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CMS Has Announced that it is Extending Home Health Enrollment Moratoria

February 10, 2014 by  
Filed under Home Health & Hospice

(February 10, 2014):  The Centers for Medicare & Medicaid Services (CMS) recently announced that it has extended its temporary moratoria on the enrollment of home health agencies in Fort Lauderdale, Detroit, Dallas, and Houston. Additionally, CMS has set forth a temporary moratorium on the enrollment of new ground ambulance suppliers in the Greater Philadelphia area. Furthermore, CMS is extending for six-months the current enrollment moratoria of home health agencies in Chicago and Miami and for Houston area ground ambulance supplier enrollment in its Medicare, Medicaid and Children’s Health Insurance Program (“CHIP”) operations.  This is just the latest round in CMS’ ongoing efforts to prevent and combat fraud, waste, and abuse in these health care programs while safeguarding taxpayer dollars and ensuring patient access to care is not interrupted.

I.   Background on the Home Health Enrollment Moratoria:

Under the Patient Protection and Affordable Care Act (the “ACA”), the Secretary of the Department of Health and Human Services (HHS) was given new tools and resources to combat fraud, waste, and abuse in Medicare, Medicaid, and CHIP. One of these tools allows the Secretary to impose a temporary moratorium on the enrollment of new providers and suppliers in these health care programs if the Secretary determines a moratorium is necessary to prevent or combat fraud, waste, or abuse.

·         Consultation with Law Enforcement

CMS alone, or in consultation with HHS’ Office of Inspector General (OIG) or the Department of Justice (DOJ), or both, as well as State Medicaid agencies, can impose a temporary moratorium on newly enrolling health care providers and suppliers if the agency determines that there is a significant potential for fraud, waste, or abuse with respect to a particular provider or supplier type or particular geographic locations or both. More importantly, if a provider or supplier is subject to a moratorium, CMS denies the enrollment application of that provider or supplier.

CMS previously identified two provider and supplier types – home health agencies and ground ambulance suppliers – in five geographic locations that warranted a temporary enrollment moratorium. CMS reached this conclusion based in part on the experience of Health Care Fraud Prevention and Enforcement Action Team (HEAT) units, a joint initiative between DOJ and HHS to prevent fraud, waste, and abuse in the Medicare and Medicaid programs. HEAT’s Medicare Strike Force Teams use advanced data analysis practices to identify high billing levels in health care fraud hotspots in order to target emerging or migrating schemes along with chronic fraud by criminals masked as health care providers or suppliers. Strike Force teams are generally located where Medicare claims data reveal aberrant billing patterns and intelligence data analysis suggests that fraud may be occurring. CMS generally considers the locations of these teams when moratoria extensions and additions may be imposed.

·         Data Analyses 

When considering whether to impose an enrollment moratorium, CMS looks at both qualitative and quantitative factors that suggest a high risk of fraud, waste, or abuse. For example, the agency looks at counties with 200,000 or more Medicare beneficiaries; it also analyzes metrics such as the number of providers or suppliers per 10,000 Medicare fee-for-service beneficiaries and the compounded annual growth rate in provider or supplier enrollment. CMS even assesses certain groups in target locations based on the average amount spent per beneficiary.

The agency relies on law enforcement’s longstanding experience with ongoing and emerging fraud trends and activities through civil, criminal, and administrative investigations and prosecutions. CMS’ determination of high risk fraud in certain provider and supplier types within these geographic locations are usually confirmed by the agency’s data analysis, relying on factors CMS identifies as strong indicators of fraud risk. The agency considers health care fraud schemes to be highly migratory and temporary in nature, so many of its program integrity elements and anti-fraud activities are designed to allow it to adapt to emerging fraud in different locations.

According to CMS, the laws and regulations governing its moratoria authority give the agency flexibility to use any and all relevant criteria for future moratoria, and CMS may rely on additional or different criteria as the basis for future moratoria.

·         Beneficiary Considerations With Respect to the Temporary Moratorium

Importantly, considerations as to whether to impose a moratorium must include determinations relative to beneficiaries’ access to medical assistance and care. These determinations are usually made in consultation with State Medicare Agencies and with the appropriate State Department of Emergency Medical Services, as well as the agency’s own review of its data regarding the number of providers and suppliers in the target and surrounding counties and Medicare Payment Advisory Commission (MedPAC) reports.

Moreover, CMS’ temporary enrollment moratoria remain in effect for six months. If the agency finds it necessary, it may also extend a moratorium in six-month increments. If a moratorium is lifted, the provider or supplier groups that were unable to enroll because of the moratorium are then designated to CMS’ high screening level for six months from the date the moratorium was lifted.

II.  CMS Extends its Home Health Enrollment Moratoria, Adds Four New Geographic Areas:

Under its powerful fraud fighting capabilities, CMS enacted initial enrollment moratoria of home health agencies for the Chicago and Miami geographic locations. This included the Florida counties of Miami-Dade and Monroe, as well as the Illinois counties of Cook, DuPage, Kane, Lake, McHenry, and Will. In its recent announcement, CMS will be extending for six-months the current enrollment moratoria of home health agencies in these geographic locations.

More importantly, CMS has now imposed new temporary moratoria on the enrollment of home health agencies in four major metropolitan areas. Specifically, a moratorium has been placed on: Broward County, Florida, which includes the city of Fort Lauderdale; the Texas county of Dallas, which includes the city of Dallas, as well as the surrounding counties of Collin, Denton, Ellis, Kaufman, Rockwall, and Tarrant; the Texas county of Harris, which includes Texas’ largest city Houston, as well as the surrounding counties of Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller; and finally, the Michigan counties of Wayne, which includes the largest city in that state, Detroit, as well as the surrounding counties of Macomb, Oakland, and Washtenaw.

III.  CMS Imposes Enrollment Moratoria of New Ground Ambulance Suppliers in Philadelphia:

Under the latest enrollment moratoria, CMS has also included a temporary moratorium on the Medicare Part B enrollment of new ground ambulance suppliers in the Greater Philadelphia area. Specifically, the moratorium will applies on the enrollment of ambulance in the Pennsylvania counties of Bucks, Delaware, and Montgomery, as well as the New Jersey counties of Burlington, Camden, and Gloucester.  It also applies to the enrollment of ambulance service providers in Medicaid and CHIP.

Notably, the moratorium does not apply to provider-based ambulances, which are owned and / or operated by a Medicare provider (or furnished under arrangement with a provider) such as a hospital, critical access hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, home health agency, or hospice program, and are not required to enroll separately as a supplier in Medicare Part B.

Moreover, the latest announcement also extends the moratorium on the enrollment of ambulance suppliers and providers in the greater Houston, Texas area.  This included the counties of Harris, Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller.

IV.  CMS’ Analysis and Statements on the New and Extended Enrollment Moratoria:

In July 2013, CMS’ initial use of the temporary enrollment moratoria authorities focused on three fraud “hot spot” metropolitan areas. As noted above, CMS consulted with HHS-OIG and the DOJ and determined that fraud trends warranted a moratorium on home health providers and ambulance suppliers in these metropolitan areas. CMS’ review of key factors of potential fraud risk included a disproportionate number of providers and suppliers relative to beneficiaries, and extremely high utilization.  The geographic areas outlined above ranked high in these fraud risk factors.

Marilyn Tavenner, the Administrator for CMS, believes that the agency’s recent action demonstrates how the ACA continues to protect taxpayer dollars by moving the agency beyond “pay and chase” to prevent fraud in areas of known risk.  Ms. Tavenner found that the

“first use of the moratoria put fraudsters on notice that we are using all available tools, including these moratoria, to combat fraud, waste and abuse in our health care programs, while maintaining patients’ access to care…Today’s announcement shows we are continuing our intense fight against fraud, waste and abuse in these vital health care programs.”

