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

(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?

Robert W. Liles, M.B.A., M.S., J.D., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Robert represents health care providers and suppliers around the country in connection with Medicare audits by UPICs, ZPICs, MACs, 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 Address Fraud Prevention

(January 25, 2018): On January 23rd, the Veteran Administration (VA) and the Centers for Medicare and Medicaid Services (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.

Liles 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. 

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]

A.  Non-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.

Robert 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):  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): 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.

[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.

Maryland Limits on Opioid Prescriptions

(June 30, 2017):  In March 2016, the Centers for Disease Control and Prevention (CDC) published “CDC Guideline for Prescribing Opioids for Chronic Pain – United States, 2016” [1] in an effort to address the seemingly ever-increasing deaths that have been attributed to opioid-related overdose. A number of states have passed legislation or enacted regulatory provisions designed to better safeguard patients from abuse and the public from illegal diversion.

For instance, Indiana,[2] Ohio[3] and Kentucky,[4] have all taken action to better ensure that physicians, nurse practitioners and physician assistants with qualified to prescribe opioids do in a manner that will protect patients from abuse and the public from illegal diversion.  Many of the requirements put in place by these states track one or more of the recommendations set out in the CDC’s March 2016 guideline.  The State of Maryland is merely the latest jurisdiction to take action in this regard.  This article examines the approach that the Maryland legislative has taken and discusses the collateral impact that opioid prescribing practices can have on a provider’s license and financial health.

I.  Purpose of Maryland’s Legislation “The Prescriber Limits of 2017”:

 On May 25, 2017, Maryland Governor Larry Hogan, signed-off on “The Prescriber Limits of 2017.”  The legislation was enacted as an emergency measure and was found to be needed for the immediate preservation of the public’s health and safety. As an emergency measure, it was passed by a “yea” and “nay” vote supported by three-fifths of all the members elected to the each of the two Houses of the General Assembly.

The statute’s requirements are codified in several sections of the Code of Maryland, Article – Health Occupations.  Several amendments were made to Section 1-223. As the Preamble to the legislation notes:

“The rise in overdose deaths is attributable to the surge of opioid dependence that has emerged in Maryland over the past two decades, stemming from a dramatic increase in the number of opioid medications prescribed by the medical community and the influx of cheap, potent heroin and fentanyl

II. Guidelines a Health Care Provider Must Follow When Prescribing an Opioid for Pain:

As set out under Section 1-223(B), a Maryland health care provider must base pain treatment decisions based on his / her clinical judgement.  The health care provider must prescribe:

 (1) The lowest effective dose of an opioid, and

(2) a quantity that is no greater than the quantity needed for the expected duration of pain severe enough to require an opioid that is a controlled dangerous substance unless the opioid is prescribed to treat:[5]

A substance-related disorder;

Pain associated with a cancer diagnosis;

Pain experienced while the patient is receiving end-of-life, hospice or palliative care services; or

Chronic pain.

Section 1-223(c) requires that the dosage, quantity and duration of an opioid prescribed under Section 1-223(B) SHALL “be based on evidence-based clinical guideline for prescribing controlled substances that is appropriate” for:

(1) The health care service delivery setting for the patient;

The type of health care services required by the patient; and

The age and health status of the patient.”

As Section 1-223(D) notes, if a prescribing health care provider violates one of the requirements set out under Section 1-223(B), the violation constitutes grounds for disciplinary action and the responsible Maryland Health Occupational Board[6] can take action against a licensee.

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

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

III. Maryland Licensing Boards are Authorized to Discipline Physicians, Nurse Practitioners, Physician Assistants, Podiatrists and Dentists Who Violate “The Prescriber Limits of 2017.”

As the Preamble to the legislation notes, state licensing boards play an important role in the education and supervision of licensees under their jurisdiction who prescribe opioids and other controlled substances.  It was the intent of the General Assembly that the:

“. . . State Board of Dental Examiners, State Board of Nursing, State Board of Physicians, and State Board of Podiatric Medical Examiners shall work to educate practitioners to ensure that the residents of Maryland are aware of the risks associated with the use of opioid drugs, including the risks of dependence, addiction, and overdose, and the dangers of taking an opioid drug with alcohol, benzodiazepines, and other depressants;”

• Amendments to the Authority of the Maryland Board of Dentistry.

The amendments made to Section 4-315(a) modified the list of reasons that the Board may “deny a general license to practice dentistry, a limited license to practice dentistry, or a teacher’s license to practice dentistry to any applicant, reprimand any licensed dentist, place any licensed dentist on probation, or suspend or revoke the license of any licensed dentist.”  Under the legislation, these actions may now also be taken if an applicant or licensed dentist:

            . . .

(33) Fails to comply with any Board order; [or]

(34) Willfully and without legal justification, fails to cooperate with a lawful investigation conducted by the Board; OR

(35) Fails to comply with § 1-223 of this Article.

• Amendments to the Authority of the Maryland Board of Nursing.

The amendments made to Section 8-316(a) modified the list of reasons that the Board may “deny a license or grant a license, including a license subject to a reprimand, probation, or suspension, to any applicant, reprimand any licensee, place any licensee on probation, or suspend or revoke the license of a licensee. . .”  Under the legislation, these actions may now also be taken if an applicant or licensed nurse:

(34) When acting in a supervisory position, directs another nurse to delegate a nursing task to an individual when that nurse reasonably believes:

• . . .

