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Expect a Rise in Audits of Chiropractic Services!

April 16, 2018 by  
Filed under Health Law Articles

Health care Law(April 16, 2018): Chiropractors around the country are again finding their services and claims under intensive scrutiny from Medicare contractors and investigators, despite the fact that only three services even qualify for coverage and payment.  Several weeks ago, the Department of Health and Human Services (HHS), Office of the Inspector General (OIG) released its latest critical assessment of chiropractic services currently being billed to the Medicare program. The agency’s report, entitled “Medicare Needs Better Controls To Prevent Fraud, Waste, And Abuse Related To Chiropractic Services,”[i] reemphasizes the OIG’s prior findings that the Centers for Medicare and Medicaid Services (CMS) still lacks appropriate safeguards to prevent the submission and payment of improper, sometimes fraudulent claims for chiropractic services to the Medicare program.  This article is intended to highlight the government’s concerns and outline the steps that a provider should take to better ensure that any chiropractic services billed to Medicare qualify for coverage and payment.

I. Improper Chiropractic Claims Remain a Problem:

At the outset, it is important to recognize that in recent years, CMS and its program integrity contractors have taken a number of steps to elevate the level of scrutiny placed on questionable chiropractic claims billed to Medicare. Nevertheless, the OIG has taken the position that considerable work still needs to be done in order to better protect the Medicare program from fraudulent, wasteful and abusive chiropractic billings. For example, the average improper payment rate for Medicare Part B services has been estimated at between 9.9%-12.9%. For chiropractic services, the improper payment rate has been estimated to be between 43.9%-54.1%. About half of all chiropractic services covered by Medicare were not supposed to be covered.  The OIG has estimated that of the nearly $450 million spent by Medicare on chiropractic services every year, between $257 million and $304 million in improper payments are being made every year for chiropractic services.[ii] Over a six-year period, $2.9 billion was spent by Medicare on chiropractic services. Theoretically, this means that at least $1.27 billion was wasted over those six years.

  • Submit claims for services that never occurred.

  • Submit claims for services that were medically unnecessary.

  • Bill for services covered by Medicare but provided other services such as a massage or acupuncture.

  • Falsified patient medical records.

  • Provided services to beneficiaries without a valid license.

  • Offered incentives to patients to receive unnecessary services.

During this six-year period, 11[iii] of the chiropractors were incarcerated and over 500 chiropractors were excluded from participation in the Medicare and Medicaid programs by the OIG for various reasons. The OIG remains concerned that inadequate oversight is continuing to allow fraudulent chiropractors to hide their improper billings from regulators

II. What Solutions Has CMS Tried?

In an effort to spur more detailed documentation, CMS implemented the initial treatment date requirement for claims. This requirement has been more effective than the AT modifier requirement, as 7 out of 8 contractors do check to ensure this requirement is met. In that respect, this is a successfully implemented requirement. However, when audited, this requirement has largely failed due to inadequate documentation. Approximately 86% of all claims that included an initial treatment date did not adequately document the medical necessity of the services provided. Once again, it appears that chiropractors are aware that the initial date is necessary for payment and will include the date regardless of the quality of their documentation.

At the urging of the OIG, CMS has made significant efforts to better educate chiropractors on the importance of proper documentation and which chiropractic services are actually covered by Medicare Part B. CMS has create publications, seminars, and an educational video for chiropractors to learn about services that are covered under Medicare Part B and how to meet documentation standards. Unfortunately, either through lack of provider participation or because of difficulties in accessing the information, this initiative has largely failed.  Many chiropractors and beneficiaries remain ignorant with respect to the  medical necessity, documentation and coverage requirements of chiropractic services under Medicare Part B. For example, one of the educational videos created by CMS is supposed to educate chiropractors on how to meet documentation requirements. This video only received 8,898 views between December 2015 and January 2017. Even if we were to assume that every view was by a licensed chiropractor (which is highly unlikely), it only reached a fraction of the chiropractors participating in the Medicare program. CMS will likely need to implement more changes that may lead chiropractors to utilize educational resources and improve documentation.

III. Would A Medical Review Threshold or Service Limit Work?

Approximately 61% of private insurance plans that participate in the federal employee health benefits program (FEHB) cover chiropractic services. Of the FEHB private insurance plans that cover chiropractic services, there are limits between 10 and 60 services per year, with the average plan limiting patients to 21 chiropractic services per year. The concept of limiting the number of services a beneficiary has been proposed by the OIG in the past, but CMS did not agree with this solution.

A medical review threshold is a limit on the number or cost of services before a review of medical necessity must be completed to continue coverage of future services. CMS states that contractors may set thresholds for the number of services allowed before medical review, but may not limit the number of services provided. There is no CMS-level medical review threshold, but as mentioned earlier 2 of the 8 contractors have already set medical review thresholds. CMS-level medical review thresholds are already in place for out-patient therapy specialties such as physical therapy and speech-language pathology. The threshold for these two specialties is monetary, at $1,920. After a beneficiary reaches $3,700 in physical therapy or speech -language pathology services, a medical review s needed for the beneficiary to continue treatment.

The OIG conducted a nationwide review of the percentage of “unallowable payments” made for three groups of beneficiaries, divided by the number of services received in a calendar year. The first group received 1-12 chiropractic services in a year, 76% of which were unallowable payments. The second group received between 12-30 chiropractic services in a year, of which 95% were unallowable payments. The final group received more than 30 chiropractic services in a year, of which every single payment was unallowable. It is worth noting that the two contractors that had set a medical review threshold had no beneficiaries in the last category. Based on this assessment, HHS-OIG estimates that a threshold for medical review between 12-30 services would have saved Medicare between $95 million and $447 million between 2013-2015. Additionally, that same threshold would have saved beneficiaries between $24 million and $114 million in out-of-pocket expenses over the same period. 

IV. HHS-OIG Recommendations:

In addition to highlighting issue with the current system, OIG’s report provided a few recommendations for CMS to consider implementing:

  • Work with contractors to educate chiropractors on the training resources that CMS has already made available to them
  • Educate beneficiaries on which chiropractic services are and are not covered by Medicare Part B, and encourage beneficiaries to report chiropractors that are providing services that should not be covered by Medicare.
  • Identify chiropractors with high-service denial rates or aberrant billing practices, estimate the amount of overpayments made through a statistically significant sample, and recover the overpayments
  • Establish a threshold for the number of services that may be provide before a medical review is needed

V. Chiropractic Basics – Medicare Coverage Limitations: 

Chiropractors diagnose and treat subluxation disorders primarily through manual adjustment and manual manipulation of the spine.  CMS defines subluxation as “a motion segment, in which alignment, movement integrity, and/or physiological function of the spine are altered although contact between joint surfaces remains intact”[iv] More simply put, a spinal subluxation is a purported misalignment of the spinal column that can cause pain and other symptoms in patients suffering from this misalignment.  One question that regularly arises when documenting chiropractic services is:

“How does Medicare expect me to show that evidence of subluxation if present?”

In most instances, a Medicare contractor will review a provider’s documentation to determine if an x-ray has been used, or a physical examination was conducted to document subluxation. Each of these diagnostic methods are discussed below:

• Subluxation determination based on an x-ray. If a provider has determined that a subluxation is present based on an x-ray,[v] a Medicare contractor will likely take into consideration when the x-ray was taken and how much time has elapsed before a course of treatment was initiated. As discussed in Local Coverage Determination (LCD) L34009 published by Noridian Healthcare Solutions, LLC (Noridian), the contractor requires that an x-ray must have been taken at a time “reasonably proximate” to the start of care. Noridian considers an x-ray to be reasonably proximate to the initiation of care if it was taken no more than 12 months prior to or 3 months following the initiation of a course of chiropractic treatment. Understandably, Noridian will typically allow a chiropractor to base his / her subluxation determination on an older x-ray if a beneficiary’s medical records show that the patient has suffered from a chronic subluxation condition (such as scoliosis) for longer than 12 months AND there is a reasonable basis to believe that the chronic condition is permanent.

• Subluxation determination based on an a physical examination. If a provider has determined that a subluxation is present based on a physical examination that has been conducted, a CMS contractor is going to review the medical documentation to determine if two of the following four criteria have been identified during the examination of the patient’s musculoskeletal / nervous system, one of which must be either asymmetry / misalignment or range of motion abnormality. The four criteria examined include:

• Pain/tenderness evaluated in terms of location, quality, and intensity;
• Asymmetry/misalignment identified on a sectional or segmental level;
• Range of motion abnormality (changes in active, passive, and accessory joint movements resulting in an increase or a decrease of sectional or segmental mobility); and
• Tissue, tone changes in the characteristics of contiguous, or associated soft tissues, including skin, fascia, muscle, and ligament.

A limited scope of chiropractic services qualify for coverage under Medicare Part B if they are performed by a licensed, qualified chiropractor. Regrettably, CMS still takes the position that most of the various services offered by a chiropractor are “supportive” in nature rather than “corrective.”  In other words, CMS considers most chiropractic services to be “maintenance therapy,” which is not covered under Medicare Part B. As maintenance therapy, CMS does not consider most chiropractic services to be medically necessary.

So what chiropractic services ARE covered under Medicare Part B?  Frankly, not many. CMS specifically limits Medicare Part B coverage to hands-on manual manipulation of the spine for symptomatology associated with spinal subluxation. Additionally, qualifying hand-held manual devices (where the thrust of the force of the device is manually controlled) may also be used by chiropractors in performing manual manipulation of the spine. Notably, Medicare does not recognize any additional charges associated the use of such a hand-held device.

When documenting a covered service, a chiropractor must note the precise level of the subluxation. Depending on the number of spinal regions involved, one of three Current Procedural Terminology (CPT) codes can be billed:

• CPT Code 98940 (for treatment of one or two spinal regions);
• CPT Code 98941 (for treatment of three or four spinal regions); and
• CPT Code 98942 (for treatment of all five spinal regions).

The five regions of the, from the cervical area (neck) to the coccyx (tailbone) are illustrated below:

When providing chiropractic services that are intended to provide active / corrective treatment, Medicare requires chiropractors to append the claim with an AT modifier.  The AT modifier is intended to denote the fact that “Acute Treatment” for subluxation was provided to the beneficiary.  If a chiropractor bills one of the three covered codes without an AT modifier, the service will be automatically denied as not medically necessary when the claim is processed by your Medicare Administrative Contractor (MAC).

In most instances, properly coded chiropractic services (limited to 98940, 98941 and 98942) will qualify for payment.  Having said that, both CMS contractors and OIG have repeatedly found that just because a claim has been appended with the AT modifier does not mean that the chiropractic services billed were in fact, medically necessary. In multiple audits conducted over the last decade, government reviewers have found that chiropractors have failed to properly document the medical need for services billed to Medicare.

Although Medicare has not placed a limit on the number of chiropractic services that a beneficiary can receive, providers who appear to be billing an excessive number of services will quickly be flagged for medical review by a MAC, a Zone Program Integrity Contractor (ZPIC) or a Uniform Program Integrity Contractor (UPIC). It is essential that you carefully document the medical necessity of any services billed. At present, pre-authorization to confirm the medical necessity of a treatment is only required by two MACs. One contractor sets its threshold for medical review as 12 services per month but no more than 30 services per year. The other sets a threshold of 25 chiropractic services per year.

VI. Documenting Chiropractic Services:

It is important to keep in mind that under Title XVIII of the Social Security Act, §1862(a)(1)(A), services must be medically reasonable and necessary in order to qualify for coverage and payment.  Similarly, Title XVIII of the Social Security Act, §1833(e) prohibits Medicare from paying for any claims that lacks the necessary information to process the claim.  Therefore, regardless of whether the determination of a subluxation has been based on an x-ray or a physical examination, a chiropractor must ensure that complete and accurate records of the encounter are taken.

Experience has shown that in the event of an audit by a CMS contractor, the MAC, ZPIC or UPIC auditing chiropractic services will primarily base claims on a provider’s failure to properly document the medical necessity of the services billed. It is therefore essential that you review and understand your documentation obligations when billing for chiropractic claims. As a first step, you need to review:

CMS Medicare Benefit Policy Manual, Pub. 100-2, Chapter 15, Sections 30.5 and 240.
• CMS Medicare Claims Processing Manual, Pub. 100-4 Chapter 12, Section 220.

Moreover, you should continue to periodically review any LCD guidance on chiropractic services that has been issued by your MAC.  Again using Noridian’s LCD guidance as an example, during an initial visit, the MAC expects a provider to document the following six categories of information when providing chiropractic services:

A. Documentation Requirements – Initial Visit. The following documentation requirements apply whether the subluxation is demonstrated by x-ray or by physical examination:

#1. Family History / Past Medical History.
• Symptoms causing patient to seek treatment;
• Family history if relevant;
• Past health history (general health, prior illness, injuries, or hospitalizations; medications; surgical history);
• Mechanism of trauma;
• Quality and character of symptoms/problem;
• Onset, duration, intensity, frequency, location and radiation of symptoms;
• Aggravating or relieving factors; and
• Prior interventions, treatments, medications, secondary complaints.

#2. Description of the Present Illness.
• Mechanism of trauma;
• Quality and character of symptoms/problem;
• Onset, duration, intensity, frequency, location, and radiation of symptoms;
• Aggravating or relieving factors;
• Prior interventions, treatments, medications, secondary complaints; and
• Symptoms causing patient to seek treatment.

