Indiana Prescribing Guidelines–Eff. July 1, 2017.

(June 29, 2017):  Deaths resulting from a drug overdose have grown considerably in recent years.  The results of a study published in “Morbidity and Mortality Weekly Report”  by the Centers for Disease Control and Prevention (CDC) found that 63.1% of the overdose-related deaths in 2015 involved opioids. Notably, this was a significant increase from the 60.9% figure recorded in 2014.[1] The CDC has noted that overdoses from prescription opioids have been a “driving problem” contributing to this problem.[2]  In an effort to further address the opioid overdose crisis, in March 2016, the CDC published “CDC Guideline for Prescribing Opioids for Chronic Pain – United States, 2016.” [3] Many states have also taken affirmative steps to ensure that their licensed prescribers of opioids are taking additional steps to safeguard both their patients and the public (from the illegal diversion of prescription drugs). Indiana has recently passed legislation in this regard.  This article examines the actions that the State of Indiana has recently taken to protect the citizens of its state from opioid-related drug death.

I. Recent Legislative Action Taken in Indiana to Address Opioid Prescribing Practices:

On April 26, 2017, Indiana Governor Eric Holcomb signed Senate Enrolled Act 226 (SEA 226) into law.  Notably, this legislation followed similar restrictive measures taken in neighboring Ohio[4] and Kentucky[5] to require that their state professional licensing boards act to ensure that licensees qualified to prescribe opioids were doing so in a manner that is consistent with the CDC’s March 2016 guideline.

II. Overview of Indiana’s Prescriber Requirements:

The provisions of SEA 226 have been codified as a new chapter to the Indiana Code and is effective on July 1, 2017.  The new chapter is Chapter 9.7 Prescribing and Dispensing of Opioids.   As Sec. 1 of Chapter 9.7 provides, the term “prescriber” refers to a practitioner who maintains an Indiana controlled substance registration AND a federal Drug Enforcement Administration registration.

Except as provided under Sec. 2(b), an Indiana qualified prescriber may only issue a prescription for an opioid if the following requirements under Sec. 2(a) are met:

“(1) If the prescription is for an adult who is being prescribed an opioid for the first time by the prescriber, the initial prescription may not exceed a seven (7) day supply.

(2) If the prescription is for a child who is less than eighteen (18) years of age, the prescription may not exceed a seven (7) day supply.”

Notably, the restrictions set out under Sec. 2(a) above do not apply if one of the following circumstances outlined under Sec. 2(b)(1) or (2) is met:

“(1) The prescriber is issuing the prescription for the treatment or provision of any of the following:

(A) Cancer.
(B) Palliative care.
(C) Medication-assisted treatment for a substance use disorder.
(D) A condition that is adopted by rule by the medical licensing board under IC 25-22.5-13-8 to be necessary to be exempted from subsection (a).

(2) If, in the professional judgment of a prescriber, a patient requires more than the prescription limitations specified in subsection (a).”

As the code provisions further reflect, an Indiana prescriber must take care whenever issuing a prescription under the exceptions discussed above in Sec. 2(b)(1) and Sec. 2(b)(2).  Under the provisions of Sec.2(c), if a prescriber:

“(1) determines that a drug other than an opioid is not appropriate; and

(2) uses an exemption specified in subsection (b)(1)(B) or (b)(2) and issues a prescription for a patient that exceeds the limitations set forth in subsection (a);”

The prescriber is required to carefully document in the patient’s medical record the reasons(s) why a drug other than an opiate was not appropriate in the care and treatment of a particular patient.  Additionally, the prescriber must document that the patient is receiving palliative care or that the decision is based on the prescriber’s professional judgment that the exemption is reasonable and appropriate.

An interesting component of the law’s requirement is that a prescriber is required, if requested by a patient, the patient’s legal representative or guardian, to issue an opioid prescription for a lesser amount that the prescriber initially intended to prescribe.  The prescriber must also document in the patient’s medical records that such a request was made and who made it.

III. Conclusion:

Physicians, nurse practitioners and physician assistants authorized to prescribe controlled substances (especially opioids) need to review both the CDC guidance and any state requirements that have been issued to protect both patients and the public from abuse and diversion.  Your prescribing practices are continuously being monitored by Medicare, Medicaid and private payors.  You should monitor and audit your practices as part of your overall Compliance Program. To the extent that your prescribing practices are different from those of your peers, there is a significant likelihood in today’s enforcement environment that you will be audited.

Should you receive an audit request from a NBI MEDIC, UPIC or ZPIC we strongly recommend that you contract a qualified health lawyer to advise you regarding the records submission and appeals process.  This initial level of the audit is a provider’s best opportunity to present his / her arguments in support of payment in a positive light.

Robert W. Liles is Managing Partner at the health law firm, Liles Parker, PLLC.  With offices in Washington, DC, Houston, TX, and Baton Rouge, LA, our attorneys represent pain management physicians and practices around the country in connection with Medicare / Medicaid audits, Compliance Plan reviews and state peer review actions.  Should you have any questions, please call us for a free consultation.  Robert can be reached at: 1 (800) 475-1906.  

[1] Rudd RA, Seth P, David F, Scholl L. Increases in Drug and Opioid-Involved Overdose Deaths — United States, 2010–2015. MMWR Morb Mortal Wkly Rep. ePub: 16 December 2016. DOI: http://dx.doi.org/10.15585/mmwr.mm6550e1


[3] Dowell D, Haegerich TM, Chou R. CDC Guideline for Prescribing Opioids for Chronic Pain — United States, 2016. MMWR Recomm Rep. 2016;65:1-49. http://dx.doi.org/10.15585/mmwr.rr6501e1.

[4]State of Ohio, Board of Pharmacy.  “FAQ: New Limits on Prescription Opiates for Acute Pain, Updated 4/3/2017.” http://www.pharmacy.ohio.gov/Documents/Pubs/Special/ControlledSubstances/New%20Limits%20on%20Prescription%20Opiates%20for%20Acute%20Pain%20-%20Frequently%20Asked%20Questions.pdf

[5] See Kentucky House Bill 333 http://www.lrc.ky.gov/recorddocuments/bill/17RS/HB333/bill.pdf

[6] HHS OIG. “High Part D Spending on Opioids and Substantial Growth in Compounded Drugs Raise Concerns” (OEI-02-16-00290)(Page 4). 6/21/2016. https://oig.hhs.gov/oei/reports/oei-02-16-00290.pdf

[7] Lembke A, Chen J. Use of Opioid Agonist Therapy for Medicare Patients in 2013. JAMA Psychiatry. 2016; 73(9): 990-992.

[8] Ghate SR, Haroutiunian S, Winslow R, McAdam-Marx C. Cost and comorbidities associated with opioid abuse in managed care and Medicaid patients in the United States: a comparison of two recently published studies. Journal of Pain & Palliative Care Pharmacotherapy. 2010 Sep; 24(3): 251-8.

UPIC Audits of Medicare Claims are Underway! Is Your Practice Ready?

June 13, 2017 by  
Filed under Featured, Health Law Articles

UPIC Audits(June 12, 2017):  Historically, the Centers for Medicare and Medicaid Services (CMS) has relied on a network of private contractors to handle the program integrity functions for both the Medicare and Medicaid programs.  With respect to Medicare, CMS has utilized Zone Program Integrity Contractors (ZPICs) and to a much lesser extent, Program Safeguard Contractors (PSCs) to perform a wide range of program integrity functions.[1] On the Medicaid side, CMS utilized Medicaid Integrity Contractors (MICs) to handle Medicaid-related program integrity activities.  As discussed below, the Unified Program Integrity Contractor (UPIC) program is now poised to take over all of these responsibilities.

I. Early Historical Background of Fiscal Intermediaries (FIs) and Carriers:

The Medicare and Medicaid program were first enacted into law on July 30, 1965 by President Lyndon B. Johnson. When the programs were subsequently implemented in 1966, the government chose to use private health care payors to process the claims of Medicare beneficiaries.  Private entities were awarded contracts to serve as “Fiscal Intermediaries” and “Carriers.”  Fiscal Intermediaries were responsible for handling Part A claims.  Generally, Part A claims includes hospital care, skilled nursing facility care, non-custodial nursing home care, hospice care and home health services.  In contrast, Carriers were responsible for handling Part B claims.  Unlike Part A, Medicare Part B covers a wide variety of medically necessary outpatient care and treatment services.  It also covered a number of preventative services.  Additionally, Medicare Part B covers certain types of supplies and durable medical equipment.  Since their inception, both Fiscal Intermediaries and Carriers have been responsible for fulfilling a number of Medicare program education, administrative processing and program integrity roles.

II. Early Medicare Program Integrity Funding Efforts:

Prior to 1996, funding for Medicare program integrity activities was included in Medicare’s general administrative budget.  As such, it had to “compete,” so to speak, with all of the claims-related education and processing programs paid for out of Medicare’s general administrative budget.  As you can imagine, this led to a variety of budgetary conflicts and counterproductive competition between programs to obtain a suitable share of available funding.  The General Accounting Office (GAO) issued reports in 1993 and 1995 calling for separate, dedicated funding for Medicare program integrity activities.[2]

III. Passage of HIPAA – Establishment of Program Safeguard Contractors (PSCs):

On August 21, 1996, the Health Insurance Portability and Accountability Act (HIPAA) was enacted into law.  While HIPAA is practically synonymous with “medical privacy” among both lay persons and most health care providers, law enforcement’s view of the statute was quite different.  Under HIPAA, both the Department of Justice (DOJ) and the Department of Health and Human Services (HHS), Office of Inspector General (OIG) received sizeable, recurring funding that was to be used solely for the investigation and prosecution of cases involving health care fraud, waste and abuse.

Among its many provisions, HIPAA also established the Medicare Integrity Program (MIP). The MIP was created in an effort to further enhance the ability of the Health Care Financing Administration (HCFA)[3] to detect and deter fraud, waste and abuse in the Medicare program. As part of MIP, HCFA created the Program Safeguard Contractor (PSC) program.  From a program integrity standpoint, PSCs were a major step forward.  Among their many duties, PSCs were expressly tasked with identifying potential cases of fraud and making referrals to OIG and DOJ, as appropriate.

IV. Enactment of the MMA – Creation of MACs and ZPICs:

The Medicare Modernization Act (MMA) was subsequently signed into law on December 8, 2003.  The MMA greatly simplified the administrative processing of Medicare claims through its implementation of a comprehensive Medicare Fee-For-Service Contracting Reform program.  Under this program, CMS used the competitive bidding process to replace the existing system of Fiscal Intermediaries (responsible for processing Part A claims) and Carriers (responsible for processing Part B claims) with a single administrative claims processing entity known as Medicare Administrative Contractors (MACs).