(ii) The patient’s condition does not allow delegation of the nursing task; [or]

(35) Has misappropriated the property of a patient or a facility; OR

(36) Fails to comply with the opioid prescribing limitation established under §1–223 of this article.

• Amendments to the Authority of the Maryland Board of Medicine.

Consistent with the amendments made to Section 14-404(a), subject to the hearing provisions of §14-405 of this subtitle:

. . .a disciplinary panel, on the affirmative vote of a majority of the quorum of the disciplinary panel, may reprimand any licensee, place any licensee on probation, or suspend or revoke a license if the licensee:

(41) Performs a cosmetic surgical procedure in an office or a facility that is not:

(ii) Certified to participate in the Medicare program, as enacted by Title XVIII of the Social Security Act; [or]

(42) Fails to submit to a criminal history records check under § 14–308.1 of this title; OR

(43) Fails to comply with the opioid prescribing limitation established under § 1–223 of this article.

• Amendments to the Authority of the Maryland Board of Podiatric Medical Examiners.

Amendments were made to Section 16-313 to bring provisions governing applicants and licensed podiatrists into alignment with the requirements of “The Prescriber Limits of 2017.”  Amendments made include:

Subject to the hearing provisions of § 16–313 of this subtitle, the Board, on the affirmative vote of a majority of its members then serving, may deny a license or a limited license to any applicant, reprimand any licensee or holder of a limited license, impose an administrative monetary penalty not exceeding $50,000 on any licensee or holder of a limited license, place any licensee or holder of a limited license on probation, or suspend or revoke a license or a limited license if the applicant, licensee, or holder:

 (8) Prescribes or distributes a controlled dangerous substance to any other person in violation of the law, including in violation under §1–223 of this article;

IV.  Conclusion:

Physicians, nurse practitioners and physician assistants authorized to prescribe opioids and other controlled substances, need to review both the CDC guidance and any state requirements that have been issued to protect both patients and the public from abuse and diversion.  Prescriptions for opioids are continuously monitored by a variety of law enforcement agencies and government program integrity contractors. In addition to the Drug Enforcement Agency[10] (DEA), your prescribing and billing practices are actively being assessed by Medicare, Medicaid and private payor auditors and investigators.  You should monitor and audit your practices as part of your overall Compliance Program. To the extent that your prescribing and / or billing practices are different from those of your peers, there is a significant likelihood in today’s enforcement environment that you will be audited.

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

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

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

[2] A copy of Senate Enrolled Act No. 226 (SEA 226), amended the Indiana Code and established “Chapter 9.7. Prescribing and Dispensing Opioids.”  A copy of the legislation can be found at:  https://iga.in.gov/legislative/2017/bills/senate/226#document-b9523207

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

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

[5] Although Maryland’s statute does not provide dosage recommendations, prescribers may wish to consider the recommendations made by the CDC in its March 2016 guidance.  As Recommendation #6 provides:

Long-term opioid use often begins with treatment of acute pain. When opioids are used for acute pain, clinicians should prescribe the lowest effective dose of immediate-release opioids and should prescribe no greater quantity than needed for the expected duration of pain severe enough to require opioids. Three days or less will often be sufficient; more than seven days will rarely be needed.

[6] The State Board of Dental Examiners, State Board of Nursing, State Board of Physicians, and State Board of Podiatric Medical Examiners.

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

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

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

[10] DEA is an agency of the U.S. Department of Justice. A link to the agency’s diversion program description is: https://www.deadiversion.usdoj.gov/

Indiana Opioid Prescribing Guidelines–Eff. July 1, 2017.

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

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

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

II. Overview of Indiana Opioid Prescribing Requirements:

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

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

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

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

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

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

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

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

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

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

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

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

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

III. Conclusion:

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

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

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

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

[2].https://www.cdc.gov/drugoverdose/epidemic/index.html

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

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

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

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

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

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

Opioid Prescribing Practices & NBI MEDIC / UPIC / ZPIC and Board Actions

(June 29, 2017):  It has been estimated that from 1999 to 2014, more than 165,000 persons died from an overdose of opioid medications in the United States.  Researchers also noted that during this same time period, sales of opioids increased in proportion to the rise in deaths resulting from an opioid-related overdose.  In an effort to better protect patients from opioid abuse and the public from illegal opioid diversion, state and federal agencies have ramped up their audit and investigation efforts of physician, nurse practitioner, physician assistant, podiatrist and dentist opioid prescribing practices and are actively referring cases alleging improper opioid practices to State Licensure Boards.  The Centers for Disease Control and Prevention (CDC) has taken a central role in establishing recommendations and guidance on the ordering of opioids by qualified prescribers when treating patients who suffer from chronic pain. In March 2016, the CDC published “The CDC Guideline for Prescribing Opioids for Chronic Pain — United States, 2016.”  As the document reflects, the CDC expressly intended for the guidance to:

• Help ensure that clinicians and patients consider safer and more effective treatment;

• Improve patient outcomes such as reduced pain and improved function, and

• Reduce the number of persons who develop opioid use disorder, overdose, or experience other adverse events related to these drugs.

Over the past year, a number of state legislatures and professional licensing boards have followed-up with their own restrictions and / or guidance on the parameters to be observed when writing a prescription for opioids or other controlled substances.  This article looks back at the CDC guidelines and examines the primary recommendations made by the agency.

