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What is a Medicare Deactivation of Your Billing Privileges?

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Guide to Selecting an Independent Review Organization (IRO) for Your Corporate Integrity Agreement (CIA)

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What is a Referral Under the Anti-Kickback Statute?

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What is a Referral Under the Federal Anti-Kickback Statute?(January 26,  2021Under the Anti-Kickback Statute (Anti-Kickback Statute), what constitutes a referral? Notably, neither the term referral nor the term referring (as it is referred to in the law) are defined in the statute. While you may be tempted to argue that a referral only occurs when one party refers a beneficiary to another party for services or supplies that may be covered by a Federal health care provider, a Seventh Circuit case shows how broad this term is likely to be interpreted by the courts.

 

I.  The Federal Anti-Kickback Statute:

At the outset, it is important to keep in mind that the Anti-Kickback Statute is a criminal statute. The statute makes it a crime to exchange (or offer to exchange), anything of value, in an effort to induce (or reward) the referral of Federal health care program business. See 42 U.S.C. § 1320a-7b. Violations of the Anti-Kickback Statute can result in fines of up to $100,000 and imprisonment for up to ten years. Under the Anti-Kickback Statute, a health care provider may be liable if he or she is found to be:

(b) Illegal remunerations

 (1) Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

(B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program,[1] shall be guilty of a felony and upon conviction thereof, shall be fined not more than $100,000 or imprisoned for not more than 10 years, or both.[2]

 (2) Whoever knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person –(A) to refer an individual to a person  for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program, shall be guilty of a felony and upon conviction thereof, shall be fined not more than $100,000 or imprisoned for not more than 10 years, or both.

           . . .

 (h) Actual knowledge or specific intent not required

 With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.   (emphasis added).

A recent decision issued by the Seventh Circuit Court of Appeals has provided a comprehensive analysis as to what it believes may constitutes a referral under the Anti-Kickback Statute. In the case, United States vs. Kamal Patel, a Chicago area doctor was found to be in violation of the Anti-Kickback Statute because he allegedly referred one of his patients to a home health care provider in return for a monetary payment. The Patel case has important implications for physicians and other health care providers who wish to avoid liability under the Anti-Kickback Statute and, possibly in turn, under the False Claims Act.

II.  What is a Referral Under the Anti-Kickback Statute?

Dr. Patel practiced internal medicine and provided services for elderly patients. He prescribed home health care services to about ten patients per month. 95% of Dr. Patel’s patients were Medicare beneficiaries. The home health care provider, Grand Home Health Care (Grand), was among several providers available to Dr. Patel’s patients. After experiencing a decline in its patients, the owners of Grand met with Dr. Patel and offered to pay Dr. Patel for referrals on a per-patient basis. Grand started to provide services for 2 to 4 of Dr. Patel’s patients per month. After the patients selected Grand as the home health care provider, Grand was required to obtain Dr. Patel’s certification and recertification on the Medicare Form 485 for payment under Medicare. Grand would pay Dr. Patel $400 for each certification and $300 for each re-certification.

Importantly, Dr. Patel was not involved in the selection of Grand by his patients. The patients chose Grand among a number of choices given to them by Dr. Patel’s assistant. Moreover, Dr. Patel did not discuss the selection with the patients or their family members. Grand, however, could not be paid and reimbursed under Medicare without Dr. Patel signing the Form 785 certification form which stated that the home health care was medically necessary. Dr. Patel would also sign the re-certification form if home health care and treatment lasted longer than 60 days. Grand paid Dr. Patel $300 for each certification form, and $400 for each re-certification form signed. The certification form also stated that Dr. Patel “authorized” the services.

Dr. Patel was subsequently investigated and prosecuted under the Anti-Kickback Statute for referring patients to Grand in return for monetary payments. Dr. Patel argued that he had not referred his patients because the patients selected Grand without input or recommendation from him. The Court disagreed. The Court found that a broader definition of referring is mandated in order to promote the central purpose of the Anti-Kickback Statute to prevent Medicare and Medicaid fraud and to “protect doctors whose medical judgments might be clouded by improper financial considerations.”

The Court therefore concluded that the term referring under the Anti-Kickback Statute not only addresses an action by a physician in recommending home care services but also in authorizing such services. The Court found that the danger of fraud in the certification process is quite clear because a physician could refuse to certify the provider thereby increasing the cost of care and impeding the selection process of the patient. Also, the Court found that the doctor would have an improper incentive to certify or re-certify a provider when the care is not necessary or the services of the provider are not competent. Ultimately, the Court found that Dr. Patel acted as a financial gatekeeper to the patient selecting the provider of choice, making the patient’s independent choices at the outset meaningless if Dr. Patel did not provide certifications.

III.  “Certifications” and “Recertifications” Can Result in Liability:

In the Patel case, the physician there did not directly refer his patients to the home health care provider at issue. Yet, the Court found treated certifications and recertifications completed by Dr. Patel to be the same conduct as a referral because without the doctor’s authorization the provider could not be paid under Medicare. Accordingly, doctors must take extra care to monitor staff and the providers with whom they work with in treating payments. Both monetary payments and other forms of remuneration received from a home health agency must be carefully evaluated to ensure that the relationship does not run afoul of the Federal Anti-Kickback Statute. Depending on the state, it may also be necessary for you to analyze any applicable state statutes that may criminalize such conduct. As this case reflects, referrals, certifications and recertifications can result in a violation of the statute.

The Patel case suggests that what is a “referral” may be broadly construed by a court to include any type of approval or authorization by the physician, including, but not necessarily limited to, the signing of a Medicare certification or recertification form.

IV.  Final Remarks:

It is important to keep in mind that the Anti-Kickback Statute is a criminal statute. Moreover, a violation of the Anti-Kickback Statute may give rise to parties involved in the “referral” – both a referring (certifying or recertifying) physician, and the home health agency to whom the referral is being made. It is imperative that any and all home health Medical Director (and similar) relationships must be carefully vetted to ensure that the business relationship does not run afoul of the Anti-Kickback Statute.

