(April 2, 2018): Our nation’s demographics are changing. In less than 20 years, it is estimated that for the first time in country’s history, the number of individuals over the age of 65 will exceed the number of children. These increases are already being seen in our rapidly expanding Medicare healthcare benefit program. At last estimate, Medicare Administrative Contractors (MACs) processed an estimated 1.2 billion claims on behalf of America’s seniors. As the Medicare program has grown, the Centers for Medicare and Medicaid Services (CMS) has employed a variety of different claims audit mechanisms to better ensure that the Medicare Trust Fund is protected from waste, fraud and abuse. The Provider Self-Audit Validation and Extrapolation (PSAVE) pilot program is among the agency’s most recent efforts to protect the integrity of the Medicare program. An overview of the PSAVE pilot program is set out below.
I. Providers and Suppliers Currently Subject to the PSAVE Pilot Program:
In November 2017, Noridian Healthcare Solutions LLC (Noridian), the MAC for Jurisdiction F, and CMS launched a pilot Medicare claims self-auditing program. Jurisdiction F is comprised of Alaska, Arizona, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. When announced, the program was touted as a way to provide long term educational benefits to Medicare providers, while also granting “immunity” from further audit of Medicare claims by both the provider’s MAC and from the Recovery Auditor (RA) contractor assigned to the provider. Is your practice likely to receive an “invitation” to conduct a self-audit of its claims? Let examine the pilot program in more detail to find out:
II. Why Was Your Practice Invited to Participate in the PSAVE Pilot Program?
While Noridian claims that the PSAVE pilot program is open to almost any Medicare Part B healthcare provider, invitations to participate where not sent out to all of the Medicare participating providers in Jurisdiction F. Instead, data analytics were used to identify providers with abnormal billing or coding practices, based on the audit findings of Comprehensive Error Rate Testing (CERT) postpayment review data. Initially focusing on only a limited number of medical specialties, providers with irregular billing patterns were first chosen by Noridian to “test” the PSAVE pilot self-auditing program. Primarily relying on sophisticated data mining techniques, Noridian has identified certain Part B providers with questionable billing practices and invited them to participate in the PSAVE pilot program. If your practice was invited to participate in this pilot self-auditing program, this practice is an outlier and will likely be subjected to an audit, whether it chooses to participate in the PSAVE pilot program or not.
III. How Does the PSAVE Pilot Program Work?
At the outset, it is important to keep in mind that if your practice was invited to participate in the PSAVE pilot program, your billing practices have been found to be aberrant by a CERT contractor. As an outlier, your practice’s Medicare claims for reimbursement have been targeted for audit.
Potential PSAVE pilot program participants were sent (or will be sent as the program expands) a notification letter by Noridian which included a sample listing of claims that the MAC has identified for inclusion in your self-audit. In addition to the claims listing, Noridian’s letter also specified the specific elements that it expected each provider to review in connection with the claims. Importantly, Noridian’s notification letter also included an “Appeals Waiver” form that it required participating providers to sign prior to being admitted into the pilot program.
• In exchange for participating in the PSAVE pilot program, Noridian notes that any claims covered by the audit would be immune from subsequent review and audit by the MAC and / or a Recovery Auditor.
• If a provider agreed with the terms of the PSAVE process, the provider was required to return the executed Appeals Waiver form to Noridian and assemble all of the documentation related to the “Education Sample” of claims listed in the MAC’s letter. Importantly, the sample chosen by Noridian was meant to represent a statistically-relevant sample of the provider’s universe of claims previously paid by the Medicare contractor.
• Upon receipt of the signed Appeals Waiver form, a 90-day period for the provider to review the Medicare claims at issue began.
• Prior to conducting the self-audit, Noridian required that each provider participate in a webinar on how the Education Sample of claims was to be reviewed.
• Participating providers then conducted the self-audit. The provider’s findings (and the associated documentation) would then be submitted to Noridian for validation. It is important to note that the validation review may result in additional overpayments identified that may have been missed by the provider when the self-audit was conducted.
• After validating the self-audit findings, Noridian would then determine whether it was appropriate to extrapolate the identified overpayment to the universe OR merely base an overpayment on the sample of claims reviewed. It has our experience that Medicare contractors have the latitude not to extrapolate an overpayment if a provider’s overall error rate is below a certain level (typically less than 10%).
• After extrapolating the overpayment identified, Noridian would then send the provider a letter identifying the overall amount of any extrapolated overpayment that may be owed.
• The provider would then be required to repay the identified overpayment within a timeframe set out in Noridian’s notice letter.
