(May 20, 2022): Acupuncture audits and investigations by federal, state and private payors have greatly expanded in recent years. One of the most active players conducting acupuncture audits today is the U.S. Department of Veterans Affairs. (VA). It is worth noting that long before traditional Medicare even considered covering acupuncture services, the VA made these services available to service-connected veterans around the country as part of the "Veterans’ Access to Care through Choice, Accountability and Transparency Act of 2014" (Choice Act)., The Choice Act provided funding for veterans to obtain medical care and treatment services from non-VA employed health care providers, including qualified acupuncturists. The "VA MISSION Act of 2018" further expanded a veteran’s ability to seek care locally. During Fiscal Years (FYs) 2018 and 2019, the VA paid approximately $114 million to non-VA, community acupuncture providers. Notably, at the time of its passage, the VA did not employ sufficient acupuncturists (if any) to provide these services in-house. In December 2021, the VA’s Office of Inspector General (OIG) found that many of the 607,000 acupuncture services provided during the audit period did not qualify for coverage and payment. Since the issuance of the OIG’s report, the number of VA acupuncture audits has risen dramatically. This article examines the reasons cited by the VA’s OIG when denying acupuncture claims and discusses ways to reduce your level of audit risk.
I. Passage of the Veterans Access, Choice, and Accountability Act of 2014:
The VA has a long and storied history of providing comprehensive care to service-connected veterans. As the VA’s program responsibilities have grown, the scope of services provided has also expanded. Unfortunately, the VA’s inability to meet the growing demand for medical care for our nation’s veterans led to the passage of the Choice Act. The Veterans Health Administration, Office of Community Care (collectively referred to as the “VHA”) is the section within the VA that is responsible for managing programs that allow veterans to receive medical care, including acupuncture services, from local, non-VA employed, community health care providers. The VHA has contracted with a number of third-party administrators to process and pay the acupuncture claims of these non-government acupuncture providers.
II. How is a Veteran Referred to a Non-VA Provider for Acupuncture Services?
Even before passage of the Choice Act, the VA had been looking for ways to provide alternatives to opioid use for pain management. The VA’s "Opioid Safety Initiative" was started in October 2013 as a way to address the opioid problem through the promotion of complementary and alternative medicine practices (such as acupuncture and chiropractic treatments).
With the enactment of the Choice Act and VA MISSION Act, the department accelerated its efforts to referral appropriate patients to non-VA providers for medical services. In the context of acupuncture services, before referring a veteran for these treatment services to a non-VA acupuncture service provider, a VHA medical center provider is supposed to evaluate the veteran’s clinical needs. Referrals to an outside, non-VA provider are supposed to be entered into the patient’s medical record. If a veteran meets the eligibility requirements, VHA staff are supposed to contact the veteran and go over non-VA options to obtain the required acupuncture services. Once a non-VA provider is selected, the VHA forwards an authorization to the non-VAed provider. A copy of the authorization is also sent to the VA’s third-party administrator responsible for paying the non-VA provider’s acupuncture claims.
III. Problems Found in VA Acupuncture Audits of Non-VA, Community Providers:
In an effort to determine whether the VHA was properly paying non-VA acupuncture providers, the VA’s OIG conducted an audit of these claims. In December 2021, the OIG issued its findings. After reviewing a sample of the acupuncture claims paid to non-VA, community acupuncturists, the OIG found that the VHA improperly paid approximately $85.4 million for acupuncture services during FY 2018 and 2019. Breaking down the improperly paid acupuncture claims into categories, the OIG found the following problems:
- Approximately 51,200 acupuncture claims lacked the necessary authorizations required by law. Prior to treating an eligible veteran, a non-VA, community acupuncture provider was required to obtain authorization from VHA (through its contractor) to provide the care. Unfortunately, rather than restricting payments for acupuncture claims to the number of visits or specific dates permitted under the authorization made, the VA’s financial services system automatically paid for ALL claims submitted within one year of the authorization date. This error was further compounded because the VHA did not perform internal audits of the claims submitted by non-VA employed acupuncture providers. The failure to meet the VA’s authorization requirements resulted in the following errors:
- The number of acupuncture visits paid exceeded the number that was authorized by the VA.
- The date of a claimed acupuncture service was after the allowable dates on the authorization.
- The third-party administrator authorized claims for veterans who did not meet the mileage requirements.
- Claims paid included both acupuncture and chiropractic treatments when authorization was only for one of these types of care.
- Approximately 76% of the acupuncture claims were not properly documented. The VA’s OIG found that most of the acupuncture claims submitted for payment by non-VA employed acupuncturists were not fully supported by medical documentation that complied with the VHA’s requirements for completeness and accuracy. The OIG typically found the acupuncture claims reviewed were missing necessary medical documentation and / or the information documented was illegible. In order to provide acupuncture services to veterans, non-VA employed providers are required to comply with the medical documentation requirements set out in the VA’s Office of Community Care Field Guidebook. The VA requires that non-VA providers meet the American Medical Association’s (AMA’s) Current Procedural Terminology (CPT) and CMS guidelines. Notably, the VA’s contracts with its third-party administrators also require that claims conform to Medicare’s billing requirements.
