, or supervising physician)	X	X	X
Unscheduled or Unannounced Site Visits		X	X
Criminal Background Check			X
Fingerprinting			X

 Notably, CMS considers currently enrolled “Home Health Agencies” to represent a “Moderate” risk.  In comparison, CMS considers prospective (newly enrolling) home health agencies to be a “High Risk.” Commenting on the screening steps that CMS will be taking when dealing with providers and suppliers with a “Moderate” level of risk:

 “We propose that Medicare contractors will conduct unannounced pre- and/or post-enrollment site visits in addition to those screening tools applicable to the “limited” level of risk. Based on the success of pre-and/or post enrollment site visits conducted by the NSC during the enrollment process for suppliers of DMEPOS and a similar process established by carriers and A/B MACs during the enrollment of IDTFs, we believe that unscheduled and unannounced pre-and post-enrollment site visits help ensure that suppliers are operational and meet applicable supplier standards or performance standards. In addition, we believe that unscheduled and unannounced pre-and post-enrollment site visits are an essential tool in determining whether a provider or supplier is in compliance with its reporting responsibilities, including the requirement in §424.516 to notify the Medicare contractor of any change of practice location. Moreover, §424.530(a)(5) and §424.535(a)(5) give CMS and its Medicare contractors the authority to deny or revoke Medicare billing privileges for providers and suppliers respectively if the provider or supplier is not operational or the provider does not maintain the established provider or supplier performance standards.” (emphasis added).

 In addition to the screening steps to be taken, the Proposed Rule also covers the implementation of payment suspension authorities and a variety of other provisions set out in the Health Care Reform Act.

 Should you have any questions regarding these issues, please give us a call at 1 (800) 475-1906 for a free consultation.

CMS Publishes Stark Self-Disclosure Protocol

(September 30, 2010): The Health Care Reform Act has dramatically changed the future of health care for millions of Americans.  While many of its provisions are directed at access and affordability issues, a significant portion of the Act addresses various loopholes in existing statutory and regulatory provisions aimed at fighting health care fraud.  One of these statutes is the “Physician Self-Referral Statute,” Section 1877 of the Social Security Act, also known as “Stark.”

Section 6409 of the Health Care Reform Act required that the Secretary, Health and Human Services (HHS) work with HHS’ Inspector General of HHS to establish a Medicare self-referral disclosure protocol.  Last week, CMS published a Self-Referral Protocol to be used by providers when disclosing Stark violations.  Notably, this protocol is specifically limited to Stark issues. 

As the protocol discusses:

“Participation in the SRDP [self-referral disclosure protocol] is limited to actual or potential violations of the physician self-referral statute. The OIG’s Self-Disclosure Protocol is available for disclosing conduct that raises potential liabilities under other federal criminal, civil, or administrative laws. See. 63 Fed. Reg. 58399 (Oct. 30, 1998); OIG’s Open Letter to Health Care Providers, March 24, 2009. For example, conduct that raises liability risks under the physician self-referral statute may also raise liability risks under the OIG’s civil monetary penalty authorities regarding the federal anti-kickback statute and should be disclosed through the OIG’s Self-Disclosure Protocol. Disclosing parties should not disclose the same conduct under both the SRDP and OIG’s Self-Disclosure Protocol.”

When evaluating self-disclosures made, CMS has stated that it will consider the following factors in its assessment of whether or not to reduce any amounts that may be owed due to violations of the Stark statute.  These include:

(1) The nature and extent of the improper or illegal practice;

(2) The timeliness of the self-disclosure;

(3) The cooperation in providing additional information related to the disclosure;

(4) The litigation risk associated with the matter disclosed; and

(5) The financial position of the disclosing party.

 Importantly, there are no guarantees.  CMS has no obligation to reduce any amounts that may be owed.   The Stark statute can be quite complicated and providers facing Stark issues should discuss these points with qualified legal counsel when deciding whether or not to use the self-disclosure protocol.

Liles Parker attorneys are experienced in assessing business arrangements which may implicate the Stark statute.  Should you have questions regarding Stark or this self-disclosure protocol, please give us a call at 1 (800) 475-1906.  

As Noted at the Los Angeles DOJ/HHS Health Care Fraud Summit — Data Mining is Being Used by DOJ to Target Health Care Providers

(August 31, 2010): Introduction: Last week, department heads of the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS), met in Los Angeles, CA and conducted the second of a planned series of “Regional Health Care Fraud Prevention Summits.”  Following-up on a similar conference held in Miami, DOJ Attorney General Eric Holder HHS Secretary Kathleen Sebelius discussed a number of ongoing concerns and remedial steps that are being taken to identify, investigate and prosecute instances of Medicare fraud.  In addition to these agency heads, participants learned of current and additional planned fraud enforcement initiatives from Federal and State law enforcement officials.

 Issues Discussed at the Summit: As Attorney General Holder discussed, the administration’s current enforcement actions were having a significant impact on health care fraud.  In fact, additional funding has been allocated to expand the HEAT program to additional cities:

 “. . . Last year brought an historic step forward in this fight.   In May 2009, the Departments of Justice and Health and Human Services launched the Health Care Fraud Prevention and Enforcement Action Team, or “HEAT.”   Through HEAT, we’ve fostered unprecedented collaboration between our agencies and our law enforcement partners.   We’ve ensured that the fight against criminal and civil health care fraud is a Cabinet-level priority.   And we’ve strengthened our capacity to fight health care fraud through the enhanced use of our joint Medicare Strike Forces.    