IV. Benefits of Participation in the PSAVE Pilot Program:
Perhaps the greatest benefit of participating in the PSAVE pilot program is the fact that you are in charge and you are directly involved in the claims audit process. As the audit progresses, you will be aware of any problems that may arise with your claims. In simplified terms, self-audits provide you with a significant degree of control over the process. Nevertheless, just because you may exercise a significant degree of control over the audit process does not mean that you will be able to control the outcome of the audit. As with other self-audit / self-reporting programs administered by CMS and the Office of Inspector General (OIG), a provider’s voluntary participation in the PSAVE pilot program allows a provider to present its view of the claims in the best possible light while positioning itself as a “Good Corporate Citizen.”
V. PSAVE Pilot Program Risk Issues:
While proponents of the PSAVE pilot program are quick to point out the educational value of participating in the program, a provider should exercise care before deciding to sigh-onto the program. For example, the Appeals Waiver signed can leave a provider vulnerable at the conclusion of the program, as there is no mechanism of contesting the overpayments that may be identified as owed by Noridian. To make matters worse, the validation review is a blind sample, meaning that the provider will not be fully aware of any potential claims errors until after the validation review has been completed by the MAC. In some cases, Noridian may be willing to permit a provider to submit additional documentation before the MAC concludes its review of the documentation. Since the right to file an administrative appeal of any Medicare overpayment has already been waived, a provider is assuming a significant risk when participating in the PSAVE pilot program.
Additionally, PSAVE pilot program representations extolling the benefits of immunity from subsequent MAC and RAC audits (limited to the specific claims or extrapolated claims set covered by the PSAVE audit) is somewhat misleading. The promised immunity from audit does not apply to Unified Program Integrity Contractor (UPIC) / Zone Program Integrity Contactor (ZPIC) audits, which are far more likely than MAC or RA audits for Medicare Part B providers. Moreover, neither CMS nor its contractors (such as Noridian) have the authority to waive liability on behalf of the OIG or the U.S. Department of Justice (DOJ).
VI. Risks Encountered When Opting-Out of the PSAVE Pilot Program:
Should you decide to decline Noridian’s invitation to participate in the PSAVE pilot program, you need to keep in mind that the likelihood of being subjected to a compulsory audit by Noridian, the UPIC / ZPIC or even OIG is quite high. Your practice’s billing practices have already been identified as problematic. If targeted in a future non-PSAVE audit, you will lose the ability to conduct a self-audit and any identified overpayment may still be subjected to extrapolation. Nevertheless, should such an audit lead to unfavorable results, you will still retain the ability to avail yourself of Medicare’s administrative appeal process. As we have found when appealing an alleged overpayment on behalf of a Part B provider, the ability of a Medicare contractor to correctly conduct a statistical extrapolation of an identified overpayment varies widely from contractor to contractor. When challenging an overpayment that has been assessed, we regularly challenge the statistical methodology and numerous other errors made by the contractor when it calculated extrapolated damages estimates based on the sample of claims reviewed
How should you proceed? If your practice is invited to participate in the PSAVE pilot program, you need to carefully consider the risks of choosing to participate in the initiative. The PSAVE pilot program is merely one of the most recent efforts by CMS to educate providers on their medical necessity, documentation, coding and billing obligations. Although the PSAVE pilot program may advance the agency’s overall goal of reducing Medicare waste, fraud and abuse, there are other more effective, less invasive ways for your practice to integrate and encourage a culture of compliance in your organization.
Adherence to the requirements set out in a well-designed Compliance Program is perhaps a Part B provider’s best approach that can speed up and optimize the proper payment of claims, minimize billing mistakes, and reduce the chances that an audit will be deemed necessary by CMS or one of its program integrity contractors. The “sampling” of one’s claims on a periodic basis to ensure that the services being billed to the Medicare program qualify for coverage and payment would squarely fall within the “Auditing and Monitoring” element identified by OIG as one of the seven elements of a provider’s effective Compliance Program. A “GAP Analysis” of your practice will make it easier to identify any weaknesses in the provision, documentation and submission of your claims for reimbursement by the Medicare program. If you identify an error when reviewing your claims processes, promptly taking remedial action can often minimize the size and scope of any overpayment that is identified. The prompt repayment of any overpayments you may have received can also prevent Federal and State auditors from disrupting your practice and conducting their own assessment of your Medicare claims. Additional risk areas to be considered when reviewing your claims include, but are not limited to:
- What was the source of the referral for services provided by you or another member of your practice?
- Do you or another member of your practice provide something of value in exchange for referrals?
- Do you provide any gifts to patients?
- Are your employees, agents and / or contractors been screened against all Federal and State lists of excluded parties?
- Has the proper level of supervision been exercised in connection with each of the claims billed to Medicare?
Robert W. Liles, M.B.A., M.S., J.D., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Robert represents health care providers and suppliers around the country in connection with Medicare audits by UPICs, ZPICs, MACs, SMRCs and other CMS program integrity contractors. Our firm also represents healthcare providers in connection with Medicare revocation, suspension and exclusion actions. For a free consultation, please call Robert at: 1 (800) 475-1906