- VHA facility staff failed to follow the VA’s “Office of Community Care Field Guidebook” when reauthorizing acupuncture care. One of the ways that the VA is supposed to safeguard both our veterans and federal monies is by working to ensure that veterans "receive the right care, in the right setting, at the right time, and for the right clinical reasons." As set out in the Office of Community Care Field Guidebook, the VHA is also supposed to evaluate the efficacy of non-VA care prior to reauthorizing additional acupuncture services. Unfortunately, that often didn’t happen. Improper payments were made for acupuncture claims due to treatment not authorized.
- Evaluation and Management (E/M) Services were often non-payable. The OIG found that in a number of instances the E/M services provided and billed were not fully supported in the medical records of the patient. In other instances, the OIG found that essential information was missing or that the documentation provided was illegible.
IV. Lessons Learned from the VA OIG’s Acupuncture Audits:
There are a number of key lessons to be learned from the VA OIG’s acupuncture audit report:
First, as a non-VA acupuncturist, you must always ensure that the claims / treatments provided are both medically necessary and have been fully documented in the patient’s medical records.
Second, you must ensure that the acupuncture services provided are administered in the care setting by the medical provider that has been authorized by the VHA.
Third, you must take care to limit the acupuncture services to the number that has been authorized by VHA, within the time period that has been authorized by the government.
Fourth, non-VA employed providers must take care to correctly code the acupuncture services provided in accordance with the AMA CPT Codebook. As you will recall, CPT Codes 97810 through 97814 are defined as follows:
- CPT 97810 – Acupuncture, one or more needles, without electrical stimulation, initial 15 minutes of personal one-on-one contact with the patient.
- CPT 97811 – Acupuncture, one or more needles, without electrical stimulation, each additional 15 minutes of personal one-on-one contact with the patient, with re-insertion of needle(s)(List separately in addition to code for primary procedure).
- CPT 97813 – Acupuncture, one or more needles, with electrical stimulation, initial 15 minutes of personal one-on-one contact with the patient.
- CPT 97814 – Acupuncture, one or more needles, with electrical stimulation, each additional 15 minutes of personal one-on-one contact with the patient, with re-insertion of needle(s)(List separately in addition to code for primary procedure).
Fifth, as a final point, keep in mind that neatness counts. The VA OIG’s report repeatedly made a point of the fact that claims had to be denied because the medical documentation they reviewed was illegible.
V. What Are the Potential Ramifications to Your Practice of a VA OIG Acupuncture Audit?
Not surprisingly, the VA OIG’s acupuncture audit report has generated number of provider audits and investigations around the country. These audits and investigations are being conducted by both third-party administrators working for the VA and, in some cases, by the U.S. Department of Justice (DOJ). If you receive notice of an audit or investigation of your acupuncture claims, it is essential that you take this matter seriously. The results of these audits and investigations can lead to the following:
- Administrative recoupment: Depending on the amount in controversy and the specific conduct identified by the VA’s third-party administrator, you may be asked to repay monies that you were wrongfully paid. Several of these bases cited in overpayment cases have been the fact that the acupuncture services were not authorized, the medical documentation is incomplete or missing, and / or it was illegible.
- Civil False Claims Liability: The civil False Claims Act is the primary civil health care fraud enforcement tool utilized by the federal government. Simply put, if a provider knowingly submits a false claim to the government for payment, the provider may be liable for significant penalties (currently up to $25,076 per false claim), plus treble damages under the False Claims Act. Most of the VA acupuncture audits being handled by the DOJ have been proceeding under the civil False Claims Act.
- Criminal Liability: To the extent that an audit or investigation finds that you have engaged in conduct that may constitute health care fraud, or a violation of another criminal statute, the DOJ will not hesitate to pursue a case criminally. Examples of conduct that the government may contend is criminal in nature may include:
- Billing for acupuncture services that were not rendered.
- Performing non-covered services (such as massage therapy or another type of alternative / complimentary medicine) but billing fraudulently billing for acupuncture services.
- Having the acupuncture services performed by a provider who is ineligible to treat veterans (for example, an acupuncturist may have been excluded from participation in federal health programs), but billing for the acupuncture services under the name of a qualified, VA-credentialed provider.
With the expansion of coverage for acupuncture services continues to grow, we expect to see the number of acupuncture audits and investigations increase. State, federal and private payor Special Investigation Units (SIUs) are not actively investigating acupuncture claims around the country. It is important that you review your medical necessity, documentation, coverage, coding and billing practices to ensure that you are meeting the requirements mandated by each individual payor. Are your acupuncture services being audited or investigated? If so, call us for a free consultation. 1 (800) 475-1906.