Although not raised in the Patel case, it is important to also keep in mind that the Affordable Care Act, Public Law 111-148, can lead to civil False Claims Act liability under similar facts. As you will recall, the Affordable Care Act was passed by Congress and subsequently signed into law by President Obama on March 23, 2010. While the overall purpose of the legislation was to make health care more accessible and affordable for millions of uninsured Americans, the statute also introduced a number of important revisions to the Federal Anti-Kickback Statute, one of which expanded a health care provider’s potential liability for a Medicare or Medicaid-related kickback violation. While both the government and private relators had successfully argued (under an implied certification theory) that a violation of the Anti-Kickback Statute may give rise to a violation of the False Claims Act, the Affordable Care Act effectively codified this theory. As 42 U.S.C. § 1320(a)-7b(g) now provides:

“(f) HEALTH CARE FRAUD.—

(1) KICKBACKS.—Section 1128B of the Social Security Act

(42 U.S.C. 1320a–7b) is amended by adding at the end the following new subsection:

‘‘(g) In addition to the penalties provided for in this section or section 1128A, a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim for purposes of subchapter III of chapter 37 of title 31, United States Code.’’

As a result of this legislation, Federal prosecutors (and possibly whistleblowers) could have also pursued this case under the civil False Claims Act. Both physicians and home health care providers must be mindful that the damages and penalties under the False Claims Act can be quite severe. For false claims or statements made on or after June 19, 2020, the penalties that may be assessed vary from a minimum of $11,665 to a maximum penalty of $23,331, per false claim, plus treble damages.

What’s the answer for your organization? First and foremost, it is imperative that you develop, implement and adhere to the provisions and guidelines of an effective Compliance Plan. While no Compliance Plan can completely shield a health care provider from liability, your earnest efforts to fully comply with the law can go a long ways towards dispelling the argument that you knowingly (as defined under the False Claims Act) submitted a false claim to the government for payment.

Robert Liles represents health care providers in RAC and ZPIC appeals.Robert W. Liles, JD, MS, MBA serves as Managing Partner at Liles Parker, Attorneys and Counselors at Law. Robert represents home health agencies of all sizes around the country in connection with a full range of MAC and UPIC prepayment reviews, UPIC postpayment audits, suspension actions, and the revocation of a provider’s Medicare billing privileges. He also handles home health False Claims Act cases. For a complimentary consultation, please call Robert at: 1 (800) 475-1906.

[1] A “Federal health care program” is defined as (1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government [not including health insurance provided to federal government employees] or (2) any state health care program, as defined in Section 1128(h) [42 U.S.C. §1320a-7(h)]. 42 U.S.C. §1320a-7b(f). Federal health care programs include Medicare and Medicaid.

[2] Among its many provisions, the Bipartisan Budget Act of 2018 (enacted February 9, 2018) increased the criminal penalties under the Anti-Kickback Statute from a maximum of $25,000 to a maximum of $100,000, per violation.  The Bipartisan Budget Act of 2018 also increased the potential period of incarceration from five years to ten years.

Prepayment Reviews and Audits of Medicare Claims are Ongoing. Are Your Claims Being Audited?

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Prepayment Review / Prepayment Audit

(January 19, 2021):  As you will recall, on March 30, 2020, the Centers for Medicare and Medicaid Services (CMS) suspended most Medicare audits and reviews due to the COVID-19 national emergency.  In early August, CMS instructed its contractors to resume their prepayment and postpayment audit activities. Over the last six months, we have seen a significant increase in the number of prepayment reviews initiated by Medicare Administrative Contractors (MACs) and other CMS contractors. It is therefore essential that home health agencies, physician practices and other health care providers and suppliers understand the prepayment review process and are prepared to appropriately respond to an document request if a MAC, a RAC or another CMS contractor initiates a prepayment audit of their claims.  This article provides an overview of the process and discusses ways of reducing your level of risk.

I. Legislative Background:

With the passage of the Medicare and Medicaid programs in 1965, the Centers for Medicare and Medicaid Services (CMS)[1] became authorized to perform a myriad of Medicare program functions, either directly or by contract. Moreover, on August 21, 1996, the Congress enacted the Health Insurance Portability and Accountability Act of 1996 (HIPAA).   Section 202 of HIPAA added section 1893 to the Social Security Act, thereby establishing the Medicare Integrity Program (MIP Program).  This legislation also permitted CMS to contract with eligible contractors to perform program integrity activities.

On December 8, 2003, Congress subsequently enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).  The MMA included a new subsection  regarding both random prepayment audits and non-random prepayment complex medical reviews.  Today, prepayment audits of Medicare claims are now conducted by MACs and other CMS contractors around the country.

II.  Reasons Providers are Targeted for Prepayment Review / Prepayment Audit:

Contrary to popular belief, CMS and its contractors do not conduct random a prepayment audit of health care providers.  As CMS expressly set out in the Federal Register:

“Although section 934 of the MMA sets forth requirements for random prepayment review, our contractors currently do not perform random prepayment review. However, our contractors do perform non-random prepayment complex medical review. We are cognizant of the need for additional rulemaking should we wish our contractors to perform random review.” [2]

As a result, if your practice or home health agency has been subjected to non-random prepayment complex medical review by a MAC, it is because of one or more reasons.  In most instances, prepayment reviews / prepayment audits are the result of data mining efforts used by CMS contractors to identify potentially inappropriately billed claims. The data mining runs may have been initiated by:

  • National or local claims data comparisons.
  • An analysis of utilization practices.
  • Beneficiary complaints.
  • Competitor complaints.
  • Department of Health and Human Services, Office of Inspector General (OIG)
  • Government Accountability Office (GAO) reports.
  • Department of Justice (DOJ) investigations.   

Regardless of the reason for review, once a CMS contractor conducts a data mining run and identifies a likelihood of sustained or high level of payment error, the contractor will typically place a health care provider on prepayment audit and immediately request supporting medical documentation in support of any claims submitted by the provider for payment.

III.  Types of Non-Random Prepayment Review:

There are a number of reasons that a MAC may place your practice or agency on prepayment review.  These reasons are outlined below.  Regardless of the reason for placing a Medicare provider or supplier on prepayment review, from an operational standpoint, the MAC installs an edit in the Fiscal Intermediary Standard System (FISS) which suspends a claim for medical review before the claim is paid by the contractor.  One the edit is put in place, the only way for it to be removed is for the provider or supplier to effectively show (through their submission of a claim’s supporting documentation), that the medical services or DME supplies at issue are medically necessary and qualify for coverage and payment.  An overview of the reasons for being placed on prepayment review / prepayment audit (along with a description of their associated edits) are outlined below:

Automated Edits.  Automated edits have been implemented to address systemic concerns regarding certain billing or claims practices and are not provider specific.  Once an improper practice is identified, MACs will go into their claims processing systems and install automated edits in the FISS so that certain claims are either automatically denied or are flagged for further review. [3]

New Provider/New Benefit Edits.  The billing practices of newly enrolled Medicare providers and suppliers are carefully monitored by MACs to help ensure that the claims being submitted qualify for coverage and payment.  To accomplish this monitoring function, MACs install a “new provider” edit in the FISS system that will then flag claims for prepayment review.  This same approach is used when Medicare is introducing a new benefit and CMS wants to better ensure that providers are meeting medical necessity, documentation, coding and billing requirements. [4].

