Liles Parker PLLC
(202) 298-8750 (800) 475-1906
Washington, DC | Houston, TX
San Antonio, TX | Baton Rouge, LA

We Defend Healthcare Providers Nationwide in Audits & Investigations

HHS Issues Final Rule to Address Record High Medicare Appeals Backlog

Medicare appeals backlog(January 20, 2017): The Medicare appeals backlog has reached its all-time worst. If you’re a healthcare provider or supplier waiting for a hearing before an Administrative Law Judge (ALJ) at the Office of Medicare Hearings and Medicare Appeals (OMHA) – the third level of the Medicare appeals process – you’ve likely been waiting years to have your case heard or, at least, you’re expecting such a wait. This wait time has persisted despite that ALJs are statutorily required to issue a decision within 90 days of receipt of a hearing request. The reasons for the backlog depend on who you ask: the American Hospital Association (AHA) and others have contended that the Recovery Audit Program is the “primary culprit in creating and sustaining” the backlog because Recovery Audit Contractors (RACs) “receive a cut of any improper payments they recover […] and can challenge claims going back as far as three years.”  The U.S. Department of Health and Human Services (HHS) agrees that the Recovery Audit Program has contributed to the backlog, but believes there are other reasons as well, like an increase in Medicare beneficiaries and a growing practice among some providers to appeal virtually every claim denial through ALJ review (coupled with only modest increases in funding for the agency, thereby limiting their ability to address the growing number of appeals and backlog).

I.  Statistical Overview of the Medicare Appeals Backlog:

In any event, the statistics are astounding:

  • The number of ALJ appeals filed grew 936%, from 41,733 to 432,534, between fiscal years (FY) 2010 and 2014.
  • By the end of FY2014, 767,422 appeals were pending at ALJ.
  • ALJ decisions are issued well after the 90-day statutory deadline: in FY2014, it took OMHA an average of 415 days to process an ALJ appeal; in FY2015, it took OMHA an average of 662 days to process an ALJ appeal; and in FY2016, it took OMHA an average of 877 days to process an ALJ appeal.

The backlog has been a significant source of frustration for healthcare providers and suppliers (and their representatives) stuck in the lingering appeals process – and not just because it takes so long to achieve a final judgment by the Secretary. The delay often has significant financial consequences because Medicare can statutorily recover the alleged overpayment shortly after a second level (reconsideration) appeal decision issues, despite that the appeals process is not over and despite that the first two levels of appeal are littered with problems (e.g., we see chronic misapplication of Medicare coverage and payment rules by appeals contractors at the first two levels of appeal).

II.  Order by the U.S. District Court:

Thanks to the efforts of AHA and other plaintiffs who sought relief in court, we may see the backlog resolve over the next few years. On 12/05/2016, the United States District Court for the District of Columbia ordered that the HHS Secretary reduce the backlog according to the following timeline:

  • 30% reduction from the current backlog of cases pending at the ALJ level by 12/31/2017;
  • 60% reduction by 12/31/2018;
  • 90% reduction by 12/31/2019; and
  • 100% reduction by 12/31/2020.

III.  Other HHS Efforts to Address the Medicare Appeals Backlog:

In an effort to meet these mandated backlog reduction timelines, HHS issued a final rule on 01/17/2017 titled “Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures”. The final rule includes an assortment of initiatives to reduce the backlog which become effective 03/17/2017, including:

  • Giving select Medicare Appeals Council decisions precedential effect. The final rule provides that designated “Medicare Appeals Council decisions […] have precedential effect and are binding on all CMS components, on all HHS components that adjudicate matters under the jurisdiction of CMS, and on the Social Security Administration to the extent that components of the Social Security Administration adjudicate matters under the jurisdiction of CMS.” This is significant because, currently, even if the Medicare Appeals Council interprets a Medicare authority or provision in a specific way in a decision, that interpretation only applies to the case at hand (even though the decision represents the final decision of the Secretary). In other words, an Appellant can’t contend that the interpretation of a Medicare authority or provision in a previous Medicare Appeals Council matter is binding in their case as well, even if the facts and issues are very similar. HHS hopes the precedential nature of Medicare Appeals Council decisions as of 03/17/2017 will create consistency in the appeals process. It’s possible, though, that the discretion given to the Departmental Appeals Board (DAB) Chair to decide which cases have precedential effect may impact how effective this change will ultimately be.
  • Expanding the pool of adjudicators at OMHA to include attorney adjudicators. An attorney adjudicator is a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance, and authorized to take the actions on requests for ALJ hearing and requests for reviews of QIC dismissals. HHS estimates that the expansion of the pool of adjudicators at OMHA could redirect approximately 24,500 appeals per year to attorney adjudicators who would be able to process these appeals at a lower cost than would be required if only ALJs were used to address the same workload.
  • Creating process efficiencies. These include, for example, allowing ALJs to vacate their own dismissals rather than requiring Appellants to appeal a dismissal to the Medicare Appeals Council and using telephone hearings for certain Appellants.