In addition to completely revising the administrative claims processing scheme (through the creation of MACs), the MMA also directed that newly-established would take over the responsibility for handling Medicare program integrity functions and activities. A total of seven ZPIC zones were created to work with the MAC in their jurisdiction.  Each of these ZPICs have been responsible for performing program integrity functions Medicare Parts A, B, Durable Medical Equipment Prosthetics, Orthotics, and Supplies, Home Health and Hospice and Medicare-Medicaid data matching, in their respective zones.  Notably, Medicare Part C and D program integrity efforts have been assigned to a single national contractor.  The contractor responsible for handling Medicare Part C and Part D claims is known as the Medicare Drug Integrity Contractor (MEDIC).

V. Rise of the UPICs

As detailed in the Comprehensive Medicaid Integrity Plan. Fiscal Years 2014—2018,” issued by CMS, Section 1936(d) of the Social Security Act requires that the HHS Secretary establish a comprehensive plan for ensuring the program integrity of the Medicaid program, on a recurring 5-fiscal year basis.  To this end, CMS developed Unified Program Integrity Contractor (UPIC) program. Unlike earlier program integrity efforts, UPIC contractors have been tasked with conducting Medicare, Medicaid and Medi-Mal investigations and audits of participating health care providers and suppliers in their assigned jurisdictions.

While both ZPICs and MICs are still active around the country, efforts by CMS to consolidate Medicare, Medicaid and Medi-Mal fraud fighting efforts under a single entity are well underway.  Contracts awarding these integrated program integrity responsibilities were awarded to the following UPICs in May 2016:

  • Health Integrity, LLC (Western Jurisdiction)

  • AdvanceMed Corporation (Midwestern Jurisdiction)

  • IntegriGuard, LLC, dba HMS Federal (Indefinite Delivery Indefinite Quantity)

  • Noridian Healthcare Solutions, LLC (Indefinite Delivery Indefinite Quantity)

  • Safeguard Services LLC (North Eastern Jurisdiction)

  • StrategicHealthSolutions, LLC (Indefinite Delivery Indefinite Quantity)

  • TriCenturion, Inc. (Indefinite Delivery Indefinite Quantity)

At first glance, you will likely note that the virtually none of the awardees are new to the business of “program integrity.”  In fact, each of these contractors have previously served as a ZPIC or PSC.  As such, each of these UPIC contractors have years of experience supporting the government’s efforts to identify, deter, prevent, and reduce fraud, waste and abuse.

VI. What is the Practical Difference Between a PSC, ZPIC and UPIC Contractor, if Any?

You may ask, “What is the difference between a PSC, a ZPIC and a UPIC?”  Great question.  With respect to Medicare, the program integrity activities conducted are essentially the same.  In fact, Chapter 4, Section 4.1, of the Medicare Program Integrity Manual (MPIM) expressly states:

 “For this entire chapter, and until such time as all ZPICs are awarded, any reference to ZPICs shall also apply to Program Safeguard Contractors (PSCs), unless otherwise noted. All references to ZPICs shall also apply to Unified Program Integrity Contractor (UPIC) unless otherwise specified in the UPIC [Statement of Work] SOW.”

VII. UPIC Contracts Have Been Awarded and UPIC Audits are Currently Underway:

A number of our clients around the country have already received requests for records from the UPIC handling their jurisdiction.  One UPIC in particular, AdvanceMed, has been especially active over the last six months in sending out audit letters requesting copies of medical records and other documentation which supports the specific claims being assessed.  As discussed below, a careful review of any request that you receive may give an indication of how the case arose and whether the contractor’s review is merely claims focused or also includes an assessment of the provider’s business relationships and practices.

Requests for documents sent by UPICs and their predecessor ZPICs can vary in terms of scope, purpose and due date.  There are several points that should be considered whenever a UPIC or ZPIC request for medical records is received by a Medicare provider:

When must the requested documents be sent to the UPIC or ZPIC? Over the last year, a number of ZPIC requests for documents have required that the documentation must be submitted to the contractor within 15 days. This is really frustrating in light of the fact that under 42 CFR 420.304(b)(1), the contractor is supposed the health care provider 30 days to submit the documents being requested.  Although most ZPICs will readily agree to an extension of time, if they only agree to extend the deadline to 30 days, they really are granting the provider anything, are they?  To date, we have not seen UPIC requests for documents ask that documents be returned to the contractor in less than 30 days.

What types of documents are requested in contractor’s request? Carefully review the nature of the request.  Is the UPIC only seeking administrative and claims-related medical records OR, is the contractor also seeking documentation related to a provider’s business relationships and / or business practices?

  • UPIC Claims Audits:  Most audits (and claims reopenings) by UPICs are generated as a result of data mining.  In these cases, a UPIC often restricts its review efforts (at least initially) to the claims being assessed, along with relevant, associated administrative materials.  Examples of documents sought in these types of review include, but are not limited to:
  1. Copy of claim, if available;
  2. Beneficiary Notice of Liability;
  3. Authorization of Benefits;
  4. Consent for treatment;
  5. Signed HIPAA privacy notification forms;
  6. Signature card including names and signatures of all personnel documenting in the beneficiary’s chart.
  7. Electronic signature policy;
  8. Copy of face sheet with beneficiary contact information;
  9. Signed “Consent for Treatment” authorizing the medical service;
  10. A copy of the beneficiary’s Medicare card;
  11. A legend or list that defines acronyms, symbols or abbreviations used in the medical records;
  12. A completed Advanced Beneficiary Notice (ABN), as appropriate;
  13. Copies of licenses and / or certifications of any personnel documenting in the beneficiary’s medical records. This includes, physicians, nurse practitioners, physician assistants, nurses, and other caregivers that require licensure or certification;
  14. If electronic signatures are used, documentation which shows that the electronic signatures properly authenticated and dated. The UPIC will also typically ask for the provider to show that safeguards are in place to prevent unauthorized access;
  15. Physician orders;
  16. History and physical;
  17. Patient encounter / visit forms;
  18. Physician’s office and Progress Notes;
  19. Consultation reports (if applicable);
  20. Surgical reports (if applicable);
  21. Pathology reports (if applicable);
  22. Pathology reports (if applicable);
  23. Laboratory tests results (if applicable);
  24. Radiology reports (if applicable);
  25. Previous treatments received to include dates, diagnosis for treatment, treatments administered; and the patient’s response to treatment / progress made;
  26. Discharge notes (if applicable);
  27. Any additional medical records or findings that support the claim(s) or service(s) billed;
  • UPIC Requests for Business Records Along with Claims Audit Information:  In addition to the claims-related documents above, if a UPIC also seeks documents related to a provider’s business practices and / or business relationships (i.e. where does the provider get its referrals AND where does the provider send its referrals), there is greater likelihood that other information has been received by the UPIC which suggests that the provider may be engaging in one or more improper business practices. Providers should exercise extreme caution if this type of information is being sought.  To the extent that a UPIC finds evidence that a provider is engaging in wrongdoing, the contractor is required to make a referral to law enforcement (OIG and / or DOJ).  Examples of the business-related documents that may be sought by the UPIC include:
  1. Copies of any leases;
  2. Please provide a listing of all patients seen on the dates of the claims requested in this audit;
  3. Copies of any Medicare Director agreements;
  4. Name of HER software used (if applicable);
  5. Name and contact information for third-party billing company (if utilized);
  6. Please provide a sample of each encounter form utilized in your office;
  7. Copy of patient collections for the period at issue which reflects any copayments and / or deductibles collected from the beneficiary;
  8. Names, addresses and phone numbers and former positions of individuals who are no longer employed by the organization and left within the past three years;
  9. If you are associated with or a member of any assignment account, do you also bill under separate provider numbers? If so, list the numbers and describe the reasons for separate billing;
  10. Copies of any consulting agreements or other business agreements with laboratories, imaging centers or any other entity whose services are billed to Medicare;
  11. List all employees or contracted staff (physicians, therapists, physician assistants, nurses, etc.) who render services and bill Medicare under your provider number;
  12. List associates, partners, employees who bill under their own PTAN numbers;
  13. List associates, partners, employees who bill under your PTAN number;
  14. List the name of the manufacturer, model number and purpose of each piece of diagnostic or treatment equipment in your office, e.g. laboratory equipment, diagnostic equipment (x-ray, MRI, EMG, nerve conduction equipment, cardiac tests, other specialty diagnostic equipment, etc.), physical therapy equipment, chiropractic equipment;

How many Medicare claims are to be audited?  If 10 or less postpayment claims are being reviewed, more than likely the UPIC is conducting a “Probe Sample” of the provider’s claims.  The purpose of the probe sample is to see if there appears to be a potential problem with the provider’s medical necessity, documentation, coding or billing practices.  If few problems are found, the UPIC will likely issue an “Education Letter” to the provider.  If, however, a significant number of errors are identified, the UPIC will likely expand its audit and issue a subsequent request for the supporting documentation associated with 30 or more claims that have already been paid.

If the UPIC’s initial request for records asks for records associated with 30 or more claims (usually billed over a two year period), there is high likelihood that the UPIC have pulled these claims as part of a “Statistically Relevant Sample.”  As such, the UPIC intends to extrapolated the error rate found to the entire universe of claims.

VIII. How Should You Respond if Your Organization Receives a UPIC Records Request?

Should you receive a UPIC records request, we strongly recommend that you immediately contact a qualified health care lawyer.  There are a number of steps you can take at this initial stage in the review that may have a significant impact on whether the UPIC determines that a more in-depth audit is needed.  Moreover, the potential overpayment may also be greatly reduced (depending on the completeness of a provider’s medical records).  Questions?  Give us a call for a free consultation.

UPIC AuditsRobert W. Liles serves as Managing Partner at Liles Parker, Attorneys & Clients at Law.  Our Firm represents health care providers and suppliers around the country in UPIC, ZPIC, RAC and MIC audits.  We also work with providers to develop and implement an effective Compliance Program.  Call Robert for a free consultation.  He can be reached at:  1 (800) 475-1906.

[1] Only a minimum of legacy PSCs are still operating.  Almost all PSC contracts were previously replaced with ZPIC contracts.

[2] GAO, Medicare Spending: Modern Management Strategies Needed to Curb Billions in Unnecessary Payments, GAO/HEHS-95-210 (Washington, D.C.: Sept. 19, 1995); Medicare: Adequate Funding and Better Oversight Needed to Protect Benefit Dollars, GAO/T-HRD-94-59 (Washington, D.C.: Nov. 12, 1993); and Medicare: Funding and Management Problems Result in Unnecessary Expenditures GAO/T-HRD-93-4 (Washington, D.C.: Feb. 17, 1993).

[3] On June 1, 2001, it was announced that the Health Care Financing Administration (HCFA) was being changed to the Centers for Medicare and Medicare Services (CMS).

Chiropractic Audits by Medicare are Increasing!