Importantly, the “symptoms” covered in your description of the patient’s present illness are required to be directly related to the level of subluxation. When describing a patient’s symptoms:

• The symptoms should refer to the spine, muscle, bone, rib and / or joint and be reported as pain, inflammation, or as signs such as swelling, spasticity, etc.
• The symptoms documented must be related to the level of the subluxation that has been cited. A statement on a claim that there is “pain” is insufficient.

Finally, the location of a patient’s pain must be described and the symptoms documented must be related to the level of the subluxation that has been cited.  Noridian further requires that the location of pain must be described and whether the particular vertebra listed is capable of producing pain in the area determined.

#3. Evaluation of musculoskeletal/nervous system through physical examination.

#4. Diagnosis. The primary diagnosis must be subluxation, including the level of subluxation, either so stated or identified by a term descriptive of subluxation. Such terms may refer either to the condition of the spinal joint involved or to the direction of position assumed by the particular bone named.

#5. Treatment Plan. The treatment plan should include the following:
• Recommended level of care (duration and frequency of visits);
• Specific treatment goals; and
• Objective measures to evaluate treatment effectiveness.

#6. Date of the initial treatment.

B. Documentation Requirements: Subsequent Visits.  The following documentation requirements apply whether the subluxation is demonstrated by x-ray or by physical examination:

#1. History.
• Review of chief complaint;
• Changes since last visit;
• System review if relevant.

#2. Physical exam.
• Exam of area of spine involved in diagnosis;
• Assessment of change in patient condition since last visit;
• Evaluation of treatment effectiveness.

#3. Documentation of treatment given on day of visit.  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 demonstrated by x-ray or physical exam as described above.

VII.  Conclusion

It has been more than 20 years since the OIG first identified chiropractic billings as a potential fraud and abuse problem.  To their dismay, the AT modifier requirement, initial treatment date documentation requirement, and educational resources have failed to significantly remedy the level of improper claims for chiropractic services being billed to the Medicare program. In light of the OIG’s latest report, chiropractors should expect CMS and its MAC, ZPIC and UPIC contractors to increase their audits of chiropractic claims.  Providers should also expect to see oversight through education, medical review, limits to the number of services, and documentation requirements.

What should you do?  Get back to basicsWhen is the last time you compared your medical necessity, documentation, coding and billing practices to those outlined in your respective LCD and the Medicare Benefit Policy Manual.

Need help?  Give us a call.  Our attorneys are experienced in representing chiropractors in audits and investigations of their Medicaid and private payor claims.

Health Care LawyerRobert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent chiropractors and chiropractic practices around the country in connection with Medicare, Medicaid and private payors claims audits.  We also represent chiropractors in connection with complaints filed against our clients with the State Chiropractic Board.  For a complimentary review and discussion of your issues, you can call Robert at: (202) 298-8750.  

 

[i] Department of Health and Human Services, Office of Inspector General. Medicare Needs Better Controls To Prevent Fraud, Waste, And Abuse Related To Chiropractic. A-09-16-02042. February 2018.
[ii] CMS’s Supplementary Appendices for the Medicare Fee-for-Service Improper Payment Reports for 2010–2015.
[iii] In one case, when an audit was initiated against a chiropractic practice, the chiropractor supposedly falsely reported a robbery had taken place and that medical records were stolen from his car. This triggered a fraud investigation that led to a 63-month fraud conviction, over $1 million in restitution, and a 23-year exclusion for the chiropractor.
[iv] Medicare Benefit Policy Manual, Chapter 15, §240.1.2.
[v] Noridian will usually permit a previous CT scan MRI to be used as evidence if a subluxation of the spine is demonstrated.

CBRs for Spinal Orthoses (CBR201803): What Do You Need to Know?

April 12, 2018 by  
Filed under Health Law Articles

(April 12, 2018): The Centers for Medicare & Medicaid Services (CMS) utilizes a variety of private contractors to process Medicare claims and conduct both administrative and program integrity audits of claims submitted by healthcare providers and suppliers.  At the present time, CMS has contracted with eGlobalTech (eGT) to analyze data and prepare “Comparative Billing Reports (CBRs) of various services and claims billed to the Medicare program. eGT works directly with another CMS contractor, Palmetto GBA (Palmetto), to conduct the statistical work that is necessary to complete the CBR process. The latest report to be issued by eGT is CBR201803.

I.  eGT is Currently Distributing CBRs to Spinal Orthoses Suppliers:

The most recent CBR review initiated by eGT has been focused on Spinal Orthoses Suppliers. On April 2, 2018, eGlobalTech sent out letters to affected suppliers around the country advising them of the initiation of CBR201803: Spinal Orthoses Suppliers. This CBR is focused on orthotic suppliers that have billed the Medicare Part B program for both off-the-shelf and custom-fitted prefabricated spinal orthoses (commonly referred to as “braces”[1]) in claims with dates of service from October 1, 2016 to September 30, 2017.[2]  CBR201803 focuses on the following Healthcare Common Procedure Coding System (HCPCS) codes:

Prefabricated Custom-Fitted Spinal Orthoses.[3]

L0627: Lumbar orthosis, sagittal control, with rigid anterior and posterior panels

L0631: Lumbar-sacral orthosis, sagittal control, with rigid anterior and posterior panels

L0637: Lumbar-sacral orthosis, sagittal-coronal, with rigid anterior and posterior panels

Prefabricated Off-the-Shelf-Fitted Spinal Orthoses.[4]

L0642: Lumbar orthosis, sagittal control, with rigid anterior and posterior panels

L0648: Lumbar-sacral orthosis, sagittal control, with rigid anterior and posterior panels

L0650: Lumbar-sacral orthosis, sagittal-coronal, with rigid anterior and posterior panels

 II.  The Improper Billing of Medicare Claims for Spinal Orthoses Has Been a Long-Standing Problem for CMS:

The initiation of CBR201803 is merely the government’s most recent attempt to address long-standing problems that have repeatedly been identified in connection with the coverage, coding and billing of spinal orthoses by authorized Medicare suppliers.  As eGT has noted on its website (and in correspondence with affected suppliers), Lumbar-Sacral Orthoses have been on the government’s Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMSPOS) list of “Top 20 Service Types with Highest Improper Payments” as far back as 2013. In fact, as set out in the most recent assessment of improper billing data by the Department of Health and Human Services (HHS), entitled “2017 Medicare Fee-for-Service Supplemental Improper Payment Data,” the estimated improper error rate for Lumbar-Sacral Orthoses was 52.5%. The magnitude of this problem is easily seen when compared with the overall improper payment rate for ALL Medicare claims which has been estimated at 9.5%.  Finally, it is worth noting that the HHS Office of Inspector General (OIG) identified concerns with the billing of orthotic braces in both its 2016 and 2017 Work Plans.[5]

III.  How Were Spinal Orthoses Suppliers Categorized this Review?

At last count, more than 6,000 qualified DME suppliers billed Medicare Part B for spinal orthoses under one of the six HCPCS codes outlined above.  In an effort to define peer groups for general comparison purposes, DMEPOS suppliers and physicians / non-physicians were assigned to a specialty peer group, based on their assigned Medicare Specialty Code and whether or not the provider / supplier was likely to have orthotist training The following categories were used by eGT:

 Peer Group#1:  DMEPOS Supplier Not Likely to Have Orthotist Training 
Medicare Specialty Code Medicare Provider / Supplier Type Description
A6 Medical Supply Co. with Respiratory Therapist
B1 Oxygen Supplier
54 Medical Supply Co. — Other
58 Medical Supply Co. with Registered Pharmacist
63 Portable X-Ray Supplier
87 All Other Suppliers
 Peer Group#2:  DMEPOS Supplier Likely to Have Orthotist Training 
Medicare Specialty Code Medicare Provider / Supplier Type Description
B3 Medical Supply Co. with Pedorthic Personnel
51 Medical Supply Co. with Certified[6] Orthotic Personnel
52 Medical Supply Co. with Certified Prosthetic Personnel
53 Medical Supply Co. with Prosthetic / Orthotic Personnel
 Peer Group#3:  Physician / Non-Physician Not Likely to Have Orthotist Training 
Medicare Specialty Code Medicare Provider / Supplier Type Description
A0 Hospital
A5 Pharmacy
01 General Practice
02 General Surgery
04 Otolaryngology
05 Anesthesiology
08 Family Practice
11 Internal Medicine
16 Obstetrics / Gynecology
19 Oral Surgery (Dentists Only) (LLP)
30 Diagnostic Radiology Head
40 Hand Surgery
41 Optometry (LLP)
48 Podiatry (LLP)
66 Rheumatology
84 Preventative Medicine
93 Emergency Medicine
94 Interventional Radiology
99 Unknown Physician Specialty
 Peer Group#4:  Physician / Non-Physician Likely to Have Orthotist Training 
Medicare Specialty Code Medicare Provider / Supplier Type Description
B2 Pedorthic Personnel
12 Osteopathic Manipulative
13 Neurology
14 Neurosurgery
20 Orthopedic Surgery
23 Sports Medicine
25 Physical Medicine and Rehabilitation
35 Chiropractic (LLP)
55 Individual Orthotic Personnel
56 Individual Prosthetic Personnel
57 Individual Prosthetic / Orthotic Personnel
65 Physical Therapist in Private Practice
67 Occupational Therapist in Private Practice
70 Single or Multispecialty Clinic or Group Practice
72 Pain Management

CBR contractors (eGT and Palmetto) then calculated statistics for each of the separate peer groups.  As the categories reflect, the CBR contractors separated suppliers from providers and then further stratified the two primary groups by whether or not they were “likely” to have orthotist training.  While the CBR contractors expressly recognized that an individual may be specially trained to custom fit beneficiaries with a medically necessary orthosis, for the purposes of this review, they still ultimately categorized both suppliers and providers by Medicare specialty code based on the contractors’ assessment of whether a specific specialty was likely to have specialized orthotist training.[7] Unfortunately, there are likely a number of instances where eGT’s presumption of whether a supplier has orthotist training may be just plain wrong.

IV.  Why Was My DME Company Included in this Review?

A Comparison of Your Billing Percentages for Each of the Six HCPCS Categories of Spinal Orthoses.  As a first step, the CBR contractors compared each supplier’s billing patterns, by HCPCS code, with those of other suppliers in their peer specialty group.  To the extent that a supplier’s utilization ratios were aberrant when compared to the ratios of their peers, the supplier was more likely to be sent a CBR.

The Percentage of Allowed Services Defined as Custom-Fitted.  Another primary assessment conducted by the CBR contractors is whether the percentage of spinal orthoses submitted for payment by a supplier was billed as a “custom fitted” brace.  The percentage of custom-fitted braces billed by a specific supplier was compared to the percentage billed to their DME MAC contractor by other suppliers in their respective peer specialty group.  Each supplier’s percentage of custom-fitted brace billings were also compared to the national average.  If a specific supplier’s percentage was deemed to be “significantly higher” than one of these peer groups, it was one step closer to being sent a CBR.

The Percentage of Allowed Services Submitted without a Visit to the Referring Provider within 90 Days of the DMEPOS Service Date.  Another factor analyzed by the CBR contractors is whether a significant percentage of beneficiaries fitted (either custom-fitted or off-the-shelf) for a brace by a specific supplier had not been seen by their referring provider within 90 days of the DMEPOS service date (the date that the spinal orthosis order was filled by the DMEPOS supplier).  Simply stated, red flags are going to be raised if you fill a prescription / order for a brace and the patient hasn’t seen his / her referring provider within the previous 90 days.[8]  Once again, the CBR contractor compared each specific supplier’s percentage to the percentage billed to their DME MAC contractor by other suppliers in their respective peer specialty group.  Each supplier’s percentage of custom-fitted brace billings were also compared to the national average.

The Average Allowed Charges per Beneficiary for the One-Year Period.  The CBR contractors also examined the average allowed charges of each supplier billed to Medicare per beneficiary and compared this number to average allowed charges of other suppliers in their peer specialty group.  If a supplier’s average allowed charged were significantly higher than that of their peers, it was more likely to be issued a CBR.

V.  The Results of an Assessment by eGT:

After reviewing the utilization and billing practices of each spinal orthoses supplier, if a specific supplier’s measures were considered to be Significantly Higher than their peers in at least one of the three factors discussed above, the supplier was issued a CBR.

  1. Supplier is significantly higher than at least one of its peer groups on at least one of the measurements studied;

  2. Supplier is near or above the 45th percentile in allowed charges ($5,000); and

  3. Supplier had at least ten beneficiaries.

VI. Responding to a CBR:

If your company received a CBR, you likely noted the fact that eGT may expressly state in its reports that “no reply is necessary.”   While that may technically be the case, after handling CBRs for many years, our experience (and the collective experience of our associates) has been that your organization is much more likely to be audited if you do not respond and address any misconceptions or incorrect positions about your billing pattern stated by the contractor in its report.

To be clear, if you receive a CBR, you need to immediately take steps to validate or invalidate eGT’s findings.  If, in fact, your billing practices have been improper, you have an affirmative obligation to take steps to remedy any deficiencies. Additionally, the risk issues identified by eGT should be incorporated into your existing Compliance Program and should be taken into account when you perform periodic internal claim audits and monitoring functions.

VII.  Get Ready for Follow-Up Audits by ZPICs / UPICs!

Although your claims haven’t yet been audited, if you received one of these reports an audit of your claims may be right around the corner.  While it has been our experience that responding to a CBR is helpful, (and may reduce your chances of having a prepayment or postpayment Zone Program Integrity Contractor (ZPIC) or Uniform Program Integrity Contractor (UPIC) audit) if eGT has based its assessment on incorrect assumptions, there are no guarantees that a CMS program integrity contractor won’t still choose to initiate an audit of your claims for one or more braces billed to Medicare.