Provider Specific Probe Edits  These edits select claims from a specific provider who has been identified as having a potential problem identified through their billing patterns, Medicare’s knowledge of service area abuses, and/or complaints received by Medicare. The provider is notified in writing that a probe review (sample of 20-40 claims) is being conducted. When the provider specific probe edits are complete, and it is found that there is a high incidence of inappropriate billing, a provider may be placed on targeted review.  Examples of provider specific billing patterns that may be targeted include:  (1) Through data analysis, a MAC has identified questionable billing practices by a specific provider (such as non-covered, incorrectly coded or incorrectly billed services); (2) A MAC receives alerts from other MACs, Quality Improvement Organizations (QIOs), Comprehensive Error Rate Testing (CERT) auditors, Recovery Audit Contractors (RACs), the OIG, the General Accounting Office (GAO), or other CMS program integrity contractor findings that support the need for further review; (3) A MAC receives complaints about a specific provider’s billing practices; or (4) A MAC validates that a specific provider is billing for services that have been associated with a high risk of payment error. [5].

Provider Specific Targeted Review (TR).  Once a provider is placed on targeted review status, a TR edit is installed in the FISS so that a certain percentage of claims will be pulled for prepayment review.  Once a provider is placed on targeted review, the period of review typically lasts for three months.  At the end of the three month period, if a MAC has determined that the provider’s claims meet medical necessity requirements, are properly documented, have been coded and billed correctly, the MAC may agree to remove the edit.  If a provider’s billing practices remain problematic, the edit will generally remain in place for another three months. It is important to keep in mind that if a provider is unable to to show its MAC that its claims practices are compliant for six months or more, the MAC may make a referral to a Unified Program Integrity Contractor (UPIC) for postpayment audit. [6][7].

Referral Edits. Referral edits are based on a referral from other entities, for example the state surveyor after identifying potential unusual billing patterns or practices. Providers are notified by letter when they have been placed on a referral edit. The source of the referral is not disclosed. 

Widespread Edits.  MACs regularly review claims with the greatest risk of inappropriate program payment, this includes areas that have been identified through data analysis. The following list provides examples of widespread edits but is not all inclusive:  (1) Length of stay or number of visits; (2) Revenue and/or HCPCS; (3) Diagnosis and may include ICD-9/ICD-10 codes in relation to revenue codes.

IV.  Considerations if Your Practice or Home Health Agency is Placed on Non-Random Prepayment Review:

Importantly, once a provider is placed is targeted for prepayment audit, it is highly unlikely that the claims edit will be lifted any time soon without significant work on your part.  Please keep in mind:

  • There is no “silver bullet” approach having a prepayment audit discontinued.
  • There is no administrative appeals process in which to contest the placement of your organization on prepayment audit.
  • Be wary of consultants who claim to “know someone” that can have you removed from prepayment status.

Once you have been placed on prepayment review, your first task is to figure out the reason why your claims were identified for audit.  Were you placed on prepayment review because of your utilization practices, documentation deficiencies or another reason? Ultimately, getting off of prepayment review is just plain hard work.

Over the years, our firm has been contacted by numerous providers whose approach consisted of “holding” their claims in the mistaken belief that the review would eventually be lifted, at which time they would submit their claims for payment.  You need to understand – health care providers are placed on prepayment review because a MAC or another CMS contractor has reason to believe (rightly or wrongly) that their claims are not in full compliance with applicable coverage, documentation, medical necessity, coding or billing rules. The best approach to having a prepayment review lifted is to carefully analyze each aspect of your claims, compare your practices with those set out in the applicable rules and correct any deficiencies.  Sounds simple doesn’t it?  Unfortunately, it can be quite difficult, depending on the types of claims involved.  Our firm has worked with a number of health care providers over the years, assisting them in getting removed from prepayment review and incorporating remedial steps into their Compliance Plan.

Robert Liles represents providers in prepayment review / prepayment audit actions.Robert W. Liles, JD, is Managing Partner at the health law firm, Liles Parker, PLLC.  With offices in Washington, DC, Houston, TX, and Baton Rouge, LA, our attorneys represent home health agencies, physicians and other health care providers around the country in connection with Medicare / Medicaid prepayment reviews, UPIC postpayment audits, Compliance Plan reviews and State licensing board actions.  Should you have any questions, please call us for a free consultation.  Robert can be reached at: 1 (800) 475-1906.   

[1] At the time of passage, the Health Care Financing Administration (HCFA) was responsible for the management of the Medicare and Medicaid programs.  In September 2001, the Secretary, Health and Human Services, Tommie Thompson, changed HCFA’s name to the Centers for Medicare and Medicaid Services
[2] Federal Register /Vol. 73, No. 188 / Friday, September 26, 2008 /Rules and Regulations, 55753.
[3] CMS Pub. 100-08, Ch. 3, §3.3.1.2B.
[4] CMS Pub. 100-08, Ch. 3, §3.1B.
[5] CMS Pub. 100-08, Ch. 3, §3.2.2A.
[6] CMS Pub. 100-08, Ch. 3, §3.2.1.
[7] For an overview of the UPIC program, see our discussion at this link.

Chiropractor Owned Multidisciplinary Practices are at a Higher Risk of Audit

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Chiropractor Owned Multidisciplinary Practices are Being Audited by UPICs(January 13, 2021):  Over the last few years, we have noted a significant increase in the number of audits initiated against Chiropractor owned multidisciplinary practices.  Typically, these integrated medical practices and clinics employ at least one Chiropractor (typically in an ownership or managerial capacity), along with multiple Doctors of Medicine (MDs), Doctors of Osteopathy (DOs). Physician-extenders such as Nurse Practitioners (NPs) and Physician Assistants (PAs) are also commonly employed in these multidisciplinary practices and clinics.

The purpose of this article is to examine Chiropractor owned multidisciplinary practices which employ MDs, DOs and physician extenders in order to provide a wide range of care and treatment services.  While there are a number of benefits to such a model, both State regulatory entities and Federally-contracted Unified Program Integrity Contractors (UPICs) working for the Centers for Medicare and Medicaid services (CMS) have shown their concern regarding these organizations.  Depending on the jurisdiction, a number of State regulatory entities have questioned the appropriateness of the model itself.  UPICs and other CMS Medicare contractors have initiated (or, in some cases, are in the process of initiating) a review or audit of various claims submitted to Medicare for coverage and payment.