I.  Overview of the CDC’s Recommendations When Prescribing Opioids:

Although voluntary, the CDC guidance notes that a qualified health care provider’s decision to prescribe opioids should take a number of factors into account.  A summary of the CDC’s recommendations are set out below:

Determining When to Initiate or Continue Opioids for Chronic Pain.

Recommendation #1: Nonpharmacologic therapy and nonopioid pharmacologic therapy are preferred for chronic pain. Clinicians should consider opioid therapy only if expected benefits for both pain and function are anticipated to outweigh risks to the patient. If opioids are used, they should be combined with nonpharmacologic therapy and nonopioid pharmacologic therapy, as appropriate.

Recommendation #2: Before starting opioid therapy for chronic pain, clinicians should establish treatment goals with all patients, including realistic goals for pain and function, and should consider how therapy will be discontinued if benefits do not outweigh risks. Clinicians should continue opioid therapy only if there is clinically meaningful improvement in pain and function that outweighs risks to patient safety.

Recommendation #3: Before starting and periodically during opioid therapy, clinicians should discuss with patients known risks and realistic benefits of opioid therapy and patient and clinician responsibilities for managing therapy. Opioid Selection, Dosage, Duration, Follow-Up, and Discontinuation.

Recommendation #4: When starting opioid therapy for chronic pain, clinicians should prescribe immediate-release opioids instead of extended-release/long-acting (ER/LA) opioids.

Recommendation #5: When opioids are started, clinicians should prescribe the lowest effective dosage. Clinicians should use caution when prescribing opioids at any dosage, should carefully reassess evidence of individual benefits and risks when increasing dosage to ?50 morphine milligram equivalents (MME)/day, and should avoid increasing dosage to ?90 MME/day or carefully justify a decision to titrate dosage to ?90 MME/day.

Recommendation #6: Long-term opioid use often begins with treatment of acute pain. When opioids are used for acute pain, clinicians should prescribe the lowest effective dose of immediate-release opioids and should prescribe no greater quantity than needed for the expected duration of pain severe enough to require opioids. Three days or less will often be sufficient; more than seven days will rarely be needed.

Recommendation #7: Clinicians should evaluate benefits and harms with patients within 1 to 4 weeks of starting opioid therapy for chronic pain or of dose escalation. Clinicians should evaluate benefits and harms of continued therapy with patients every 3 months or more frequently. If benefits do not outweigh harms of continued opioid therapy, clinicians should optimize other therapies and work with patients to taper opioids to lower dosages or to taper and discontinue opioids.

Assessing Risk and Addressing Harms of Opioid Use.

Recommendation #8: Before starting and periodically during continuation of opioid therapy, clinicians should evaluate risk factors for opioid-related harms. Clinicians should incorporate into the management plan strategies to mitigate risk, including considering offering naloxone when factors that increase risk for opioid overdose, such as history of overdose, history of substance use disorder, higher opioid dosages (?50 MME/day), or concurrent benzodiazepine use, are present.

Recommendation #9: Clinicians should review the patient’s history of controlled substance prescriptions using state prescription drug monitoring program (PDMP) data to determine whether the patient is receiving opioid dosages or dangerous combinations that put him or her at high risk for overdose. Clinicians should review PDMP data when starting opioid therapy for chronic pain and periodically during opioid therapy for chronic pain, ranging from every prescription to every 3 months.

Recommendation #10: When prescribing opioids for chronic pain, clinicians should use urine drug testing before starting opioid therapy and consider urine drug testing at least annually to assess for prescribed medications as well as other controlled prescription drugs and illicit drugs.

Recommendation #11: Clinicians should avoid prescribing opioid pain medication and benzodiazepines concurrently whenever possible.

Recommendation #12: Clinicians should offer or arrange evidence-based treatment (usually medication-assisted treatment with buprenorphine or methadone in combination with behavioral therapies) for patients with opioid use disorder.

II. The CDC Prescribing Guidelines are Intended to Address Improper Opioid Prescribing Practices:

Importantly, the March 2016 guidance issued by the CDC was not intended to serve as a restrictive set of guidelines that would prevent a prescribing physician from exercising his or her independent medical judgement.  As the Director for the CDC’s National Center Injury Prevention and Control wrote in response to the concerns of a patient suffering from pain:

“The Guideline is a set of voluntary recommendations intended to guide primary care providers as they work in consultation with their patients to address chronic pain.  It helps physicians assess how to safely maintain or discontinue opioid use in patients who are currently on an opioid treatment plan.  Specifically, the Guideline includes a recommendation to taper or reduce dosage only when patient harm outweighs patient benefit of opioid therapy.  The Guideline is not a rule, regulation or law.  It is not intended to deny access to opioid pain medication as an option for pain management.  It is not intended to take away physician discretion and decision-making. . . .

Furthermore, CDC encourages physicians to continue to use their clinical judgement and base their treatment on what they know about their patients.  It is the ultimate goal of the Guidelines to ensure people who need them have access to opioids, while reducing opioid related deaths.” (emphasis added).