As a CBR recipient, you need to recognize that your organization has been identified as an outlier and there is significant likelihood that your spinal orthoses claims will be audited in the near future by a ZPIC or a UPIC, especially if you have not taken steps to identify and correct any misconceptions about your billing practices that the CBR contractor has made.

Now, more than ever, it is essential that suppliers review their documentation and ensure that they are fulling complying with all applicable requirements to show that each brace was medically necessary, fully documented, properly coded and billed.  For instance, as set forth under the Medicare Program Integrity Manual:

“All DMEPOS items…require detailed written orders prior to billing. Detailed written orders may take the form of a photocopy, facsimile image, electronically maintained, or original ‘pen-and-ink’ document. The written order must be sufficiently detailed, including all options or additional features that will be separately billed or that will require an upgraded code. The description can be either a narrative description (e.g., lightweight wheelchair base), or a brand name/model number. All orders must clearly specify the start date of the order.”

The failure to fully document the delivery of a brace is another significant risk faced by spinal orthoses suppliers.  ZPICs and UPICs routinely refuse payment citing this reason for denial.  As discussed in the Medicare Program Integrity Manual:

“Suppliers are required to maintain proof of delivery documentation in their files. Proof of delivery documentation must be maintained in the supplier’s files for 7 years (starting from the date of service).” 

Pursuant to 42 C.F.R. Sec. 424.57(c)(12), proof of delivery:

Must be responsible for the delivery of Medicare covered items to beneficiaries and maintain proof of delivery. (The supplier must document that it or another qualified party has at an appropriate time, provided beneficiaries with necessary information and instructions on how to use Medicare-covered items safely and effectively).”[9]

VIII.  Potential Liability for Non-Compliance:

After receiving a CBR, you may soon find that your supplier claims will be subject to  prepayment or postpayment audit by a ZPIC or UPIC. Alternatively, you may merely receive an “Additional Document Request” (ADR) from a CMS contractor.  ADRs aren’t uncommon and most suppliers have received multiple such requests since becoming a participating supplier in the Medicare program.  Nevertheless, in recent years, ADRs have taken on a new level of importance. ZPICs and UPICs aren’t hesitating to place a supplier on 100% prepayment review if the documentation submitted in response to an ADR results in the denial of one or more claims.

Similarly, if a supplier is placed on prepayment review and a significant percentage of your claims are denied when the associated supporting documentation is submitted, there is much higher risk that your claims will be subjected to a postpayment audit.  In some cases, a high error rate identified in a prepayment or postpayment audit has led to the suspension of Medicare supplier’s billing privileges. Unfortunately, this “snowball effect” of cumulative adverse administrative actions may not be over. In accordance with 42 C.F.R. Sec. 424.57(e), a CMS contractor may recommend to the agency that your billing privileges are “revoked” if a supplier is found not meet applicable conditions of payment:

“Failure to meet standards. CMS will revoke a supplier’s billing privileges if it is found not to meet the standards in paragraphs (b) and (c) of this section. (The revocation is effective 15 days after the entity is sent notice of the revocation, as specified in §405.874 of this subchapter.)” 

IX. Conclusion:

Despite what you may have been told, CBRs are far from benign.  If a provider or supplier has received a CBR (such as, but not limited to CBR201803), it may be a harbinger of future administrative audits or in more serious cases, a possible civil and / or criminal investigation of your billing practices.  While every case is different, if the CBR contractor’s CBR findings (as outlined in their letter to your organization) are incorrect, it is typically in your best interests to correct the record.  Our attorneys are experienced in assessing these matters and can assist your organization is putting its best foot forward when responding to a CBR, the receipt of an ADR, prepayment review or postpayment audit.  Give us a call for a free consultation.  1 (800) 475-1906.

Robert W. Liles defends health care providers in Medicare auditsRobert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at the law firm of Liles Parker, Attorneys & Clients at Law.  Robert represents providers and suppliers around the country in ZPIC / UPIC audits, Medicare suspension actions and revocation cases.  For a complimentary consultation, please call: 1 (800) 475-1906.

[1] As set out in the Chapter 15, Section 130 of the Medicare Benefit Policy Manual, braces are “rigid and semi-rigid devices which are used for the purpose of supporting a weak or deformed body member or restricting or eliminating motion in a diseased or injured part of the body.”

[2] eGT’s analysis is based on a snapshot of claims in the Integrated Data Repository as of January 24, 2018.

[3] As set out in the Joint DME MAC Publication, a “Custom-Fitted Orthosis,” is defined as:

  • Devices that are prefabricated.
  • They may or may not be supplied as a kit that requires some assembly. Assembly of the item and/or installation of add-on components and/or the use of some basic materials in preparation of the item does not change classification from OTS to custom fitted.
  • Classification as custom fitted requires substantial modificationfor fitting at the time of delivery in order to provide an individualized fit, i.e., the item must be trimmed, bent, molded (with or without heat), or otherwise modified resulting in alterations beyond minimal self-adjustment.
  • This fitting at delivery does require expertise of a certified orthotist or an individual who has equivalent specialized training in the provision of orthosis to fit the item to the individual beneficiary.

[4] Off-the-shelf (OTS) orthotics are defined as:

  • Items that are prefabricated.
  • They may or may not be supplied as a kit that requires some assembly. Assembly of the item and/or installation of add-on components and/or the use of some basic materials in preparation of the item does not change classification from OTS to custom fitted.
  • OTS items require minimal self-adjustmentfor fitting at the time of delivery for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit an individual.
  • This fitting does not require expertise of a certified orthotist or an individual who has equivalent specialized training in the provision of orthoses to fit the item to the individual beneficiary.

[5] In both its 2016 and 2017 Work Plans, OIG noted that it would be reviewing the reasonableness of Medicare payments for orthotic braces when compared to the amounts paid by other non-Medicare payers..

[6]A “certified” individual is someone who is certified by either the American Board for Certification in Orthotics and Prosthetics, Inc., or the Board for Orthotist/Prosthetist Certification.

[7] As set out in Appendix C of the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Quality Standards, “Individuals supplying the item(s) set out in this appendix must possess specialized education, training, and experience in fitting, and certification and/or licensing.”  While the CBR contractors expressly recognized that an individual specially trained to custom fit beneficiaries that have a medical need for an orthosis.

[8] To determine this, the CBR contractor checks to see if the referring provider billed for a Part B visit within 90 days of the service date of the DMEPOS claim.

[9] https://www.gpo.gov/fdsys/pkg/CFR-2005-title42-vol2/pdf/CFR-2005-title42-vol2-sec424-57.pdf

 

ZPIC Audits / UPIC Audits: Transmittal 768

April 12, 2018 by  
Filed under Health Law Articles

Liles Parker represents Medicare providers in connection with ZPIC and UPIC audits.(April 12, 2018): A big concern with the Medicare appeals process is the ghastly backlog at the Office of Medicare Hearings and Appeals (OMHA) for an Administrative Law Judge (ALJ) hearing coupled with the government’s authority to recoup alleged overpayments after the second level of appeal (reconsideration). There is renewed buzz regarding the backlog and potential recourse given the Fifth Circuit’s decision on March 27, 2018 in Family Rehabilitation, Inc. v. Azar, No. 17-11337, which affirmed the possibility for providers to sue for an injunction to prevent Medicare Administrative Contractors (MACs) from recouping overpayments until administrative appeals are concluded under the collateral-claim exception. But what about the snail-like pace of postpayment reviews at the very beginning of this process?  As discussed below, Medicare’s Transmittal 768 may alleviate this continuing problem to some extent.

I.  Continuing Delays by ZPICs / UPICs in Completing an Initial Review – Overview of the Problem:

Before claims are appealable, they have to be denied on review. A major source of massive extrapolated alleged overpayments are postpayment reviews by Zone Program Integrity Contractors (ZPICs) and their successor Unified Program Integrity Contractors (UPICs). Our experience has been that these reviews usually take many months, even years. This is in spite of the fact that providers are required to turn over the requested records in somewhere between 15 and 30 days, maybe even 45 days if the provider requests an extension. The investigators typically remain tight-lipped throughout the review and investigation process. Inquiries about the status of a review are usually met with no response or cryptic feedback like “The review findings will be provided at the conclusion of the review.” In the meantime, providers are expected to sit on their hands. Then one day, a letter arrives which often reflects an unmanageable alleged overpayment figure for the provider and the provider is left to dispute the alleged overpayment through “Medicare’s Byzantine four-stage administrative appeals process” – in the words of Circuit Judge Jerry E. Smith in Family Rehabilitation, Inc. v. Azar.

II.  New Timelines Under Transmittal 768 for ZPICs / UPICs to Complete a Postpayment Review:

There has been a development that may effectuate speedier postpayment reviews by ZPICs and UPICs. The Centers for Medicare and Medicaid Services (CMS) issued guidance, which imposes a new timeline and requirements on these contractors effective March 1, 2018. Specifically, the transmittal adds the following requirements to Chapter 3 of the Medicare Program Integrity Manual:

the UPICs / ZPICs shall complete postpayment medical review and provide the lead investigator with a final summary of the medical review findings that includes reference to the allegations being substantiated/not substantiated by medical review, reasons for denials, and any observations or trends noted within 60 calendar days” and “[t]he counting for the 60-day time period begins when all of the documentation is received by the UPIC / ZPIC contractor.”

Please note, however, that this is an internal timeline for the contractors (as between the medical reviewer(s) and lead investigator), meaning that providers should not expect to receive the postpayment audit results within 60 days of having submitted the records to the UPIC / ZPIC. However, Transmittal 768 may be useful to put pressure on the contractors when reviews are pending for months or years on end.

Lorraine A. Rosado, J.D., is a Senior Associate at Liles Parker and has extensive experience representing Medicare providers and suppliers around the country in administrative claims audits, suspension and revocation cases.  She is also performed a number of IRO reviews in connection with annual CIA reviews by HHS-OIG.  Should you have any questions regarding an administrative enforcement action, please feel free to call Lorraine for a free consultation.  She can be reached at: (202) 298-8750.

Medicare Advantage Plans May Soon Offer Personal Care Services

April 10, 2018 by  
Filed under Health Law Articles, Medicaid

Medicare Advantage Plans May Soon Cover Personal Care Services

(April 10, 2018):  On April 2, the Centers for Medicare and Medicaid Services (CMS) announced an expansion of the benefits that private health plans may offer Medicare beneficiaries under the Medicare Advantage (MA) program in 2019.  In its Final Call Letter for bids from plans that participate in the MA program (“MA plans”) for 2019, CMS expanded the services that plans would be permitted to offer in 2019 as supplemental health related benefits, even if the primary purpose of those benefits includes daily maintenance.  While these benefits are not required to be included in MA plans, plans are provided the latitude to include them if they choose and may very well change the reimbursement landscape for personal care agencies around the country.

I.  Background:

As background, MA Plans are permitted to offer certain benefits that are not included as part of the Medicare fee for service, or Original Medicare, benefits, if those benefits are, among other things, primarily health related.  As discussed in the Final Call Letter, CMS considers an item or service to be primarily health related “…if the primary purpose of the item or service is to prevent, cure, or diminish an illness or injury.”  However, CMS previously has not considered a service to fit within this category if the primary purpose is daily maintenance.

II.  Expansion of Coverage for Personal Care Services:

In the Final Call Letter, CMS recognizes that there is value in certain services that “diminish the impact of injuries or health related conditions and reduce avoidable emergency and health care utilization.”  The Letter does not specify the benefits that would fall under this rubric, but includes as an example, fall prevention devices for individuals at risk high risk for falling and similar products that protect against injury resulting from falls.  The Letter further states that services that diminish the impact of injuries and health conditions and reduce avoidable utilization can be included as supplemental benefits under certain circumstances, even if a significant purpose of the item is daily maintenance.”

As further described in the Letter, “[u]nder the new interpretation, in order … to be ‘primarily health related’ … [an item] must diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychosocial impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization.”  The intent is to provide plans with the flexibility to offer supplemental benefits that can enhance quality of life and improve health outcomes.

The service must, however, be medically appropriate, recommended by a licensed provider as part of a plan of care, and cannot include items or services that are solely to induce enrollment.  The Letter also indicates that CMS will be issuing more detailed guidance in the future.

As noted, above, while not entirely clear, it is quite possible that MA plans will be permitted to cover personal care services under the revised standards for supplemental benefits.  Indeed, in a press release issued by CMS announcing a draft of the Bid Letter for comment in early February, CMS described the proposal as allowing supplemental benefits to “include services that increase health and improve quality of life, including coverage of non-skilled in-home supports, portable wheel chair ramps and other assistive devices and modifications when patients need them.” (Emphasis supplied.)  While neither the press release accompanying the Final Bid Letter nor the Letter, itself, includes any language specifically referencing these items, the broader language of the Final Letter can certainly be read to permit plans to offer personal care services under certain circumstances.

III.  What Steps Should Your Personal Care Agency Take?

So what can a provider that wishes to offer these services, including personal care services, as part of an MA plan for 2019, do at this point?  First, providers can be watchful for additional guidance from CMS that should be forthcoming.  Second, they can begin to approach the MA plans that cover a significant number of MA subscribers in their service area to discuss both including these items or services as supplemental benefits in the plans’ upcoming bids to CMS for the 2019 year, and to discuss pricing.   In doing so, providers should be prepared with data or other information demonstrating that offering the service will reduce costs without harming patients.  For example, a provider that wished to offer personal home care services would attempt to prepare a cost benefit analysis showing that home visits reduce the incidence for hospital admissions or admissions to skilled nursing facilities. Additionally, if the MA plan is also a provider of Medicaid managed care services, the provider may also include in the analysis the cost/benefit of lowering admissions to the nursing facility long stay side of the equation.  There are other permutations to the analysis, but the key is to begin discussions with the various plans, and to accumulate data that demonstrate both the short term and long-term cost and health benefits of the particular service.