I. Why have Chiropractors Worked to Integrate Other Medical Services Into Their Practice?

While you may disagree, it has been our observation that many Chiropractors have an entrepreneurial spirit.  This has manifested itself in a growing number of Chiropractor owned multidisciplinary practices which provide health care services other than merely those associated with chiropractic care.  Depending on the State, integrating other medical services into a chiropractic practice isn’t always easy – there are often a number of statutory and / or regulatory barriers to be overcome. Examples of the Chiropractor owned multidisciplinary practices we have recently seen have included:

  • Pain management clinics.
  • Multidisciplinary clinics which also offer complimentary and alternative medicine therapy options.
  • Industrial medicine clinics (often focusing on Workman’s Compensation cases).
  • Orthopedic clinics focusing on back injuries, spinal compression problems and victims of automobile accidents.

Chiropractic practices choosing to transition over to a multidisciplinary model have often found that they are better equipped to address the health problems of their patients.  This is often due to the fact that an integrated DC / MD practice typically greatly expands the scope of care and treatment services available to patients. This multidisciplinary approach provides patients with a convenient one-stop care and treatment option.

From a financial standpoint, Chiropractor owned multidisciplinary practices have also found that this business model opens up a number of previously-unavailable opportunities.  As you are aware, only a few chiropractic services qualify for coverage and payment under Medicare.  While private payor plans typically cover a somewhat wider scope of services, many Chiropractors have essentially built their business on cash-pay patients.  The addition of MDs, DOs and physician extenders has permitted integrated practices to expand their scope of medically-reimbursable services, many of which now qualify for coverage and payment by Medicare and  private payor programs.  While there are both patient-care and financial benefits to the integrated, multi-disciplinary model, there are also a number of challenges you should consider prior to setting up this type of practice or clinic.

II.  Challenges to be Considered:

A.     State Regulatory Considerations.

Depending on the State, it may be illegal for anyone other than a medical physician to own a medical practice.  For example, many jurisdictions still prohibit the “Corporate Practice of Medicine.” In such States, it is illegal for a corporation to practice medicine.  Moreover, a corporation cannot employ a physician to provide medical care and treatment services.

Although every State is different, if your State prohibits the Corporate Practice of Medicine, it may be against the law for a corporation or for a non-physician individual (including a Chiropractor) to own or control a physician practice or clinic which provides professional physician services.  Therefore, we strongly recommend that prior to setting up a Chiropractor-owned, multidisciplinary practice or clinic, you should contact a qualified health lawyer to assist you maneuvering through the myriad statutory and regulatory requirements governing this complex area of law.  As a final point in this regard, should you choose to set up an integrated practice or clinic, it is essential that you have a full understanding of both your State’s Chiropractic Practice Act and the Medical Practice Act governing the physicians you intend to employ.

B.    Current Audit Challenges.

Over the last few years, many providers, including Chiropractor owned multidisciplinary practices, have been advised that their claims are being placed on prepayment review or that their prior-paid claims are being be subjected to a postpayment audit by a UPIC, such as Qlarant, Safeguard Services or CoventBridge. [1]  Most of these CMS program integrity contractor audit actions have been generated as a result of data-mining.  Other reasons for audit and / or review have included: patient complaints, competitor complaints and referrals from State Medical Boards.  Regardless of the reason for audit, if your integrated practice or clinic is audited, it is essential that you engage qualified health law counsel to advise you on your options for responding to an inquiry by a UPIC.  For a detailed discussion of the current UPIC audit environment, please see our article titled “A UPIC Audit is Serious Business — Is Your Office Prepared?”  [2]

Prepayment Reviews: Unlike postpayment overpayment assessments, there is not an effective administrative overpayment process for health care providers placed on prepayment review.  We recommend that you consult with legal counsel if your practice is placed on prepayment review.  There are three points to keep in mind in such cases:

  • It is often in your best interest to continue to submit claims for review and not hold them.  Even if they are denied, at least you can initiate the postpayment appeals process as soon as possible and hopefully begin to restore cash flow;
  • It is often helpful to engage qualified health law counsel to review your claims and generate a report that can be sent to the UPIC, pointing out that the claims do, in fact, qualify for coverage and payment.
  • Think outside of the box—no provider can survive on prepayment review over a long period if a significant portion of their payor mix is Medicare.  Contact your health law counsel to discuss possible options for seeking remedial action to have the prepayment review lifted.

Postpayment Audits: Over the last decade, program integrity contractors (such as UPICs) have aggressively pursued alleged Medicare overpayments from Chiropractors, Physicians and other health care providers around the country.  Specific actions taken have included:

  • Using statistical sampling and extrapolation.While the Medicare Program Integrity Manual sets out the basic requirements for a UPIC to conduct a statistical sampling, these contractors have been known to have deviated from the sampling methodologies proscribed by CMS.
  • UPIC reviews have often alleged significant claims coverage concerns.Identified error rates of 100% by UPICs are not uncommon.  They then seek a full refund of all claims submitted by an individual provide.
  • Multiple errors often identified. Due to the massive amount of minute technical requirements imposed on providers, UPICs are often able to identify and allege multiple technical and substantive errors in many of the claims which they review.

Medicare Revocation Actions:Over the last year, we have seen a sharp increase in the number of Medicare revocation actions taken.  The reasons for revocation have varied but have typically been associated with alleged violations of a health care provider’s participation agreement.  In some cases, the UPIC contractors found that the provider had moved addresses and had not properly notified Medicare.  In other cases, a health care provider was alleged to have not been cooperative or refused to participate in a site visit.  As a participating provider in the Medicare program, your organization must fully meet each of its obligations under the agreement in order to remain in the program.

UPIC Referrals for Civil and Criminal Enforcement: UPICs are actively referring health care providers to law enforcement agencies such as the Office of Inspector General (OIG) and the  Department of Justice (DOJ) for possible civil and / or criminal enforcement) when a case appears to entail more than a mere overpayment.  However, just because a referral is made doesn’t mean that it will be prosecuted.  In many instances, OIG and / or DOJ will decline to open a case for a variety of reasons (such as lack of evidence, insufficient damages, etc.).