June 8, 2017 by  
Filed under Featured, Health Law Articles

Chiropractic Audits(June 5, 2017):   Despite the fact that only three treatment services are covered by Medicare, the number of chiropractic audits conducted by the Department of Health Human Services (HHS), Office of Inspector General (OIG), has remained high over the last decade and is anticipated to grow throughout 2017 and 2018.  As you are aware, the Department of Health and Human Services (HHS), Office of Inspector General (OIG), concluded that in Fiscal Year 2016 the Improper Payment Rate for chiropractic services was 46.0%.  Even more alarming is the fact that OIG has found that the Improper Payment Rate of chiropractic Part B Medicare claims was the highest of any Part B service type in both FY 2015 and FY 2016.[1]

I.   Medicare Contractor Audits of Chiropractic Services are Anticipated to Intensify in FY 2017 and FY 2018.

The already-active Medicare audit landscape facing chiropractors is likely the proverbial “calm before the storm.”  When you think of “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA),[2] it’s likely you first think of the statute’s Quality Payment Program provisions which are intended to tie Medicare’s payments to the quality of the medical being provided.   Unfortunately, the documentation of chiropractic services have the unique distinction of being the only Part B service that are expressly address in MACRA.  A detailed discussion of the documentation requirements for chiropractic services under Medicare Part A will be addressed in a separate article.  The bottom line is simple – chiropractors participating in the Medicare Part B program are strongly encouraged to have a comprehensive assessment of their services conducted as soon as possible.  An overview of the current audit landscape is discussed below.

II.   Almost All Medicare Part B Chiropractic Audits Find Documentation Problems.

As set out in OIG’s Improper Payment Report for FY 2016, when examining the 46% of chiropractic services that were denied, the Centers for Medicare and Medicaid Services (CMS) found that  98.4% of the chiropractic denied claims were denied because of NO DOCUMENTATION or INSUFFICIENT DOCUMENTATION.  We believe that this is due, in large part, to the fact that the clinical reviewers employed by a Zone Program Integrity Contractor (ZPIC) or a Medicare Administrative Contractor (MAC) to audit your chiropractic claims (primarily Registered Nurses), aren’t really qualified to conduct these reviews. Sure, they can read Medicare’s guidelines governing medical necessity, coverage, documentation, coding and billing – but that doesn’t mean that they truly understand what constitutes a “subluxation” or that they can recognize that the patient’s condition warrants manual manipulation. The vast majority of medical reviewers examining your claims have little or no substantive knowledge and training in the field of chiropractic care.  Therefore, why are you surprised that the ZPIC reviewer is now alleging that 80$ – 100% of the claims you have billed to Medicare do not qualify for coverage or payment?

III.   Medicare’s Position with Respect to “Medical Necessity.”

Under Medicare, the definition of “medical necessity” is generally defined under Title XVIII of the Social Security Act, Section 1862(a)(1)(a):  As the statute provides:

“No payment may be made under Part A or Part B for expenses incurred for items or services which are not reasonable and necessary for the diagnosis or treatment of necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

Despite the fact that chiropractors are recognized as physicians by Medicare, CMS has steadfastly refused to cover most of the traditional care and treatment services that are offered by licensed chiropractors around the country.  Medicare Part B only covers treatment by means of manual manipulation of the spine that is used to correct a subluxation (i.e. spinal manipulation). Moreover, the coverage policies developed by CMS and its contractors make it clear that the agency has restricted the definition of what is considered to be “medically necessary” chiropractic care to only include spinal manipulation services that are active or corrective in nature.

IV.   Maintenance Therapy is Not Covered by Medicare.

CMS has essentially taken the position that maintenance therapy does not qualify as medically necessary care and therefore does not qualify for coverage and payment.   As set out in the Medicare Benefit Policy Manual, Section 30.5.B:

Under the Medicare program, Chiropractic maintenance therapy is not considered to be medically reasonable or necessary, and is therefore not payable. Maintenance therapy is defined as a treatment plan that seeks to prevent disease, promote health, and prolong and enhance the quality of life; or therapy that is performed to maintain or prevent deterioration of a chronic condition. When further clinical improvement cannot reasonably be expected from continuous ongoing care, and the chiropractic treatment becomes supportive rather than corrective in nature, the treatment is then considered maintenance therapy.  (emphasis added).

The fact that chiropractic care used to “prevent deterioration of a chronic condition” remains non-covered is especially frustrating in light of the 2013 settlement in the case Jimmo v. Sebelius.   Earlier this year, the court approved a Corrective Statement that is to be used by CMS to affirmatively discontinue the use of an “Improvement Standard” for Medicare coverage.  Unfortunately, chiropractors and dentists were specifically carved out of this new rule by CMS.  As CMS noted in its January 14, 2014 guidance intended to clarify the agency’s new position after the settlement in Jimmo v. Sebelius, Pub. 100-02 Medicare Benefit Policy.  Transmittal 179 expressly provides that:

Chiropractors and doctors of dental surgery or dental medicine are not considered physicians for therapy services and may neither refer patients for rehabilitation therapy services nor establish therapy plans of care. (emphasis added).

V.   The Types of Chiropractic Services Covered by Medicare are Extremely Limited.

Under Medicare, the types of chiropractic services that are eligible for coverage and treatment are limited to three chiropractor-administered services.  To ensure that claims are processed in in an orderly and consistent fashion, Medicare employs the Healthcare Common Procedure Coding System (HCPCS) developed by the American Medical Association (AMA).  Level I of this standardized coding system is comprised of Current Procedural Terminology (CPT) codes that the AMA maintains.  The CPT uniform coding system consists of descriptive terms and identifying codes that are used primarily to identify medical services and procedures furnished by physicians and other health care professionals.  The CPT codes of the three chiropractic manipulation services that may qualify for payment by Medicare include the following:

98940: Chiropractic Manipulative Treatment (CMT); spinal, one or two regions;

98941: CMT; spinal, three to four regions; and

98942: CMT; spinal, five regions.[3]

To add insult to injury, even though a number of Medicare procedures may be within a licensed chiropractor’s state-defined scope of practice, with the exception of the three services described above, no other diagnostic or therapeutic service furnished by a licensed chiropractor, or under his / her order, is considered a covered service under Medicare.  We have handled a number of cases in recent years where the medical necessity of these manipulative treatments was never challenged by the auditing ZPIC.  Nevertheless, almost all of the otherwise-covered chiropractic claims were denied because the CMS program integrity contractor concluded that the services were improperly documented.  The primary reasons that these claims have been denied have been documentation-related.

VI.   Medicare’s Position with Respect to the Documentation of Chiropractic Services.

When providing one of these three covered services, it is essential that you carefully review Medicare’s current documentation requirements. The documentation mandates described under MACRA are not the necessarily the litmus test you should be applying.  The statutory requirements mandated under MACRA have been reviewed and interpreted by CMS so that appropriate regulations and policies implanting any applicable statutory provisions have been developed.  Additionally, as described in Section IX below, MACs are given some latitude in further defining what they require in terms of documentation.

VII.   Risks in Using a “Travel Card” if Your Practice is Subjected to a Chiropractic Audit.

Chiropractic services primarily documented with a “travel card” are likely to be denied if you are audited by a CMS program integrity contractor. Although it has been a while since we have defended a case of this type, they still occasionally arise.  For decades, travel cards have been used by chiropractors to document the care and treatment services they have provided.  Travel cards were easy and could provide an excellent picture of whether a patient was progressing.  While additional information (such as x-rays and other diagnostic studies) were also recorded in the patient’s medical record, the travel card was, and still is, utilized in a number of practices as a documentation tool.  Unfortunately, if your Medicare claims are ever audited by a ZPIC or MAC, you are likely to face a multitude of problems if you are relying on a travel card to document your services.  Unfortunately, CMS contractors (such as ZPICs and MACs)) don’t know how to read a travel card.  While there may be isolated exceptions to this statement, in the cases we have handled over the last decade, none of the auditors working for a ZPIC or for the MAC had been trained on how to read and interpret a travel card.  Additionally, most travel cards still in use don’t even come close to documenting all of the various points are set out in a MAC’s LCD.  As a result, when auditing chiropractic claims billed to Medicare, they almost always found a 100% error rate.

VIII.   Are Applicable Documentation Requirements Met if We Utilize Both a Travel Card and SOAP Note to Record the Chiropractic Services Provided?

Efforts to address the travel card problem by also documenting their services in a SOAP note format[4] have often been unsuccessful. Many experienced chiropractors love travel cards.  Their ease of use and ability to provide a quick, accurate picture of the patient’s prior care and progress are invaluable in a busy practice.  Recognizing that both government and private payors now require that a more detailed discussion of the patient’s care be documented, some chiropractors also document the care provided in a SOAP note format.  Unfortunately, in the cases we have seen, this approach typically fails to fully document the points that are now required by governmental and private payors alike.

IX.   Basic Rule for Documentation Under the Social Security Act.

Medicare’s documentation requirements are based on the fundamental obligation set out in Section 1833(e) of the Social Security Act which states that:

“no payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period.”  (emphasis added).

X.   Complying with Medicare’s Documentation Requirements.

If you intend to bill Medicare for one of the three manual manipulation services set out above, it is essential that you regularly check to ensure that your documentation practices fully comply with Medicare’s requirements. When is the last time you reviewed the documentation and coverage requirements issued applicable for your jurisdiction?  MACs have been delegated the responsibility for developing Local Coverage Determination (LCD) guidance by the Secretary for the Department of Health and Human Services (HHS) under section 1395y(a)[5] of the Social Security Act.  This responsibility also includes the promulgation of reasonable and necessary coverage determinations.[6] Therefore, in the absence of applicable National Coverage Determination (NCD) guidance,[7] MACs are responsible issuing LCD guidance.  LCDs must adhere with applicable requirements set out under the Social Security Act, federal regulations, CMS rulings, Medicare Manual Provisions, and other forms of guidance.

An overview of the coverage and documentation requirements that must be met when providing Medicare-covered chiropractic services is set out in the Section 240.1. of the Medicare Benefit Policy Manual.  Additionally, the Medicare Program Integrity Manual (PIM), mandates that any LCD that is promulgated must reflect local medical practice within the contractor’s jurisdiction and must be supported by substantial medical evidence.[8]  A CMS contractor must ensure that LCDs are consistent with applicable Medicare statutory provisions, regulations, NCDs, and other federal guidance.[9]

When developing an LCD, MACs also consider medical literature, the advice of medical societies and consultants, public comments, and comments from the Medicare provider community.[10]  Like NCDs, an LCD’s coverage guidance on whether an item is medically “reasonable and necessary” means that the item is safe and effective and not experimental or investigational as determined by the Food and Drug Administration (FDA) approval process.[11]  Working within these parameters, it is important to recognize that the specific requirements for documenting your chiropractic claims may vary from one MAC region to another.