Providers that wish to take advantage of this opportunity should also note that the Bipartisan Budget Act of 2018 expands supplemental benefits for chronically ill enrollees to also encompass benefits that are not primarily health related in certain circumstances beginning in 2020.  This change recognizes the importance of certain social determinants to health status – something that some state Medicaid programs are beginning to recognize as well.  However, this change only affects “chronically ill” beneficiaries and does not begin until 2020, whereas the expanded definition of supplemental benefits in the Bid Letter affects services provided to all MA beneficiaries and begins in 2019.  Additionally, the Final Bid Letter notes that the expanded definition of supplemental benefits in that Letter requires that the benefit address specific illnesses and/or injuries, and reiterates that it will be issuing further guidance on both expansion options in the future.

We would also note that all MA plans are required to have compliance programs in place that meet the seven elements of an effective program.  Under this program, they are also responsible for providing certain training for providers under their programs, as well as for the compliance of those providers.  While Liles Parker attorneys, and in fact, virtually all knowledgeable health care attorneys, have long counseled their clients on the importance of establishing and maintaining effective compliance programs, and while some segments of the industry are required to maintain such programs by law, any entity that wishes to contract with MA plans to provide health care related services almost certainly will be required by the plan to maintain a compliance program.  Thus, any entity that wishes to take advantage of the expanded coverage of services under the Final Bid Letter should be prepared to demonstrate that it has an effective compliance program.

With respect to providers of personal care services, there are a number of areas of vulnerability.  One major such area is ensuring that aides actually perform the services for which a program is billed.  Several years ago, there were a number of investigations and prosecutions where aides were alleged to have colluded with clients to defraud the Medicaid program by failing to provide the service for which the aides were paid, and paying the client a portion of the payments.  There are mechanisms to monitor this type of activity; however, it is a major risk area for home care agencies and should be addressed in any compliance program.

IV.  Conclusion:

In short, the Final Bid Letter for 2019 presents the possibility of expanding the services that certain MA plans will cover, including the possibility of covering personal care services.  However, providers that wish to contract with MA plans for these services should be taking the actions described, above. Liles Parker attorneys have extensive experience in assisting clients throughout the health care industry, including home care and home health, in responding to new government and payor initiatives, including establishing and maintaining an effective compliance program.

Michael Cook is a healthcare lawyer and represents personal care providers around the countryMichael Cook, J.D., is a Partner at the firm Liles Parker, Attorneys & Counselors at Law.  Mr. Cook represents nursing home, assisted living, home health and personal care clients in regulatory matters.  Anyone interested in discussing the material discussed in this article should feel free to contact Michael Cook at 202-298-8750 or mcook@lilesparker.com.       

 

 

 

 

 

 

The PSAVE Pilot Program: Should You Self-Audit Your Medicare Claims?

April 2, 2018 by  
Filed under Health Law Articles

PSAVE Pilot Program(April 2, 2018):  Our nation’s demographics are changing.  In less than 20 years, it is estimated that for the first time in country’s history, the number of individuals over the age of 65 will exceed the number of children.[1] These increases are already being seen in our rapidly expanding Medicare healthcare benefit program.  At last estimate, Medicare Administrative Contractors (MACs) processed an estimated 1.2 billion claims on behalf of America’s seniors.[2]  As the Medicare program has grown, the Centers for Medicare and Medicaid Services (CMS) has employed a variety of different claims audit mechanisms to better ensure that the Medicare Trust Fund is protected from waste, fraud and abuse.  The Provider Self-Audit Validation and Extrapolation (PSAVE) pilot program is among the agency’s most recent efforts to protect the integrity of the Medicare program.  An overview of the PSAVE pilot program is set out below.

I. Providers and Suppliers Currently Subject to the PSAVE Pilot Program:

In November 2017, Noridian Healthcare Solutions LLC (Noridian), the MAC for Jurisdiction F, and CMS launched a pilot Medicare claims self-auditing program. Jurisdiction F is comprised of Alaska, Arizona, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.[3] When announced, the program was touted as a way to provide long term educational benefits to Medicare providers, while also granting “immunity” from further audit of Medicare claims by both the provider’s MAC and from the Recovery Auditor (RA) contractor assigned to the provider. Is your practice likely to receive an “invitation” to conduct a self-audit of its claims?  Let examine the pilot program in more detail to find out:

II. Why Was Your Practice Invited to Participate in the PSAVE Pilot Program?

While Noridian claims that the PSAVE pilot program is open to almost any Medicare Part B healthcare provider, invitations to participate where not sent out to all of the Medicare participating providers in Jurisdiction F. Instead, data analytics were used to identify providers with abnormal billing or coding practices, based on the audit findings of  Comprehensive Error Rate Testing (CERT) postpayment review data.  Initially focusing on only a limited number of medical specialties, providers with irregular billing patterns  were first chosen by Noridian to “test” the PSAVE pilot self-auditing program. Primarily relying on sophisticated data mining techniques, Noridian has identified certain Part B providers with questionable billing practices and invited them to participate in the PSAVE pilot program.[4]  If your practice was invited to participate in this pilot self-auditing program, this practice is an outlier and will likely be subjected to an audit, whether it chooses to participate in the PSAVE pilot program or not.

III. How Does the PSAVE Pilot Program Work?

At the outset, it is important to keep in mind that if your practice was invited to participate in the PSAVE pilot program, your billing practices have been found to be aberrant by a CERT contractor.  As an outlier, your practice’s Medicare claims for reimbursement have been targeted for audit.

Potential PSAVE pilot program participants were sent (or will be sent as the program expands) a notification letter by Noridian which included a sample listing of claims that the MAC has identified for inclusion in your self-audit.  In addition to the claims listing, Noridian’s letter also specified the specific elements that it expected each provider to review in connection with the claims.  Importantly, Noridian’s notification letter also included an “Appeals Waiver” form that it required participating providers to sign prior to being admitted into the pilot program.

• In exchange for participating in the PSAVE pilot program, Noridian notes that any claims covered by the audit would be immune from subsequent review and audit by the MAC and / or a Recovery Auditor.

• If a provider agreed with the terms of the PSAVE process, the provider was required to return the executed Appeals Waiver form to Noridian and assemble all of the documentation related to the “Education Sample” of claims listed in the MAC’s letter. Importantly, the sample chosen by Noridian was meant to represent a statistically-relevant sample of the provider’s universe of claims previously paid by the Medicare contractor.

• Upon receipt of the signed Appeals Waiver form, a 90-day period for the provider to review the Medicare claims at issue began.

• Prior to conducting the self-audit, Noridian required that each provider participate in a webinar on how the Education Sample of claims was to be reviewed.

• Participating providers then conducted the self-audit. The provider’s findings (and the associated documentation) would then be submitted to Noridian for validation. It is important to note that the validation review may result in additional overpayments identified that may have been missed by the provider when the self-audit was conducted.

• After validating the self-audit findings, Noridian would then determine whether it was appropriate to extrapolate the identified overpayment to the universe OR merely base an overpayment on the sample of claims reviewed. It has our experience that Medicare contractors have the latitude not to extrapolate an overpayment if a provider’s overall error rate is below a certain level (typically less than 10%).

• After extrapolating the overpayment identified, Noridian would then send the provider a letter identifying the overall amount of any extrapolated overpayment that may be owed.

• The provider would then be required to repay the identified overpayment within a timeframe set out in Noridian’s notice letter.

IV. Benefits of Participation in the PSAVE Pilot Program:

Perhaps the greatest benefit of participating in the PSAVE pilot program is the fact that you are in charge and you are directly involved in the claims audit process.  As the audit progresses, you will be aware of any problems that may arise with your claims. In simplified terms, self-audits provide you with a significant degree of control over the process.  Nevertheless, just because you may exercise a significant degree of control over the audit process does not mean that you will be able to control the outcome of the audit. As with other self-audit / self-reporting programs administered by CMS and the Office of Inspector General (OIG), a provider’s voluntary participation in the PSAVE pilot program allows a provider to present its view of the claims in the best possible light while positioning itself as a “Good Corporate Citizen.”

 V. PSAVE Pilot Program Risk Issues:

While proponents of the PSAVE pilot program are quick to point out the educational value of participating in the program, a provider should exercise care before deciding to sigh-onto the program. For example, the Appeals Waiver signed can leave a provider vulnerable at the conclusion of the program, as there is no mechanism of contesting the overpayments that may be identified as owed by Noridian. To make matters worse, the validation review is a blind sample, meaning that the provider will not be fully aware of any potential claims errors until after the validation review has been completed by the MAC.   In some cases, Noridian may be willing to permit a provider to submit additional documentation before the MAC concludes its review of the documentation.  Since the right to file an administrative appeal of any Medicare overpayment has already been waived,  a provider is assuming a significant risk when participating in the PSAVE pilot program.

Additionally, PSAVE pilot program representations extolling the benefits of immunity from subsequent MAC and RAC audits (limited to the specific claims or extrapolated claims set  covered by the PSAVE audit) is somewhat misleading. The promised immunity from audit does not apply to Unified Program Integrity Contractor (UPIC) / Zone Program Integrity Contactor (ZPIC) audits, which are far more likely than MAC or RA audits for Medicare Part B providers. Moreover, neither CMS nor its contractors (such as Noridian) have the authority to waive liability on behalf of the OIG or the U.S. Department of Justice (DOJ).

VI. Risks Encountered When Opting-Out of the PSAVE Pilot Program:

Should you decide to decline Noridian’s invitation to participate in the PSAVE pilot program, you need to keep in mind that the likelihood of being subjected to a compulsory audit by Noridian, the UPIC / ZPIC or even OIG is quite high.  Your practice’s billing practices have already been identified as problematic.  If targeted in a future non-PSAVE audit, you will lose the ability to conduct a self-audit and any identified overpayment may still be subjected to extrapolation.  Nevertheless, should such an audit lead to unfavorable results, you will still retain the ability to avail yourself of Medicare’s administrative appeal process.  As we have found when appealing an alleged overpayment on behalf of a Part B provider, the ability of a Medicare contractor to correctly conduct a statistical extrapolation of an identified overpayment varies widely from contractor to contractor.  When challenging an overpayment that has been assessed, we regularly challenge the statistical methodology and numerous other errors made by the contractor when it calculated extrapolated damages estimates based on the sample of claims reviewed 

VII.  Conclusion: 

How should you proceed? If your practice is invited to participate in the PSAVE pilot program, you need to carefully consider the risks of choosing to participate in the initiative.  The PSAVE pilot program is merely one of the most recent efforts by CMS to educate providers on their medical necessity, documentation, coding and billing obligations. Although the PSAVE pilot program may advance the agency’s overall goal of reducing Medicare waste, fraud and abuse, there are other more effective, less invasive ways for your practice to integrate and encourage a culture of compliance in your organization.

Adherence to the requirements set out in a well-designed Compliance Program is perhaps a Part B provider’s best approach that can speed up and optimize the proper payment of claims, minimize billing mistakes, and reduce the chances that an audit will be deemed necessary by CMS or one of its program integrity contractors.  The “sampling” of one’s claims on a periodic basis to ensure that the services being billed to the Medicare program qualify for coverage and payment would squarely fall within the “Auditing and Monitoring”  element identified by OIG as one of the seven elements of a provider’s effective Compliance Program.  A “GAP Analysis” of your practice will make it easier to identify any weaknesses in the provision, documentation and submission of your claims for reimbursement by the Medicare program.  If you identify an error when reviewing your claims processes, promptly taking remedial action can often minimize the size and scope of any overpayment that is identified.  The prompt repayment of any overpayments you may have received can also prevent Federal and State auditors from disrupting your practice and conducting their own assessment of your Medicare claims.  Additional risk areas to be considered when reviewing your claims include, but are not limited to:

• What was the source of the referral for services provided by you or another member of your practice?

• Do you or another member of your practice provide something of value in exchange for referrals?

• Do you provide any gifts to patients?

• Are your employees, agents and / or contractors been screened against all Federal and State lists of excluded parties?

• Has the proper level of supervision been exercised in connection with each of the claims billed to Medicare?

PSAVE Pilot ProgramRobert W. Liles, M.B.A., M.S., J.D., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Robert represents health care providers and suppliers around the country in connection with Medicare audits by UPICs, ZPICs, MACs, SMERCs and other CMS program integrity contractors.  Our firm also represents healthcare providers in connection with Medicare revocation, suspension and exclusion actions. For a free consultation, please call Robert at:  1 (800) 475-1906.

 

[1] https://www.census.gov/library/stories/2018/03/graying-america.html

[2] https://www.hhs.gov/sites/default/files/dab/medicare-appeals-backlog.pdf

[3] https://www.cms.gov/Medicare/Medicare-Contracting/Medicare-Administrative-Contractors/Who-are-the-MACs-A-B-MAC-Jurisdiction-F-JF.html

[4] https://www.csmonitor.com/USA/Society/2017/0530/How-data-crunching-is-cutting-down-on-massive-health-care-fraud

Veterans Administration and CMS Announce Partnership to Adress Fraud Prevention

January 25, 2018 by  
Filed under Health Law Articles

On January 23, the VA and CMS announced a “partnership to strengthen prevention of fraud, waste and abuse.”  According to the press release, under this partnership:

“VA plans to capitalize on the advancement in analytics CMS has made by concentrating on its use of advanced technology, statistics and data analytics to improve fraud detection and prevention efforts.  Additionally, in November 2017, VA invited industry experts to provide information on the latest commercial sector tools and techniques to enhance VA’s fraud detection capabilities.  In April, VA will invite these industry experts to demonstrate their capabilities for detecting and preventing fraud, waste, and abuse and recovering improper payments.”