What Sources of Coding / Billing Data are used by UPICs? UPICs are required to use a variety of proactive and reactive techniques to identify and confront any potentially improper or fraudulent practices.  As set out in Chapter 2 of the Medicare Integrity Policy Manual (MIPM), UPICs utilize a wide variety of data sources. Primary sources relied on by UPICs include:

  • Claims Summary Information (CSI) reports.  CSI reports describe the various provider types and break down each provider’s utilization practices by units of service performed, charges billed, etc.
  • Part B Analytics System Report (PBASR). The PBASR compares utilization ratios by code, further broken down by MAC, and each provider’s specialty.
  • Short Term Alternatives for Therapy Services (STATS) reportsUPICs use STATS reports to analyze the outpatient therapy professional and provider claims data.
  • IDR Analysis Reports.  UPICs use IDR analysis reports and Focused Medical Review (FMR) to analyze shows Part B claims utilization and enrollment data.

III.  Final Thoughts:

Chiropractor-owned multidisciplinary practices and clinics currently appear to be under the proverbial microscope While there is little, if any, action that can reduce your likelihood of being targeted for an audit due to data-mining, there are a number of effective steps that you can reduce your risk of liability if an audit or investigation is initiated.  The design, implementation and adherence to provisions set out in an effective compliance plan can greatly improve your efforts to fully meet your statutory and regulatory requirements under the law.

Healthcare LawyerRobert W. Liles, JD, MBA, MS, CPC, serves as Managing Partner at the health law firm of Liles Parker, Attorneys and Counselors at Law.  Robert represents Chiropractors and other health care providers around the country in connection with UPIC audits, DOJ investigations, State Medical Board disciplinary, and other health law related issues.  Please give Robert a call for free consultation.  He can be reached at:  1 (800) 475-1906.


[1] Qlarant, Safeguard Services and CoventBridge are the current program integrity contractors that have been awarded contracts as Unified Program Integrity Contractors (UPICs) by the Centers for Medicare and Medicaid Services (CMS).

[2]  A copy of this article can be found at the following link.

[3] CMS, Medicare Program Integrity Manual, § 2, available at this link.

Pierce the Corporate Veil — Are You Personally Liable for a UPIC Overpayment?

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Can the Government Pierce the Corporate Veil?(Updated January 9, 2021): Owners of healthcare companies often wonder whether the government can pierce the corporate veil and try to hold the owners personally liable for overpayment claims when facing a program integrity audit by a Unified Program Integrity Contractor (UPIC). [1] This rarely happens, but assuming that a provider does not prevail in the administrative appeal process, one way for the government to try and collect monies owed by a bankrupt health care entity would be to try and pierce the corporate veil.  A health care entity is usually owned by one or more individual owners. These owners often organize the company into an entity such as a corporation or Limited Liability Company (LLC). This is specifically done to limit each individual owner’s personal liability. Owners of incorporated health care providers can only be found personally liable for their companies’ debts to the Centers for Medicare & Medicaid Services (CMS) in certain very narrow circumstances, one of which is piercing the corporate veil.

I.  Will the Government Seek to Pierce the Corporate Veil?

The legal doctrine of piercing the corporate veil allows creditors to reach through the corporate structure and collect their debts from shareholders or similar owners. This doctrine is not unique to healthcare. In fact it is a potential way for all creditors to collect debts from individual entity owners.

CMS and its contractors rarely seek to pierce the corporate veil, and courts also tend to disfavor the practice. Veil piercing depends on facts that by their nature are difficult to prove in court. The burden of proving the facts is always on the creditor. Even though it may be difficult for a creditor to prove these facts exist, it is still important to know how a creditor could pierce a healthcare corporation’s “veil” to prevent individual owner liability. Creditors must prove specific factors to justify imposing liability on owners for a provider’s debts to CMS, including the following:

  1. Defective Incorporation: If the legal statutory requirements for organizing the corporation or LLC are not met, no corporation exists to shield owners from liability.

  2. Ignoring the Separateness of the Corporation: Entering into contracts and otherwise transacting business variously in a corporate name and an individual name can justify piercing the corporate veil. Commingling corporate and individual assets, transferring assets between the provider and an owner without formalities, or transferring assets between the provider and a sister company, can also suggest the owners did not respect the separate nature of the entity, potentially allowing CMS to pierce the corporate veil.

  3. Significant Undercapitalization: A corporation must have a reasonably sufficient amount of capital to pay its expected debts. Undercapitalization is grounds to impose liability on the owners.

  4. Excessive Dividends or Other Payments to Owners: When owners are actually working for a corporation, they can usually pay themselves fair compensation, as long as it is clearly characterized as salary or wages. However, additional dividends and other non-compensation distributions can only be safely taken out by an owner to the extent the distributions reflect profits. If an owner takes non-compensation distributions exceeding profits, these distributions constitute a return of capital and can give rise to an undercapitalization claim by a corporate creditor. If such distributions are made when the corporation is insolvent, the creditors’ claims against the owner will be almost impossible to defend.

  5. Misrepresentation and other Unfair Dealings with Creditors: Deceptive practices such as dishonesty, false statements to corporate creditors, and asset concealment can make owners liable for corporate debts.

  6. Absence or Inaccuracy of Records: If corporate records are missing or inaccurate, this can form a basis to pierce the corporate veil, especially if they hinder a creditor’s collection efforts against the provider.

  7. Failure to Maintain Ongoing Legal Requirements: Each state’s statutes impose annual franchise fees and report-filing requirements on corporations and similar entities. These usually have grace periods and cure provisions, but if they are neglected long enough the corporation or LLC will legally cease to exist, resulting in owner liability.

II.  Case Example Where the Government Sought to Pierce the Corporate Veil of a Home Health Agency:

In United States v. Bridle Path Enterprises, Inc., a Massachusetts Federal district court held the owners of a home health agency personally liable for the provider’s Medicare overpayment debt. The provider, Bridle Path, made payments toward the overpayment until they sold all of their assets to another provider. At the time of the sale, $64,807.84 was outstanding on the overpayment liability. The United States sought to hold Bridle Path’s owners personally liable for the Medicare overpayment, using the piercing the corporate veil doctrine. Due to the number of checks Bridle Path wrote to its owners, their home health agency, and their real-estate holding company, the court found that the owners did not treat Bridle Path as a separate corporate entity and pierced the corporate veil to hold the owners liable for the Medicare debt.

