Moving the HME Industry Forward

Billing/Reimbursement

CMS Limits Scope of Review on Redetermination and Reconsideration

August 24, 2015

AMARILLO, TX – One of the most difficult and frustrating aspects of being a DME supplier is dealing with Medicare post-payment reviews, audits and overpayment determinations. The experience of a large audit can be daunting and expensive.  

Typically, the audit process begins with an ominous letter from a Zone Program Integrity Contractor (ZPIC), Recovery Auditor Contractor (RAC), Comprehensive Error Rate Testing (CERT) contractor or DME Medicare Administrator Contractor (MAC) requesting additional documentation for a set of claims to confirm that the claims were properly payable. The supplier is not told what the issues are, so the guessing game begins. Once the supplier provides the requested documentation, the waiting game begins. Suppliers may receive a formal overpayment determination within 30-60 days, or the process could linger for over a year.

The overpayment determination will outline the reasons why claims were denied. The supplier then has 120 days to appeal the overpayment determination by requesting a redetermination. The redetermination review is conducted by an employee of the ZPIC, RAC or DME MAC who did not partake in the initial determination. If the redetermination confirms the initial findings, the supplier may request reconsideration, within 180 days from the redetermination decision, by a Qualified Independent Contractor (QIC). If the QIC confirms the determination, a supplier may appeal the decision to an Administrative Law Judge, then to the Departmental Appeals Board, and finally to federal district court.        

It has been CMS’s policy, up until now, that redetermination and reconsideration appeals were reviewed de novo, which means that the appeal was a new and independent review of a claim regardless of the reasoning outlined in the initial overpayment determination. For example, if an initial overpayment determination stated that claims were improper because of reasons A, B and C, upon redetermination or reconsideration the reviewer, for the first time, could argue that the claims were improper because of reasons D and E. This presented significant “moving target” problems for suppliers, because their claims would be deemed improper for new reasons and suppliers had limited opportunity to fully articulate responses.

Fortunately, in a new Medicare Learning Network (MLN) Matters Special Edition Article, CMS has instructed its contractors and QICs that they must now limit the scope of their review of post-payment audits to the reasons articulated in the initial overpayment determination. The MLN Matters reasoned that because MACs and QICs have discretion while conducting appeals to develop new issues and review all aspects of coverage and payment related to a claim or line item, unfavorable appeal decisions could occur even if the original denial reasons were cured.

But, CMS made it clear that if an initial denial was based on insufficient documentation, a subsequent appeal may still deny the claim if the additional documentation provided does not support medical necessity. And, “[i]f an appeal involves a claim or line item denied on a pre-payment basis, MACs and QICs may continue to develop new issues and evidence at the their discretion and may issue unfavorable decisions for reasons other than those specified in the initial determination.” Finally, CMS’s instructions to limit the scope of review applies to redetermination and reconsideration requests received by a MAC or QIC on or after Aug 1, 2015. It will not be applied retroactive.

This is an important development in how MACs and QICs are able to review previously denied claims. If, moving forward, suppliers are able to provide documentation and medical records that cure the initial reasons for denial, the inquiry should be over and suppliers should be paid or overpayment determinations reversed.

Jeff Baird will be presenting the following webinars:

AAHomecare’s Educational Webinar
Use of Social Media: What You Need to Know and Do
Presented by:  Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Tuesday, August 25, 2015
2:30-4:00 p.m. EASTERN TIME
The use of social media is growing at exponential rates and can be very beneficial for a company’s advertising and promotion. This area is in a constant state of evolution, and if you are not paying attention, your practices may quickly become outdated or, worse, unlawful. Understand the law and the nuances in developing policies because it is no simple task. You need to get it right; it must match your culture, comply with the law and be effectively communicated to your staff.

“Use of Social Media: What You Need to Know and Do” takes place on Tuesday, August 25, 2015, 2:30-4:00 pm ET, with Jeffrey S. Baird, of Brown & Fortunato, PC. Contact Ika Sukh at ikas@aahomecare.org to register.

FEES
Member: $99.00        
Non-Member: $129.00

AAHomecare’s Educational Webinar
Joint Ventures and Other Arrangements with Referral Sources
Presented by:  Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Thursday, September 10, 2015
2:30-4:00 p.m. EASTERN TIME
In the real world one business can enter into an arrangement with another business without worrying about pesky government regulations.  Unfortunately, DME suppliers are not in the real world……they are in an alternative universe known as “health care world.” Unlike auto parts suppliers and widget manufacturers, DME suppliers must be careful in entering into arrangements with other providers. This is because of federal and state anti-fraud statutes and regulations.  For example, the Medicare anti-kickback statute makes it a crime for a person/entity to receive compensation for referring (or arranging for the referral of) Medicare/Medicaid patients to a health care provider.  All states have anti-kickback statutes that are similar to the federal statute. The federal Stark physician self-referral statute prohibits a physician from referring Medicare/Medicaid patients to a provider in which the physician has a compensation or ownership interest. These are but two examples of the many anti-fraud laws that are on the books.  This program will discuss the relevant state and federal anti-fraud statutes and regulations that govern the types of arrangements that a DME supplier can enter into with another provider, such as a physician, home health agency or pharmacy. The program will discuss the types of arrangements that are clearly legal, the types of arrangements that fall within the proverbial “gray area,” and the types of arrangements that must be clearly avoided.

“Joint Ventures and Other Arrangements with Referral Sources” takes place on Thursday, Sept 10, 2015, 2:30-4:00 pm ET, with Jeffrey S. Baird, of Brown & Fortunato, PC. Contact Ika Sukh at ikas@aahomecare.org to register.
FEES
Member: $99.00        
Non-Member: $129.00

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or jbaird@bf-law.com.

Joshua I. Skora, JD, is an attorney with the Health Care Group of Brown & Fortunato PC, a law firm based in Amarillo, Tex. Skora represents HME companies, pharmacies, and other health care providers throughout the United States. He earned his B.A. from Dartmouth College and his law degree from the University of Minnesota School of Law. Skora is a member of the American Health Lawyers Association, and can be reached at (806) 345-6346 or jskora@bf-law.com.