V.  What Does this Mean for Current and Future Home Health Agencies and Ambulance Suppliers?

The new moratoria and the six-month extension of the existing home health enrollment moratoria began on Friday, January 31. CMS expects this new and extended moratorium to remain in place for a period of six months. CMS can lift the moratoria earlier or extend it another six months if data indicates that it is warranted.

Regarding the extension of the current moratoria for home health agencies in the Miami and Chicago metropolitan areas, and to ground ambulance suppliers in the Houston metropolitan area, the extension only applies to new enrollments. Existing providers and suppliers in these areas can continue to deliver and bill for services; however, no new provider and supplier applications will be approved in these areas. 

Moreover, prospective home health agency applications within the affected geographic areas that were not approved prior to the January 30, 2104 announcement will be denied by the Medicare Administrative Contractor (MAC). “Approved” means that by 12:00 AM on January 30, 2014, the initial certification was completed, the second MAC review was completed, the CMS Regional Office (“RO)” sent the tie-in notice to the MAC; the MAC performed a site visit and the MAC decided to switch the home health agency’s Provider Enrollment Chain Organization System record to an “approved” status.

Additionally, as of 12:00 AM on January 30, 2014, the State Survey Agencies (SAs) and ROs must cease all review of any initial home health agency applications pending within the SA or RO for prospective providers in the affected counties of the moratoria. Furthermore, the SAs / ROs may not review any application for a home health agency branch location within the affected geographic areas through the duration of the moratorium.

VI.  Final Remarks:

This latest announcement has a substantial impact of new home health agencies and ground ambulance suppliers in the affected metropolitan areas.  Home health agencies whose applications are denied due to the moratorium will receive denial letters and will be given appeal rights.

How significant is this announcement? One of our attorneys, Jennifer Papapanagiotou, spoke with an authority at the CMS-Dallas Regional Office and that individual reported that over 100 applications in Texas alone have been affected. Interestingly, the individual at CMS reported that the CMS-Dallas Regional office had no prior notice of the moratorium and that it is being driven largely by the HEAT task force.

While we cannot say whether the moratorium will be extended after this six-month period, there are some telling signs in the data that may give some hints.  We believe that the moratorium in the Houston area will likely be extended again. The data indicates that the Houston area is off-the-charts regarding its disproportionately large numbers of agencies per beneficiary and its higher than normal claim payments per beneficiary. While Dallas’s numbers are not as severe, they, too, are disproportionately high and may indicate that the moratorium will likely be extended in this metropolitan area as well.

We have worked with a number of home health providers in the past. We recognize the complexities with setting up a new home health agency or ensuring that your current practice meets all of the relevant Federal and State regulations. We also understand the medical necessity, documentation, coverage, coding and billing requirements applicable to home health claims.  If you need assistance with dealing with the new CMS moratoria or any home health compliance issues, give us a call today.

Robert W. Liles, Esq., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with Medicare audits by ZPICs and other CMS program integrity contractors.  The firm also represents health care providers in HIPAA Omnibus Rule risk assessments, privacy breach matters, State Medical Board inquiries and regulatory compliance reviews.  For a free consultation, call Robert at:  1 (800) 475-1906

OIG Report OEI-05-11-00250 — Problems With Medicare’s EHR Incentive Payment Program


(January 7, 2013): Have you read Office of Inspector Generals’s (OIG’s) report, OEI-05-11-00250? The DOIGepartment of Health and Human Services, Offices of Inspector General (OIG) has identified a number of obstacles in the way the Centers for Medicare and Medicaid Services (CMS) has been overseeing Medicare’s Electronic Health Record (EHR) Incentive Program. These vulnerabilities in the program could lead to overpayment of incentives to medical providers that do not meet EHR meaningful use requirements.


I.  Background of the EHR Incentive Payment Program:

The Medicare EHR incentive payment program was created by the American Recovery and Reinvestment Act with the aim of promoting the use of EHR technology by healthcare providers. This technology is comprised of computerized record keeping systems and is meant to improve health care quality and efficiency. To meet the qualifications for Medicare’s EHR incentive payment program, healthcare professionals and hospitals must possess certified EHR technology and meaningfully use that technology in accordance with CMS criterion for a 90-day reporting period. For example, one meaningful use measure requires providers to submit over 40 percent of all prescriptions electronically. As of September 2012, CMS had paid approximately $4 billion in incentive payments to 82,535 health care professionals and 1,474 hospitals.

In order to receive incentive payment, providers self-report information on their meaningful use of EHR technology to CMS. This is the root of the issue — self-reporting information leaves potential for miscalculation or dishonest reporting that could lead to incorrect allocation of incentive payments. To avoid this, CMS conducts prepayment validation of self-reported meaningful use information and intends to audit selected providers after payment. If a provider fails either step, they will not receive incentive payments or CMS (more than likely one of its contractors) will initiate proceedings recover any incentive funds paid to a provider.  However, HHS-OIG found that these two steps are not sufficient for proper oversight of the Medicare EHR incentive program.

II.  Methodology Used by the OIG:

The OIG conducted an extensive review of the Medicare EHR incentive payment program oversight process. It reviewed self-reported meaningful use information for providers that were approved to receive incentive payments and determined whether that information met meaningful use measure criteria. It reviewed federal regulations and CMS’s audit planning documents in addition to conducting structured interviews with CMS staff about payment oversight.

III.  Findings Discussed in OEI-05-11-00250

The OIG found that in the past, CMS does not always verified the accuracy of a physician’s or other health care provider’s self-reported meaningful use information prior to receiving payment. Instead, it appears that providers have been found to be eligible for incentive payments based solely on information self-reported by the health care provider. Although their prepayment validation step functions properly, it does not verify that the self-reported information is accurate and CMS doesn’t have sufficient data sources available to verify the self-reported information.

Moreover, the OIG also found that CMS’s planned post-payment audits may not conclusively verify the accuracy of physicians’’ and hospitals’ self-reported meaningful use information. CMS may not be able to acquire adequate supporting documentation to verify self-reported information during audits. Additionally, reports from certified EHR technology are not sufficient for CMS to verify self-reported information, which is an issue with the Office of the National Coordinator for Health Information Technology (ONC) requirements for EHR reports.

IV.  Recommendations:

Based on these findings, the OIG has recommended that CMS take the following actions:

  • Obtain and review supporting documentation from selected health care providers and hospitals prior to payment to verify the accuracy of their self-reported information; and
  • Issue guidance that details the types of documentation it expects professionals and hospitals to maintain to support their compliance.

HHS-OIG recommended that ONC take the following actions:

  • Require certified EHR technology to be capable of producing reports for yes/no meaningful use measures, where possible; and
  • Improve the certification process for EHR technology to ensure accurate EHR reports.

CMS did not concur with its first recommendation and HHS-OIG continues to recommend that CMS conduct more extensive prepayment reviews of selected providers. CMS did concur with the second recommendation and is currently developing extended guidance that professionals and hospitals can utilize to ensure their compliance with meaningful use measures. ONC concurred with both recommendations and is currently working towards their completion. This assessment of CMS oversight of the Medicare EHR incentive program is invaluable to strengthening the program.