 III.  Final Remarks:

If any of the factors above exist, CMS and its Medicare contractors can seek to pierce the corporate veil of a healthcare provider’s company and collect debts from the provider’s owners. These circumstances are not typical for health care providers and are easily avoided by maintaining personal owner dealings separate from all entity business.  Do your practice’s day-to-day operations expose you to unnecessary liability?  If your business was assessed a huge fine and forced into bankruptcy, are you 100% confident that you, as the owner, will be free of individual liability? If you have any questions about this or any other health law issue, call 1 (800) 475-1906 for a complimentary consultation.

Robert W. Liles is a health care attorney experienced in handling prepayment reviews and audits.The attorneys at Liles Parker, Attorneys & Counselors at Law represent health care suppliers and providers around the country. We specialize in regulatory compliance reviews, UPIC audits of Medicare and Medicaid claims, and the defense of proposed State Medical Board disciplinary actions. Need help?  Call Robert Liles for a free consultation:  1 (800) 475-1906.

 

[1] For a detailed discussion of the Unified Program Integrity Contractor (UPIC) audits and investigations currently being conducted, please see our page titled: “A UPIC Audit is Serious Business — Is Your Office Prepared?” 

Preparing for a UPIC Audit? Examine These Eight Claim Elements

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Preparing for a UPIC Audit(Updated January 9, 2021):  Each year, our attorneys and paralegals review and assess literally thousands of Medicare claims which have been audited (and denied) by Unified Program Integrity Contractors (UPICs) and other contractors working for the Centers for Medicare and Medicaid Services (CMS).  Are you preparing for a UPIC audit?  If your Medicare or Medicaid claims haven’t already been audited by a UPIC, chances are that it will eventually happen. As UPIC audits increase during 2021, it is essential that health care providers and suppliers review their processes to better ensure that services and supplies billed to Medicare and Medicare fully comply with applicable coverage, coding and billing requirements.  While defending physicians and other health care providers in UPIC audits and government reviews, we have identified a relatively straight-forward approach for determining whether a particular claim qualifies for coverage and payment.  Generally, we refer to this approach as an examination of the “Eight Elements of a Payable Claim.Notably, this has proven to be extremely helpful tool when developing an effective Compliance Plan for a client.  As set out below, physicians and other non-hospital health care providers can often use this approach to determine whether specific services billed to the Medicare and Medicaid programs.

I.  Assessing Your Claims — Preparing for a UPIC Audit:

A discussion of the eight elements which must be carefully assessed for each and every claim is provided below.  This is especially when you are preparing for a UPIC audit of the medical services or supplies you have billed to the Medicare and Medicaid programs.

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

Just because a certain treatment regime is medically necessary does not mean that it will be covered by Medicare or Medicaid.  We believe that this element constitutes the most important question to be answered by a provider.  Government payors only cover medically necessary services and supplies.

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

As you can imagine, regardless of the fact that services ordered were medically necessary, the services must actually be provided in order for those services to be billed and paid.  When you are preparing for a UPIC audit, as part of your internal auditing and monitoring, should you find instances where you cannot show that a medical service or piece of durable medical equipment was provided, you must return any funds that have been received.  Equally important, medical services must actually be provided at a level of quality consistent with Medicare’s expectations or the expectations of the covering payor.

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

Remember, a UPIC is specifically instructed to detect and refer instances of fraud, waste and abuse. [1]  When you are preparing for a UPIC audit, your review of claims should not be limited to merely a review of the documentation.  You need to also examine your organization’s business relationship and business practices.  For example, is there any evidence that the service or supplies are linked in any way to a breach of the Federal Anti-Kickback Statute or Stark’s prohibition against improper self-referrals?  Similarly, is the service or claim associated with a possible violation of the civil False Claims Act? In recent years, we have see an increasing number of cases where otherwise payable claims were tainted due to the fact that the referring or servicing provider was excluded from participation in the Medicare or Medicaid programs. [2]  The bottom line is fairly straight-forward: it is insufficient to merely show that a claim appears to meet the government payor’s basic medical necessity, billing and coding rules. You need to also verify that the way the business was generated or referred was proper and not due to a statutory violation.

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

The next point to be addressed when auditing a claim is to determine whether or not it is covered by Medicare or Medicaid.  It is important to keep in mind that a medical service or supplies can be medically necessary yet still not qualify for coverage and payment.   Ultimately, every service or claim, regardless of whether the beneficiary is a Medicare or a Medicaid plan participant, must be examined to see if it qualifies for coverage.

Element #5Full and Complete Documentation – Have the services rendered been properly and fully documented?

It is essential that you pull each and every regulatory issuance, along with any guidance issued by the state which sets out the documentation requirements associated with a particular service or claim.  After auditing literally thousands of claims, we have found that over a majority of the health care providers we have audited have never fully researched and reviewed applicable  documentation requirements.  As UPIC clinical reviewers of both Medicare and Medicaid claims are quick to state in hearings before an Administrative Law Judge (ALJ), “If it isn’t documented, it didn’t happen.”   When made during an ALJ hearing by a UPIC, this point is quite effective—it is extremely difficult for a provider to prove that a service was provided if there is insufficient documentation of the work conducted in the patient’s medical records.  Therefore, research, review, and confirm the precise documentation requirements to be met, then ensure that you take the time to fully and accurately document the work you have performed.

UPIC 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 (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 UPIC’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 processes.  It is very important that you show your clinicians that UPICs  enforce a strict application of Medicare’s documentation and coverage requirements.

Element #6: Proper Coding – Were the services rendered correctly coded?

Unfortunately, even if the foregoing rules have been met, it is quite simple to make a coding mistake, therefore invalidating the claim.  The coding rules are both complicated and dynamic, potentially changing from year to year.  We recommend that you either engage a qualified third-party billing company to assist you with coding and billing or ensure that your in-house staff members handling these duties are experienced and provided regular opportunities for updated training.

Element #7: Proper Billing Practices – Were the services rendered correctly billed to Medicare?

As a final requirement, health care providers must ensure that the services or claims performed fully meet Medicare or Medicaid;s billing rules.  Once again, you need to ensure that your staff is properly trained to handle the organization’s billing responsibilities. As you review your billing practices, you should abide by the following:  First, “If it doesn’t belong to you, give it back.” [3] Conversely, if you don’t owe the money, don’t automatically throw in the towel.  Discuss these claims with our attorneys to determine if there may be other arguments in support of payment that may be asserted.  