For instance, National Government Services (NGS) has issued an LCD titled “Chiropractic Services – L27350.” [12]   For chiropractic services to be medically indicated in the region managed by NGS:

“The patient must have a significant health problem in the form of a neuromusculoskeletal condition necessitating treatment, and the manipulative services rendered must have a direct therapeutic relationship to the patient’s condition and provide reasonable expectation of recovery or improvement of function. The patient must have a subluxation of the spine as demonstrated by x-ray or physical exam. (CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 240.1.3).”

Under its section titled Limitations, NGS essentially set out the coverage requirements that must be met in order for chiropractic services to qualify for coverage and payment.  Moreover, ICD codes that support medical necessity are laid out in the guidance.  Should you code a chiropractic service with a diagnosis code that does not qualify for coverage, edits in the claims processing programs run by the MAC will automatically identify and deny the claims.

The documentation requirements set out in the LCD issued by NGS are typical of what you are likely to find in your particular region.  Nevertheless, you cannot assume that they are the same.  Check the LCD documentation requirements that have been published by your MAC.  The documentation requirements that are applied by NGS and other MACs are quite extensive.  A chiropractic audit of your Medicare claims will heavily rely on the coverage requirements set out in the LCD covering your region.

XI.   Elements to Review When Assessing Your Claims in Advance of a Chiropractic Audit.

The best time to assess your compliance with applicable Medicare medical necessity, coverage, documentation, coding and billing requirements is NOW, not after an audit has already been initiated by Medicare.  There are seven elements to be considered when assessing whether any chiropractic claims will qualify for coverage and payment.  These elements are:

Element #1: Medical Necessity – In addressing this element, every treating health care provider should ask the following question: “Were the services administered medically necessary?”

Element #2: Services Were Provided The second issue addressed is whether the services at issue were actually provided.

Element #3No Statutory Violations Are the services “tainted” by any statutory or regulatory violation, such as the Stark Law, federal Anti-Kickback or a False Claims Act violation?

Element #4Meets all Coverage Rules – Do the services meet Medicare’s coverage requirements?

Element #5Fully Documented Have the services been properly and fully documented?

Element #6: Properly Coded – Were the services correctly coded?

Element #7: Properly Billed – Were the services correctly billed to Medicare?

XII.  Consultants and Device Manufacturer Representatives.

Take care when conducting an internal review of your documentation and billing practices.  Should you decide to bring in an outside consultant to assist you in preparing for a chiropractic audit, you shoudl be prepared to apply the doctrine of “caveat emptor” (let the buyer beware).  The types of problems our clients have faced when engaging consultants generally fall within one of two categories, both of which are discussed below.

  • If it sounds too good to be true – it probably is!

Unfortunately, some consultants and device manufacturer representatives have used the challenging financial environment now facing chiropractic practices to their advantage.[13]  If a chiropractic consultant claims to have “proprietary” or “special” methods that can raise your billing revenues, or makes similar claims, be careful.

We have represented numerous chiropractic and medical practices over the years that have been led astray by coding and / or billing consultants, device manufacturers and others purporting to have identified supposed legal methods of coding and billing non-covered services so that they will, in fact, pass through the MACs edits and be paid. Years later, the chiropractic practice may learn that the practices they taught to employ are improper and do not qualify for payment.

  • Even Well-Meaning Consultants May Adversely Impact Your Practice.

Imagine for a moment that in an effort to improve your level of regulatory compliance, you have decided to engage a well-known coding and billing consultant to review your medical necessity, coverage, documentation, coding and billing practices. Assuming that the consultant is thorough, chances are that he / she will present you with a list of problems at the end of their review, you need to keep in mind that their findings are not privileged.  In other words, any reports that they issue, work papers that they prepare and actions that they take are discoverable by the government.  As a result, a list of problems identified by a coding or billing consultant can essentially be used as a roadmap for the prosecution.

You should therefore consider having a qualified health lawyer engage the consultant and direct his or her work.  Any reports would be issued to the attorney, not to you or your chiropractic practice. As a result, the work product prepared by the consultant would likely qualify and privileged and would not be discoverable by the government.  Does this mean that any errors, improper claims or other problems identified by the consultant could be “swept under the rug”?  No, not at all, but it may give the practice considerably more latitude in how they ultimately take remedial action.  Improper payments must be reported and repaid to Medicare in a timely fashion.. The problem we typically see is that non-attorneys are imprecise in how they describe a problem.  We have seen reports prepared by well-meaning consultants that are full of hyperbole and characterize certain conduct as possible fraud, when in fact, the actions that led to an overpayment were nothing more than a mere accident, error or mistake.

  • Call Liles Parker if Your Chiropractic Practice is Being Audited.

Liles Parker attorneys are not merely dedicated health lawyers.  We require that our associate attorneys study for and pass the certification requirements to be a Certified Medical Reimbursement Specialist.  Additionally, most of our attorneys and paralegals are Certified Medical Compliance Officers. Our staff has extensive experience conducting pre-audit assessments of provider documentation, coding and billing practices.  To the extent that your practice is undergoing a chiropractice audit by a UPIC, ZPIC or MAC, it isn’t too late to obtain a favorable result. Our health lawyers have extensive knowledge and experience of the Medicare appeals process, up to and including post-ALJ appeals to the Medicare Appeals Counsel and Federal Court.

Chiropractic AuditsRobert W. Liles, M.S., M.B.A., J.D., has worked on the provider side in health care management, served as a federal prosecutor and now represents chiropractors and other health care providers around the country in connection with Medicare and private payor audits and investigations.  For a complementary consultation, please call us at: 1 (800) 475-1906.




[1] Chiropractic services were not separately broken out in OIG’s Medicare Fee-For-Service 2014 Improper Payment Report. https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/Downloads/MedicareFeeforService2014ImproperPaymentsReport.pdf

[2] Effective January 1, 2017.

[3] These three claims are expressly covered in Local Coverage Determination (LCD) guidance issued by National Government Services (NGS) and other Medicare Administrative Contractors (MACs).  For additional information please see:  https://apps.ngsmedicare.com/lcd/LCD_L27350.htm

[4] The acronym “SOAP” is a long-standing approach utilized by a variety of medical disciplines when documenting their evaluation of a patient and the plan of care to be followed.  SOAP stands for Subjective, Objective, Assessment, and Plan.

[5] See 42 U.S.C. § 1395h.

[6] See 42 U.S.C. § 1395ff(f)(2)(B).

[7] LCDs are defined as “determination[s] by a [contractor] under. . . part B. . . respecting whether or not a particular item or service is covered. . . in accordance with section 1395y(a)(1)(A).”[7]

[8] See 64 Fed. Reg. 22,619, 22,621 (Apr. 27, 1999) (stating that the purpose of local medical review policies is to explain to the public and the medical community “when an item or service will be considered ‘reasonable and necessary’ and thus eligible for coverage under the Medicare statute”); PIM Ch.1, §§ 2.1.B,, 2.3.2.

[9] PIM, supra note 17, at § 2.1.B.

[10] PIM, supra note 17, at §1.2.

[11] See Abbott Laboratories, at 29.

[12] https://apps.ngsmedicare.com/lcd/LCD_L27350.htm

[13] Unscrupulous business consultants are nothing new. Almost 20 years ago, HHS, Office of Inspector General (OIG) recognized this problem and issued guidance to providers outlining its concerns. In June 2001, OIG issued a “Special Advisory” titled “Practices of Business Consultants” which detailed the agency’s concerns in this regard.  As OIG noted, health care providers and suppliers need to be wary of potential:

  • Illegal or Misleading Representations.
  • Promises and Guarantees.
  • Encouraging Abusive Practices.
  • Discouraging Compliance Efforts.


Payors are Aggressively Auditing Acupuncture Claims.

May 26, 2017 by  
Filed under Featured, Health Law Articles

Acupuncture(May 26, 2017):  Over the past decade, the number of patients utilizing one or more complimentary or alternative care modalities has steadily increased.  As patient demand for such services has grown, the percentage of payors including acupuncture in their plans as a covered service has also increased. For over a decade now, most private payor plans have covered acupuncture services (although the number and frequency of covered treatments is often limited).  While private payors have often included acupuncture as a covered service, traditional Medicare has continued to take the position that acupuncture services are not a covered benefit.  The purpose of this article is to provide an overview of the audit and investigative landscape currently facing acupuncturists around the country.

I.     Private Insurance Audits of Acupuncture Claims.

Many private payors have readily agreed to include acupuncture as a covered benefit in their insurance plans.  Unfortunately, practically none of these payors have issued guidance outlining what needs to be shown in order for acupuncture services to qualify for coverage and payment.  Recent private payor audits of acupuncture services have denied claims based on the following:

  • Medical Necessity. A number of payor plans have effectively conflated “medical necessity” and “coverage.”  As a result, a beneficiary’s plan may take the position that acupuncture is only medically necessary for a limited number of medical and / or mental (such as depression) conditions.  Frankly, what the payor is really saying is that it will only provide coverage for acupuncture services if the underlying condition fits within one of these categories.  To the extent that a licensed acupuncturist determines that acupuncture services would benefit, and is, in fact, medically necessary in the treatment of a patient suffering from a non-covered condition is often immaterial to a payor’s decision of whether it will cover the services.
  • Documentation. At the outset, it is essential to keep in mind that it is highly unlikely that the medical reviewer (typically a nurse) assigned to audit your acupuncture claims will have practical experience and knowledge with acupuncture care and treatment services.  As a result, the medical reviewer has virtually no idea what to look for when assessing your documentation.  This problem is further compounded by the fact that most payors have not detailed their documentation expectations in their provider manuals.  Medical reviewers evaluating your documentation of acupuncture services are therefore free to exercise a high degree of discretion when auditing your records.  What can you do to better document your services?  As a first step, you need to ensure that your documentation practices fully comply with any requirements set out by your State Board of Acupuncture Examiners.[1] Next, check out the provider manual, website and any other guidance issued by a particular payor.  Does it provide specific guidance regarding medical necessity, coverage, documentation, billing and / or coding of acupuncture services?  If so, be sure and comply with the payor’s requirements. Finally, you need to ensure that your documentation practices meet industry practices.
  • Can an Acupuncturist Bill E/M Services? The answer to this question varies from state to state and from private payor to private payor.  For example, using Texas as an example, the Texas State Board of Acupuncture Examiners (Texas Board) has expressly addressed this issue.[2]  Importantly, the Texas Board has stated that the mere use of E/M codes by a licensed acupuncturist “is not fraudulent per se and will not automatically subject licensees to discipline.” In fact, the Texas Board notes that utilization of E/M codes qualify within an acupuncturist’s scope of practice.  Nevertheless, the Texas Board takes no position on whether E/M codes utilized by a licensed acupuncturist may be properly billed to a payor.  Whether or not an insurance company chooses to cover and pay for these types of services is completely up to the payor.  Please keep in mind that a private payor may change its policy regarding the use of E/M codes by non-physician health care professionals at any time.  For instance, in December 2016, UnitedHealthcare Community Plan issued a policy revision stating that it would no longer reimburse E/M codes billed by opticians, surgical technicians, naturopaths and massage therapists.  However, the payor’s policy revision did not include acupuncturists in its list.  As UnitedHealthcare later clarified, Since acupuncturists were not included in the policy revision that occurred in December 2016, E/M codes billed by acupuncturists have not been and will not be denied under the Nonphysician Health Care Professionals Billing Evaluation and Management Codes Policy.”[3]
  • Can an Acupuncturist Bill for E/M Services Provided on the Same Day as Acupuncture Treatment Services? While a number of private payors have chosen to cover E/M services that are properly performed and documented by acupuncturists, you should expect considerable scrutiny if you perform and bill for acupuncture treatment performed on the same date of service as an E/M service. In order to properly bill a separate E/M service, you will need to document that the service went above and beyond the brief assessment that is already expected to be performed as part of the acupuncture treatment. The separate billing of an E/M service and acupuncture treatment on the same date of service would likely only occur on an infrequent basis.  If you are billing these codes on regular basis, we recommend that you carefully review your practices to ensure that the services billed are both medically necessary and warranted in light of the patient’s clinical profile.
  • How is an Acupuncturist Supposed to Bill Units Based on Time? Most private payors require that acupuncture services be billed using one of the following four AMA CPT codes:
    • 97810 (acupuncture, 1 or more needles; without electrical stimulation, Initial 15 minutes of personal one-on-one contact with the patient).