III.  State Efforts to Address Improper Opioid Abuse and Diversion:

Many state legislatures and / or state licensing boards have taken affirmative steps to incorporate one or more of the CDC’s recommendations into their laws and regulations.  For instance, legislation addressing improper opioid practices was signed into law by the Governor of Massachusetts at about the same time that the CDC’s guidance was formally published.  On March 14, 2016, Governor Charlie Baker signed “An Act Relative to Substance Use Treatment, Education and Prevention.”  A number of additional states (Ohio, Kentucky and Indiana) have also action to better ensure that physicians, nurse practitioners and physician assistants qualified to prescribe opioids do so in a manner that will protect patients from abuse and the public from illegal diversion.  Most recently, on May 25, 2017, Maryland Governor Larry Hogan, signed-off on “The Prescriber Limits of 2017.”  The legislation was enacted as an emergency measure and was found to be needed for the immediate preservation of the public’s health and safety.  While all of these statutes are consistent with the overall purpose and goals of the CDC Mach 2016 guidelines, each of them address prescriber limits on opioids and other controlled substances in a different fashion.  Moreover, a number of other states have similar legislation that is still pending.  It is therefore essential that you carefully monitor the rules in your state, both at the legislative and at the licensing board level, to ensure that your prescribing practices are consistent with applicable standards of care and stay within the four corners of law.

IV. Medicare and Medicaid Patient Considerations:

It is important to keep in mind that deaths due to prescription opioid overdoses have been disproportionately high in elderly and financially disadvantaged populations. Last June, the Office of Inspector General (OIG), issued its report “High Part D Spending on Opioids and Substantial Growth in Compounded Drugs Raise Concerns.”  As the report details, in 2015, 1 in 3 Medicare beneficiaries received a prescription for a commonly abused opioid.  Additionally, OIG found that these Medicare beneficiaries received prescriptions for an average of five commonly abused opioids during 2015.[6]  Moreover, the Medicare population has one of the highest and fastest growing rates of diagnosed opioid use disorder.  One researcher found that more than 6 out of every 1000 Medicare beneficiaries suffer from this condition.[7]  Unfortunately, the Medicaid population is even worse, at 8.7 per 1000 beneficiaries.  The prevalence of opioid use disorder among Medicaid patients is more than 10 times higher than that of populations covered by private insurance.[8]

V. The Collateral Impact of Opioid Misuse on Medicare and Medicaid Program Integrity Audits:

Over the last year, we have seen a significant increase in the number of Medicare and Medicaid audits of pain management physicians and practices by program integrity contractors working for the Centers for Medicare and Medicaid Services (CMS).  On the Medicare side, these audits have been dominated by Zone Program Integrity Contractors (ZPICs) and the National Benefit Integrity Medicare Drug Integrity Contractor (NBI MEDIC) responsible for performing data analyses to identify questionable physician prescribing practices.

On the Medicaid side, these audits have typically been conducted by the Medicaid Integrity Contractor (MIC) handling a particular state. In some jurisdictions, where the contractor consolidation process has progressed, pain management professionals have received audit letter from a Unified Program Integrity Contractor (UPIC).  UPICs are intended to replace and consolidate the various Medicare and Medicaid program integrity contractors into a single contracting entity.

CMS is actively utilizing its program integrity contractors to identify opioid prescription practices of physicians, nurse practitioners and physician assistants that appear to be different from those of their peers OR appear to be contrary to the best practices outlined in CDC’s guidance. Please keep in mind – once an audit is initiated, every aspect of the care and treatment provided will be subject to review.  Even though a physician’s prescribing habits may have been the impetus for an audit, once medical records are submitted for review, the program integrity contractor will examine multiple aspects of the care in its determination of whether the services at issue were medically necessary and qualify for coverage and payment.

As a final point, it is important to remember pursuant to Chapter 4 of the Medicare Program Integrity Manual, Section 4.18.2, that if a ZPIC or UPIC determines that a Medicare provider engaged in “unethical or improper practices,” it is REQUIRED to also make a referral’s to the provider’s state licensure authority, medical boards and professional societies so that these organizations can review the practices and decide whether disciplinary action is required.

VI. Improper Opioid Prescriber Practices are Leading to Sanctions by State Licensure Boards:

To be clear, the government’s interest in opioid and controlled substance prescribing practices isn’t new.  A cursory look at the list of administrative sanctions taken by almost any state’s Medical Board and / or Dental Board will confirm that pain medications have been, and will likely continue to be, a significant problem.  Unfortunately, the number of opioid-related complaint referrals has risen over the last six months due to the rise in NBI MEDIC and ZPIC audits of provider care, treatment and prescribing practices. Nevertheless, prescribing practices of Federal and state regulators are carefully monitoring the opioid prescribing practices of qualified physicians, nurse practitioners, physician assistants, podiatrists and dentists in their respective jurisdiction. 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.

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

NBI MEDIC Referrals to Boards, OIG and DOJ are Here!

(June 28, 2017):  The Medicare program is enormous.  As of 2016, more than 56 million individuals participated in the program, with more than 10,000 additional individuals enrolling in the program each day.  The Centers for Medicare and Medicaid Services (CMS) is the agency responsible for managing this costly program.  To direct this $640 billion program, CMS has engaged a number of private companies to handle practically every aspect of the administrative claims submission, payment and audit process.  Several companies have dominated this industry, one of which is Health Integrity, LLC (Health Integrity).  Established in 2006, Health Integrity has been awarded three major categories of contracts by CMS.  In addition to serving a Zone Program Integrity Contractor (ZPIC) responsible for auditing Medicare Part B claims[1], Health Integrity also serves as the Medicaid Integrity Contractor (MIC) in one or more jurisdictions around the country.  Finally, since 2009, Health Integrity has served as the only National Benefit Integrity Medicare Drug Integrity Contract (NBI MEDIC).