II.  Final Considerations — UPIC Audits:

The likelihood that your practice or organization will be subjected to a Medicare or Medicaid audit is increasing every day.  As a participating provider in one or more Federal health care programs, you have an affirmative obligation to ensure that your claims are properly provided, documented, coded, and billed.  Unfortunately, many health care providers have never researched and reviewed the proper rules covering the care and treatment services they provide.  When conducting a “GAP Analysis” [4] of your organization, a sample of your claims is an important proactive step you can take to help ensure that your current practices are fully compliant with applicable laws and regulations; such analyses do not have to be statistically significant.  Should you identify deficiencies, remedial steps should be taken (immediately) so that future claims for care and treatment will meet all applicable requirements.  Keep in mind—any identified overpayments must be repaid promptly to the government in order to avoid possible False Claims Act liability.

Healthcare LawyerRobert W. Liles represents health care providers in UPIC Medicare and Medicaid audits. In addition, Robert counsels clients on regulatory compliance issues, performs GAP analyses, conducts internal reviews, and trains healthcare professionals on various legal and compliance issues Do you need help preparing for a UPIC audit? Call Robert for a free consultation: 1 (800) 475-1906.


[1] A detailed discussion of the UPIC audit process can be found at the following link.

[2]  For an overview of the impact of an “exclusion” action, please see Paul Wiedenfeld’s article titled “A Provider’s Guide to OIG Exclusions.”

[3] A detailed discussion of a provider’s repayment obligations when an overpayment has been identified can be found at this link.

[4]  For a detailed discussion on how to conduct a “GAP Analysis” of your health care claims, please see our page titled: “How to Conduct a GAP Analysis of Your Health Care Practice.”

Audits of Respiratory (CPT Code 87633) / Gastro (CPT Code 87507) Panels are Ongoing.

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(January 3, 2021):  In recent months, we have seen a significant rise in the number of Medicare and Medicaid audits focusing on the medical necessity of certain outpatient Respiratory Viral Panels (CPT Code 87633) and Gastrointestinal Pathogen Panels (CPT Code 87507).  Unfortunately, many of these audits seem to be merely the latest example where payors have conflated the issues of “Medical Necessity” and “Coverage.”  In this article, we examine a number of the laboratory tests currently being audited by Medicare and Medicaid payors and we discuss why the government’s crack-down on respiratory and gastrointestinal testing may be ill-advised.  Specific outpatient respiratory tests currently being scrutinized include:

CPT Code 87631 (Respiratory Virus Panel.  3-5 Targets)

CPT Code 87632 (Respiratory Virus Panel. 6-12 Targets)

CPT Code 87633 (Respiratory Virus Panel.  12-20 Targets)

Specific outpatient gastrointestinal tests currently being audited include:  

CPT Code 87505 (Infectious agent detection by nucleic acid (DNA or RNA) Gastrointestinal Pathogen Panel (PCR).  3-5 Targets)

CPT Code 87506 (Infectious agent detection by nucleic acid (DNA or RNA) Gastrointestinal Pathogen Panel (PCR).  6-11 Targets)

CPT Code 87507 (Infectious agent detection by nucleic acid (DNA or RNA) Gastrointestinal Pathogen Panel (PCR).  12-25 Targets)

I.  Clinical Laboratory Testing for Viral Respiratory Infections:

Prior to the development of low-cost, outpatient multiplex laboratory testing technologies, clinicians diagnosed viral respiratory track infections with the assistance of direct fluorescent-antibody assay (DFA) and culture testing.  With this approach, clinicians were able to detect only a little more than a handful of commonly seen respiratory viruses.  DFA testing was labor intensive, required qualified laboratory staff and specific monoclonal antibodies. As technology has advanced, the ability to detect new respiratory viruses also increased.  From 2000 to 2007, five new human respiratory viruses were discovered. The emergence of five new respiratory viruses since 2000, including metapneumovirus (MPV), severe acute respiratory syndrome coronavirus (SARS-CoV), avian influenza virus H5N1, CoVs NL63 and HKU1, and human bocavirus really amplified the limitations of relying on DFA and culture testing. It became more important than ever that clinicians have the ability to readily detect both traditional and emerging respiratory viruses. [1]

Since 2000, a number of laboratory polymerase chain reaction (PCR) testing technologies were developed that enabled the rapid processing of 20 or more respiratory tests simultaneously, using a single sample.  As this technology has developed, the use of these multiplex testing systems has grown.  Today, a number of physician practices and clinics have integrated multiplex PCR testing systems into their outpatient practices.  The benefits of using multiplex PCR respiratory viral panel tests are well established and are discussed below.

II.  Benefits of Outpatient Multiplex PCR Respiratory Viral Panels — CPT Code 87631, CPT Code 87632 and CPT Code 87633:

The specific respiratory lab tests being audited include: CPT Code 87631, CPT Code 87632 and CPT Code 87633.  As you would expect, payors are quite concerned with the proliferation of CPT Code 87633, which involves the testing and billing for 12-20 targets. Despite these concerns, proponents of broad respiratory testing can point to a wide variety of benefits that have been realized through the use of multiplex PCR respiratory viral panel systems.  These benefits include, but are not limited to:

PCR testing platforms cover a broader scope of viral agents. PCR respiratory viral panel testing platforms can automatically process 22 (or more) viral tests at one time. DFA testing systems were typically limited to conducting 6 or 7 concurrent tests.

PCR test results are faster. PCR respiratory viral panel test results are typically available within an hour.  In contrast, old-school DFA and culture testing is both labor intensive and more time consuming.

PCR respiratory viral panels have been shown to significantly reduce ICU days.[2]

PCR respiratory viral panels have been shown to reduce the duration of a patient’s antibiotic use. [3]

Perhaps most importantly, PCR respiratory viral panels just work better.

PCR respiratory viral panels identified significantly more pathogens than traditional testing platforms. Christine Ginocchio, Ph.D.[4] presented a poster at the recent Seasonal and Pandemic Influenza meeting in Washington, DC, that emphasized the assay’s reproducibility and its ability to detect mixed infections.  “Overall, we detected a variety of respiratory viruses in 29 percent of specimens tested by direct immunofluorescence [DFA], in 49.9 percent of the specimens by rapid viral culture using R-Mix cells [Diagnostic Hybrids, Athens, Ohio], and in 64 percent of the specimens by the RVP [respiratory viral panel] assay,” she says. “The increase in identifying specimens positive for a respiratory virus was due to the fact that we are detecting viruses we normally do not culture for or grow routinely in the laboratory—the rhinoviruses, parainfluenza, and coronaviruses.”

Despite the fact that the benefits to using multiplex testing are numerous, a number of payors have taken a hard line when it comes to covering these tests.  Several of the payors concerns are discussed below.