V.  Our Take on the EHR Incentive Payment Program:

CMS has diligently worked to incentivize health care providers of all sizes to convert to an electronic-based records system.  In recognition of the cost and complexity of this project, CMS has assisted converting health care providers with a portion of the costs incurred.  Should your physician practice or clinic choose to participate in this incentive program, it is essential that you fully understand the rules, requirements and obligations you are assuming in exchange for these EHR funds.  All incentive program participating providers should prepare to be audited.  If anything, the OIG’s findings, as set out in OEI-05-11-00250, will serve to galvanize CMS’ commitment to better ensure that EHR incentive program funds are properly spent.  In recent weeks, we have been contacted by various health care providers (including a single physician practice) in connection with EHR meaningful use audit letters they have received. Therefore, we strongly encourage all incentive program participants to review their obligations under the rules.  Are they complying with the program requirements?  If not, what remedial steps must be taken?  As our friend D.K. Everitt reminds us, Compliance is not an option.”  

Healthcare LawyerRobert W. Liles serves as Managing Partner at Liles Parker, PLLC, a boutique health law firm representing physicians, home health agencies, clinics and other health care providers around the country.  If your practice is audited, give us a call for a free consultation.  Robert can be reached at:  1 (800) 475-1906.

Home Health Compliance Risks are a Significant Issue for Texas and Oklahoma Agencies

March 21, 2012 by  
Filed under Home Health & Hospice

Agencies Should Fully Evaluate Their Home Health Compliance Risks.

(March 21, 2012): Over the past few weeks, several important events have occurred which should have home health agencies in Texas, Oklahoma and the rest of the country rethinking the adequacy of their existing compliance efforts. The home health compliance practices of many agencies have long been a concern of the Department of Health and Human Services, Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS).  It is therefore essential that agencies assess their home health compliance risks.  Last week, the OIG issued yet another report recommending that CMS further tighten its oversight of home health compliance through the implementation of additional sanctions for non-compliant home health agencies.  Notably, OIG’s report has been issued literally “on the heels” of a significant home health fraud investigation centered in the Dallas, Texas area which was reportedly initiated by Health Integrity, the Zone Program Integrity Contractor (ZPIC) covering Texas and Oklahoma.

I. The OIG’s Home Health Report of Fraud and Abuse:

On March 2, 2012, the OIG issued a report entitled, “Intermediate Sanctions for Noncompliant Home Health Agencies” which examined CMS’ ongoing efforts to identify and sanction home health agencies that were non-compliant with Medicare’s applicable conditions of participation. As detailed in the report, CMS (formerly known as the Health Care Financing Administration (HCFA)) was directed in 1987 to develop and implement “intermediate sanctions” against home health providers violating Medicare rules. These sanctions were anticipated to include civil monetary penalties (CMPs), Medicare payment suspension, and even appointment of temporary management of a noncompliant agency. Initially required to implement these sanctions under the Omnibus Budget Reconciliation Act of 1987 (OBRA 1987), CMS issued a Notice of Proposed Rulemaking in 1991, but subsequently withdrew this notice in 2000.

CMS has stated that it anticipates publishing new proposed rules in September 2012 addressing these “intermediate sanctions.”  Frankly, home health providers and their associates cannot continue down the current path.  While both CMS and the OIG recognize the important role played by home health agencies in the care and treatment of homebound Medicare beneficiaries, the government has made it abundantly clear that participating providers must fully comply with applicable medical necessity, coverage, documentation, coding and billing rules.  Non-compliant providers are being immediately suspended and / or excluded from participating in the Medicare program.  Moreover, health care providers who engage in nefarious activities are being aggressively prosecuted.

II.  Health Integrity’s Audit of Home Health Agencies:

Since winning the contract in 2009, Health Integrity, the Zone 4 ZPIC covering Texas, Oklahoma, New Mexico and Colorado, has conducted a wide variety of Medicare post-payment audits throughout Zone 4.  To their credit, Health Integrity’s post-payment audits have not been limited to merely large metropolitan areas.  Rather, the ZPIC is in the process of “leaving no stone unturned,” conducting home health compliance audits and reviews throughout Zone 4, regardless of size, revenues and / or location.

To be clear, Health Integrity’s audits have not been limited to only home health services.  The ZPIC has actively reviewed the operational, coding and billing practices of a wide variety of Part B health care providers in Zone 4.  Nevertheless, the ZPIC does appear to have redoubled its audits of home health compliance for Texas and Oklahoma providers who appear to be outliers through data-mining activities. After reviewing the homebound status of both prior and current patients, clinicians working for Health Integrity have been thoroughly assessing the care and treatment provided by billing home health agencies.  After carefully assessing the medical records forwarded by the home health agency, in many cases Health Integrity has concluded that it is appropriate to seek extrapolated damages based on the Medicare post-payment audit conducted.

III. Health Integrity is on the Front Line of Home Health Fraud Identification:

Despite the fact that most Texas home health agencies are doing their best to operate within the four corners of the law, there are still a number of providers who are continuing to engage in wrongdoing. Texas home health providers recently received significant negative media coverage for fraudulent and abusive billing practices allegedly committed by agencies within their ranks. As you may have heard, just last week a physician and several home health agency “recruiters” in the Dallas-Fort Worth area were indicted in the largest Medicare fraud scheme in history, allegedly totaling nearly $375 million for home health services either not needed or never provided. Additionally, it was noted that over 75 home health agencies to whom referrals were made have also been implicated in the wrongdoing.  Such an enormous scheme only further demonstrates the fact that fraudulent activity in home health services is continuing, despite the fact that most Texas home health providers are well-meaning organizations, trying in good faith to provide medically necessary services to our nation’s most sick and disabled. Nevertheless, such accusations only increase suspicion and scrutiny of the entire home health industry in this region.

In a separate incident, a news reporter recently had a healthy, yet elderly, woman pose undercover as a potential home health patient when visiting a physician in South Texas.  The reporter noted that the healthy patient was allegedly improperly diagnosed and certified as qualified for home health services. While some providers may be concerned about the use of patients in undercover sting operations such as this, the fact is that improper conduct is occurring, at both the physician referral and the home health agency level, clearly illustrating why law enforcement is concerned that fraud is continuing to occur in this area of practice. In light of these and similar cases, it is clear why Health Integrity appears to be “ramping up” its reviews of home health providers throughout Texas and Oklahoma.

IV.  What Steps Can an Agency Take to Home Health Compliance Risks?

To be clear, there is no proverbial “silver bullet” that can be used by a home health agency to avoid the scrutiny of Health Integrity and / or law enforcement.  Every home health agency in Texas and Oklahoma should expect to be audited.  Rather than wait for such an eventuality, home health agencies should affirmatively review their operations, coding and billing practices to ensure that their practices squarely fall within the rules.  Although not all-inclusive, the following five steps can serve as an excellent starting point when preparing for an audit of your agency’s home health claims:

Recommendation #1  Don’t assume that your current practices are compliant, check them out! Conduct a “gap” analysis and implement an effective Compliance Plan.  While most, if not all, home health agencies will profess to have a Compliance Plan already in place, the real question is whether the existing plan is “effective,” or merely a sample that was obtained by the agency in the past.  No two home health agencies are alike.  As a first step, a home health provider needs to engage qualified legal counsel to advise the organization on whether the agency is properly operating at a baseline level of compliance.  If not, remedial steps must be taken so that the agency can move forward in a compliant fashion.

As you will recall, Section 6401 of the Affordable Care Act (ACA) (generally referred to as the “Health Care Reform Act”) states, “. . . a provider of medical or other items or services or supplier within a particular industry, sector or category shall, as a condition of enrollment in the program under this Title . . . establish a compliance program.”  Although HHS-OIG has not announced the deadline for home health agencies to meet this requirement, it is only a matter of time before all health care providers who choose to participate in the Medicare program must have an effective Compliance Plan in place in order to remain a participating provider.