I.  Impact of the Opioid Crisis on Health Integrity’s Activities (as NBI MEDIC):

As NBI MEDIC, Health Integrity is responsible for identifying and investigating incidents of fraud, waste and abuse in the Medicare Part C (Medicare Advantage) and Medicare Part D (Outpatient Prescription Drug) programs.  In this capacity, Health Integrity has established close working relationships with federal and state law enforcement and regulatory agencies around the country.

Over the last two years, Health Integrity’s benefit integrity activities as NBI MEDIC have effectively been on overdrive.  This is due, in large part, to the government’s national initiative to address the current opioid epidemic that has become endemic in areas around the country and has disproportionately impacted Medicare and Medicaid beneficiaries. In one report published by the Office of Inspector General (OIG) in 2016, the agency found that 30% of Medicare of beneficiaries have at least one prescription for an opioid.  Moreover, OIG concluded that a median number of 5 prescriptions for opioids were issued per Medicare beneficiaries over the period of a year.[2]  Over the last year, a number of federal and state legislature and regulatory bodies have taken affirmative steps to better protect patients from opioid abuse and the public from the illegal diversion of opioids and other controlled substances.[3]  In addition to their day-to-day analytics work to identify health care providers with aberrant opioid and / or other controlled substance prescribing practices, Health Integrity is also actively involved in a number of specific projects targeting specific categories of prescribers and / or claims.  These projects include:

The Quarterly Pharmacy Risk Assessment Project: In this project Health Integrity is targeting pharmacies that appear to be engaged in illegal or improper prescribing activities.  Two of the factors examined by Health Integrity involved schedule II controlled substances. Potential wrongdoers are either audited or referred to law enforcement for further investigation.

The Prescriber Risk Assessment Project: In this project, Health Integrity is comparing the controlled substances prescribing practices of physician, nurse practitioners, physician assistants, podiatrists and dentists against those their peers within their primary specialty and location (by state).  If a licensed prescriber is identified as a potential target, Health Integrity may initiate a claims audits of the opioid prescriptions at issue to see whether the orders were medically necessary and appropriate. If evidence of fraud, waste or abuse is identified, Health Integrity may also make referral to federal and state law enforcement for further investigation and prosecution, if justified.  Finally, Health Integrity may also file a complaint against the licensee with the licensee’s state licensing board.  It is this final category of referrals where we have recently been seeing an increase in enforcement activity.

The Quarterly Pharmacy Spike Analysis Project. Health Integrity uses this project to identify “spikes” in the billing patterns of pharmacies from one-quarter to another with respect to schedule II through IV controlled substances. While this project is focused on pharmacies, it is important to keep in mind that every one of the prescriptions filled was originally filled by qualified prescriber.  After auditing a pharmacy identified under this project, Health Integrity will automatically turn to the physicians and other prescribers who are alleged to have ordered the scripts to be filled in the first place.

The Quarterly Prescriber Spike Analysis Project. In this project, Health Integrity analyses available databases to identify any billing trends of nationwide prescribers that appear to be unusual of controlled substances, human immunodeficiency virus medications, and antipsychotics. Health integrity also looks for unusual spikes in the quantity of schedule III-V control substances prescribed by qualified physicians, nurse practitioners, physician assistants, podiatrists and dentists.  As a participant in the Medicare program, you are REQUIRED to have an effective Compliance Program in place.  One of the seven essential elements of your Compliance Program is that you are supposed to be monitoring and reviewing claims submitted for coverage and payment. An important component if this internal monitoring process should be an ongoing comparison of your provider’s prescribing practices. If there are spikes, you need to be prepared to explain how and / or why they occurred.

The Transmucosal Immediate Release Fentanyl (TIRF) Drug Project. This project involves the identification of improper payments by Health Integrity that have made by Prescription Drug Plans (PDP) and Medicare Advantage-Prescription Drug (MA-PD) Plans for unapproved uses of these drugs. Health Integrity is also examining whether prescriptions for TIRF have been medically necessary and appropriate. TIRF drugs are typically used by licensed prescribers to achieve pain relief in cancer patients.  We recommend that you carefully monitor your staff prescription practices when it comes to TIRF drugs.  Are the prescriptions related to the care of a cancer patient?  If not, is the medical necessity of this drug fully documented.

The Pill Mill Doctor Project. Health Integrity participated in this project to identify prescribers with a high risk of fraud, waste, and abuse in prescribing schedule II-IV controlled substances. Essentially, Health Integrity is seeking to identify and either audit or refer any prescribers who might be engaged in “pill mill” related prescribing practices.  Over the last few months, both federal and state law enforcement agencies have been actively investigating and prosecuting physicians and others who appear to be engaging in “pill mill” type prescribing practices.

The Trio Prescriber Project. This project is used by Health Integrity to focus on identifying licensed health care providers who prescribe the following three medications to a Medicare beneficiary: (1) an Opioid, (2) a Benzodiazepine, and (3) the Muscle Relaxant carisoprodol. This particular combination of medications is a popular “drug cocktail” used by individuals to heighten the effects of the opioid.  With access to the various CMS claims databases, Health Integrity has been quite effective at determining which prescribers AND beneficiaries may be engaged in these drug cocktail practices.