For more information on these and numerous other initiatives, please refer to the Federal Register. The hope is that the finalization of this rule and the Secretary’s accountability to the District Court – the Court retained jurisdiction of the case to review the quarterly status reports the Secretary is required to prepare and to rule on any challenges to unmet deadlines – will achieve the intended result: complete elimination of the backlog by 2020.

The Centers for Medicare and Medicaid Services (CMS) has taken steps in the past to improve the appeals process, and these steps have not always achieved the intended result. For example, with regard to appeals stemming from a post-payment review, CMS directed redetermination (first level) and reconsideration (second level) appeals contractors – effective August 2015 – to restrict their review on appeal to (in most cases) only the issues alleged by the reviewing contractor (i.e., the contractor that requested the records and issued the initial audit results). The purpose was to avoid a moving ball – where one Medicare contractor alleges one issue and the Appellant addresses it, but then another contractor alleges another issue, requiring the Appellant to then address a different issue with regard to the same claim. However, we have seen the redetermination and reconsideration appeals contractors repeatedly disregard this CMS directive and continue to try and add new denial reasons to the administrative record. We have also seen the initial auditing contractors increasingly allege more than one denial reason, throwing everything but the kitchen sink at providers and suppliers. It seems that Medicare is hoping for at least one denial reason to persist through the appeals process.

Judicial oversight is the difference this time around and could be the key to reducing the backlog. We’ll be monitoring HHS’s progress closely and hoping for expeditious relief for our current and future clients, and healthcare providers and suppliers everywhere.

Lorraine Ater, JDHealthcare Lawyer is a health law attorney with the firm Liles Parker.  She is also a Certified Medical Compliance Officer (CMCO) and a Certified Medical Reimbursement Specialist (CMRS).  Lorraine represents healthcare providers and suppliers around the country in connection with Medicare audits and appeals.  Liles Parker is a boutique health law firm with offices in Washington, DC; across the State of Texas; and in Baton Rouge, LA.  Need assistance?  For a free consultation, please call: (202) 298-8750.

 

Sources:

AHA v. Burwell, 2016 U.S. Dist. LEXIS 126840 (D.D.C. Sept. 19, 2016).

AHA v. Burwell, 2016 U.S. Dist. LEXIS 167291, 2016 WL 7076983 (D.D.C. Dec. 5, 2016).

Federal Register, Volume 82, Number 10, Pages 4974-5140, “Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures” (01/17/2017). Available at https://www.federalregister.gov/documents/2017/01/17/2016-32058/medicare-program-changes-to-the-medicare-claims-and-entitlement-medicare-advantage-organization.

HHS, “FACT SHEET: HHS Issues Final Rule to Improve the Medicare Appeals Process”.

HHS, OMHA, “Average Processing Time By Fiscal Year” (11/18/2016). Available at https://www.hhs.gov/about/agencies/omha/about/current-workload/average-processing-time-by-fiscal-year/index.html#.

Medicare’s Home Health Probe and Educate Program is Underway

December 4, 2015 by  
Filed under Home Health & Hospice

Arbitration(December 4, 2015): The Centers for Medicare and Medicaid Services (CMS) has directed its contractors to initiate a home health probe and educate program review process with home health agencies around the country. The focus of this program will be to assess agencies’ compliance with the new face-to-face (F2F) documentation requirements that became effective 01/01/15.

CMS has directed its Medicare Administrative Contractors (MACs) to request records for 5 claims from each home health agency within their jurisdiction to review on a pre-payment basis. This review will apply to claims with dates of service beginning on or after 08/01/15. If the MAC denies one out of the five claims under review, it will send an education letter to the agency summarizing its findings and the process will be complete. However, if more than one of the five claims is denied or if the agency fails to submit documentation in response to the request, then the MAC will send a “detailed” findings letter and repeat the review process with another 5 claims with dates of service on or after the date of the findings letter. The purpose of this second review will presumably be to assess the agency’s compliance with the MAC’s previous education efforts.