Recommendation #2 As you review your claims, you should abide by the following:  First, “If it doesn’t belong to you, give it back.”  Conversely, “If you don’t owe the money, don’t throw in the towel.”  One of the attorneys in our firm is regularly asked to speak at provider conventions around the country.  For years, he has told providers “If it doesn’t belong to you, give it back.”  This simple concept covers a lot of ground when it comes to Medicare overpayments and is the single best policy you can employ as a good corporate citizen.

Recommendation #3 Don’t merely focus on your claims.  Are your business practices fully compliant with applicable laws and regulations?  Health Integrity and other ZPICs serve an essential role in identifying overpayments and other wrongdoing by health care providers. While an audit will almost always include a request for medical records, you should keep in mind that Health Integrity will not merely be examining your medical documentation.  Should you receive a request for documents, it will probably be broken into two major parts. The first section will likely be focused on business-related records such as the following: 

“Business contracts or agreements with other providers, suppliers, physicians, businesses or individuals in place during a specific period.  Additionally, any verbal agreements must be summarized in writing.

A listing of all current and former employees (employed during a specific period), along with their hire date, termination date, reason for leaving, title, qualifications, last known address, phone number.

  • A list of all practice locations, along with their address and phone number.
  • Leases.
  • Employment agreements.
  • Medical Director contracts.” 

One purpose of this section is to assist the ZPIC in identifying potential business practices which may constitute a violation of the Federal Anti-Kickback Statute, Stark Laws and / or the False Claims Act.  Should the ZPIC identify a possible violation, it will readily refer the case to CMS, HHS-OIG and / or DOJ, depending on the nature of the potential violation.

In contrast to the first section of the ZPIC’s request, the second section of the request will usually list the patient records and dates of service to be audited.  The number of dates of service audited differs from case to case.  Regardless of whether the ZPIC requests supporting documentation related to 5 claims or 50 claims, it is essential that you never ignore a request for information.  If additional time is needed to assemble the requested information, call the contractor.  Health Integrity has generally been cooperative with providers needing additional time to gather the records being requested.

Recommendation #4:  Remember learning how to “drive defensively” in high school?  Your documentation practices should be approached in a similar fashion.   When is the last time that you have reviewed the applicable documentation requirements set out in the Medicare Administrative Contractor’s latest Local Coverage Determination guidance covering the services you are providing?  Health Integrity’s auditors are excellent at identifying one or more deficiencies in your documentation. While you may disagree with the ultimate conclusions reached by their clinicians, you should not completely discount their assessments.  Health Integrity’s findings should be carefully analyzed so that any problems with your documentation can be promptly addressed.

Recommendation #5 Engage qualified legal counsel and clinical experts to assist with your efforts. If your home health agency is audited, we strongly recommend that you engage qualified legal counsel, with experience handling this specific type of case.  Moreover, don’t be afraid to ask for references and to inquire about the anticipated cost of an engagement.  While it is often difficult to estimate legal costs due to the various factors faced when handling a ZPIC audit case, most experienced health lawyers can give you a range of expected legal fees.

V.  Conclusion:

While an effective home health Compliance Plan cannot fully shield an organization from risk, the implementation of, and adherence to, an effective plan can greatly assist your home health agency in identifying weaknesses and taking corrective action before an audit occurs.  Now is the time to ensure that your practices are compliant – after an audit occurs, it may be too late.

Robert Liles Healthcare LawyerLiles Parker is a full service health law firm, providing compliance reviews, “gap analyses” and training to home health providers and their staff.  Our attorneys are also experienced in representing home health providers in the administrative appeal of overpayments identified in the post-payment audit process. Should you have any questions, please Robert W. Liles at 1 (800) 475-1906 for a free consultation.

The Physician Payment Sunshine Rules

Comments on the Physician Payment Sunshine Rules are Now Closed(February 2, 2012):  Last week, the Centers for Medicare & Medicaid Services (CMS) closed its public comment period regarding proposed regulations for what is being called the Physician Payment Sunshine Rules. Generally, these rules require drug and device manufacturers to report payments, in cash or otherwise, to physicians. CMS is then authorized to publish these disclosures on a website for the public to review when researching and choosing their physicians. While a number of requirements and/or informal guidance may already limit or otherwise affect payment to physicians by drug and device manufacturers (for instance, the PhRMA Code), these new rules will require nearly every payment to physicians in this context be publicly reported and available. This may present new challenges for physicians, manufacturers and their interactions and relationships.

I.   The Physician Payment Sunshine Rules:

Implementing Section 6002 of the Affordable Care Act, Transparency Reports and Reporting of Physician Ownership or Investment Interests, the law requires that drug or biologic manufacturers, device or medical supply manufacturers and group purchasing organizations submit information regarding any payments to physicians on an annual basis. These payments include not only cash, but also gifts, consulting fees, research activities, speaking fees, meals and travel expenses. The reporting requirements mandate that a drug or device manufacturer or GPO must disclose all payments to physicians greater than $10 if such amounts do not exceed $100 per year. If payments to a specific physician are greater than $100, the manufacturer or GPO must report every payment to the physician, even those less than $10. These are very low dollar requirements, and will substantially affect the reporting requirements for nearly every manufacturer or GPO in the country. Under the proposed law, nearly every meal with a physician will require disclosure.

II.   Effect on Physicians:

While manufacturers and GPOs are responsible for actually reporting amounts paid, the Physician Payment Sunshine rules do not affect their business and business practices as much as it will likely affect physicians. Specifically, the law is intended to give the public complete transparency in a provider’s relationships, thus allowing the public to discern whether a physician is making a medical decision based on any factors other than what is best for the patient. In essence, it is taking the intent of Stark and Anti-Kickback laws – to ensure that medical decisions by a physician are made solely in the best interest of the patient – and requiring that any financial interests of a physician be publicly disclosed (even if such interests do not violate the Stark and Anti-Kickback laws). While the law requires compliance by manufacturers and GPOs, it primarily affects the reputation of physicians. As such, physicians and their associates should understand the ins and outs of the proposed rules, so that they can better protect both the reputation of the physician as well as the integrity of the practice as a whole.

III.   Penalties for Failure to Report:

Under the Physician Payment Sunshine law, CMS can assess fines in two situations. The proposed rules state that a manufacturer or GPO that unknowingly fails to report payment or other consideration given to a physician may be liable for $1,000 to $10,000 per violation, not to exceed $150,000 per year. On the other hand, a knowing failure to report payment may subject a company to $10,000 to $100,000 in penalties, capped at $1,000,000 per year. To enforce the law, CMS and the Office of Inspector General (OIG) have reserved the authority to “audit, evaluate, or inspect” applicable entities for compliance. In addition, CMS has mandated that device and drug manufacturers and GPOs maintain documentation of payments made to physicians for at least five years from the date in which the applicable data was made available on CMS’ disclosure website.

IV.   What if the Reported Information is Wrong?

One issue that may concern many physicians is the inaccurate reporting of information. While manufacturers and GPOs have the duty and the authority to report payment information to CMS, the information reported can only substantially impact physicians. As such, if information is incorrectly reported to CMS, a physician may be improperly associated with a certain drug, device or company, and such association may harm the integrity of that physician’s practice. CMS has taken a “hands-off” approach on this issue, leaving it to the involved parties to “resolve disputes about the information reported.” It is also proposing that “if the dispute cannot be resolved, the transaction will be noted as disputed, and both amounts will be published.” Such an approach will likely only confuse patients researching their physicians and negatively impact the integrity of a physician practice.