Robert W. Liles, J.D, M.S., M.B.A., represents acupuncturists and other health care providers around the country in connection with claims audits and investigations by the Veterans Administration, Medicare, Medicaid and private payors such as United Healthcare. He also represents licensed providers in connection with complaints filed with State Licensure Boards. For a complimentary consultation regarding your case, please give us a call at: 1 (800) 475-1906.
-  The Department of Health and Human Services (HHS), Centers for Medicare and Medicare Services (CMS) did not decide to cover a narrow class of acupuncture services (chronic low back pain) under Section 1862(a)(1)(A) of the Social Security Act until January 21, 2020. A copy of CMS’s Decision Memo titled “National Coverage Determination for Acupuncture for Chronic Low Back Pain” is available at the following link. Please note, the coverage of acupuncture services by Medicare Advantage plans may differ from that of traditional Medicare.
-  The "Veterans Access, Choice, and Accountability Act of 2014,” (Public Law 113-146) (Choice Act), as amended by the "Department of Veterans Affairs Expiring Authorities Act of 2014" (Public Law 113-175) The Choice Act states, "In the case of an eligible veteran... the Secretary shall... [provide the care at VA or] authorize that such care or services be furnished to the eligible veteran under this section for a period of time specified by the Secretary.”
As early as 1636, long before the establishment of the United States, the Pilgrims of Plymouth Colony passed a law that soldiers disabled in their war with the Pequot Indians would be supported by the colony. Approximately 140 years later, the Continental Congress of 1776 encouraged enlistment in support of the Revolutionary War by providing pensions to disabled soldiers. During the Civil War, President Lincoln addressed the care veterans in his second Inaugural Address on March 4, 1865:
"With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation’s wounds, to care for him who shall have borne the battle and for his widow, and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations." (Emphasis added). (Notably, these enduring, italicized words became the motto of the Veterans Administration in 1959)."
When the United States entered into World War I, Congress took action to establish a new system of benefits for veterans. In 1921, Congress combined all of the existing veteran programs into a new federal Veteran program. This federal Veterans program was elevated to the level of a “Bureau” and effectively created the “Veterans Administration.” The Veterans Administration was further elevated department by President Ronald Reagan in 1988. (For a more detailed overview of the History of the VA, please see the following link).
-  It is worth noting that the VA’s Patient-Centered Community Care program was established on September 3, 2013, before the Veterans Choice Program. The VA’s Patient-Centered Community Care program permitted veterans to seek health care from non-VA providers. The Patient-Centered Community Care Program was administered by two third-party administrators. In October 2014, VA expanded the contracts with the two third-party administrators to include responsibility for the Veterans Choice Program
-  The "VA MISSION Act of 2018," (Public Law 115-182). The MISSION Act states, "[The] covered veteran may only receive care or services under this section upon the authorization of such care or services by the Secretary."
-  Department of Veterans Affairs, Office of Inspector General, report titled "VHA Improperly Paid Reauthorized Non-VA Acupuncture and Chiropractic Services." (December 21, 2021).
-  Third-party administrators were only supposed to authorize care on behalf of VHA for veterans who lived more than 40 miles from the nearest VA Medical Center OR be unable to get an appointment within 30 days. Since there are currently very few acupuncturists currently working at VA Medical Centers, most eligible veterans who qualify for medical coverage end up receiving acupuncture treatments from a non-VA provider.
-  VHA Handbook 1907.01, Health Information Management and Health Records, March 19, 2015. According to the handbook, "The medical facility Director, or designee, is responsible for establishing policies and processes in compliance with this Handbook, to include ensuring … Non-VA medical care is documented," and "the latest United States editions of the American Medical Association’s CPT … must be used to provide uniform disease and operation terminology." For billing purposes, a treatment is represented by a Current Procedural Terminology code.
-  The fact that the VHA requires non-VA employed providers meet Medicare’s billing requirements is somewhat confusing since Medicare did not start covering acupuncture services until January 2020 and has limited coverage to only patients with chronic low back pain. The VA OIG’s acupuncture audit only looked at 2018 and 2019 paid claims.
-  or a more detailed discussion on acupuncture documentation requirements, please see our article titled "Private Payors are Aggressively Conducting Acupuncture Audits."
-  For claims or statements made on or after January 29, 2018, but before June 19, 2020, the new minimum which may be assessed under 31 U.S.C. 3729 was raised to $11,181 and the maximum penalty was raised to $22,363. For claims or statements made on or after June 19, 2020, but before December 13, 2021, the new minimum which may be assessed under 31 U.S.C. 3729 was raised to $11,665 and the maximum penalty was raised to $23, 331. For claims or statements made on or after December 13, 2021, but before May 9, 2022, the new minimum which may be assessed under 31 U.S.C. 3729 was raised to $11,803 and the maximum penalty was raised to $23,607. For claims or statements made on or after May 9, 2022, the new minimum which may be assessed under 31 U.S.C. 3729 was raised to $12,537 and the maximum penalty was raised to $25,076