    • 97811 (acupuncture, 1 or more needles; without electrical stimulation, for each additional 15 minutes of personal one-on-one contact with the patient, with reinsertion of needles)

    • 97813 (acupuncture, 1 or more needles; with electrical stimulation, initial 15 minutes of personal one-on-one contact with the patient).

    • 97814 (acupuncture, 1 or more needles; with electrical stimulation, for each additional 15 minutes of personal one-on-one contact with the patient, with reinsertion of needles)

Seems straight forward?  Unfortunately, sometimes it feels like nothing is straight forward when it comes to the coding and billing of acupuncture services. For instance, how many units should be billed if 10 needles are inserted into a patient and retained for 30 minutes?  How many units (and which units) should be billed?  It depends on whether the needles were removed and new needles were reinserted into the patient.

For instance, if the 10 needles originally inserted into the patient remained in the patient for 30 minutes, only one unit of CPT code 97810 can be billed.  Many payors take the position that once the needles are inserted, no additional work is required and one-on-one contact is no longer required.  This remains the case even if an acupuncturist periodically returns to stimulate the needles.  Absent the removal and reinsertion of new needles, no additional units can be billed.

What is meant by the term “one-on-one contact with the patient.”?  This phrase has been interpreted to mean that the acupuncturist is in the room with the patient and is performing a medically necessary activity that is a component of acupuncture.  When calculating the initial 15 minutes, Excellus BCBS permits the inclusion of many preliminary activities.  These include, but are not limited to a review of the patient’s chart, greeting the patient, obtaining an account of the results of the previous treatment, palpation of a patient’s tender points, marking and cleaning insertion sites, inserting needles, and removing needles.[4]

When billing a private payor, it is important that you first determine how the particular payor interprets these coding requirements.  You should not assume that every payor strictly follows the general approach taken expressed in the AMA CPT Codebook.

Perhaps most importantly, when billing time-based units it is imperative that you the total personal contact time spent performing the medically necessary components outlined above and document this time in the treatment note. While many providers disagree with their approach, a number of private payors are actively contesting claims where it appears that an acupuncturist has billed units based on needle retention time rather than active, personal, one-on-one contact involving the provision of substantive acupuncture-related services.

II.     Audits of Acupuncture Services Billed to Federal Health Benefit Programs.

As noted earlier, traditional Medicare does not cover acupuncture services.  As a result, you may initially conclude that contractors working for the Centers for Medicare and Medicaid Services (CMS), such as Zone Program Integrity Contractors (ZPICs) and Medicare Administrative Contractors (MACs) would have little interest in auditing practitioners of such services.  As we have repeatedly seen, such a conclusion would be wrong.

(A) What is Medical Acupuncture?

A number of licensed physicians, podiatrists and dentists around the country have also been trained to provide acupuncture treatment services.  These physicians often employ traditional medical care and supplement this approach with acupuncture treatment services. The care they provide is sometimes referred to as “Medical Acupuncture.”  Many of these medical practitioners are members of the American Academy of Medical Acupuncture[5] (AAMA).  In order to qualify as a “full member” in the AAMA, an applicant must:

  • Be an active, licensed MD, DOs, DPM or DDS in the United States or Canada;

  • Be engaged in the practice of medical acupuncture.

  • Have completed a minimum of 220 hours of formal training in Medical Acupuncture (120 hours didactic, 100 hours clinical), or the equivalent, in an educational program acceptable to the Membership Committee;

Even though an individual may qualify as a member of the AAMA, he / she must also meet state licensure requirements mandated by a state’s Board of Acupuncture Examiners.

(B) E/M Services Conducted by Medical Acupuncturists are Often Misunderstood by CMS Contractors.

ZPIC claims audits of licensed physicians providing Medical Acupuncture care have typically focused on the accompanying Evaluation and Management (E/M) services often performed prior to, and in connection with, the provision of acupuncture.  Based on the assessment and findings of the E/M service performed, a Medical Acupuncturist may conclude that a patient placed on a traditional treatment regimen with or without medications support, would also benefit from medically necessary acupuncture services.  We have seen numerous denied claims where a ZPIC or MAC has alleged that the E/M service provided does not qualify for coverage and payment.  The contractors often argue that the physician’s documentation the E/M services is deficient and / or that the E/M service was not really medically necessary.  Instead, the ZPIC or MAC has suggested that the E/M services billed to Medicare have essentially been nothing more than a sham, provided and billed as a way to receive reimbursement since the acupuncture services subsequently provided did not qualify for coverage and payment.  When defending these providers, we have often found that the E/M service conducted and billed to Medicare was (in our opinion) both medically necessary and appropriate in light of the patient’s clinical profile.  Medical Acupuncturists should assume that their E/M services will be audited by one or more CMS program integrity contractors.  Physicians should ensure that the E/M services conducted are fully documented and are coded and billed at the proper level.

Essentially, the traditional medical services conducted need to be individually assessed, separate and apart from any complimentary care (such as acupuncture) that is subsequently provided.  The question to ask is straightforward“Were the traditional medical services provided and billed to Medicare medically necessary, fully documented, properly coded and accurately billed?”  If so, the decision to complement the traditional care with acupuncture should have no impact on whether or not the medical services qualify for coverage and payment under Medicare.  Unfortunately, it has been our experience that ZPICs and other CMS program integrity contractors are often skeptical of the medical necessity of the medical services conducted.  Frankly, we disagree.  After defending a number of these claims, it is our belief that Medical Acupuncturists have, in fact, typically concluded that a traditional assessment and treatment approach, coupled with complimentary acupuncture care services, are in fact, in the best interests of the patient.

(C) Physical Therapy Services Billed by Clinics That Also Offer Complementary Care are Under the Regulatory Microscope.

As reimbursement rates have dropped, a number of providers have expanded the scope of services offered by their clinics.  It is now quite common to find a clinic that offers licensed physical therapy, acupuncture and massage services to its clientele. These changes have not gone unnoticed by ZPICs.  In fact, it appears that ZPICs and other CMS program integrity contractors remain on the lookout for the improper billing of physical and / or occupational therapy claims to the Medicare program, even though the actual procedures performed have really involved acupuncture or massage therapy services.  Examples of improper billing include, but are not limited to:

CPT Code Billed to Medicare Service Billed that May Qualify for Coverage Under Medicare Actual Service Provided Not Covered by Medicare
CPT Code 97032 Electrical Stimulation “Dry Needling”[6]
CPT Code 97110 Therapeutic Exercises Massage Therapy
CPT Code 97112 Neuromuscular Education Acupuncture
CPT Code 97140 Manual Therapy Massage Therapy

 (D) Federal and State Prosecutors Have Pursued a Number of Health Care Fraud Cases for the Improper Billing of Acupuncture Services. 

While ZPICs and MACs are continuing to dedicate a portion of their time and resources to auditing Medicare claims submitted for coverage and payment by Medical Acupuncturists, it is important to keep in mind that these administrative audits can lead to more serious enforcement action.  Prosecutions have been, and are continuing to be pursued by state and federal law enforcement authorities for acupuncture-related health care fraud.  Examples of acupuncture-related fraud pursued by law enforcement are outlined below:

  • In this early example of acupuncture fraud, the U.S. Attorney’s Office for the Middle District of Florida prosecuted the owners, operators and physician employees of six acupuncture clinics alleged to have fraudulently billed the Medicare program from 1989 through 1993, for non-covered acupuncture treatment services. According to DOJ, the acupuncture clinics “hired physicians to illegally circumvent the Medicare rules prohibiting reimbursement for acupuncture and acupuncture related medical services. The defendants fraudulently back-dated medical and billing records to conceal that they were operating acupuncture clinics and that the medical services rendered were all in conjunction with acupuncture treatments.” [7]
  •  In this 1997 / 1998 case, a physician employee of a hospital improperly billed Medicaid for non-covered acupuncture services related to its drug and alcohol program. As the Department of Health and Human Services (HHS), Office of Inspector General (OIG) noted, “[t]he hospital knew or should have known that Medicaid does not cover acupuncture.”  The case was resolved through civil settlement.[8]
  • In this 2012 case, the owner of two acupuncture clinics and his staff allegedly billed Medicare for non-covered services. The government also alleged that the owner “received kickbacks for providing Medicare beneficiaries’ health identification cards and other personal and medical information to a clinic enrolled as a Medicare provider for physical therapy services” even though the beneficiaries did not receive any services from the clinic. Additionally, the owner’s co-conspirators were alleged to have created false medical documentation in connection with fraudulent claims.[9]
  • In this 2014 criminal case, the owner (who was also a licensed acupuncturist) of this clinic allegedly submitted non-covered acupuncture claims to the Medicare program for payment. Moreover, the clinic was alleged to have billed for massage and physical therapy services that were not performed by licensed physical therapists or physical therapy assistants.  Over a two year period, the clinic was alleged to have submitted more than $1.6 million in fraudulent claims to Medicare and more than $475,000 to Blue Cross Blue Shield for payment.[10]
  • In this 2016 case, the U.S. Attorney’s Office for the Central District of California criminally prosecuted the owner of several companies and was alleged to have “recruited Medicare beneficiaries and provided uncovered services like massage and acupuncture for them. Even though the beneficiaries did not receive actual physical therapy, [the defendant’s] co-conspirators billed Medicare for physical therapy, and then funneled 56 percent of the reimbursement funds back to [the defendant].”[11]

III.     Conclusion.

As the popularity and acceptance of acupuncture increases, we should expect for the number of claims audits and investigations to increase as well.  Now, more than ever, it is essential that you review both your business and clinical practices to better ensure that your care and treatment services fully comply with applicable statutory, regulatory and contractual obligations.  Have you properly established that the acupuncture treatment services are medically necessary?  Are the services fully documented in the patient’s medical records?  Are your coding and billing practices accurate and consistent with the payor’s requirements?  Finally, to the extent that your clinic also bills Medicare or a private payor for medical services, you must ensure that the services billed are, in fact, bona fide medical services, not acupuncture or massage therapy services that have been mischaracterized as physical or occupational therapy.