Among other things, we can expect that the VA will begin to employ techniques utilized by CMS such as predictive analytics to identify instances where providers may be exceeding certain benchmarks in procedures, and to adopt techniques utilized by CMS in the provider enrollment process.  The VA may also be looking at outside contractors that also perform functions as  UPICs, ZPICs and RACs.  This, in turn, means that those providers that serve patients covered by the VA should review their compliance programs and billing and claims processing systems to ensure that they cover adequately VA requirements and procedures, and to ensure that they respond adequately to any investigation or threatened payment denials for those patients.

Healthcare AttorneyLiles Parker attorneys have significant experience in assisting clients with their compliance programs and in responding to enforcement actions such as audits, payment denials, suspensions and investigations.  Any person seeking additional information in this area should contact Michael Cook at mcook@lilesparker.com or at (202) 298-8750

Personal Care Services Are Under the Government’s Microscope

January 22, 2018 by  
Filed under Health Law Articles

personal care services (January 22, 2018): The Department of Health and Human Services, Office of Inspector General (HHS-OIG) has conducted numerous audits, evaluations, and investigations involving the provision of “ personal care services ” to Medicaid beneficiaries.  In fact, from 2006 to 2012, HHS-OIG produced more than 20 audit and evaluation reports analyzing various program integrity risks presented when providing personal care services.  Much of this work was summarized in a November 2012 report entitled “Personal Care Services: Trends, Vulnerabilities, and Recommendations for Improvement.” [1] Additionally, last month, HHS-OIG published an Issue Brief highlighting the involvement of State Medicaid Fraud Control Units (MFCUs) in pursuing health care fraud and beneficiary abuse in personal care services programs.

In this article, we have taken the summary information assembled by HHS-OIG in the reports outlined above and combined this information with data collected from the 50 state MFCUs in order to provide an overview of state and federal investigations, indictments, convictions, and recoveries involving fraud, waste, abuse and patient neglect in Medicaid personal care services programs around the country.  Before examining this information, let’s go over a few basics.

I. What Are “Personal Care Services”?

The coverage and scope of a state’s specific personal care services benefit varies from one state’s Medicaid program to another.  Using Texas as an example, prior to 2006, personal care services under Medicaid were only provided to qualified minors with physical disabilities and other medical needs.  Notably, children with cognitive or behavioral disabilities did not qualify for this benefit.  As a result of a class action lawsuit settlement,[2] the Texas Medicaid State plan was amended to cover personal care services for children with disabilities and chronic health conditions enrolled in the state’s Medicaid program. Today, the Texas Department of State Health Services describes “personal care services” as:

“A Medicaid benefit that assists eligible clients who require assistance with activities of daily living (ADLs) and instrumental activities of daily living (IADLs) because of a physical, cognitive or behavioral limitation related to their disability, physical or mental illness, or chronic condition.”[3]

Examples of ADLs that are often provided under the personal care services benefit include bathing, eating, toileting, positioning and transferring, dressing and walking. IADLS provided under the benefit typically include doing laundry, performing light housework, shopping for groceries and preparing meals.  As these tasks and activities reflect, personal care services are non-skilled in nature.  Skilled services provided by nursing personnel do not qualify as personal care services, though they may qualify under some other benefit such as home health.

It is also important to remember that neither ADLs nor IADLs would qualify as covered personal care services if a beneficiary has the physical, behavioral and cognitive ability to perform these tasks and activities without adult supervision.

II. Who Qualifies for Medicaid-Covered Personal Care Services?

Like the service itself, whether a person qualifies for personal care services depends on the specific requirements of each state program. However, using Texas as an example, a beneficiary must:

  • Be 20 years or younger and be eligible for Medicaid.
  • Have a disability, physical or mental illness, or a health problem that lasts for a long time.
  • Have a Practitioner Statement of Need signed by a practitioner (physician, advanced practice nurse, or physician assistant) who has examined you in the last 12 months.
  • Need help with ADLs and IADLs based on the Personal Care Assessment Form (PCAF).
  • Provide a reason why your guardian cannot help you with ADLs and IADLs.[4]

III. Trends in Medicaid Personal Care Service and MFCUs: 

Between 2012 and 2015, Medicaid spending on personal care services jumped from $10.9 billion to $13.3 billion.[5] As a result, MFCUs have increasingly been tasked with investigating and prosecuting Medicaid provider fraud and patient abuse and neglect within healthcare facilities. Despite being only one of 80 types of providers regulated by MFCUs, personal care service providers constituted 38% of their indictments and 34% of their convictions. During this period indictments and convictions related to fraud by personal care service providers increased 56% and 33% respectively. In the year 2015, cases of fraud by personal care service providers constituted 12% of all MFCU investigations. Overall these trends indicate that MFCUs are concerned with the vulnerability of Medicaid beneficiaries and are more aggressively targeting personal care service providers.

IV. Current Systemic Weaknesses Facilitate Fraud, Abuse, and Neglect:

Throughout last month’s report, HHS-OIG highlighted many of the weaknesses of the current model of Medicaid personal care service oversight. Presently, there are no federal training or educational requirements for personal care service attendants so the quality of personal care services provided from one caregiver to another can vary greatly.  Additionally, thorough background checks are not consistently required.  As a result, there have been a number of instances where habitual offenders have been found to have exploited beneficiaries under their care.

Another issue of concern is that thorough documentation is not required for Medicaid personal care services, leading to the ability of an attendant to charge for services that did not occur or for time in which the attendant and beneficiary where not even in the same location. Aside from creating a window of opportunity for fraud, this also allows for personal care service attendants to neglect their beneficiaries. In the past, this scenario has led to the death of a beneficiary.  Lack of oversight also shifts the burden to report on to the beneficiary. Thus, mental and physical handicaps of beneficiaries leave them vulnerable as reporting may be rather difficult. Due to federal regulations, MFCUs are also unable to investigate or prosecute cases of abuse or neglect by in-home/community personal care service providers.

As a consequence of these systemic issues, despite being the best equipped agency to take on this task, MCFUs do not receive funding for this and are forced to refer such cases to other agencies that may be less effective in investigating and prosecuting these cases. Overall, the current model is vulnerable to fraud and leaves beneficiaries vulnerable to abuse and neglect.

V. Improper Payments to Personal Care Service Providers Will Lead to Investigations:

An improper payment is any payment that is made that, according to federal and/or state laws, should not have been made. The inconsistency in state rules and the lack of depth of federal rules complicates the generalization of improper payments. According to an audit of state Medicaid programs by HHS-OIG, the most common types of improper personal care service payments are:

  • Claims paid without supporting documentation.
  • Services provided and billed that are ineligible for Medicaid reimbursement.
  • Services provided without required supervision.
  • Services provided by an unqualified attendant.
  • Services provided by an attendant without proper verification of required qualifications.
  • Payments made for care while the Medicaid beneficiary was in an institution.

It is important to note that improper payment is not the same as fraud. Improper payments are considered a result of error and a personal care service provider is required to return the overpayment as soon as the improper payment is discovered and may face further consequences. While self-disclosure of improper payments is considered an act of good faith, the nature of the improper payment may lead into an investigation into potential waste, fraud, and/or abuse.[6]

VI. What is Personal Care Services Fraud?

The vulnerability of the current personal care services system to fraud has made these services a significant concern for MCFUs around the country. Many of the fraud cases brought in recent years have involved instances of billing for services not rendered to a Medicaid beneficiary.  Examples of this type of improper conduct has included instances when:

  • A Medicaid beneficiary was on a vacation.
  • A Medicaid beneficiary was in an institution.
  • A Medicaid beneficiary was documented to be without the personal care attendant by another healthcare provider.
  • The personal care aide or attendant was documented to be working elsewhere at the time.
  • The Medicaid beneficiary was deceased at the time personal care services were billed.

Often, wrongdoers have committed this type of fraud by having a Medicaid beneficiary sign off on blank time sheets in advance of services that are to be provided. While the Medicaid beneficiary is typically unaware of the fraudulent intentions of the personal care attendant, there have been cases where the personal care services attendant has made an agreement to share profits with the beneficiary or a family member of the beneficiary in order to obtain a signed blank time sheet.

While fraud is often committed by individual personal care aides or attendants, a personal care services agency can be held accountable if it is aware of the attendant’s fraudulent billing practices. One investigation in Alaska led to the criminal prosecution of over 40 individuals for fraud.[7] In that case, the personal care services agency was aware that employees were submitting falsified timesheets in addition to charging Medicaid for services rendered by excluded individuals.

VII. Personal Care Services Fraud Investigations:

Personal care services fraud has been an increasing concern of MCFUs. As expected, the amount of criminal investigation into personal care services fraud has risen over the 2015 and 2016 fiscal years, with a total of 1,929 individual personal care services attendants and 250 personal care services agencies being investigated for fraud at the end of 2016.[8] Convictions have risen slightly over those 2 years, with 464 individual personal care aides and attendants and 36 personal care services agencies convicted of criminal fraud charges in 2016. Overall, personal care service fraud appears to more commonly perpetrated by individual personal care service attendants, though agencies are certainly being held responsible for their role in personal care services fraud.

personal care services fraud

Table 1: The number of open investigations into personal care services fraud by agencies and attendants at the close of the 2015 and 2016 fiscal years.

personal care services fraud

Table 2: The number of criminal convictions and civil court settlements/judgements for personal care services fraud in the 2015 and 2016 fiscal years.

VIII. Recoveries from PCS Fraud Cases:

Despite an increase in civil settlements and judgements, the total amount recovered through settlements decreased substantially for both PCS attendants and PCS agencies. The result of criminal convictions has been markedly different. In the fiscal year 2016, a total of 464 PCS attendants were convicted of PCS fraud compared to only 36 agencies.[11] While personal care attendants constitute the overwhelming majority of convictions, approximately 45.8% of the amount recovered in 2016 came from personal care service Agencies. From fiscal year 2015 to 2015, the amount of PCS agencies convicted increased by 63.6%, from 22 to 36. In the same period, the amount recovered from criminal convictions of PCS agencies more than doubled, from $1,718,223 to $4,108,575. Thus, it is evident that PCS agencies are increasingly being held responsible for their role in PCS fraud.

personal care services fraud

Table 3: The amount of money recovered in personal care services fraud cases in the 2015 and 2016 fiscal years.

 IX. What is Abuse or Neglect of a Beneficiary?

The current system leaves beneficiaries vulnerable to abuse. Abuse has cases revolve around incidents in which a personal care services attendant causes physical harm to the beneficiary. In a case in Florida, a personal care attendant was fired and later charged with elderly abuse after repeatedly striking, pinching, and pulling at an elderly individual and leaving bruises on the individual.[13] However, abuse is not always physical. Abuse also includes harm done by theft, in which personal care service attendants take advantage of their beneficiaries and steal valuable items from them. In one case, a personal care service attendant at an assisted living facility stole nearly $10,000 from beneficiaries.[14] In another, an attendant stole two guitars from a beneficiary and sold the guitars to a local music shop.[15] When the attendant became aware of the beneficiary’s intent to contact authorities, the attendant returned the items. In the end, the attendant was still charged with fourth degree larceny.

Drug diversion is a serious abuse prevalent in personal care service that goes beyond theft and extends into physical harm as well. In addition to the monetary loss, the beneficiary is losing the treatment they require. For many, especially in hospice care, the use of opioids is used to manage pain. When attendants take these medications, they leave the beneficiaries suffering. In one case, an attendant began to switch a beneficiary’s hydrocodone with acetaminophen, leaving the patient suffering until the attendant’s drug diversion was discovered. In addition to leaving patients suffering, the use of substitute substances and potentially unsterile equipment puts the beneficiary at risk of serious harm or death.

Neglect is defined as “the failure or omission on the part of a caregiver to provide the care, supervision, and services necessary to maintain the physical and mental health of a disabled adult or elderly person that a prudent person would deem essential for the  well-being of the patient.” Neglect is serious, as the lack of adequate care or supervision of vulnerable individuals can be fatal. In one case, a personal care service attendant did not provide the services that were billed for an entire week, leaving the beneficiary hospitalized due to malnourishment and dehydration.[16] In another case, a personal care service attendant took a mentally handicap person to a crowded shopping area and lost the individual on a winter day in Philadelphia. The attendant did not immediately seek out the beneficiary nor did the attendant contact authorities in a prompt manner. The beneficiary was later found dead due to hypothermia. Neglect can also stem from fraud. In one case in Arkansas, a personal care service attendant billed Medicaid for services rendered to a beneficiary while frequenting Casino.[17] The attendant’s neglect led to malnourishment and dehydration, eventually leading to the death of the beneficiary.

X. Investigating Abuse or Neglect of a Beneficiary:

Despite the desire of MCFUs to investigate abuse or neglect, allegations are not investigated as often and extensively as they would like due to a lack of federal and state funding to do so. From the close of the 2015 fiscal year to the close of the 2016 fiscal year, open investigations into Abuse or neglect of a beneficiary decreased marginally from 254 to 252 investigations.[18] This marginal decline indicates the limitations placed on MCFUs ability to investigate abuse or neglect of beneficiaries. All of these investigations were criminal. In the same period, criminal convictions for abuse or neglect raised from 44 in 2015 to 52 in 2016. In 2015, there was one civil court settlement for abuse or neglect by a personal care service attendant. Overall it appears that MCFUs are becoming increasingly serious about addressing abuse or neglect by personal care service attendants and will continue to do what they can within their means to address the issues.

personal care service abuse

Table 4: The number of open investigations into abuse or neglect by personal care service attendants at the close of the 2015 and 2016 fiscal years.

personal care service abuse

Table 5: The number of criminal convictions and civil court settlements/judgements for personal care service abuse or neglect cases in the 2015 and 2016 fiscal years.