III.  Problems with Multiplex PCR Respiratory Viral Panels:

Testing platform manufacturers have programmed their machines to test for organisms that are not common. One the one hand, manufacturers have covered their bases when it comes to commonly identified viral infections.  However, as the number of emerging respiratory viral organisms has grown, the manufacturers have expanded the scope of testing to include these organisms, despite the fact that they infrequently seen.

Testing platforms have a “fixed” testing protocol. For example, one of the more common PCR respiratory viral panel testing platforms is set up to test for 22 different organisms using a single sample, regardless of whether the ordering physician believes that a patient should be tested for all 22 of these viral organisms.

Medicare takes the position that multiplex PCR respiratory platforms do not meet the payor’s “reasonable and necessary” requirements. Essentially, Medicare takes the position that fixed testing platforms, where a sample is automatically tested for 22 organisms, regardless of whether or not they are needed, does not meet the payor’s reasonable and necessary requirements.  As such, checking for organisms where there is no identified need for testing would be medically unnecessary.  As Palmetto has argued “The multiplex PCR respiratory viral panels are effectively a ‘one size fits all’ diagnostic approach, and do not meet Medicare’s ‘reasonable and necessary’ criteria. Non-coverage of these multiplex PCR respiratory viral panels does not deny patient access because appropriate clinician directed testing is available.”

The Emergence of COVID-19 has Heightened the Government’s Concerns Regarding Multiplex Testing.   Earlier this year, the OIG added “COVID-19 Add-on Testing” to its list Work Plan projects.  As the OIG noted at the time, the OIG has program integrity concerns related to add-on tests in conjunction with COVID-19 testing, particularly related to potentially fraudulent billing for associated respiratory pathogen panel (RPP) tests, allergy tests, or genetic tests.

IV.  Coverage Concerns with Respect to Outpatient Gastrointestinal Multiplex Testing — CPT Code 87505, CPT Code 87506 and CPT Code 87507:

The specific gastrointestinal lab tests being audited include: CPT Code 87505, CPT Code 87506 and CPT Code 87507.  As you would expect, payors are quite concerned with the proliferation of CPT Code 87507, which involves the testing and billing for 12-25 targets.  Proponents of broad, multiplex testing can point to a number of benefits that have been identified in connection with this approach.  Several of these benefits include:

(a) Reduced antibiotic use.[5]

(b) Reduced time to antimicrobial therapy.[6]

(c) Led to more targeted therapy.[7]

(d) Reduced downstream procedures such as endoscopies and abdominal imaging.[8]

Medicare, Medicaid and private payors have approached both respiratory and gastrointestinal multiplex testing in a similar fashion.  For example, Noridian has issued Local Coverage Determination guidance providing that it would only cover multiplex gastrointestinal pathogen molecular assays in limited circumstances:

“In immune competent beneficiaries, coverage is limited to no more than 5 bacterial targets (when not testing for Clostridium difficile). Testing for 6-11 pathogens is covered when there is a clinical concern for Clostridium Difficile colitis, and Clostridium difficile is one of the pathogens being tested.

Testing for 12 or more organisms will only be covered in critically ill or immunosuppressed patients.”[9]

V.  Responding to an Audit of Outpatient Respiratory and Gastrointestinal Multiplex Laboratory Tests:

Arguably, there has been a disconnect between the technology being developed by industry and payor policies. A number of the multiplex lab testing technologies currently being sold are not set up to test for only a limited number of specified pathogens.  When conducting outpatient respiratory and gastrointestinal multiplex tests, these machines may automatically test the maximum number of targets.  In other words, a provider can’t use some of these machines to only test for 3-5 targets even if that is all the provider wanted to test.  While payors like to base their denials of higher level multiplex testing on lack of medical necessity grounds, there have been a number of studies which suggest that in the long run, it is both better for the patient and more economical to conduct broad-based multiplex testing.  In any event, you cannot bill a payor for respiratory viral or gastrointestinal pathogen tests that were not medically necessary.  Should you identify that you have received an overpayment, you have an affirmative obligation to return it to the appropriate payment.  For more information on your duty to return overpayments, please see our page on the subject.

If your respiratory and / or gastrointestinal laboratory testing practices are audited (especially CPT Code 87633 and CPT Code 87507), you will need to be able to show that the level of testing billed was medical necessary and appropriate given the clinical profile of each patient.

NATIONWIDE REPRESENTATION:  Call for Free Consultation. 1 (800) 475-1906

Robert W. Liles, JD, MS, CPC, serves as Managing Partner at Liles Parker.  Liles Parker health law attorneys [10] are experienced in defending claims audits of this type.  In addition to being experienced health lawyers, many of our attorneys have also achieved recognition as Certified Professional Coders (CPCs).  Are your laboratory claims for CPT Code 87633 and CPT Code 87507 being audited?  Give us a call for a free consultation:  1 (800) 475-1906.

Robert W. Liles represents providers in audits of CPT Code 87633 and CPT Code 87507 claims

[1] Journal of Clinical Microbiology, Development of a Respiratory Virus Panel Test for Detection of Twenty Human Respiratory Viruses by Use of Multiplex PCR and a Fluid Microbead-Based Assay Sept. 2007, p. 2965–2970.

[2] Martinez R, et al. Clinical Virology Symposium, Poster #C-368, May 2016.

[3] Rogers B, et al. Arch. Path. & Lab. Med. 2015;139(5): 636-41.

[4] CGinocch@NSHS.edu

[5] Axelrad JE, Freedberg DE, Whittier S, Greendyke W, Lebwohl B, Green DA. Impact of Gastrointestinal Panel Implementation on Healthcare Utilization and Outcomes. J of Clin. Microbiology. 2019; 27;57(3). e01775-18.

[6] Cybulski R, Bateman A, Bourassa L, Bryan A, Beail B, Matsumoto J, Cookson B, Fang FC; Clinical impact of a Multiplex Gastrointestinal PCR Panel in Patients with Acute Gastroenteritis. 2018. Clinical Infectious Diseases, ciy357, https://doi.org/10.1093/cid/ciy357.

[7] Id.

[8] Axelrad JE, Freedberg DE, Whittier S, Greendyke W, Lebwohl B, Green DA. Impact of Gastrointestinal Panel Implementation on Healthcare Utilization and Outcomes. J of Clin. Microbiology. 2019; 27;57(3). e01775-18.

[9] Noridian Local Coverage Article: Billing and Coding: Foodborne Gastrointestinal Panels Identified by Multiplex Nucleic Acid Amplification (NAATs) (A56711)