AcupunctureRobert W. Liles, J.D, M.S., M.B.A., represents health care providers around the country in connection with claims audits and investigations by Medicare, Medicaid and private payors. 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. 



[1] For example, a licensed Acupuncturist in Texas must document the following information (as set out under 22 Tex. Admin. Code § 183.10), provides, in part:

Acupuncturists licensed under the Act shall keep and maintain adequate records of all patient visits or consultations which shall, at a minimum, be written in English and include:

(1) the patient’s name and address;

(2) vital signs to include body temperature, pulse or heart rate, respiratory rate, and blood pressure upon initial presentation of the patient, and those vital signs as deemed appropriate by the practitioner for follow-up treatment;

(3) the chief complaint of the patient;

(4) a patient history;

(5) a treatment plan for each patient visit or consultation;

(6) a notation of any herbal medications, including amounts and forms, and other modalities used in the course of treatment with corresponding dates for such treatment;

(7) a system of billing records which accurately reflect patient names, services rendered, the date of the services rendered, and the amount charged or billed for each service rendered;

(8) a written record regarding whether or not a patient was evaluated by a physician or dentist, as appropriate, for the condition being treated within 12 months before the date acupuncture was performed as required by §183.7(a) of this title (relating to Scope of Practice);

(9) a written record regarding whether or not a patient was referred to a physician after the acupuncturist performed acupuncture 20 times or for two months whichever occurs first, as required by §183.7(b) of this title (relating to Scope of Practice) in regard to treatment of patients upon referral by a doctor licensed to practice chiropractic by the Texas Board of Chiropractic Examiners;

(10) in the case of referrals to the acupuncturist of a patient by a doctor licensed to practice chiropractic by the Texas Board of Chiropractic Examiners, the acupuncturist shall record the date of the referral and the most recent date of chiropractic treatment prior to acupuncture treatment; and,

(11) reasonable documentation that the evaluation required by §183.7 of this title (relating to Scope of Practice) was performed or, in the event that the licensee is unable to determine that the evaluation took place, a written statement signed by the patient stating that the patient has been evaluated by a physician within the required time frame . . . .”


[2] http://www.tmb.state.tx.us/idl/ECEA703E-ED1F-11D6-149A-C0CEFFBCF9D7

[3] https://www.uhccommunityplan.com/content/dam/communityplan/healthcareprofessionals/Bulletins/Non-Phys-Bill-Eval-Mgmt-Policy-Codes-Acupuncturist.pdf

4] https://www.excellusbcbs.com/wps/wcm/connect/6e9c5e35-2d2b-4767-b25d-e6e2e82fda67/Excellus+Coding+%26+Billing+for+Acupuncturists+Tip+Sheet+FINAL.pdf?MOD=AJPERES&CACHEID=6e9c5e35-2d2b-4767-b25d-e6e2e82fda67

[5] The American Academy of Medical Acupuncture (AAMA) was first established in 1987 by physicians who had graduated from the Medical Acupuncture for Physicians Training Program at the UCLA School of Medicine. The AAMA has rapidly grown in recent years and now has over 1,300 members.

[6] The question of whether “dry needling” qualifies as acupuncture remains in controversy.  Nevertheless, a number of government and private payors have held that “dry needling” is, in fact, acupuncture.  As such it does not qualify as a covered service under Medicare, regardless of whether a licensed physical therapist or a licensed acupuncturist performs the service.

[7] For additional information on this case, please see:  https://www.justice.gov/opa/selected-cases

[8] Department of Health and Human Services, Office of Inspector General, Semiannual Report, October 1, 1997 – March 31, 1998.  (Page 35). https://oig.hhs.gov/publications/docs/semiannual/1998/98ssemi.pdf

[9] Office of Inspector General, Semiannual Report to Congress, April 2013 – September 2013.  (Page 47).


[10] For additional information on this case, please see: https://www.justice.gov/usao-ndga/pr/norcross-clinic-owner-sentenced-healthcare-fraud

[11]For additional information on this case, please see:  https://www.justice.gov/usao-cdca/pr/brea-man-who-operated-physical-therapy-clinics-sentenced-over-10-years-federal-prison-3


Screening and Evaluating Employee Suitability: The New “Seventh Element” of Compliance.

Screening and Evaluation(May 17, 2017): The recently issued Resource Guide for Measuring Compliance Program Effectiveness,” a product of Office of Inspector General staff and compliance professionals roundtable discussions, reconfigures the traditional “Seven Elements of an Effective Compliance Program” by making the “Screening and Evaluation of Employees, Physicians, Vendors and other Agents” an element unto itself – or the new Seventh Element of Compliance! The Resource Guide, prepared under the auspices of the Health Care Compliance Association (HCCA), serves to once again underscore the critical role of exclusion screening and background checks in compliance.

Paul Weidenfeld, Counsel at Liles Parker, has recently assessed this important change and provided an overview of the impact this change for the folks at Exclusion Screening.  For more information on the critical role of screening and evaluating employee suitability in health care, click here.

Delta Dental is Conducting Dental Claims Audits Around the Country.

May 16, 2017 by  
Filed under Dental Law Articles, Featured

Delta Dental is Conducting Dental Claims Audits Around the Country(May 15, 2017):  Over the last decade, both state and federal law enforcement agencies have aggressively investigated and prosecuted instances of Medicaid dental fraud.  In recent years, these efforts have been widely implemented (and expanded) by private payor Special Investigative Units (SIUs).  One dental benefits program in particular has been especially active in this regard – Delta Dental.  This not-for-profit dental insurance company has been engaged to administer a number of state[i], federal and private dental benefits programs around the country.  Its administrative responsibilities also include the performance of dental claims audits.

Delta Dental is the proverbial “800 Pound Gorilla” of dental benefits programs.  For more than 60 years, Delta Dental has provided dental coverage to individuals, employers, associations and groups around the country.  At last count, Delta Dental was estimated to provide dental insurance to approximately one-third of all Americans.  More than 73 million individuals (in more than 129,000 associations and groups) are currently covered by Delta Dental Insurance. It has been estimated that Delta Dental processes more than 2.2 million dental claims each week.[ii]  Depending on the jurisdiction, Delta Dental benefit programs may cover state programs (such as Medi-Cal), federal programs (such as TriCare and CHAMPUS) and a host of private, non-governmental associations and groups.  As a result, there is high likelihood that your dental practice currently provides oral health treatment services to patients covered by Delta Dental.  This article examines a number of the audit practices that you may encounter if your dental claims are targeted by Delta Dental’s SIU.

I. How Does Delta Dental Identify Dental Practices for Audit?

The primary targeting tools utilized by dental payors to identify improper dental claims and business practices are “Predictive Modeling and Data Mining.” Other significant sources of audits typically include “Complaints” by beneficiaries, other dental practices (such as competitors), former (and, often disgruntled) employees.  Delta Dental SIU’s have also consistently monitored a dental provider’s “Error Rate” when selecting specific targets for audit and investigation.

  • Predictive Modeling / Data Mining. Delta Dental SIUs actively conduct analyses of a dental providers’ utilization and claims submission practices.  If the care and treatment practices of a specific dentist or dental group appear to be inconsistent with those its peers, the dental provider will be flagged for audit as an outlier.  To the extent that your dental practice or organization is subjected to an audit, it is essential that you determine whether your dental coding and billing practices fully comply with applicable regulations and / or contractual requirements. If so, you must be prepared to explain to an SIU (and in some cases, to law enforcement) why the anomalies identified through data mining or predictive modeling are not evidence of fraud or overpayment.  Dental providers facing this situation should work with experienced legal counsel to ensure that the arguments to be presented fully address the payor’s concerns.  Failure to do so may result in an expansion of a dental claims audit.

  • Understandably, Delta Dental SIUs actively encourage beneficiaries and others to report incidents of possible billing fraud, waste and abuse.   Delta Dental SIUs and other dental payors have repeatedly found that the documentation practices of many dental providers are often incomplete and fail to comply with the minimum standards required by Delta Dental and / or other payors.  As a result, when an SIU investigates a complaint, the Investigator assigned to the case is often unable to establish that the care and treatment services billed were medically necessary and qualify for coverage and payment under the payor’s plan.

  • Error Rate. Not surprisingly, to the extent that a dental provider’s prior claims have been denied, dental payor SIUs have often utilized a provider’s error rate as a targeting tool.  The theory employed by dental payors is that dental providers with a history of denied claims are more likely to have problems documenting medical necessity, meeting a payor’s coverage requirements, properly coding and billing a dental claim, and / or fully documenting a patient’s care.

II. Typical Problems Identified by Delta Dental SIUs When Conducting Dental Claims Audits.

Regardless of the reason(s) an audit of your dental claims may have been generated, once it is initiated, Delta Dental’s SIU isn’t limited in its scope of audit review.  In other words, even though an audit have been pursued due to the fact that a dental provider’s utilization of a specific service is far more frequent that what would normally be expected, the payor’s SIU is not restricted from examining other potential areas of non-compliance.  For instance, several of the problem areas repeatedly identified by Delta Dental when conducting dental claims audits have included:

  • Routine failure to collect the patient’s full payment or share of cost without notifying the carrier. Is your dental practice consistently collecting co-payments and deductibles that may be owed by a covered beneficiary?  In the case of non-government administered plan, the unsupported waiver of these amounts may constitute a breach of contract (In the case of a state or federal funded plan that is administered by Delta Dental, such a failure may constitute a violation of the Anti-Kickback Statute.

  • Concealing other available coverage. The failure to identify (and bill) additional dental payors is often cited as a basis for an overpayment in dental claims audits conducted by Delta Dental and other payors.

  • Misreporting dates to circumvent calendar year maximums or time limitations. The misreporting of dates in an effort to evade calendar year maximums and / or time limitations may constitute a violation of one or more state and federal fraud statutes.

  • Submitting claims for covered services when non-covered services are provided. The mischaracterization of services in an effort to get an otherwise non-covered service paid by a payor is very problematic.  Dental payor SIUs view such conduct as evidence that a dental provider is purposely attempting to avoid the payment denial of a non-covered service or claim.