 XI. Recoveries from Abuse or Neglect Cases:

As can be expected by the findings of the recent HHS-OIG issue brief, convictions of abuse or neglect of a beneficiary only increased by 8 convictions in 2016, an 18% increase from the 2015 fiscal year. This again highlights the limitations placed of MFCUs in addressing abuse or neglect of beneficiaries. However, the total amount recovered in these cases more than tripled from the 2015 to the 2016 fiscal year, from $71,817 in 2015 to $247,972 in 2016. This substantial increase in recoveries again suggests that MFCUs are increasingly serious about addressing abuse or neglect of beneficiaries.

personal care service abuse

Table 6: The amount of money recovered in personal care service abuse or neglect cases in the 2015 and 2016 fiscal years.

XII.  HHS-OIG Recommendations:

The recommendations made by HHS-OIG are aimed at creating greater state oversight of personal care services provided by aides and attendants to Medicaid beneficiaries. These recommendations include measures such as:

  • Creating an enrollment or registration process for attendants.
  • Requiring comprehensive background checks for personal care service attendants
  • Mandating greater documentation requirements for personal care service attendants, including details such as time of service and services provided.
  • Requiring beneficiary case managers to conduct more in-home/community supervisory visits.
  • Establishing mandatory training or educational standards for personal care service attendants.
  • Cross-referencing personal care service attendant and beneficiary locations to prevent fraudulent billing.
  • Federal funding for investigations and prosecutions of abuse or neglect by in-home/community personal care service agencies.

The current model provides too much opportunity for fraudulent, negligent, and abusive behavior by agency providers to be overlooked. These reforms could effectively deter personal care service providers from engaging in fraudulent, abusive, or negligent behavior by making them aware of the consequences of such behavior. In addition, these reforms would make it easier for MFCUs to effectively hold all personal care service providers accountable for their actions.

XIII.  Conclusion:

At present, despite efforts from personal care agencies to better screen their staff, Medicaid beneficiaries are still finding themselves subject to fraud, abuse and / or neglect by a significant number of individual personal care service aides and attendants each year. Unfortunately, fraud, abuse and / or neglect by personal care service aides and attendants will likely continue to be a major concern until the further safeguards are taken by both personal care agencies and regulators to better protect Medicaid beneficiaries.

In addition to conducting standard due diligence, as an owner of a personal care services agency, it is especially important that you screen your applicants (before hire), employees, vendors and contractors, against all Federal and State exclusion databases, every 30 days.  We recommend that you contact the folks at Exclusion Screening to get this accomplished.  They can be reached at www.exclusionscreening.com

Robert W. Liles is a health care attorney experienced in handling prepayment reviews and audits.Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, PLLC.  Liles Parker is a health law firm representing personal care agencies and other health care providers around the country in connection with Medicare, Medicaid and private payor audits.  For a complimentary consultation, give Robert a call at: (202) 298-8750.

[1] As mandated by Public Law 95-452, HHS-OIG’s mission is to “protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the health and welfare of beneficiaries served by those programs.”  HHS-OIG’s report entitled “Personal Care Services: Trends, Vulnerabilities, and Recommendations for Improvement” (OIG-12-12-01).

[2] Alberto N. et al. v. Hawkins. (No. 6:99-cv-00459) May 19, 2005.  EDTX, Tyler Division.

[3] https://www.dshs.texas.gov/region1/documents/tmp-personalCareservices.pdf

[4] https://www.dshs.texas.gov/caseman/pcs.shtm

[5] https://oig.hhs.gov/oei/reports/oei-12-16-00500.pdf

[6] “Waste” occurs when unnecessary services are provided that lead to a waste of resources, such as when more hours of services are rendered than are necessary. “Fraud” is defined at 42 C.F.R. §433.304 as “(in accordance with §455.2) . . . an intentional deception or misrepresentation made by a person with knowledge that the deception could result in some unauthorized benefit to himself or some other person. This includes any act that constitutes fraud under applicable Federal of State law.” “Abuse” is defined is defined at 42 C.F.R. §455.2 as “provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care. It also includes beneficiary practices that result in unnecessary cost to the Medicaid program.”

[7] https://oig.hhs.gov/reports-and-publications/portfolio/ia-mpcs2016.pdf

[8] https://oig.hhs.gov/oei/reports/oei-09-17-00210.pdf;

https://oig.hhs.gov/oei/reports/oei-07-16-00050.pdf

[9] Ibid.

[10] Ibid.

[11] Ibid.

[12] Ibid.

[13]http://www.myfloridalegal.com/newsrel.nsf/newsreleases/8A86BFE3E705BD60852580D5006CC686

[14] http://www.fox9.com/news/caregiver-admits-to-stealing-thousands-in-cash-jewelry-from-elderly-patients

[15] https://www.nbcconnecticut.com/news/local/Personal-Care-Attendant-Accused-of-Stealing-Guitars-from-Client-in-Southington-464400253.html

[16] https://oig.hhs.gov/reports-and-publications/portfolio/ia-mpcs2016.pdf

[17] http://www.swtimes.com/news/caretaker-arrested-fort-smith-man-s-death?start=6

[18] https://oig.hhs.gov/oei/reports/oei-09-17-00210.pdf;

https://oig.hhs.gov/oei/reports/oei-07-16-00050.pdf

[19] Ibid.

[20] Ibid.

[21] Ibid.

Revocation of Your Medicare Billing Privileges.

December 14, 2017 by  
Filed under Featured, Health Law Articles

Revocation of Your Medicare Billing Privileges

The revocation of your Medicare billing privileges can subject your practice to financial ruin!

(December 14, 2017):  The Centers for Medicare and Medicaid Services (CMS) has engaged various types of outside contracting entities to perform program integrity functions on behalf of the Medicare program.  At the present time, Uniform Program Integrity Contractors (UPICs) and Zone Program Integrity Contractors (ZPICs) are very aggressive when it comes to referring evidence of potential fraud to federal law enforcement agencies, primarily the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the U.S. Department of Justice (DOJ).  In matters where fraud is not apparent but it appears that other improper conduct has occurred, UPICs and ZPICs are actively recommending to CMS that adverse administrative actions (such as the revocation of your Medicare billing privileges), be taken.  As the General Accounting Office (GAO) noted in its August 2017 report entitled “CMS Fraud Prevention System Uses Claims Analysis to Address Fraud,  the administrative actions[1] recommended by these program integrity contractors typically range from prepayment review to revocation.[2]

 

I. Background:

To participate in the Medicare program, a provider must typically complete either a CMS-855A, CMS-855B, CMS-855I or CMS-855S[3] enrollment application, each of which requires that the provider disclose their practice or office address.[4] Notably, a provider may also  provide documentation of its “practice location” with its enrollment application.[5] Once a provider has enrolled in the Medicare program, any changes to the provider’s enrollment information must be reported within a strict timeframe.  For example, a change in practice location must be reported within 30 days.[6]

Among their various duties, Medicare Administrative Contractors (MACs), UPICs and ZPICs are required to periodically perform site visits in order to verify that a provider is operational, that the provider’s enrollment information is accurate, and that the provider is in compliance with applicable Medicare enrollment requirements.[7] To accomplish this, the CMS contractor will normally inspect the  “qualified physical practice location” given by the provider or supplier that is currently in file with the MAC. See, e.g., JIB Enterprises, LLC, DAB CR3010, at 9 (2013).

II. Failure to Meet Provider Requirement to Maintain Active Enrollment Status:

Over the past year, our firm has represented more physicians, home health agencies and other providers than ever before in challenging proposed Medicare revocation actions.  As we indicated in an article on ZPIC audits last March, program integrity contractors are aggressively conducting site visits of enrolled providers. Approximately one-third of these revocation actions have been based on a Medicare contractor’s assertion that they were unable to verify a provider’s operational status. In many cases, this has occurred because a provider has moved its office or clinic without properly reporting the relocation to Medicare in a timely manner. GAO’s December 2017 report on the status of CMS fraud efforts illustrates how frequently this particular category of revocation action has been occurring. As GAO noted with respect to Florida:

“According to a 2016 report, from July 1, 2015, through September 30, 2016, a contractor covering Florida had conducted 9,891 site visits to verify providers’ and suppliers’ operational status, deactivated 422 practice locations, and revoked or denied 1,157 providers.[8]

III.  What Occurs if a Medicare Contractor Believes that a Provider is Not Operational?

What does it mean for a provider’s practice or office to be “operational”?  As set out under 42 C.F.R. § 424.502, the term operational:

“means the provider or supplier has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.”

Therefore, if a UPIC or ZPIC were to visit the location of your practice (as then listed in Medicare’s records) and were to find that the practice or office were closed, the contractor would likely take the position that your organization is not operational.

Neither UPICs nor ZPICs exercise independent authority to issue a revocation letter or otherwise revoke your Medicare billing privileges.  These contractors must first obtain prior approval from CMS’ Provider Enrollment & Oversight Group (PEOG).  When seeking approval to initiate a revocation action, the contractor is required to cite the specific regulatory basis upon which this adverse action is being based.  In most cases, obtaining CMS approval to initiate a revocation action is a perfunctory step in the process. Once approval is obtained, the provider’s Medicare billing privileges are normally revoked, retroactive to the date that the CMS contractor determined that the provider was not operational.[9]  As set out in the Federal Register:

“Moreover, we maintain that when CMS or our contractor determines that a provider or supplier, including a DMEPOS supplier, is no longer operating at the practice location provided to Medicare on a paper or electronic Medicare enrollment application that the revocation should be effective with the date that CMS or our contractor determines that the provider or supplier is no longer operating at the practice location.”[10]

ANon-Operational Due to Change in Location Without Proper Notice.

 We have handled practically every permutation of this scenario that you can imagine.  The most common facts have involved a provider or supplier who moved offices and failed to notify their MAC.  As luck would have it, a UPIC or ZPIC contractor conducted a site visit, found that the practice location on file was closed or empty, and concluded that it was not operational.  The contractor then recommended to CMS that a revocation action be pursued.

In several instances, the provider and / or the provider’s office manager was willing to swear that written notice of the change in location was, in fact, sent to the MAC.  Unfortunately, unless the provider can provide proof that notice was given by Certified Mail, Return Receipt Requested or other trackable mail service, these cases have been an uphill battle in the administrative appeals process.

In other cases, a provider has been able to show that written notice was given, in a timely fashion, to state regulatory authorities.  In at least one case, a provider argued that the MAC was provided proper notice through the Cost Report process.  Unfortunately, proof of such notice was not provided to the Administrative Law Judge so no ruling as to adequacy was issued.

The bottom line with respect to notice is fairly straight forward, timely notice of a change in practice location must be provided to the MAC, on the proper form and within the proscribed time limits.  Moreover, as with all communications to a CMS contractor, it is imperative that proof of submission and receipt be maintained.

B.  Non-Operational Due to Closed or Non-Staffed at the Time of the Site Visit.

From a practical standpoint, a provider doesn’t necessarily have to change its practice or office location to be found non-operational.  We have handled multiple cases where a ZPIC contractor conducted a site visit at the provider’s address listed on the CMS-855, but for one reason or another, the office was locked and was not staffed at the time of the visit, thereby giving rise to a revocation action.

IV.  A Look at the Regulatory Bases for Revocation:

As reflected under 42 CFR §424.535(a)(1)-(14), there are fourteen regulatory bases for revocation that may be relied upon by the government.  This article focuses on only one of these reasons for revocation – a provider’s failure to notify Medicare of a change in its practice location.  Notably, there are several regulatory bases that may be cited when revoking a provider’s billing privileges for this infraction, each of which are briefly discussed below.

A.  42 C.F.R. §424.535(a)(1), “Non-Compliance.”

Under 42 C.F.R. §424.535(a)(1), a revocation may be pursued if:

“The provider or supplier is determined to not be in compliance with the enrollment requirements described in this subpart P or in the enrollment application applicable for its provider or supplier type, and has not submitted a plan of corrective action as outlined in part 488 of this chapter. The provider or supplier may also be determined not to be in compliance if it has failed to pay any user fees as assessed under part 488 of this chapter.

(i) CMS may request additional documentation from the provider or supplier to determine compliance if adverse information is received or otherwise found concerning the provider or supplier.

(ii) Requested additional documentation must be submitted within 60 calendar days of request.”

Under this basis for revocation, CMS or one of its contractors typically alleges that a provider has violated an enrollment requirement listed on the enrollment application or currently in Medicare’s electronic records system.  Although most revocation actions pursued under this regulatory provision are based on a licensure-related violation, the scope of the provision is broad enough to cover situations where a provider has failed to meet its obligations to report a change in practice location in a timely fashion.

B.  42 C.F.R. §424.535(a)(5), “On-Site Review.”

Under 42 C.F.R. §424.535(a)(5), a revocation action may be pursued if:

“Upon on-site review or other reliable evidence, CMS determines that the provider or supplier is either of the following:

 (i) No longer operational to furnish Medicare-covered items or services.

(ii) Otherwise fails to satisfy any Medicare enrollment requirement.”