Healthcare LawyerThe new law can present complex problems for physicians and device and drug manufacturers alike. Liles Parker can handle dispute resolution between parties, reporting and appeals of agency decisions. Moreover, Liles Parker attorneys are experienced in assisting providers with implementation of compliance initiatives and other compliance activities to make sure that problems are addressed before they arise. For more information or a free consultation, please do not hesitate to call us.  Please call Robert W. Liles, Esq. at: 1 (800) 475-1906.

Data Mining Tools Can Help Identify Possible Problems

Data Mining Tools(February 8, 2012):  While we all know that many Medicare post-payment audits are often generated as a result of sophisticated data mining analyses, the particular elements of concern which may give rise to a specific provider audit are not always so clear.  Health care providers interested in compliance can use data mining assessment tools to help determine how their coding and billing practices “stack up” when compared to the practices of their peers working in the same specialty area.  One question to be addressed is whether your coding and billing practices make you appear as an  “outlier.” If, in fact, you are an outlier, you should expect to be audited by the Centers for Medicare and Medicaid Services (CMS) or one of its contractors.  To be clear, just because you are an outlier does not necessarily mean that you are engaging in improper conduct.  Nevertheless, if you are an outlier, we strongly recommend that carefully analyze practices in an effort to identify why your practices differ from those of your peers.  Perhaps you are, in fact, improperly coding or billing for services rendered.  If so, you will need to determine the scope of any overpayment and work with your legal counsel to promptly reimburse the government.  As we have repeatedly advised our clients, “If it isn’t your’s, give it back.” If your practices appear to be correct, what other reasons my explain why your practices differ from those of your peers.

I.  Data Mining Tools You Can Use to Assess “Risk”:

While you can’t completely eliminate the risk of an audit, there are several tools that can help your organization determine how your utilization rates compare to those of your peers.  Among these data mining assessment tools is one of our personal favorites – DecisionHealth’s “E/M Bell Curve Data Book,” which gives a visual overview of the Center for Medicare and Medicaid Services’ (CMS’) Evaluation and Management (E/M) data rates for 59 different specialties. For instance, a general practitioner can look at his established patient office visits (CPT© codes 99211 – 99215) and compare his utilization rates to the national average for the same CPT© codes. This data can be extremely useful in assessing an office’s billing practices and patterns and give confidence to a provider whose rates are similar to the national average.

Another effective data mining assessment tool, especially for non-E/M practices, such as home health agencies and hospices, is the “The Dartmouth Atlas of Health Care,” which provides a variety of data tools to evaluate Medicare spending by county. Not only does this interactive website have average-spending-per-Medicare-beneficiary maps, it also has a tool which allows providers to examine national and state benchmarks for a variety of statistics. These include Medicare reimbursements, hospice, skilled nursing facility, and home health agency utilization rates, surgical procedures and more. Applied correctly, this data can be instrumental in a practice’s self-evaluation and gives providers significant insight into their own billing patterns.

II.      Know Your Appeal Rights:

Unfortunately, staying compliant with Medicare rules and regulations and avoiding audit can be a constant and ever-evolving challenge. Even with the best data mining tools, physicians, group practices, clinics, home health agencies and other providers may still find themselves subject to Medicare post-payment and / or prepayment audit by a Zone Program Integrity Contractor (ZPIC) or by another one of CMS’ contractors.  ZPICs, Recovery Audit Contractors (RACs) and other Medicare-contractors reviewers are highly knowledgeable and skilled at what they do.  They are experienced in handling audits and are quite good at identifying deficiencies in your documentation, regardless of how minor those deficiencies might be.  While it is essential to understand your obligations as a Medicare participant, it is equally important to understanding how and why practices get audited.  Moreover, it is also necessary to know how to appeal an adverse determination that you sincerely feel is unwarranted.

Healthcare lawyerRobert W. Liles and other health law attorneys at Liles Parker PLLC have significant experience handling a wide range of health law matters and cases, ranging from transactional projects to representing health care providers in administrative appeals of Medicare post-payment audits.  For more information, feel free to call Robert for a free consultation.  Call Robert today at: 1 (800) 475-1906.

CMS’s New Physician Compare Website to Report on Provider Performance

(November 15, 2011): The New Physician Compare Website Will Allow Patients to Check on PerformanceLast year, the Centers for Medicare and Medicaid Services (CMS) launched their Physician Compare website.  CMS’s Physician Compare website allows beneficiaries to research their health care providers. The Affordable Care Act (commonly referred to as “Health Care Reform”) mandated that CMS launch such a website and that it implement physician performance metrics on the site no later than January 1, 2013.

I.      What Will the “Physician Compare” Website Permit?

In theory, the Physician Compare website will serve as an invaluable tool for researching Medicare providers in any locality, even allowing for specific criteria searches such as languages spoken, group practice locations, education history, hospital associations and whether a provider accepts the Medicare-approved amount as payment in full on all claims (obviously patients are still responsible for any copayments and deductibles which might be due).  Moreover, by including information from the Physician Quality Reporting System (PQRS),the Physician Compare website has been designed to encourage health care professionals to enhance and improve the quality of care they provide to Medicare beneficiaries.

II.  Health Care Providers Have Raised a Number of Concerns Regarding the Physician Compare Website:

Since its inception, the Physician Compare” website has raised  a number of concerns for some health care providers.  Clerical mistakes from the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) could be duplicated on the site, resulting in health professionals not showing up in locality searches.  It could also result in misinformation about current staff members and incorrect Medicare participation status being listed on the website.

III.  Current Status of the Physician Compare Website:

Currently, the Physician Compare website only states whether a physician “successfully participated” in the PQRS, but soon the site will be expanded to include actual performance results from the program, ensuring a higher level of scrutiny in physician evaluations.

IV.  Summary:

Why is this important to you?  As a health care provider, your reputation is one of the most important aspects of your business. With this in mind, it is more important than ever to maintain a positive image and relationship with both your patients and the government.  While you can never completely eliminate mistakes, you can work to reduce the likelihood that mistakes may occur.  Compliance initiatives designed to ensure correct information reporting with Medicare, quality documentation and accurate coding and billing serve as an important first step to combating future errors.

Robert W. Liles, Esq., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Robert has extensive experience working with physicians and other health care providers to develop and implement effective Compliance Plans and Programs.  Robert can work with and train your staff on coding, billing, documentation and medical necessity issues.  Questions?  Call Robert today for a free consultation at: 1 (800) 475-1906.

Conducting a Gap Analysis / Mock Audit: An Essential Compliance Tool for Your Practice

Health Care Providers Should Conduct a GAP Analysis / Mock Audit of Their Claims. (November 15, 2011): Understandably, health care providers have grown weary of government audits, malpractice issues, peer reviews and private payor assessments.  In an effort to reduce their potential liability, many providers are now regularly utilizing Gap Analyses Mock Audits to test their preparedness for audit.  In doing so, they have been able to identify and correct potential problems before they result in more serious problems.  The purpose of this brief article is to discuss the process of conducting a preliminary or mock audit of your medical records, documentation, coding and / or billing practices so that remedial measures can be taken if deficits are identified.


I.     “How Much is Enough” When You Are Implementing an Effective Compliance Program?

Drafting and implementing an effective compliance plan, conducting a GAP Analysis and training your staff on compliance issues are essential steps toward the peace of mind compliance can bring. But the question remains — how do you know when you’ve done enough?

In the end, the answer is that you can never do enough to completely eliminate all the risks, but you can minimize those risks and limit your possible exposure through the implementation of, and adherance to, an effective compliance plan. Mock audits can be used as a way of “testing” your compliance initiatives.