  • Providing medically unnecessary services. Delta Dental SIUs are quick to deny claims that do not fully document that the services at issue are both medically necessary and appropriate.  These types of denials often fall into two categories.  The first category would include services that are not authorized under a patient’s plan due to frequency limitations.  The second category would include services that are allegedly not warranted in light of the patient’s dental care and treatment needed.  It is It is important to keep in mind that a service or claim can be medically necessary yet still not qualify for coverage and payment.  Ultimately, every dental service or claim, regardless of whether the beneficiary is a Medicare, Medicaid, or private plan participant, must be examined to see if it qualifies for coverage.  In making coverage determinations, many dental payors have interpreted the phrase “reasonable and necessary” to reflect that a dental service is safe, effective and not experimental or investigational.  When applying these terms, dental payors often look to see whether a dental service has been proven safe and effective based on authoritative evidence, or alternatively, whether a service is generally accepted in the dental community as safe and effective for the condition for which it is used.

  • Patients who use another person’s ID to obtain benefits. While the Affordable Care Act may have made great strides in expanding eligibility and increasing the availability of medical care, covered dental care has remained problematic.  As a result, we have continued to see instances where a covered beneficiary has “lent” his or her identification to a friend or family member who would otherwise not qualify for covered dental care and treatment services.

  • Limiting the availability of appointment times when compensation is capitation-based (i.e., in dental HMO type programs). Dental payors are especially sensitive to situations where it appears that a dental provider has discriminated against a patient due to the fact that the negotiated rate of reimbursement under a dental HMO plan is lower than it is under a fee-for-service plan.  Check your contracts!  This type of conduct can expose a dental provider to significant liability.

III. Steps Your Dental Practice Can Take to Reduce the Likelihood of an Audit.

In today’s environment of sophisticated data mining, it is essential that dentists have a clear picture of how their coding and billing practices compare to those of their peers.  Unfortunately, the “benchmarking” data available to dentists is quite limited.  Nevertheless, a number of private and governmental payor reports issued in recent years can assist a dentist in determining whether its coding and billing utilization appears to be in line with what a payor would normally expect to see.

Importantly, just because a dentist’s coding and billing practices differ from those of their peers, this does not necessarily mean that the dentist’s action are illegal or improper. Over the years, we have seen dentists targeted by private and / or governmental payors due to the fact that their coding and billing actions were different from those of other dentists. In one case, we found that a dentists was recognized as an “expert” by his peers and often received highly-complex referrals by other dental providers. As a result, the number of highly complex procedures performed by the dentist exceeded those of other similarly-situated dentists in the community. In any event, you need to know how your practices compare to those of your peers.  If your dental coding and billing practices make you an outlier, you need to be prepared for an audit and be ready to explain why the services you provide are appreciably different from those of other dentists in the community.

If you have not already done so, you should develop and implement an effective Compliance Program for your dental practice.  If you participate in Medicaid, Medicaid Advantage or another state or federal health benefits program with dental benefits, you are likely already required by law to have one in place.  Additionally, most private payor dental plans are also now requiring that an effective Compliance Program be put into place.  The implementation of a living, breathing Compliance Program can go a long way towards helping your dental practice remain compliant with applicable, statutory, regulatory and contractual requirements.

Robert W. Liles, JD, MBA, MS is an attorney with Liles Parker, Attorneys & Clients at Law.  Our Firm has offices in Washington, DC; Baton Rouge, LA; Houston, TX and San Antonio, TX.  We represent dentists and dental providers around the country in connection with Delta Dental and other insurance payors audits of their dental claims.   Should you have questions, please give Robert a call for a free consultation.  He can be reached at:  (202) 380-8134.



[i] Delta Dental of California has administered the Denti-Cal Program for the State of California, Department of Health Care Services since 1974.


[ii] https://www.deltadental.com/Public/Company/stats2.jsp?DView=AboutDeltaDentalStats


OIG And DOJ Issue Important New Compliance Guidance

(April 14, 2017) Recently, the Office of Inspector General of the United States Department of Health and Human Services (OIG) and the Criminal Division of the Fraud Section at the United States Department of Justice (DOJ) have issued guidance on measuring the effectiveness of corporate compliance programs.  In February, DOJ placed on its website a document entitled “Evaluation of Corporate Compliance Programs.”  That document lists 119 sample questions that DOJ’s Fraud Section has in the past found relevant in its evaluation of the effectiveness of corporate compliance programs for the purpose of deciding whether to prosecute cases, and in recommending sentences for criminal violations.  These questions are separated into eleven (11) topic areas: analysis and remediation of underlying conduct, senior and middle management, autonomy and resources, policies and procedures, risk assessment, training and communication, confidential reporting and investigation, incentives and disciplinary measures, continuous improvement, periodic testing and review, third party management, and mergers and acquisitions.  While not specifically addressing health care organizations, per se, the guidance is highly relevant to organizations and practices since they are questions that Federal prosecutors will be asking when evaluating compliance programs in any criminal investigation.  The guidance can be reviewed in its entirety at https://www.justice.gov/criminal-fraud/page/file/937501/download.

Even more recently, on March 27 of this year, OIG published a parallel and more inclusive document focused specifically on the health care industry, “Measuring Compliance Program Utilization – A Resource Guide.” The Guide, which is 52 pages in length, sets out a checklist of questions broken down into seven standards based on the standard seven elements of an effective compliance programs, and further broken down into various subcategories under each element.  The guidance is the product of a round table on January 2017 that brought together a group of compliance professionals and staff from OIG “to discuss ways to measure the effectiveness of compliance programs.”  While the guidance is clear that it is not a “one size fits all,” it provides a number of ideas of “what to measure” and “how to measure” these programs, and should be mandatory reading for all compliance officers in organizations, whether a small physician’s office or a large hospital system or health care organization.  The guidance can be accessed at https://oig.hhs.gov/compliance/101/files/HCCA-OIG-Resource-Guide.pdf.

Liles Parker attorneys, and frankly any knowledgeable attorney who specializes in health care, have for many years advised clients that is essential to establish a compliance program that is implemented effectively.  Among other things, an effective compliance program establishes the culture of compliance for an organization in following the law, that should demonstrate an ethos from the top down through every employee and professional.  It also provides management with the opportunity to detect and correct problems and potential issues before they either emerge or become widespread. Many, if not most, whistleblower lawsuits are the result of employees feeling that their concerns, when reported internally, were not investigated.

Moreover, Congress has mandated compliance plans for skilled nursing facilities and the revised requirements of participation require them for both nursing and skilled nursing facilities so that the effectiveness of these programs will become part of the survey process.  And, if an investigation arises, the conversation with enforcement agencies is dramatically different when an organization can demonstrate that it has an effective program as opposed to no program, or one that sits on a shelf.

One of the criteria that OIG has had for determining whether a compliance program is effective is whether the organization measures the effectiveness of its program, itself.  At a minimum, every organization should do this once per year.

Finally, in September 2015, DOJ issued a memorandum entitled “The Individual Accountability for Corporate Wrongdoing.”  Among other things, the memorandum, referred to as the Yates Memo,” instructs prosecutors and investigators to hold highly placed individuals within an organization accountable for the organization’s misconduct.  Prior to the issuance of the Yates memo, those of us involved as defense counsel in investigations were frequently able to obtain releases for individual members of an organization in settlements of civil and administrative investigations.  Since the issuance of the Memo, releases of individuals now occur on only the rarest of occasions.


For all of these reasons, it is imperative that every health care provider establish an effective compliance program and that it periodically measure the effectiveness of that program.  These guidances provide important and helpful information in how to accomplish that result.

Compliance GuidanceLiles Parker attorneys have extensive experience in developing compliance programs, providing compliance guidance, and working with clients in investigations.  Clients having questions related to these issues should contact Michael Cook at (202) 298-8750, mcook@lilesparker.com


Home Health Final Rule Creates New Exclusion Screening Obligation

March 29, 2017 by  
Filed under Featured, Health Law Articles

Screening Obligation(March 29, 2017): The Centers for Medicare and Medicaid Services (CMS) has recently published a new Final Rule that makes changes to the Conditions of Participation for home health agencies. Under the Final Rule, providers are required to ensure that individuals and entities providing services under arrangement are not excluded, terminated, or debarred from any Federal health care program.  Simply put, these new requirements are an affirmative obligation to screen both the Federal and State exclusion lists.

While CMS does not provide detailed guidance on how a home health agency is supposed to meet this new requirement, it does make it clear that the responsibility of properly screening contracted entities remains with the home health agency.  Additionally, it makes no mention of how a provider could screen for a Medicaid exclusion.  This lack of clarity on how to effectively meet this Condition of Participation could be problematic since CMS may now hold an HHA liable for failing to catch a Medicaid exclusion.  Home health agencies are cautioned to ensure that they are properly screening for State exclusions in addition to Federal exclusions to avoid having their participation terminated. What should your home health agency do?  As a start, we recommend that you review the detailed discussion on this new requirement written by Paul Weidenfeld, Esq. and Catalina Jandorf at Exclusion Screening.

Screening ObligationDo you have questions regarding your screening obligations?  Give us a call.  Liles Parker attorneys represent home health agencies around the country in connection with ZPIC audits, OIG investigations, exclusion issues, False Claims Act cases and transactional matters.  Please call Robert W. Liles for a free consultation.  He can be reached at:  1 (800) 475-1906.

Are you Ready for the Next Round of CMS Re-Validation?

revalidation requestsCMS announced recently that it will be initiating its next round of revalidation requests to all Medicare enrolled providers and suppliers.

Current law and regulations require providers and suppliers to revalidate their enrollment with Medicare every five years (every three years for DME suppliers). There are a few changes being made to try and give providers a bit more flexibility this time around.  Below are some key highlights for the next cycle of revalidation beginning this year:

  • CMS will maintain a master list of providers/suppliers due for revalidation along with the due date for their applications here: https://data.cms.gov/revalidation. CMS has advised that all providers/suppliers should check this list to see when their application is due. If a due date is more than six months away, the list will show “TBD” for a provider/supplier due date. DO NOT SUBMIT A REVALIDATION APPLICATION IS NO DUE DATE APPEARS. IT WILL BE RETURNED.
  • The website will also provide a list of all reassignments for those suppliers that maintain reassignments.
  • Providers and suppliers don’t have to wait for a letter from their Medicare Administrative Contractor (“MAC”) to submit a revalidation application. If you are within six month of your due date shown on the above website, you are encouraged to submit your application.
  • MACs will still send an email or letter to providers/suppliers 2-3 months prior to their due date asking them to revalidate. Emails will include the title “URGENT: Medicare Provider Enrollment Revalidation Request.” If emails are returned as undeliverable, a paper letter will be sent. All letters will be sent to at least two of a providers/suppliers reported addresses (e.g. a correspondence and special payments or primary practice location address.
  • Revalidation notices sent to individual practitioners who have reassigned their billing rights to a group or groups will include a list of all reassignments on file with CMS. Special procedures will be available for groups with more than 200 members.
  • An upcoming revalidation does not relieve providers/suppliers from submitting updates to their enrollment record in the timeframes required by relevant regulations. Submit all changes of information timely, even if a revalidation is due within the next six months.