As previously indicated, both CMS contractors are actively conducting site-visits of Medicare providers and suppliers in an efforts to better ensure the program integrity of the Medicare Trust Fund.  These site-visits are expected to intensify, not subside in 2018.  It is therefore essential that you understand your obligations under the regulations to qualify as an “operational” entity and to properly notify Medicare of any changes to your enrollment status.

C.  42 C.F.R. §424.535(a)(9), “Failure to Report.”

Under 42 C.F.R. §424.535(a)(9) a revocation action may be pursued if:

The provider or supplier did not comply with the reporting requirements specified in § 424.516(d)(1)(ii) and (iii) of this subpart.”

As 42 C.F.R. §516(d)(1)(ii) and (iii) describes, physicians, nonphysician practitioners, and their organizations must report any adverse legal action or change in practice location to their Medicare contractor within 30 days. If a provider that has failed to meet this reporting requirement is subject to having their Medicare billing privileges revoked under 42 C.F.R. §424.535(a)(9).

V.  Impact of a Medicare Revocation Action:

Simply put, if your Medicare billing privileges are revoked, you will be barred from participating in the Medicare program from the date of the revocation until the end of the re-enrollment bar that has been identified in the revocation letter.  The re-enrollment bar lasts from 1 – 3 years. [11]  The length of the re-enrollment bar depends on the severity of the reason for the underlying revocation. The re-enrollment period begins 30 days after the provider receives the notice of revocation letter from CMS.

Under 15.1.1 of the MPIM, the definition of the term “Final Adverse Action” includes a Medicare-imposed revocation of any Medicare billing privileges.”  More than likely, each of your private payor participating agreements includes a requirement that you notify the payor within 30 days of any adverse action.  If for some reason your particular contract does not include this requirement, it is important to remember that all licensing boards, payors and hospitals have access to the NPDB and regularly submit queries on their staff or licensees.  Depending on the reason for revocation, these organization may choose to pursue a reciprocal action.

VI.  Appealing a Medicare Revocation Action:

As reflected in Section IV above, the business impact of a revocation action on your practice can be devastating.  If you are facing a revocation action, we strongly recommend that you engage experienced health law counsel to represent you in the process. Unlike the traditional Medicare administrative appeals process, the Medicare revocation appeals process has abbreviated timeframes and is highly restrictive with respect to the introduction of evidence and arguments.  Having said that, our attorneys have been very successful in working directly with CMS to resolve many of these revocation actions to the satisfaction of our clients and achieve a result that likely would be unavailable through the traditional revocation appeals process.

Generally, the Medicare revocation appeals process is set out under 42 C.F.R. § 405.803, “Appeal Rights.” As this provision outlines, a provider is entitled to challenge the revocation of its Medicare billing privileges an may appeal an initial determination made by CMS or its contractor by following the procedures specified in Chapter 498.  A brief overview of these provisions is outlined below:

Preliminary Appeal Determination: Can We File a Corrective Action Plan (CAP)?  In limited circumstances, if a provider’s Medicare billing number has been revoked, it may be afforded an opportunity by CMS to take remedial action to correct the deficiencies that were the basis for the revocation action.   After the effectuation of the December 2014 Final Rule, only provider’s whose Medicare billing privileges have been revoked due to non-compliance under 42 CFR 424.535(a)(1) are entitled to submit a CAP. The other thirteen regulatory bases for revocation are not eligible for CAP remediation.  To the extent that your revocation action falls within category, the CAP must be submitted within 30 days of the date of the revocation notice and must provide evidence that the provider is now in full compliance with its applicable obligations.  If the provider can demonstrate compliance, CMS will reinstate the provider’s billing privileges.  If the CAP is denied, the provider can still exercise its appeal rights under Part 498.  Importantly, the submission of a CAP does not “stay” your appeal deadlines.  More than likely, you will therefore pursue a dual-track approach is challenging the revocation action.

Appeal Level I:  Reconsideration.  The first level of appeal for a provider to contest the evocation of its Medicare billing privileges is known as the “Reconsideration” level. A reconsideration request must be submitted within 60 days from receipt of the notice of initial determination. Take care, some appeals will be filed with the CMS-PEOG while others must be filed with MAC. Any documentary evidence a provider wants considered by the hearing officer assigned to their case must be submitted at this level of appeal. If a provider later wants to submit documentary evidence into the record, an Administrative Law Judge (ALJ) will require that the provider show “Good Cause” exists for the late submission of the evidence. “Good Cause” is rarely found to exist absent evidence of an Act of God that prevented earlier submission.

Appeal Level II: Administrative Law Judge (ALJ) Hearing. Should you not prevail at the reconsideration level of appeal, you can seek a hearing before an ALJ of the HHS Departmental Appeals Board, Civil Remedies Division. Requests for an ALJ hearing must be submitted within 60 days from the date of the reconsideration decision.  The ALJ hearing is like a “mini-trial.”  The government will be represented by an attorney assigned by your HHS Regional Office of General Counsel.  If the facts in the case are contested, both sides will typically submit briefs, introduce evidence and present witness and / or expert testimony.  If both sides agree as to the basic facts in the case, the ALJ will often issue his / her ruling based on the written record.

Appeal Level III: Departmental Appeals Board (DAB) Hearing.   Both the provider and CMS may contest a decision of the ALJ. Should a party choose to do so, they must request review of the ALJ’s decision by the Departmental Appeals Board, Appellate Division within 60 days of the date of the ALJ’s decision.  Importantly, this is the end of the proverbial line administratively.  If a provider is dissatisfied with the DAB’s ruling, it must seek judicial review.

Appeal Level IV:  Judicial Review  If a provider wishes to challenge the decision of the DAB, it must file a civil action in U.S. District Court within 60 days of the date of the DAB decision.  If a provider can show “Good Cause,” the DAB is permitted to extend the civil action filing deadline.

VII.  Conclusion:

The revocation of a provider’s Medicare billing number often comes as a shock.  It is never expected and few providers are prepared to effectively respond to the challenges presented by the hyper-strict requirements of the revocation appeals process.  It is important to keep in mind that the appeals process isn’t meant to provide a level playing field for a provider to argue its case.  Unfortunately, the rules are skewed in favor of CMS from the very start.  It is therefore essential that you take steps to challenge the revocation of your Medicare billing privileges.  Unless you are skilled in responding to these types of adverse actions, it is likely in your best interests to engaged experienced health law counsel.

Healthcare AtorneyRobert W. Liles, J.D., M.B.A., M.S., is a former Federal prosecutor and an experienced health lawyer.  Robert and the other lawyers at Liles Parker, PLLC, represent health care providers and suppliers around the country in connection with Medicare revocation actions.  If you or your practice have been had their Medicare billing privileges revoked, please give Robert a call for a complimentary consultation:  Please call:  1 (800) 475-1906.    

 

[1] Importantly, this list of administrative adverse actions is not all-inclusive.  For instance, as set out in Section 4.19.2.2 of the Medicare Program Integrity Manual (MPIM), UPICs and ZPICs are also required to  review and evaluate cases to determine if they warrant exclusion action.  If so, they are to make a recommendation to OIG for exclusion. One of the examples cases suitable for exclusion listed in the MPIM includes:

“Providers who are the subject of prepayment review for an extended period of time (longer than 6 months) who have not corrected their pattern of practice after receiving educational/warning letters.”

[2] As defined under 15.1.1 of the MPIM, the term “Revocation” means that the provider or supplier’s billing privileges are terminated.

[3] CMS-855A – Medicare Enrollment Application for Institutional Providers; CMS-855B – Medicare Enrollment Application for Clinics, Group Practices, and Certain Other Suppliers; CMS-855I – Medicare Enrollment Application for Physicians and Non-Physician Practitioners; CMS-855S – for DME suppliers.

[4] 42 C.F.R. § 424.510(a).

[5] 42 C.F.R. § 424.510(d)(2)(ii).

[6] See 42 C.F.R. § 424.516(d)(1)(iii).

[7] 42 C.F.R. §§ 424.510(d)(8), 424.515(c), 424.517(a).

[8] GAO-18-88. “CMS Needs to Fully Align Its Antifraud Efforts with the Fraud Risk Framework,” December 2017.  See footnote 62.

[9]42 C.F.R. §§ 405.800(b)(2); 424.535(a)(5)(i), (g).

[10] 73 Fed. Reg. 69,725, 69,865 (Nov. 18, 2008) (emphasis added).

[11] 42 CFR §424.535(c)

[12] If a revocation actions is based on an “Abuse of Billing Privileges” under 42 CFR 424.535(a)(8), the initial level of appeal (Reconsideration) will be filed directly with CMS rather than with the provider’s MAC.

UPIC / ZPIC Referrals to State Boards, Societies, Surveyors and QIOs

November 29, 2017 by  
Filed under Health Law Articles

(November 29, 2017):  The Medicare and Medicaid programs are managed by the Centers for Medicare and Medicaid Services (CMS). CMS has engaged Unified Program Integrity Contractors (UPICs) and Zone Program Integrity Contractors (ZPICs), among others, to provide program integrity support. In the course of their duties, UPICs and ZPICs may initiate a prepayment review, postpayment audit, suspension or revocation action.  These CMS contractors are less known for their referrals to state licensing boards, professional medical societies, state survey agencies and quality improvement organizations. Nevertheless, in recent years, we have seen a significant increase in the number of UPIC / ZPIC referrals to state regulatory enforcement agencies.

This article examines the various directives governing UPIC / ZPICs that are currently generating a significant number of inter-agency referrals.[1]

I.  ZPIC Referrals to State Licensing Authorities Due to Improper Conduct:

Over the years, a number of fundamental changes have been made by the Centers for Medicare and Medicaid Services (CMS) to Chapter 4 of the Medicare Program Integrity Manual (MPIM).  Many of these changes were designed to facilitate the sharing of adverse case findings between federal and state regulatory agencies.

Pursuant to Chapter 4, Sec. 4.18.2 of the MPIM, ZPICs are required to make a referral to a provider’s state licensure board if it finds that the provider engaged in unethical or improper practices or unprofessional conduct.”  We have handled several cases that resulted from ZPIC referrals to state licensure boards.  Situations we have seen where a ZPIC has made a referral to the responsible state licensing authority include:

  • Referral to State Medical Board: Failure to exercise proper level of supervision over a Nurse Practitioner.
  • Referral to State Nursing Board: Performing certain patient care services without the requisite level of physician supervision in place.
  • Referral to State Nursing Board: Inappropriately prescribing controlled substances to one or more patients.

II.  ZPIC Referrals to State Licensing Boards Based on Data Mining:

It is important to keep in mind that ZPIC referrals to state licensure boards are not limited to merely those situations where the contractor has alleged that a provider has engaged in improper or unprofessional conduct.   We have seen at least one referral based solely on conclusions reached through data mining, where no actual audit of the provider’s medical records had been conducted.

III.  ZPIC Referrals to Professional Societies:        

Historically, professional societies have only infrequently taken disciplinary actions against their members.  When actions have been taken they have often been in response to adverse action taken by state licensure boards. That may no longer be the case in the future.  ZPICs are required under Sec. 4.18.2 of the MPIM to refer instances of apparent unethical / improper practices or unprofessional conduct to professional societies for possible disciplinary action.

IV.  ZPIC Referrals Based on Evidence of Potential Poor Quality Care or Potential Patient Harm:

Under Chapter 4, Sec. 4.4.2.1, of the MPIM, ZPICs are required to maintain effective lines of communication with other entities. As this section provides:

“The ZPIC shall establish and maintain formal and informal communication with state survey agencies, the OIG, the DOJ, state Medicaid agency, other Medicare contractors, other ZPICs, and other organizations as applicable to determine information that is available and that should be exchanged to enhance program integrity activities.

If the ZPIC identifies a potential quality problem with a provider or practitioner in its area, it shall refer such cases to the appropriate entity, be it the QIO, state medical board, state licensing agency, etc. Any provider-specific information shall be handled as confidential information.” (emphasis added).

Sec. 4.18.3 of the MPIM further requires that ZPICs make a referral to the Medicare Quality Improvement Organization (QIO) if a situation involves potential patient harm.  As the regulations state:

If potential patient harm is discovered during the course of screening a lead or through the investigation process, the ZPIC shall refer those instances to the QIO, state medical board, or state licensing agency. In addition to making the appropriate referrals, the ZPIC shall notify the COR and IAG BFL within two (2) business days once the potential patient harm issue is discovered. (emphasis added).

If the ZPIC refers a provider to the State licensing agency or medical society (i.e., those referrals that need immediate response from the State licensing agency), the ZPIC shall also send a copy of the referral to the QIO.” (emphasis added).

V.  NBI MEDIC Referrals to State Licensure Boards:

Since 2016, both state and federal authorities have been aggressively reviewing the care and treatment practices of physicians, nurse practitioners, physician assistants, dentists and others who are alleged to have engaged in improper opioid and high-risk drug prescription practices.  To accomplish this task, CMS awarded a nationwide contract known as the “National Benefit Integrity Medicare Drug Integrity Contract” (NBI MEDIC) to “Health Integrity, LLC.”  As you may recall, Health Integrity also serves as ZPIC for Zone 4.

In its role as NBI MEDIC, Health Integrity is responsible for monitoring and auditing the prescription of opioids under the Medicare Part D program.  As in its ZPIC capacity, Health Integrity is required to employ predictive analytics and other investigative tools in order to identify physicians, nurse practitioners and others whose opioid prescriptive practices appear to be aberrant.  When this occurs, two actions are normally taken:  First, a referral is typically made to the prescriber’s state licensing authorities so that they may conduct a review of the provider’s practices.  Second, the NBI MEDIC may make a referral to the responsible ZPIC so that an medical review of the provider’s Medicare claims can be conducted.