 This approach is working.   In fact, HEAT’s impact has been recognized by President Obama, whose FY2011 budget request includes an additional $60 million to expand our network of Strike Forces to additional cities.   With these new resources, and our continued commitment to collaboration, I have no doubt we’ll be able to extend HEAT’s record of achievement.   And this record is extraordinary.

 In just the last fiscal year, we’ve won or negotiated more than $1.6 billion in judgments and settlements, returned more than $2.5 billion to the Medicare Trust Fund, opened thousands of new criminal and civil health care fraud investigations, reached an all-time high in the number of health care fraud defendants charged, and stopped numerous large-scale fraud schemes in their tracks.  

 We can all be encouraged, in particular, by what’s been accomplished in L.A.   Criminals we’ve brought to justice here – in the last year alone – include the owners of the City of Angels Hospital, who   pleaded guilty to paying illegal kickbacks to homeless shelters as part of a scheme to defraud Medicare and Medi-Cal; a physician in Torrance who defrauded insurance companies by misrepresenting cosmetic procedures as “medically necessary”; an Orange County oncologist who pleaded guilty to fraudulently billing Medicare and other health insurance companies up to $1 million for cancer medications that weren’t provided; a Santa Ana doctor who pleaded guilty to health care fraud for giving AIDS and HIV patients diluted medications; and a ring of criminals who defrauded Medi-Cal out of more than $4.5 million by using unlicensed individuals to provide in-home care to scores of disabled patients, many of them children.“ (emphasis added).

 As HHS Secretary Sebelius further noted:

“In March, we gave him some help when Congress passed and the president signed the Affordable Care Act — one of the strongest health care anti-fraud bills in American history. Under the new law we’ve begun to strengthen the screenings for health care providers who want to participate in Medicaid or Medicare.  And I am proud to announce that CMS is issuing a final rule strengthening enrollment standards for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

This rule and others coming soon mean that only appropriately qualified suppliers will be enrolled in the program. The days when you could just hang a shingle over a desk and start submitting claims are over. No more power-driven wheelchairs for marathon runners.  Under the new law, we’re also making it easier for law enforcement officials to see health care claims data from around the country in one place, combining all Medicare-paid claims into a single, searchable database. And we’re getting smarter about analyzing those claims in real time to flag potential scams.  It is what credit card companies have been doing for decades:  If 10 flat screen TV’s are suddenly charged to my card in one day, they know something’s not quite right. So they put a hold on payment and call me right away. 

We should be able to take the same approach when one provider submits ten times as many claims for oxygen equipment as a similar operation just down the road.  It’s about spotting fraud early before it escalates and the cost grows.  As we step up our efforts to stamp out fraud, we’re holding ourselves accountable. The President has made a commitment to cut improper Medicare payments in half by 2012.”

While DOJ Attorney General Holder’s and HHS Secretary Sebelius’ presentations provided an overview of law enforcement’s current and future efforts, the comments of DOJ Assistant Attorney General for the Criminal Division, Lanny A. Breuer, were especially enlightening in terms of how providers are being identified and targeted for investigation.   As Mr. Breuer discussed: 

“In 2007, the Criminal Division of the Justice Department refocused our approach to investigating and prosecuting health care fraud cases. Our investigative approach is now data driven: put simply, our analysts and agents review Medicare billing data from across the country; identify patterns of unusual billing conduct; and then deploy our “Strike Force” teams of investigators and prosecutors to those hotspots to investigate, make arrests, and prosecute. And as criminals become more creative and sophisticated, we intend to use our most aggressive investigative techniques to be right at their heels. Whenever possible, we actively use undercover operations, court-authorized wiretaps and room bugs, and confidential informants to stop these schemes in their tracks.” (emphasis added).

 As Mr. Breuer’s comments further confirm, health care providers are being identified based on their billing patterns.  Through the use of data-mining, providers who coding and billing practices identify them as “outliers,” are finding themselves subjected to  administrative, civil and even criminal investigation.

 Commentary:   As counsel for a wide variety of health care providers around the country, we are especially concerned that honest, hard-working health care providers are finding themselves and their practices / clinics under investigation merely because:  (1) their productivity is higher than that of their peers, or (2) their focus is specialized and often treats a higher percentage of seriously sick patients which ultimately requires a more detailed or comprehensive examination than one might normally find.  Ultimately, through our representation of health care providers who have been targeted through data-mining, we believe that it is fundamentally unfair to investigate a provider merely on the basis of statistical data which can be manipulated in a thousand different ways in order to justify going after a specific provider or a type of practice.

 On the administrative side, when data-mining is used as a targeting tool, providers are being audited and pursued by ZPICs, PSCs and RACs – each of is incentivized (either because they receive a percentage of any overpayment OR they are under contract with CMS to find overpayments and wrongful billings) to find fault with the provider.

 Continuing Concerns:   Under the current system, providers targeted through data-mining are likely to be saddled with extrapolated damages which can easily run into the millions of dollars, regardless of the fact that a large percentage of these providers are eventually exonerated (either fully or partially) when the case is heard by an Administrative Law Judge.

 Health care providers subjected to an administrative audit (by a ZPIC, PSC or RAC), civil investigation (such as a review by the DOJ for possible False Claims Act liability), or criminal investigation (by DOJ or a State Medicaid Fraud Control Unit) should immediately contact your counsel.  Extreme care should be taken when making statements to Federal or State investigators.  Should the provider make a statement that is false or misleading, such comments could be used as the basis for bringing a separate cause of action.  Your legal counsel may choose to handle all contacts with the government.

Liles Parker attorneys represent health care providers in administrative, civil and criminal health care fraud and overpayment case.  Should you have questions regarding these issues, give us a call.  You may call 1 (800) 475-1906 for a free consultation.

 

 

 

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