In addition to outlining the process for the next round of revalidation, CMS has provided tips for ensuring your revalidation is complete.

  • Providers and suppliers are required to revalidate their entire Medicare enrollment record, including all practice locations where they see patients and all groups to which they reassign benefits.
  • All of a provider’s or supplier’s NPIs and PTANs must be revalidated when revalidation is requested.
  • Either PECOS or the paper CMS-855 applications may be used for revalidation.
  • If a provider or supplier is deactivated for failing to submit a revalidation application on time or failing to respond to a request for additional information on a pending application, they may reactivate their enrollment by submitting a new, full application. The provider/supplier, once the application is processed and approved, will maintain their original PTAN, but the reactivation date will be whatever date the new, full application was submitted. Retroactive billing privileges back to the date of deactivation will not be granted and the provider/supplier will have gap period where they may not receive payment for services provided to Medicare beneficiaries.
  • CMS has reminded certain providers and suppliers that a fee is due with their revalidation application. All “institutional providers” that submit an application via PECOS or a paper Medicare enrollment application using the CMS-855A, CMS-855B (except physician and non-physician practitioner organizations), or CMS-855S forms are required to pay the application fee. For Calendar Year 2017, the fee is $560. It can be paid via this website: https://pecos.cms.hhs.gov/pecos/feePaymentWelcome.do#headingLv1 Be sure to print proof of payment with your revalidation application to avoid delays in processing.

CMS also noted that all providers and suppliers that have not billed Medicare for 12 consecutive months will have their billing privileges deactivated. To reactivate their provider number, a complete, new application must be submitted. Once approved, the provider/suppliers will retain its original PTAN.  The effective date of reactivation will not be retroactive to the date of deactivation.

We encourage all providers and suppliers to check CMS’ list of revalidations due in the upcoming six months. The list is updated every sixty days. If you choose to use PECOS to complete your revalidation, be sure to print a copy of your submission BEFORE you click the submit button. You need to retain a copy of what you submit indefinitely in order to substantiate what you input via PECOS. We have seen far too many providers and suppliers think they properly completed a revalidation application via PECOS only to be revoked later on because some data point was missing from a submission or was submitted under the incorrect enrollment file or field. Also:

  • If you are a physician who is the sole shareholder of your practice, you do NOT need to complete a CMS-855B in most instances. However, it is very important to properly identify your practice locations under both your individual and your entity’s enrollment in PECOS when you revalidate those enrollments. Don’t make the mistake of thinking that listing practice locations under just your individual enrollment will make them automatically appear under your entity (or vice versa).
  • Physicians and non-physician practitioners that reassign payments to groups must identify all groups to which they reassign on their revalidation. Failure to list a group may result in a reassignment being deactivated. You do not need to submit new CMS-855Rs with your revalidation.
  • If you check the list of revalidations that are due and you can’t locate your record after searching by name or NPI…CALL YOUR MAC. The list contains all active Medicare program providers and suppliers, including DME suppliers. If you do not appear on the list, you need to find out why.

CMS has published an article discussing the revalidation process in more detail here: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE1605.pdf  In addition, you may visit this CMS website for additional information: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/Revalidations.html

Liles Parker PLLC attorneys are experienced in helping providers and suppliers with the Medicare enrollment and revalidation process. Please contact us if you have questions or need assistance.

revalidation requestsJennifer Papapanagiotou, Esq is a health law attorney with the firm, Liles Parker, Attorneys & Counselors at Law.  Liles Parker has offices in Washington DC, Houston TX, McAllen TX and Baton Rouge LA.  Our attorneys represent dentists, orthodontists and other health care professionals around the country in connection with Medicare provider enrollment and revocation matters.  Need assistance?  For a free consultation, please call: 1 (800) 475-1906.

Home Health Audits: Pre-Claim Demonstration Project Update – Part 1.

Home Health Claims(January 9, 2017):  As the Centers for Medicare and Medicaid Services (CMS) has announced, the alleged error rate associated with home health claims has risen from 17.3 % in FY 2013 to 51.38% in FY 2014 and 58.95% in FY 2015.  In light of these increases, CMS has taken steps to address the home health claims error rate.  Section 402(a)(1)(J) of the Social Security Amendments of 1967 authorizes the Secretary for the Department of Health and Human Services (HHS) to develop demonstration projects that:

“[D]evelop or demonstrate improved methods for the investigation and prosecution of fraud in the provision of care or services under the health programs established by the Social Security Act.”

Consistent with this authority, on February 5, 2016, the Centers for Medicare and Medicaid Services (CMS) published notice in the Federal Register that it intended to collect information that would be used by the agency to serve as a:

“[B]aseline estimate of probable fraud in payments for home health care     services in the fee-for-service Medicare program.”  42 U.S.C. 1395b-1(a)(1)(J).

On June 8, 2016, CMS announced in the Federal Register (81 Fed. Reg. 37598) that five states would be part of the new Pre-Claim Review Demonstration. These states included:  Illinois, Florida, Texas Michigan and Massachusetts.  While the program was implemented in Illinois on August 3, 2016, the rest of the implementation schedule was delayed due to a variety of implementation-related problems.

CMS has recently announced that the Pre-Claim Demonstration Project will be resumed and that it will be implemented in Florida on April 1, 2017.  While no implementation dates have been announced yet for Texas and the remaining test states, Texas home health providers could conceivably be facing this program as early as May 1, 2017.

In addition to providing an overview of the home health Pre-Claim Demonstration Project, this article examines the primary reasons for claims denial identified so far by Illinois home health agencies. In this first article, we are focusing on the denial reasons associated with errors identified with face-to-face and plans of care / certification / recertification documentation.

I. What are Medicare’s Home Health Benefit Requirements?

To qualify for the Medicare Home Health benefit, under 1814(a)(2)(C) and 1835(a)(2)(A) of the Social Security Act, a Medicare beneficiary must meet the following requirements:

  • Be confined to the home at the time of services;
  • Medicare considers the person homebound if:

1) There exist a normal inability to leave the home, and

2) Leaving home requires a considerable and taxing effort.

  • Additionally, one of the following must also be true:

1) Because of illness or injury, the person needs the aid of supportive devices such as crutches, canes, wheelchairs, and walkers; the use of special transportation; or the assistance of another person in order to leave their place of residence; or

2) The person has a condition such that leaving his or her home is medically contraindicated.

  • Under the care of a physician;
  • Receiving services under a plan of care established and periodically reviewed by a physician;
  • Be in need of skilled services;
  • Have a face-to-face encounter with an allowed provider type as mandated by the Affordable Care Act. This encounter must:

1) Occur no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care; and be related to the primary reason the patient requires home health services and was performed by a physician or non-physician practitioner.

II. Primary Reasons for the Denial of Home Health Claims Identified:

Based on the claims submitted by home health agencies in Illinois thus far, the following reasons for denial have been cited by Palmetto when reviewing agencies’ home health claims:

Denial Reason Code
Face-to-Face Errors

The physician certification was invalid since the required face-to-face encounter document was missing (actual clinical note for the face-to face encounter visit for admissions on or after 1/1/15, or the narrative for admissions on or after 4/1/11and before 1/1/15) Refer to CMS IOM Publication 100-02, Chapter 7, Section and

The physician certification was invalid since the required face-to-face encounter document was untimely and/or the certifying physician did not document the date of the encounter. Refer to CMS IOM Publication 100-02, Chapter 7, Section

The physician certification was invalid since the face-to-face encounter was not performed by an approved practitioner. Refer to CMS IOM Publication 100-02, Chapter 7, Section

The physician certification was invalid since the required face-to-face encounter was not related to the primary reason for home health services. Refer to CMS IOM Publication 100-02, Chapter 7, Section

Denial Reason Code
Plan of Care / Certification / Recertification

The Plan of Care was missing. Refer to CMS IOM Publication 100-02, Chapter 7, Section 30.2.

The content of the Plan of Care submitted was insufficient. Refer to CMS IOM Publication 100-02, Chapter 7, Section 30.2.1.

The Plan of Care submitted was not signed. Refer to CMS IOM Publication 100-02, Chapter 7, Section 30.2.3

The Plan of Care submitted was not signed timely by a qualified physician. Refer to CMS IOM Publication 100-02, Chapter 7, Section 30.2.4.

Missing physician certification/recertification. Refer to CMS IOM Publication 100-02, Chapter 7, Section 30.5

The physician certification/recertification submitted does not support skilled need. Documentation in the certifying physician’s medical records and/or the acute/post- acute care facility’s medical records (if the patient was directly admitted to home health) shall be used as the basis for certification of home health eligibility. Refer to CMS IOM Publication 100-02, Chapter 7, Section 30.5 and 42CFR 424.22 (a) and (c).

The physician certification / recertification submitted does not support homebound status. Documentation in the certifying physician’s medical records and/or the acute /post-acute care facility’s medical records (if the patient was directly admitted to home health) shall be used as the basis for certification of home health eligibility. Refer to CMS IOM Publication 100- 02, Chapter 7, Section 30.5 and 42CFR 424.22 (a) and (c).

The physician recertification estimate of how much longer skilled services are required is missing. Refer to CMS IOM Publication 100-02, Chapter 7, Section 30.5.2.

The home health agency generated record contained relevant clinical information addressing the “confined to the home” (homebound) eligibility requirement, which was corroborated by the certifying physician or the acute/post-acute facility documentation, but was NOT signed and dated by the certifying physician. Please have the certifying physician sign and date the relevant HHA-generated information and resubmit. Refer to CMS IOM Publication 100-08, Chapter 6, Section 6.2.3.

The home health agency generated record contained relevant clinical information addressing the “need for skilled services” eligibility requirement, which was corroborated by the certifying physician or the acute/post-acute facility documentation, but was NOT signed and dated by the certifying physician. Please have the certifying physician sign and date the relevant HHA-generated information and resubmit. Refer to CMS IOM Publication 100-08, Chapter 6, Section 6.2.3.

III. Lessons to be Learned:

Home health agencies in Florida, Texas, Michigan and Massachusetts should carefully review the denial reasons outlined above and conduct internal audits of your home health claims documentation to determine whether your agency’s documentation is complete.  The experiences of home health agencies in Illinois can be invaluable to your efforts to better ensure the full compliance of your agency with applicable statutory and regulatory requirements.  In future installments of this article, we will examine other reasons for denial seen by Illinois home health agencies.

Home Health ClaimsRobert W. Liles, M.B.A., M.S., J.D., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Liles Parker is a boutique health law firm, with offices in Washington DC, Houston TX, San Antonio TX, McAllen TX and Baton Rouge LA. Robert represents home health agencies around the country in connection with Medicare audits and compliance matters. Our firm also represents health care providers in connection with federal and state regulatory reviews and investigations. For a free consultation, call Robert at: 1 (800) 475-1900.

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