VI.  ZPIC Referrals to OIG for “Exclusion” Consideration:

More than likely, most of you had no idea that CMS has tasked ZPICs with making referrals of unethical / improper practices or unprofessional conduct to state regulatory bodies and private, professional societies.  If that’s the case, you will likely find Paul Weidenfeld’s article entitled Is Your Practice Being Audited by a ZPIC? Did You Know it Can Lead to an OIG Exclusion?” fascinating.  Believe it or not, CMS requires ZPICs to make appropriate referrals to the Office of Inspector General (OIG) if it believes that “exclusion” action is warranted.  Check out Paul’s article at www.exclusionscreening.com

VII.  Conclusion:

Regrettably, the number of complaints filed with state licensure boards will likely continue to increase as long as CMS contractors are required under the terms of their contract to make referrals for the types of conduct outlined above.  If you are facing a board complaint or potential disciplinary action by a professional society, it is essential that you understand the basis for the underlying referral by the UPIC or ZPIC.  We have identified a number of instances where the ZPIC basis of referral was either factually incorrect or was based on a flawed interpretation of the data.  Your ability to effectively respond to the basis for the referral can greatly impact the ultimate direction of a board action.

Robert W. Liles, JD, MBA, MS, is Managing Partner at the law firm Liles Parker.  He represents health care providers around the country in UPIC and ZPIC audits, and State Medical Board and State Nursing Board actions.  For a complimentary consultation, please give him a call.  He can be reached at: (202) 298-8750.

[1] As set out in Chapter 4, Sec. 4.1 of the Medicare Program Integrity Manual (MPIM), all references to ZPICs also apply to Unified Program Integrity Contractors (UPICs).

 

Pain Management Prescribing Practices and Audits.

August 16, 2017 by  
Filed under Health Law Articles

(August 16, 2017): Earlier this summer, the U.S. Department of Justice (DOJ) executed its most extensive “health care fraud takedown” to date, initially arresting 412 licensed healthcare providers, doctors, and nurses alleged to have engaged in fraudulent conduct (additional arrests were made in the days following the takedown).  As Attorney General Jeff Sessions stated at that time, We are sending a clear message to criminals across this country: We will find you. We will bring you to justice. And you will pay a very high price for what you have done.” Of the 412 individuals arrested, approximately 120 of the defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. The charges aggressively targeted pain management providers billing Medicare, Medicaid, and TRICARE for medically unnecessary prescription drugs and compounded medications that often were never even purchased and / or distributed to beneficiaries. Many of the charges brought against pain management professionals have alleged that these individuals have contributed to the nation’s current opioid epidemic through the unlawful distribution of opioids and other prescription narcotics.

I.  Pain Management Providers Around the Country are Being Targeted by DOJ:

To be clear, there is, in fact, a significant problem with prescription opioid abuse and diversion.  In the first six months of 2017, there have been a number of federal enforcement cases brought against pain management physicians, practices and clinics for a wide variety of opioid-related violations.  Several of these include:

February 2017:  In this Pennsylvania case, a pain management physician pleaded guilty to selling prescriptions for controlled substances in exchange for cash payments.  The government further alleged that many of the customers who went to the clinic were drug dealers or addicts who sold the medications they were prescribed.  It was further alleged that neither the defendant nor the other pain management professionals charged in the case conducted medical or mental health examinations as required by law. The government alleged that during the period that this conspiracy took place, the defendant physician illegally sold over $5 million worth of controlled substances.

March 2017:  Two Michigan physicians providing care to pain management patients were found guilty by a jury for allegedly running a “pill mill” supplying narcotics to drug-seeking individuals.  More specifically, the government argued that the evidence showed that the physicians wrote prescriptions for Schedule II narcotics to individuals outside of the course of professional medical practice and for no legitimate purpose.  The government further claimed that the clinic’s physicians prescribed over 1.5 million oxycodone pills and charged customers $250 cash for a 30-day supply of narcotics.

April 2017:  In this Louisiana case, a physician and former co-owner of a pain management practice pleaded guilty to several criminal counts.  The physician was alleged to have run a “pill mill” where he prescribed controlled substances to drug abusers and seekers for a flat fee, even though there no legitimate medical purpose for the prescriptions.

May 2017:  In this Missouri case, a medical resident pleaded guilty to writing over 70 false prescriptions.  The government reported that the defendant wrote opioid prescriptions using the names of six separate persons, despite the fact that he did not have a physician-patient relationship with any of them.

June 2017:  In this New York case, a criminal complaint was unsealed against a family practice physician with no specialized training in pain management, who is alleged to have written more than 14,000 prescriptions, totaling more than 2.2 million oxycodone pills, between approximately 2012 and 2017.  The government has alleged that thousands of illegal prescriptions were written that did not have a legitimate medical purpose.

July 2017:  This Tennessee-based pain management practice settled False Claims Act violations for $312,000.  The pain practice was alleged to have caused the submission of false claims to Medicare and TennCare for medically unnecessary urine drug tests. The settlement also resolves allegations that the [pain practice] caused the submission of false claims to Medicare and TennCare for non-Food & Drug Administration. . . approved pharmaceuticals. . . “The United States’ investigation was initiated after extensive data analysis identified [the practice] as a potential outlier in the provision of urine drug testing to Medicare patients.”

II.  Typical Criminal Violations Charged in Pain Management Diversion and / or Trafficking Cases:

As you will notice, the standard that DOJ repeatedly cites is that a prescription is illegal if it has no “legitimate medical purpose” and / or is outside the “usual course of his professional practice.”  From a practical standpoint, if your prescribing practices fall into one of these categories, DOJ is likely to argue that your practices are below the applicable standard of care and are indicative of a crime. Typical statutory offenses charged in criminal pain management diversion and / or trafficking cases include:

Drug Trafficking (21 U.S.C. §§ 84l).  Typically charged when alleging that a party knowingly and intentionally, prescribed controlled substances, not for a legitimate medical purpose and not in the usual course of professional practice.

Health Care Fraud (18 U.S.C. § 1347).  It is unlawful for any person to knowingly: (1) defraud any health care benefit program; or (2) obtain by false pretenses any money or property owned or under the control of a health care benefit program.   Any person convicted under this statute could be fined and/or imprisoned for a maximum of 10 years.  If the offense resulted in serious bodily injury, then the eligible term of imprisonment is increased to 20 years.  If the offense resulted in death, then the maximum term of imprisonment is increased to life.

Aggravated Identity Theft (18 U.S.C. § 1028A).  Under this statute, whoever during and in relation to any felony enumerated in subsection (c) [predicate offense], . . . knowingly transfers, possesses, or uses without lawful authority a means of identification of another person, shall, in addition to the punishment provided for such [predicate offense], be sentenced to a term of imprisonment of 2 years. . .

Examples of the 60 predicate offenses include:

18 U.S.C. 1001 (relating to false statements or entries generally),

18 U.S.C. 1035 (relating to false statements relating to health care matters),

18 U.S.C. 1347 (relating to health care fraud)

18 U.S.C. 1343 (relating to wire fraud)

18 U.S.C. 1341 (relating to mail fraud)

Obstruction of a Federal Audit (18 U.S.C. § 1516).  It is illegal to intentionally influence, or obstruct a federal auditor in the course of performing his or her official duties relating to any person or organization receiving more than of $100,000 from the federal government in any one-year period.  The penalty for violating this section is the imposition of a fine and/or a maximum of five years imprisonment.  A federal auditor is any person employed for the purpose of conducting an audit or quality assurance inspection on behalf of the federal government.

Obstruction of a Criminal Investigation into Health Care Offenses (18 U.S.C. § 1518).  It is unlawful to prevent, obstruct, or delay the communication of information relating to a federal health care offense to a criminal investigator. Any person convicted for violating this statute could face a fine and / or up to five years imprisonment. 

Prohibition Against Kickbacks (Anti-Kickback Statute) (42 U.S.C. § 1320a–7b(b)). The federal Anti-Kickback Statute makes it a crime to knowingly and willfully offer, pay, solicit, or receive remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to purposefully induce or reward referrals of items or services payable by a federal health care program. Simply put, it is against the law to pay or provide anything of value in an effort to induce referrals or business related to a federal health care program.

III.  What is Behind the Current Crackdown on Improper Opioid Prescribing Practices?

The DOJ currently believes that these pain management medications are a large contributing factor to the ongoing opioid epidemic. Essentially, federal prosecutors contend that opioid medications are being over prescribed and are not being used for the intended purposes, but are ending up on the streets for illegal sale and use. From 1999 to 2015, more than 183,000 patients died from overdoses related to prescription opioids with over 30,000 of those deaths occurring in 2015. Almost half of those deaths from 2015 being from prescription opioid overdose. With nearly 2 million Americans either abusing or dependent on opioids, the Center for Disease Control and Prevention (CDC) took significant steps last year to address the growing problem of opioid abuse in this country. In March 2016, the agency published its CDC Guideline for Prescribing Opioids for Chronic Pain (CDC Guideline). Since the issuance of the CDC Guideline, a growing number of states have either adopted this voluntary guidance or implemented similar restrictions on the prescribing practices of physicians, nurse practitioners and physician assistants in their respective states.

IV.  The Role of Medicare Part D:

Medicare Part D is an optional prescription drug program for Medicare beneficiaries. As of 2016 it covered more than 40 million individuals. While Medicare Part D can be very beneficial when it comes to helping its beneficiaries handle their pain management it can also easily be taken advantage of. While Medicare part D was aimed at providing medication for beneficiaries, it has substantially contributed to the opioid crisis through over prescription as well as the redirection of prescriptions for unlawful and abusive purposes, such as recreational use and the sale of opioids.

The CDC recently posted guidelines for medical prescription providers on how to prescribe opioids to patients with chronic pain. The CDC cautions providers on prescribing patients more than 90mg or more of morphine per day, any higher dosage and the patient becomes at risk for overdose or fatality.  A result of over prescription of opioids was one-third of all beneficiaries receiving at least one prescription opioid through Medicare Part D in 2016. In total, approximately 14 and a half million people received opioid prescriptions, out of a total of 43.6 million Part D beneficiaries. These 14.4 million prescriptions totaled $4.1 billion for nearly 80 million prescriptions.

Several states such as Alabama and Mississippi have significantly higher proportions of opioid prescriptions for Medicare Part B beneficiaries, 46% and 45% respectively. Approximately 10% of Medicare Part B recipients received one or more opioids on a regular basis, with 5 million beneficiaries receiving opioids for three months or more in 2016.  More than half a million beneficiaries received high amounts of opioids through Part D in 2016. All of these beneficiaries received a morphine equivalent dose (MED) of greater than 120mg per day for at least 3 months[1].

V.  Both Patients and Legitimate Pain Management Professionals are in a No-Win Situation:

From a patient standpoint, many individuals suffering from chronic pain report that it’s a bad time to be in pain.  Patients suffering from chronic pain are increasingly finding it more difficult to obtain care and treatment.  A recent survey by the Pain News Network and International Pain Foundation found that more than 90% of the respondents did not think that the 2016 CDC Guideline improved the quality of pain care in the United States.  Additionally, more than 80% reported that their level of pain had increased and their quality of life had decreased over the past year since the CDC Guideline had been issued. These increases in patient dissatisfaction are due, in large part, to the growing reluctance of non-specialists to prescribe opioids and other controlled substances. This is a result of the ever-increasing level of scrutiny that is being given to a physician’s opioid and controlled substance prescribing practices. Patients suffering from chronic pain are now often referred to pain management clinics and centers for specialized pain care and toxicology monitoring.

Unfortunately, legitimate pain management physicians, practices and clinics around the country are now finding themselves at the center of an ongoing effort by state and federal regulators to address opioid dependence, diversion and abuse.  As they diligently work to alleviate the painful conditions of their patients they must also worry about their medical decision-making and opioid prescribing practices being second-guessed by well-meaning federal and state investigators, regulators and prosecutors. Regretably, legitimate pain management professionals, practices and clinics are inadvertently being swept-up in the government’s current enforcement efforts targeting opioid abuse and diversion.

VI.  Conclusion:

While the government’s interest in opioid and controlled substance prescribing practices isn’t new, there is no question that this area is currently the subject of heightened enforcement.  The number of opioid-related administrative investigations initiated by state medical and  dental boards has significantly grown over the last year.  During this same period, the opioid prescribing practices of physicians, nurse practitioners, physician assistants, podiatrists and dentists have been carefully assessed (primarily through data mining) by state and federal law enforcement in an effort to identify and prosecute providers engaging in illegal conduct.  Now, more than ever, it is essential that you review your care and treatment practices to ensure that your documentation accurately reflects the medical necessity of any pain medications prescribed.  Despite the fact that the CDC March 2016 guidance is “voluntary,” we recommend that pain management professionals review their prescribing practices and verify whether their particular practices are consistent with the recommendations set out in the CDC’s March 2016 guidance.  Additionally, you should ensure that your opioid prescribing practices also comply with any requirements established by your state legislature and any state licensing authorities.

Pain Management

[1] United States of America. U.S. Department of Health & Human Services. Office of Inspector General. HHS OIG Data Brief OEI-02-17-00250.

Are your opioid prescribing practices currently being investigated or audited by the state medical board, state AG’s office, DEA or DOJ?  If so, give us a call.  Liles Parker attorneys represent health care providers around the country in regulatory audits and investigations.  For a free consultation, please call Robert: 1 (800) 475-1906.

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