The Compounding Pharmacy Project. Health Integrity is using data analytics to identify high-rick pharmacies that appear to be billing Medicare for compounded prescription drugs. In 2017 alone, DOJ has prosecuted a number of compounding pharmacies and associated prescribers for various violations of health care fraud and abuse laws.  Are you a licensed physician, nurse practitioner or other qualified prescriber who writes scripts for compounded drugs?  If so, we recommend that you immediately contact your health law counsel to discuss the business relationship between the parties and whether the compounded drug is truly medically necessary.

The Brand Name Drug Project. In its role as NBI MEDIC, Health Integrity is using this audit project to identify abnormal or aberrant Medicare Part D billing practices by independent pharmacies for brand-name prescription drugs, including opioids sold under brand names, such as OxyContin®, Percocet®, Vicodin®, Percodan®, Tylox®, and Demerol®.  Once again, Health Integrity’s initial audit may focus on the independent pharmacy but a collateral audit or referral to law enforcement will likely be made to examine the prescribing practices of the physician or other qualified prescriber.  Why were only expensive, brand name drugs ordered by the prescribing physician?  Why hasn’t the prescriber ordered a drug that is therapeutically equivalent to the expensive name brand drug?  If a referral to law enforcement is made, they will also likely examine the prescriber’s business relationship, if any, with the pharmaceutical manufacturer of the brand name drug(s).

II. How Are NBI MEDIC Investigations Initiated?

As the company President of Health Integrity, Susan Love, testified late last year before the U.S. Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Investigations, the NBI MEDIC performs both “reactive” and “proactive” benefit integrity enforcement audits and investigations.

• Reactive Audits. The NBI MEDIC’s Fraud Hotline provides one example of the reactive mechanisms that lead to audits and investigations handled by Health Integrity. From 2013-2015, the NBI MEDIC received more than 37,000 calls to their toll-free Fraud Hotline alleging fraud, waste and abuse of the Medicare Part C and Part D programs. The NBI MEDIC also receives complaints by fax, mail and encrypted e-mail through the contractor’s website.  After culling through these complaints, the NBI MEDIC identified more than 24,000 actionable complaints that could be pursued.
• Proactive Audits. In September 2013, CMS instructed the NBI MEDIC to perform more proactive audits using data analytics to identify and investigate possible violations.  This resulted in an increase in referrals of 520% to law enforcement.

III.  What Actions Can an NBI MEDIC Take After Conducting an Audit?

Should a Health Integrity auditor conclude that a licensed prescriber’s utilization practices of opioids and / or controlled substances are different than those of their peers, there is significant likelihood that one or more of the following actions will be taken by the NBI MEDIC:

• Make a Referral to Law Enforcement. Over the past few years, the NBI MEDIC initiated investigations have resulted in more than 1000 referrals to law enforcement.  These referrals are the result of both reactive and proactive investigations conducted by the NBI MEDIC.
• Conduct a Claims Audit. Health Integrity (as NBI MEDIC) will conduct an audit of your prescribing practices to determine if your prescriptions for opioids and other controlled substances were medically necessary and appropriate.
• Recommend that Your Medicare Number be Revoked. Notably, since August 2015, the NBI MEDIC has recommended the revocation of Medicare enrollment for 169 providers. This administrative sanction has become more frequent in 2016 and 2017.
• File a Complaint with Your State Licensing Board. Health Integrity will (as NBI MEDIC) file a complaint against your license with the state. Depending on the nature of your profession, Health Integrity will either file a complaint with the State Medical Board (If you are a physician, osteopath or physician assistant), with the State Nursing Board (if you are a nurse practitioner), with the State Board of Podiatric Examiners (if you are a podiatrist), or with the State Board of Dentistry (if you are a dentist or oral surgeon). These complaints are due, in large part, due to the opioid epidemic currently sweeping the nation. The NBI MEDIC is aggressively monitoring and auditing the prescription of opioids and other controlled substances to Medicare beneficiaries under the Part D program. These audits are typically initiated by NBI MEDIC auditors and analysts who utilize “data mining” to identify potential physician, nurse practitioner and physician assistant targets that may be engaged in prescribing practices that are different from those of prescribers that the NBI MEDIC perceives to be their peers.

IV.  How Can You Reduce Your Level of Regulatory Risk?

As reflected above, if you or your practice is targeted, the range of actions that the NBI MEDIC may take widely varies, depending the contractor’s findings.  Unfortunately, since data mining is one of the primary ways that a potential target is identified for review, the first time that you know find out that your prescribing practices are being assessed could be when you receive notice of an investigation by law enforcement or that a complaint has been filed against your with the state licensing board. This is often the case, regardless of whether the investigating contractor is a Unified Program Integrity Contractor  (UPIC), ZPIC or NBI MEDIC.

How can you reduce your level of regulatory audit risk? As a first step, if you have not already done so, you need to develop and implement an effective Compliance Program.[4]  Assuming that you already have such a program in place, take the time now, before you have a problem,  to assess your prescribing, care and treatment practices.  Are they compliant with applicable standards of care and any state law restrictions that may restrict the time period that controlled substances may be prescribed in non-cancer / non-chronic pain cases?  Does your documentation meet applicable requirements?  Have you documented that the care and treatment decisions made were medically necessary and appropriate?  Were the services properly coded and billed?