II.     How is a Gap Analysis or Mock Audit Conducted?

In a mock audit, an individual or team acts as a government agency or contractor (such as a ZPIC, RAC or MAC), and visits the practice or facility unannounced.  The mock auditor would then pull a random set of records to conduct a documentation analysis (often including both medical records and business arrangement records). Once the records are pulled, an analysis of the relevant findings is completed. These results would then be discussed with practice management so that the relevant strengths and potential areas of concern can be addressed.

III.     What is the Goal of a Gap Analysis or Mock Audit?

The goal is to test both your staff’s reaction to the exercise, as well as their understanding of what may be expected in a real audit. Moreover, the documentation analysis may be invaluable, revealing weak points in the facility’s documentation activities.  You may also learn that some of your forms (such as your Encounter Form) are defective. Finally, you will likely learn more about the various training needs of your staff.  A mock audit may also ferret out problems that management didn’t know or didn’t realize existed.  You may learn that a business arrangement or relationship is questionable or that your staff has been relying on the wrong LCD or other guidance when documenting and billing for services.  Fundamental problems such as illegibility and missing signatures may also be identified.  In any event, the results of a mock audit can be used by the practice to bolster and support its compliance initiatives.

IV.     Sound Like a Good Idea?  So, what’s the First Step?

Sound like a good idea?  Before you embark on a mock audit, you should contact your attorney and discuss any privilege issues which may exist.  As a final point, keep in mind that should you identify an overpayment, it must be returned to the government within 60 days of identification and reconciliation.  Otherwise, the overpayment could constitute a violation of the False Claims Act.

Healthcare AttorneyRobert W. Liles, Esq., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Robert and other attorneys at Liles Parker are experienced at conducting “gap analyses” and “mock audits” of physician practices, home health agencies, hospice agencies and other non-hospital provider entities.  Should you have any questions about conducting a mock audit or would like to learn more about having Liles Parker attorneys assist your practice, please call us for a free consultation.  Robert can be reached at:  1 (800) 475-1906.

Ten Recommendations to Improve Medicare Compliance and Prepare for a ZPIC Audit

Improve Medicare Compliance(July 24, 2011): Has your Texas physician practice, home health agency, hospice, DME company or PT / OT / ST clinic been audited by a Zone Program Integrity Program (ZPIC)?  If not, it may only be a matter of time.  Despite your best efforts to follow Medicare’s directives, your organization may still be identified as an “outlier” by a ZPIC and subjected to a probe review or a full-blown audit.  Should you receive a request for records from a ZPIC, being prepared — in advance of receiving a ZPIC request— can help ensure your organization’s compliance with applicable documentation, coding and billing requirements.  The following recommendations can assist with those efforts:


Recommendation #1  If you have not already done so, conduct a “gap analysis” and implement an effective Compliance Program.  Despite the fact that significant strides in compliance have been made by large Medicare providers (such as hospitals and nursing homes),  it has been our observation that most physician practices and small-to-mid sized provider organizations still do not have a tailored Compliance Plan in place.   To be clear, we recognize that many providers may have copied a draft plan right off of the internet, or may have purchased a sample plan from a vendor.  While they may fully have intended to follow through with personalization of the draft document, in most of the cases we have seen, more pressing events have taken precedence and providers have not had the time or expertise to complete the project.

Providers who have not put together a Compliance Plan should immediately do so. As you have likely heard, Section 6401 of the Affordable Care Act (ACA)(generally referred to as the “Health Care Reform Act”) states, “. . . a provider of medical or other items or services or supplier within a particular industry, sector or category shall, as a condition of enrollment in the program under this Title. . .establish a compliance program.”   To be clear, at this time, the Department of Health and Human Services, Office of Inspector General (HHS-OIG) has not announced deadlines effectuating this requirement.  Nevertheless, it is merely a matter of time until all providers who choose to participate in the Medicare program will be required to have an effective Compliance Plan in place.

Rather than wait until the last-minute, Medicare providers who have not already done so should immediately take steps to implement an effective plan.  As a first step, providers should review each of the regulatory and statutory provisions related to the specific services being billed to Medicare.  Next, providers should compare their actual documentation, coding and billing practices with Medicare’s rules.  Any gaps between the applicable requirements and a provider’s actual practices must immediately be remedied. Additionally, should these gaps represent an overpayment, the Medicare provider must repay the overpayment to the government within 60 days of identification.

Prior to conducting a gap analysis, we recommend that providers contact their legal counsel for assistance with both the internal review and with the implementation of an effective Compliance Plan.   While no Compliance Plan can prevent an audit, the implementation of an effective plan will greatly improve a provider’s likely adherence to Medicare’s rules and regulations should a ZPIC audit be initiated.

Recommendation #2:   Don’t ignore a ZPIC’s request for documents[1]. At the outset, it is important to keep in mind that ZPICs play an important role.  In addition to  auditing records for possible overpayments, ZPICs are also responsible for identifying fraudulent providers (and potentially fraudulent providers) and making referrals to the Centers for Medicare and Medicaid Services (CMS), the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the U.S. Department of Justice (DOJ) for further action.  Possible actions taken include, but are not limited to:

  • CMS — Administrative action such as suspension or revocation from the Medicare program.
  • HHS-OIG – Administrative action such as Civil Monetary Penalty action.  HHS-OIG may also investigate and refer a provider to DOJ for possible civil litigation under the False Claims Act.  Finally, HHS-OIG may investigate and refer a provider to DOJ for criminal prosecution under the Federal Anti-Kickback Act or a host of other statutes.
  • DOJ – May investigate and prosecute a provider for civil and / or criminal violations of law.

Should you receive a request for documents from your ZPIC, in many cases it will broken into two sections.  The first section will likely be focused on business related records such as the following: 

“Business contracts or agreements with other providers, suppliers, physicians,  businesses or individuals in place during a specific period.  Additionally, any verbal agreements must be summarized in writing.

A listing of all current and former employes (employed during a specific period), along with their hire date, termination date, reason for leaving, title, qualifications, last known address, phone number.

    • A list of all practice locations, along with their address and phone number.
    • Leases.
    • Employment agreements.
    • Medical Director contracts.” 

The unstated purpose of this portion of the ZPIC’s request is likely to identify potential instances of violations of the Federal Anti-Kickback Statute, Stark and / or the False Claims Act.  Should the ZPIC identify a possible violation, it will readily refer the case to CMS, HHS-OIG and / or DOJ, depending on the nature of the potential violation.

In contrast to the first section of the ZPIC’s request, the second section of the request usually lists the patient records and dates of service to be audited by the ZPIC.  While every case is different, the number of claims requested typically ranges from 8 – 100, depending on whether the ZPIC’s request is a “probe review” or a full-blown audit.  On occasion, we have seen the number of claims sought can range from 150 – 300.

Never ignore a ZPIC request for records.[2] Importantly, should you fail to respond to the ZPIC’s request, the contractor can recommend to the CMS that your organization be suspended[3] or from participation in the Medicare program.  Depending on the ZPIC’s concerns, the contractor can also recommend that CME pursue a revocation action against your organization.  Should you need more time to the ZPIC’s request for supporting documentation, don’t hesitate to request it.

Recommendation #3:  Remember learning how to “drive defensively” in high school?  Your documentation practices should be approached in a similar fashion.   ZPIC auditors are excellent at identifying one or more ways in which your claims do not meet applicable coverage requirements.  While you may very well disagree with their assessments (especially in “medical necessity” determinations), in all likelihood, when you file a request for redetermination appeal (and later, a request for reconsideration appeal), you will find that your Medicare Administrative Contractor (MAC) and your Qualified Independent Contractor (QIC) agree with the ZPIC’s denial decision.  Rather than endure significant costs and stress when defending against an overpayment assessment, you need to take steps to avoid a denial in the first place. To that end, health care providers should ensure that clinical staff members are fully trained and educated regarding Medicare’s documentation, coding and billing process.