As part of the post-review education process, CMS has directed the MACs to offer agency-specific education (to include a one-on-one telephone call with contractor medical review staff) regarding the face-to-face requirements.

Although CMS has not explicitly outlined further consequences for agencies with high error rates determined through this “Probe and Educate” program, it is likely that MACs would continue the review process for delinquent agencies, implement more extensive medical review audits on either a pre-payment or post-payment basis, or refer non-compliant agencies to a Zone Program Integrity Contractor (ZPIC) for investigation. In light of this new ongoing review program, home health agencies should:

  • Continue to obtain supporting F2F documentation on a rolling basis from referring physicians prior to submitting your EOE for the initial certification period. Agencies should not wait until Medicare requests records to obtain F2F documentation from referring physicians.

  • Promptly comply with the MAC’s request for documentation and ensure that all records submitted are complete and accurate. Records should be submitted via the MAC’s online portal or by some trackable method of delivery with signature confirmation.

  • Take advantage of the MAC’s offer to conduct one-on-one education with your agency, even if the review findings are largely positive. As all agencies know, the F2F requirement is extraordinarily vague, and agencies should always take advantage of educational opportunities offered by CMS and the contractors.

  • Contest any and all improper claim denials in the administrative appeals process.

Although the home health probe and educate reviews are, by definition, intended to be educational in nature, they could potentially result in serious consequences for non-compliant agencies. If a MAC has attempted to educate an agency regarding the F2F requirements and a subsequent audit by a MAC or another CMS review contractor determines that the agency has failed to adhere to the previous educational intervention, this could set the stage for an extrapolated overpayment assessment or a payment suspension.

Liles Parker attorneys can assist you with your home health probe and educate obligations.  We also represent home health agencies across the country with all matters related to reimbursement, enrollment, compliance, and corporate formation / transactions. If you have questions or concerns, please contact Adam Bird for a free consultation.

Bird,Adam-WebAdam Bird is a health law attorney with the firm, Liles Parker, Attorneys & Counselors at Law.  Liles Parker has offices in Washington DC, Houston TX, McAllen TX and Baton Rouge LA.  Our attorneys represent home health agencies, hospices and other health care professionals around the country in connection with government audits of Medicaid and Medicare claims, licensure matters and transactional projects.  Need assistance?  For a free consultation, please call: 1 (800) 475-1906.

CMS Awards Zone 6 ZPIC Contract to SafeGuard Services

Audit(August 15, 2015): The Centers for Medicare and Medicaid Services (CMS) has awarded the contract for Zone Program Integrity Contractor (ZPIC) services for Zone 6 to SafeGuard Services, LLC. Zone 6 encompasses Maryland, Delaware, Washington, D.C., Pennsylvania, New Jersey, New York, Connecticut, Massachusetts, Rhode Island, Vermont, New Hampshire, and Maine. SafeGuard is the current program safeguard contractor (PSC) in this jurisdiction, and its functions as a ZPIC will be similar to its duties as a PSC. SafeGuard is also the ZPIC for Zone 1 (California, Nevada, and Hawaii) and Zone 7 (Florida).

As the new Zone 6 ZPIC, SafeGuard will be responsible for investigating suspected waste, fraud, and abuse among Medicare providers. ZPICs have the authority to conduct unannounced, onsite inspections of providers’ facilities, perform pre-payment and post-payment reviews of claims, impose payment suspensions, recommend to CMS that a provider’s billing privileges be revoked, and refer providers to law enforcement for investigation. In our experience, SafeGuard is among the most aggressive ZPICs in the country.

If you receive correspondence from SafeGuard Services or any other ZPIC, we strongly recommend that you contact an experienced health care attorney as soon as possible. You should never assume that ZPIC audits or inspections are merely “routine.”

Liles Parker attorneys assist all types of providers across the country with responses to Zone 6 ZPIC investigations, audits, and other administrative actions. If you have questions or concerns about a ZPIC investigation, please contact our office for a free consultation.

Liles Parker has offices in Washington DC, Houston TX, McAllen TX and Baton Rouge LA.  Our attorneys represent health care professionals around the country in connection with ZPIC audits of Medicare claims, licensure matters and transactional projects.  Need assistance?  For a free consultation, please call: 1 (800) 475-1906.