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

[1] Health Integrity serves as the ZPIC for Texas, Oklahoma, Colorado and Oklahoma.

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

[3] In March 2016, the Centers for Disease Control and Prevention (CDC) issued its “CDC Guideline for Prescribing Opioids for Chronic Pain – United States, 2016” .  This guideline was intended to provide qualified prescribers of opioids with recommendations designed to reduce opioid-related overdoses and deaths. Although the CDC’s guidelines are voluntary, several states have taken legislative or regulatory action to adopt a number of the recommendations set out in the CDC’s March 2016 guidance.  Examples of these states include Indiana, Ohio, Kentucky and Maryland. Each of these states have adopted, to some degree, the CDC’s recommendations.

[4] The term “corporate compliance program” refers to an initiative that evolved from the Federal Sentencing Guidelines, which were adopted under the Sentencing Reform Act of 1984 (28 U.S.C. § 994).  As set out in the U.S. Sentencing Commission Guidelines, Sentencing for Organizations, lesser criminal sanctions for companies have been specifically recommended for companies that have effective compliance plans in operation. Guidelines for benefiting from a Compliance Plan have been set out as early as 1991.  (56 Fed. Reg. 22762).  As far as civil sanctions are concerned, the Department of Justice’s Civil Division has implemented a similar philosophy of treating defendants more leniently if they have endeavored to implement and follow an effective compliance program.  Finally, an effective compliance program can significantly reduce non-governmental civil exposure by identifying potential practices that may pose litigation risk and taking action to reduce that risk.

UPIC / ZPIC / Health Integrity Opioid Audits and Audits of Other High Risk Drugs.

(June 23, 2017):  Opioid audits of the prescribing practices of pain management physicians are on the rise. As the Department of Health and Human Services (HHS), Office of Inspector General (OIG), noted in its report “High Part D Spending o Opioids and Substantial Growth in Compounded Drugs Raise Concerns,” 30% of Medicare beneficiaries have at least one prescription for opioids and the median number of prescriptions received per beneficiary each year is five.[1] Unfortunately, opioid use disorder (addiction) and diversion problems are widespread around the country. Opioid abuse is especially prevalent among Medicare and Medicaid beneficiaries. It has been estimated that 6 out of every 1000 Medicare beneficiaries suffer from opioid use disorder.[2]  The problem is even worse with Medicaid beneficiaries where it is estimated that 8.7 out of every 1000 suffer from opioid use disorder.[3]  The addiction levels among Medicaid patients are more than 10 times as high as patients covered by private insurance.[4]

In light of the above, both federal and state regulators are aggressively investigating and taking administrative, civil and / or criminal action against physicians and other prescribers around the country who are alleged to have engaged in improper opioid and high-risk drug prescription practices when caring for Medicare and / or Medicaid patients.  While the Centers for Medicare and Medicaid Services (CMS) has engaged a number of private companies to conduct program integrity functions, one of the primary organizations that has been awarded these contracts is Health Integrity, LLC (Health Integrity).[5]

I.  Overview of Health Integrity NBI MEDIC, ZPIC and MIC Responsibilities:

The three primary program integrity contracts currently handled by Health Integrity include the following:

• National Benefit Integrity Medicare Drug Integrity Contract (NBI MEDIC). As the NBI MEDIC, Health Integrity is responsible for investigating and responding to allegations of fraud, waste, and abuse around the country in the Medicare Part C (Medicare Advantage) and Medicare Part D (Outpatient Prescription Drug) programs. In large part due to the opioid epidemic currently sweeping the nation, Health Integrity is aggressively monitoring and auditing the prescription of opioids to Medicare beneficiaries under the Part D program. Opioid audits are typically initiated by Health Integrity auditors and analysts using predictive analytics and other investigative tools to identify potential physicians, nurse practitioners and physician assistants that may be engaged in  opioid prescribing practices that could lead to the abuse of diversion of Medicare Part D drugs.

• Zone Program Integrity Program Contractor (ZPIC). As a ZPIC, Health Integrity is responsible for reviewing Medicare fee-for-service claims for the states of Texas, Colorado Oklahoma and New Mexico.  In this capacity, Health Integrity is required to employ sophisticated data mining and traditional investigative techniques (e.g. analyses of medical records, patient interviews, follow-up to hotline complaints, referrals from state and federal agencies) to identify potential targets for audit and investigation. Depending on Health Integrity’s findings, a health care provider’s case may be handled as an administrative overpayment, referred to CMS or the Office of Inspector General (OIG) for agency action, OR referred to law enforcement (e.g. U.S. Department of Justice (DOJ) or the appropriate Medicaid Fraud Control Unit (MFCU) for possible criminal enforcement.

• Medicaid Integrity Contractor (Audit MIC).  As Audit MIC, Health Integrity has been particularly aggressive in conducting auditing specific categories of Medicaid claims that have been associated with improper or abusing billing patterns. Although Medicaid dental claims are ongoing favorite target of MIC auditors around the country, over the past year we have seen a significant increase in the number of opioid audits focusing on a physician’s prescribing practices. 