We recognize that “perfect documentation” is neither required nor realistic to expect from your clinical staff.  Nevertheless, using published reports of other cases, you can show your clinicians that ZPICs  enforce a strict application of Medicare’s documentation and coverage requirements.  Through education and training, your clinical staff will understand why it is imperative that they review, understand and comply with:

  • Any applicable Local Coverage Determinations (LCDs).
  • Any Local Medical Review Policies (LMRPs).
  • The Medicare Policy Benefit Manual (MPBM).
  • The Medicare Program Integrity Manual (MPIM).
  • Any statutory provisions which cover the services.
  • Any additional guidance issued by Medicare which would apply to these claims.

It is important that you regularly review the government’s latest concerns and any enforcement actions which have been taken.  Additionally, you should read HHS-OIG’s reports so that you may learn from the mistakes being made by similarly situated providers.  Upon doing so, we recommend that you check the list of “risk areas” in your Compliance Plan and ensure that they reflect both general “risks” and “specific risks” which may be unique to your organization.  Is your organization still in full compliance?  If not, remedial action is likely necessary.

Recommendation #4:  Retain experienced legal counsel to assist with your efforts. When experiencing symptoms of a cardiac problem, most patients wouldn’t turn over their care to a dermatologist.  Instead, they would seek to be evaluated and treated by a Cardiologist.  Similarly, if you have a health law problem, would it be wise to rely on advice from an attorney specializing in family law?  Ultimately, that’s your call.  While no attorney can guarantee you success — we believe that an experienced health lawyer is well situated to give you advice regarding a Medicare audit or investigation.   Having said that, it is important to recognize that the field of health law is extraordinarily broad.  Should you be audited by a ZPIC or a Recovery Audit Contractor (RAC), don’t hesitate to ask a health lawyer whether they have handled these types of cases before.  If so, how many times have they represented a provider in a ZPIC overpayment case?  When selecting a lawyer, keep in mind that the legal fees charged by an attorney can vary greatly, depending on a variety of factors.  Don’t be shy – ask how much the representation is likely to cost.  While it is often difficult to estimate legal costs due to the various factors faced when handling a ZPIC audit case, most attorneys can give you a range of expected legal fees.  Finally, be sure and ask for references.  Other providers who have been through an administrative appeal case can provide you with invaluable insights into the process.  As a final point, on numerous occasions, our firm has been retained to work with a provider’s existing legal counsel.  We are more than happy to do so and can effectively work with your counsel in a fashion which avoids duplication of efforts yet allows our experience and expertise to be applied to your case.

Recommendation #5:  The administrative appeals process has become quite complicated in recent years.  ZPIC audits can result in alleged overpayments running into the millions of dollars. Moreover, the ZPIC’s overpayment assessment (and the associated “demand” letter sent by a MAC) isn’t usually the end of the story.  While providers often lose at the redetermination and reconsideration levels of appeal, the third level of appeal – before an Administrative Law Judge (ALJ) – is usually your single best opportunity to prevail in an administrative appeals action.  Over the years, our attorneys have argued cases in front of judges out of each of the field offices of the Office of Medicare Hearings and Appeals (OMHA).   While we may not always agree with their decisions, the ALJs in whose courts we have practiced have been professional, fair and more than willing to hear a provider’s arguments in support of payment.

Should you choose not to engage legal counsel and represent yourself in an ALJ hearing, keep in mind that even though these hearings are intended to be non-adversarial,”  it can feel quiteadversarial” during the actual hearing.  Furthermore, these proceedings can be quite complicated.  In most large dollar cases, representatives of the ZPIC are participating in the hearing and arguing their position before the ALJ.  ZPIC representatives can include one or more statisticians (if an extrapolation was conducted), a clinician (usually a Registered Nurse who is experienced in conducting medical reviews) and a lawyer.  In a recent Home Health Agency case we handled, this was precisely what occurred.  Frankly, few providers are experienced in presenting their case and in responding to the arguments raised by statisticians, clinicians and lawyers representing a ZPIC.  As a result, it is strongly recommended that the provider consider engaging an experienced and knowledgable attorney.

Recommendation #6 When reviewing your claims, you should abide by the following:  First, “If it doesn’t belong to you, give it back.”  Conversely, “If you don’t owe the money, don’t throw in the towel.”  One of the attorneys in our firm is regularly asked to speak at provider conventions around the country.  For years, he has told providers “If it doesn’t belong to you, give it back.”  This simple concept covers a lot of ground when it comes to alleged Medicare overpayments.  Similarly, if the facts and the evidence shows that the claims should have been paid,  think twice before waiving your right to appeal the denial of these claims.  From a practical standpoint, we have heard of  situations where a provider chooses to “just pay the bill” so that the case will quickly be resolved.  Several providers have commented that when dealing with small dollar assessments, it is just easier to pay the alleged overpayment rather than incur the hassle and expense of contesting the contractor’s denial decision.  Although we understand the reasoning behind such a decision, you should keep in mind that every claim which is denied by a ZPIC (and which remains denied) increases a provider’serror rate.”  If you were a ZPIC, PSC, RAC or MAC contractor, would you choose to audit a provider with a low error rate or a high error rate?  In any event, the bottom line is fairly straight forward.  Should you find that you are not entitled to payment for one or more claims, you must  repay the money to the government as soon as possible (but no later than 60 days after an overpayment has been identified),  regardless of whether the claim is part of an ongoing or recently completed Medicare audit.  If, however, you are audited and you believe that a ZPIC has incorrectly denied one or your claims, you have the right to appeal the denial of these wrongfully denied claims.

Recommendation #7:  Carefully read a ZPIC’s denial decision letter. When you receive a denial decision letter relied upon by a ZPIC, carefully review the notice and determine whether the contractor has specifically addressed the reasons for denial associated with each of the claims at issue.  Every ZPIC is different.  Over the last few months, one of the ZPICs involved in the cases we are handling has been citing only a general reason for denial (such as “not medically necessary”).  Should the ZPIC in your case not provide sufficient information, you will find it difficult, if not impossible, to address any specific reasons your claims have been denied.   Your legal counsel may be able to get the ZPIC to provide additional specificity in connection with their denial reasons.  Alternatively, legal counsel may be able to argue that the ZPIC’s failure to provide specific reasons for denying your claims is a clear violation of your due process rights.

Recommendation #8 Don’t forget – shortly after the “demand letter” is sent, any payments you may be expecting may be recouped by your Medicare Administrative Contractor (MAC).   A demand letter from your MAC usually follows a few days  after you receive a ZPIC’s denial decision letter.  While you have 120 days to file a request for redetermination appeal (as outlined in he MAC’s demand letter)[4], should you fail to file the request for redetermination appeal within 30 days of the date of the MAC’s demand letter (not 30 days after receiving the demand letter!), your Medicare payments will be recouped starting on day 41.  Alternatively, a provider may set up an extended repayment program with the MAC so that the alleged overpayment can be repaid through monthly installments.  We strongly recommend that you set this up.  You will then be able to take advantage of the 120 period permited to file a redetermination appeal rather than try and file a poorly prepared set of arguments within the previously discussed 30 day period.  Similar issues (with completely different deadlines) are present at the reconsideration level of appeal — the next level in the administrative appeals process. Once again, these issues can be quite complicated.  We recommend that you discuss available appeals options with your legal counsel.

