I Object on Nashville Medical News

I Object

By: CINDY SANDERS

How to Proceed When You Disagree with the Auditors

With only a 10 percent appeal rate in Region C according to the latest RACTrac statistics, one of three things must be true: 1) 90 percent of the providers in this area found to have overbilled Medicare willingly admit culpability; 2) providers believe they are innocent of overbilling, but the amount of the claims being denied isn’t worth the time, effort and expense to appeal; or 3) many providers are unsure of how to mount a viable defense of their coding and/or clinical decision-making processes.

Considering how quickly the dollars add up when error rates are extrapolated from the statistical sample and given the success rates of partial or full vindication upon appeal … it’s a reasonably safe bet that a significant number of providers fall into the last category. There is no question that some errors are indefensible — this is particularly evident in coding errors where it is clear the hospital or private practitioner has consistently made a mistake in the way they’ve billed for a specific DRG. In that case, the provider can only learn from the mistake, work with the Centers for Medicare and Medicaid Services (CMS) to arrange a payment plan that won’t sink the practice or facility, and move forward poorer but wiser.

However, in many cases are viable appeals that could save providers and facilities thousands … and in some cases millions … of dollars. The two keys, though, are timeliness and effectiveness in presenting your case.

Christopher Was, a member in the Health Care Practice group of Miller & Martin PLLC, pointed out providers have 120 days to file a formal appeal from the date of the CMS overpayment demand letter, but the timeframe is really tighter than that. “If you want to stop repayment … the take back of the overpayment … you’ve got to get that appeal filed within 35 days. It’s actually 30 days, but they allow five days for mailing,” he noted.

Once an audit is complete, the audit contractor issues a notice of determination letter to the provider and to the Medicare Administrative Contractor (MAC). This letter previews the findings and would normally arrive before the formal letter from the MAC on behalf of CMS, therefore giving providers a slight ‘head’s up’ when it comes to preparing to defend an unfavorable decision. In Tennessee, the auditors of record are Connolly Healthcare for RAC and AdvanceMed Corporation for ZPIC audits, and the MAC is Cahaba Government Benefits Administrators.

“We find a lot of providers just sit on that (auditor) letter hoping against hope nothing further is going to happen,” Was said, adding that it is a vain hope. He continued, “We are finding the letters from the auditor and CMS are coming closer together.” For that reason, he said, it is essential healthcare providers have a plan already in place to maximize the small window of opportunity to retain reimbursements while working through the appeal process.

“Don’t procrastinate when you get that overpayment letter from the auditor, and surely don’t procrastinate when you get the CMS letter,” he warned. “Work ahead of the curve and act quickly to stop recoupment at levels one and two of appeals.”

If you disagree with a finding of overpayment, there are four levels of appeal with the first two being administrative. The first level of review is a request for redetermination by the MAC. Level two is a request for reconsideration by a Qualified Independent Contractor (Q2 Administrators for cases originating in Tennessee) followed by adjudication by an Administrative Law Judge (ALJ) and finally to a hearing by the Medicare Appeals Council. After that, the provider would have to seek judicial review through the federal court system.

“You are permitted to stop recoupment right through the second level of appeal, which is the request for reconsideration,” Was explained. “After the decision on the reconsideration request, then recoupment goes forward, and you would have to get a refund if you are ultimately successful at the Administrative Law Judge level.”

While it might seem counterintuitive that the MAC would side with a provider over an auditor, that hasn’t been the case. In fact, many issues have been resolved … or determinations have been significantly reduced … at the first or second level of appeal. Was noted, “We’ve been quite successful at the first level in getting the overpayment demand reduced by two-thirds or more.”

Again, Was stressed, even a partial reversal is important. Lowering that base amount has far-reaching implications because of statistical extrapolation. “The extrapolation makes the dollars expand and multiply rapidly,” he said. Changing the base amount statistically changes the entire overpayment demand. Additionally, he said, there are a number of valid points to challenge the amount of extrapolated overpayment based on how the audit sample was initially taken (see companion article by Was).

Furthermore, he pointed out, there is a substantial opportunity to challenge rulings based on medical necessity findings. The medical personnel employed by MACs to review coding and medical necessity issues aren’t physicians “so their denials are certainly fair game for review,” he said.

Was added that findings are often made based on the information at hand. However, he pointed out, gaps in the record could be filled in with information that clarifies the decisions made at the time of service. “Oftentimes, the office administrator or the coder in the physician’s practice will only send in the progress note for the date of service, and that might not give the full picture,” Was pointed out. He said it might be necessary to supply additional documentation including a patient’s prior medical history or to get a physician’s affidavit to go toward medical necessity.

However, any additional information used to shore up a case must be submitted early in the process. “The regulations say the record must be complete upon submission to the Qualified Independent Contractor,” explained Was. “You would need good cause to add to your record at the Administrative Law Judge level.”

He added that it is important to anticipate what could become issues going up the appeal chain. Interestingly, Was noted, a provider might prevail in having a denied claim decision overturned on one basis only to find the claim denied for a different reason upon appeal. Therefore, he said, it’s important to be able to demonstrate appropriate coding even when appealing a claim denied for medical necessity.

Finally, Was said it is important to look ahead when considering the decision to appeal a current determination. RAC auditors have a direct financial incentive to find overpayments. Even ZPIC auditors, who don’t directly benefit from recouped amounts, have an incentive to be aggressive in order to keep lucrative contracts. It’s natural to go after low-hanging fruit so providers shouldn’t be surprised if they find the same types of DRGs audited again and again once an overpayment determination has been made.

“You don’t want them to think you are an easy mark just because you haven’t exercised your right to appeal,” Was concluded.