Collectively, Health Integrity’s efforts have proven effective in the detection and audit of potentially improper prescription drug practices by physicians, nurse practitioners and physician assistants that participate in the Medicare and Medicaid programs.  A first step toward consolidation began in May 2016 with the award of seven Unified Program Integrity Contracts (UPICs) to private company applicants, one of which is Health Integrity.  UPICs are intended to replace ZPICs, legacy Program Integrity Contractors (PSCs), the Medicare-Medicaid data match program (Medi-Medi) and MICs.

This article focuses on several of the prescriber-targeted programs that Health Integrity is currently using to identify Medicare and Medicaid providers for audit or referral to law enforcement.

II.  Opioid Audits / Prescription Drug Audits by Health Integrity:

Health Integrity and other program integrity contractors are dedicating a significant portion of their resources to the audit and investigation of controlled substances and other prescription drugs that the government contends may be subject to abuse or diversion. Several of the projects currently used by Health Integrity to detect waste, fraud, abuse or diversion include:

• Prescriber Risk Assessment Project – This project analyzes the prescribing practices of physicians, dentists, nurse practitioners and physician assistants Schedule II controlled substances (or opioids) prescription drug event record count and Schedule II controlled substances 30-day equivalents. Health Integrity auditors and analysts take this information and compare the prescribing practices of a provider with that of his or her peers. Health Integrity also factors in a prescriber’s primary specialty and geographical location. With this data, Health Integrity is able to readily identify outliers for audit targeting purposes.

• Quarterly Prescriber Spike Analysis Project – Health Integrity auditors and analysts utilize this project to detect unusual billing trends of nationwide prescribers of Schedule II, III, IV and V controlled substances, human immunodeficiency virus medications, and antipsychotics. Simply put, Health Integrity uses this program identify prescribers who have “unusual spikes in billing.”

• Quarterly Drug Trend Analysis Project – Health Integrity’s participation in this project has better enabled the contractor detect and address sudden increases and emerging issues that may arise from one period to another. This program is primarily utilized analyze trends in the utilization of Schedule II, III, IV and IV controlled substances.

• Transmucosal Immediate Release Fentanyl (TIRF) Drug Project – This form of Fentanyl is often used in the management of breakthrough pain in adult cancer patients. In an effort to guard against the unapproved use of this drug, Health Integrity carefully monitors its utilization of this drug to identify improper payments made by Prescription Drug Plans (PDP) and Medicare Advantage-Prescription Drug (MA-PD) Plans.

• Pill Mill Doctor Project – Under this project, Health Integrity uses data analytics to identify prescribers who may be engaged in the prescription of Schedule II-IV controlled substances without a legitimate medical purpose. Prescribers engaged in this type of activity are often referred to as “Pill Mill” doctors. Health Integrity carefully investigates high-risk leads and refers them to law enforcement and plan sponsors for further action.

• Trio Prescriber Project – Health Integrity’s participation in this project is intended to allow the contractor to readily identify providers that prescribe all three of the following to a Medicare or Medicaid beneficiary: (1) an opioid, (2) a benzodiazepine, and (3) the muscle relaxant carisoprodol. Notably, this “cocktail” of drug is often abused due to the fact that both benzodiazepines and carisoprodol can heighten or enhance the effect of the third component of the cocktail — opioids.

III.   What Do These Opioid Audits Mean for the Typical Pain Management Physician?

It is important to keep in mind that all of the projects discussed above share one major weakness – they completely rely on data analytics.  As a result, Health Integrity has based its audit targeting efforts solely on data, without any knowledge of whether the prescribing decision was medically necessary and appropriate or whether the patient’s medical records support the care and treatment decisions made by the physician.

Do you have an effective Compliance Program in place?  In the absence of an active internal auditing and monitoring program, if an audit is initiated by Health Integrity, there is a high likelihood that the contractor will find problems with your documentation.  Unfortunately, we have found this to be the case regardless of whether a practice was still using paper records or had transitioned over to an Electronic Health Records (EHR) system.  Therefore, if you or the physicians in your pain practice regularly prescribe Schedule II through V controlled substances, human immunodeficiency virus medications, antipsychotics, Transmucosal Immediate Release Fentanyl, or the trio cocktail described above,  there is a good chance that those utilization practices are subject to review by Health Integrity or another CMS program integrity contractor.

IV.  Conclusion:

Pain management physicians are under enormous scrutiny by both regulators and licensing authorities around the country.  If you or your practice is audited, we recommend you immediately contact a qualified health lawyer to assist you in navigating the complexities of the audit process.  Every case is different, and your ability to prevail in an audit will depend, in large part on the quality of your medical documentation.  Nevertheless, there are steps you can take early in the audit that can greatly increase the likelihood that Health Integrity or another CMS program integrity contractor will find that your documentation fully meets applicable requirements and the care provided qualifies for coverage and payment.

Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, Attorneys and Counselors at Law.  The health law firm Liles Parker represents pain management physicians and practices around the country in connection with ZPIC / UPIC audits.  Opioid audits conducted by ZPICs / UPICs have been especially frequent in 2017.  For a free consultation about your case, please give us a call:  1 (800) 475-1906.

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

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

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

[4] HHS.gov News. (2016).HHS takes strong steps to address opioid-drug related overdose, death and dependence, Retrieved from, http://www.hhs.gov/about/news/2015/03/26/hhs-takes-strong-steps-to-address-opioid-drug-related-overdose-death-and-dependence.html

[5] http://www.healthintegrity.org/index.html

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