Recommendation #9: Foster a corporate culture which encourages compliance.  ZPICs have increased their audit activities dramatically in numerous areas of the country.  The Southern District of Texas (especially South Texas) has been hit hard in recent months.  Providers in Houston, McAllen, Harlingen, Edinburgh, Laredo, Corpus Christi and Brownsville appear to have experienced a recent surge in audit activity.  Be aware that ZPICs are looking for aberrations in billing patterns and often target providers based on these variations in coding or billing practices.  Compliance with regulations and consistency in your “message” to employees is essential. Establishing good intake and records management procedures, continuing employee education and training efforts, can facilitate the adoption of an ethical, compliant corporate culture.

           And, last but not least,

Recommendation #10 When drafting a Compliance Plan, providers should include a “Code of Conduct” that is easily understood by all employees.  We believe that a “Code of Conduct” should accurately reflect the belief system an organization has pursued and sincerely intends to follow.   In doing so, an organization can engender a compliant corporate culture.  Over the years, we have seen organizational “Codes of Conduct” which range from a succinctly described phrase to discussions which take up more than a page.

Our favorite “Code of Conduct” (which also happens to be the “Code of Conduct” adopted by our law firm) is used by Cadets at the United States Military Academy at West Point. Modified for use by health care providers, the “Code of Conduct” reads:

Our clinicians and staff will not lie, cheat, steal, or tolerate those who do.”

This simple, yet elegant “Code of Conduct” succinctly lays out a provider’s ethical responsibilities, both with respect to Medicare and in their other business dealings.  We recommend that you consider adopting and adhering to this or a similar “Code of Conduct.”

Healthcare AttorneyOur attorneys have extensive experience representing physicians, clinics, home health agencies, hospices, DME companies, skilled nursing facilities, chiropractors, pain medicine clinics, rehabilitative medicine clinics and other Medicare providers in connection with audits by ZPICs, MACs and other contractors.  We also have years of experience assisting providers with “gap analyses” and in implementing an effective Compliance Program.  Should you have questions about these or other health law issues, please feel free to call Robert W. Liles for a complementary consultation.  Robert can be reached at:  1 (800) 475-1906.  


[1] Infrequently, a ZPIC may choose to conduct a “probe” review rather than a full audit.  Probe reviews usually involve a request for the records and supporting documentation related to 10 – 15 claims paid by Medicare.

[2] ZPIC requests for audit information typically include language similar to the following: “Failure to provide this information or to permit examination and duplication of records could result in a decision by the Office of the Inspector General to exclude you from Medicare, Medicaid and all Federal health care programs.”

[3] 42 C.F.R. §405.372(a)(2).

[4] It is presumed that you received the MAC’s demand letter 5 days after the demand letter is dated.  From a timing standpoint, we strongly recommend that you completely disregard the “5 day” issue unless it is absolutely necessary to rely on it.  Our practice is to make sure that our client’s redetermination appeal is filed (and received) well in advance of the 120 day appeal deadline.

“Form I-9” Practices for Health Care Providers

Form I-9 Practices Must be Followed by Health Care Providers(November 28, 2010): In 2003, the Immigration and Naturalization Service (INS) became part of the U.S. Department of Homeland Security. Despite this change, certain functions, such as responsibility for enforcing citizenship discrimination actions remained with the U.S. Department of Justice’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (DOJ-OSC).  As one large not-for–profit hospital group recently found, DOJ-OSC takes this responsibility quite seriously and is aggressively investigating allegations of “citizenship status discrimination” committed by employers (including health care providers). Most recently, DOJ-OSC has pursued violations allegedly occurring when prospective applicants were asked to show that they are eligible to work in the United States.

I.  Background: 

With the passage and implementation of the Immigration Reform and Control Act of 1986, employers (including health care providers) have been required to verify that applicants for jobs show that they are authorized to work in the United States.  For over 25 years, employers have been requiring that prospective applicants complete Section 1 of an “I-9 Form” (officially titled “Form I-9, Employment Eligibility Verification”).  Section 1 provides various options for an applicant to show that they are eligible to work in the United States.  Employers are then required to complete Section 2 of the form within three days of the applicant starting to work.  As the government’s Employer Handbook covering the completion of the Form I-9 reflects:

“To comply with the law, you must verify the identity and employment authorization of each person you hire, complete and retain a Form I-9 for each em­ployee, and refrain from discriminating against individu­als on the basis of national origin or citizenship.”

For most prospective applicants and employers, this process has been relatively painless.  While the failure of a company to complete I-9s for its employees could subject the employer to civil and / or criminal penalties, the relative ease of completion of this form has resulted in the I-9 becoming yet another document to be completed by applicants when they are first hired.

In a recent case pursued by DOJ-OSC, the government alleged that a health care provider required that:

“[N]on-U.S. citizen and naturalized U.S. citizen new hires . . . present more work authorization documents than required by Federal law, but permitted native born U.S. citizens to provide documents of their own choosing.”

Based on the fact that non-U.S. citizens and naturalized citizens were treated differently, the government investigated a complaint filed by a “charging party” against this health care provider. Ultimately, the government and the health care provider reached a settlement to the discriminatory allegations presented.

The health care provider was required to pay $257,000 in civil penalties plus an additional $1,000 which was given to the charging party to make up for back pay that was owed due to the delay in hiring the individual which was caused by the provider’s requirement that this non-U.S. citizen or non-U.S. born citizen was required to provide more extensive paperwork to prove his / her authorization to work in the United States. 

II. Compliance Plan Considerations with Respect to Form I-9:

Importantly, I-9 compliance considerations are not limited to only non-discrimination practices.  Both Compliance Officers and Human Resources staff should review the government’s “Handbook for Employers’ and ensure that your facility is complying with each facet of the law in this regard.  As the Handbook states, each provider must:

“Ensure that the employee fully completes Section 1 of Form I-9 at the time of hire — when the employee be­gins work. Review the employee’s document(s) and fully complete Section 2 of Form I-9 within 3 business days of the first day of work.

If you hire a person for less than 3 business days, Sections 1 and 2 of Form I-9 must be fully completed when the employee begins work.”

Importantly, I-9s do not have to be completed for some individuals.  As the government’s Handbook further states:

“You DO NOT need to complete a Form I-9 for persons who are:

1. Hired before November 7, 1986, who are continu­ing in their employment and have a reasonable expectation of employment at all times;

2. Employed for casual domestic work in a private home on a sporadic, irregular, or intermittent basis;

3. Independent contractors; or

4. Providing labor to you who are employed by a con­tractor providing contract services (e.g., employee leasing or temporary agencies).

5. Not physically working on U.S. soil.”

III. Lessons Learned:

While the Compliance Plan covering your health care facility or company likely already covers a wide variety of employment-related issues, Compliance Officers should check to ensure that I-9 requirements are made a part of your overall Compliance Program if these mandates are not already covered.

As this case reflects, health care Compliance Officers should periodically conduct a comprehensive risk assessment (we recommend that such a review be conducted at least annually) of a provider’s operations and business relationships.  While traditional compliance reviews have focused on traditional health care statutory and regulatory obligations and responsibilities, you cannot ignore other risk areas (such as I-9 related actions and responsibilities).  A good place to start would be to meet with both clinical and non-clinical supervisory and managerial employees to discuss regulated aspects of their work.

Liles Parker attorneys have extensive experience working with providers to develop and implement effective Compliance Plans and Programs.  Should you have questions, call us for a complementary consultation.  We may be reached at 1-800-475-1906.