In 2014, the Centers for Medicare and Medicaid Services (CMS) started a program that combined the process of reviewing a sample of claims with providing follow up education as a way to help reduce errors in the claim submission process. This is called the Targeted Probe and Educate Program (TPE). The goal of the program is to help providers and suppliers identify errors made and quickly make improvements. CMS has acknowledged that since its inception the program needs improvements and that this type of review can be burdensome. Most providers and suppliers never experience a TPE review; however, for the ones that receive notification, here are the top five things you should know before moving forward:
Regulatory compliance is a mandatory investment for any healthcare business owner looking to stay out of serious and personal legal peril, let alone one hoping to keep their company viable.
Yet there is seemingly an onslaught of providers that blatantly run afoul of many of these regulations, knowingly or not, or those that believe they may have found a loophole.
Concerning the latter, there is an important mantra that such DME and pharmacy providers should remember and live by: “[W]hat a provider cannot do directly, it cannot do indirectly through an intermediary.”
Marketing for DME – What exactly am I talking about?
DME providers enrolled with CMS (should) know they cannot solicit or ‘cold call’ Medicare Part B beneficiaries, per the Federal Anti-Solicitation Statute, and that they cannot offer anything of value to a potential patient that could induce them to utilize them as a provider, in accordance with the Beneficiary Inducement Statute.
In 2012, the American Hospital Association (AHA) along with three member hospitals filed a lawsuit against the U.S. Department of Health and Human Services (HHS) for the agency’s failure to meet the 90 day decision requirement at the Administrative Law Judge (ALJ) level known as the Office of Medicare Hearings and Appeals (OMHA). Through the years, the case has moved back and forth between a federal district court and federal appeals court in the District of Columbia. Most recently in March, a federal district court judge ordered the AHA to expand on its suggestions it has made over the course of its litigation for how HHS can clear the ever-growing backlog and additionally, explain why the current procedures are insufficient.
In CMS’ latest “MLN Connects” newsletter, the agency discusses the Comprehensive Error Rate Testing (CERT) program and the top five documentation errors committed by providers. Providers should pay close attention when CMS releases these types of notices. If selected for CERT review, providers are subject to potential action such as post-payment denials, payment adjustments, or other actions depending on the results of the review. Therefore, providers should ensure they fully understand Medicare’s documentation requirements and how to meet these demands.
Due to financial and regulatory constraints, many companies are merging or purchasing other healthcare companies. However, prior to closing any transaction, these companies need to first determine whether government agencies must be provided advance notice of the change of ownership (CHOW). As an example, if Medicare is involved, these companies might be required to report the CHOW.
This issue is not one to dismiss or ignore because if companies fail to comply, they face significant penalties. In a recent “MLN Connects” newsletter, the Centers for Medicare & Medicaid Services (CMS) issued a reminder to report changes in ownership. The newsletter cites to an Office of Inspector General (OIG) report from 2016 that found a substantial amount of ownership changes were not being reported.
Aside from the half million already pending before the Office of Medicare Hearings and Appeals (OMHA), OMHA indicates that it receives more appeals each year than its total annual adjudication capacity and has hit its maximum limits given their current resources. With these numbers, the current estimated wait time is 3 years for an Administrative Law Judge (ALJ) to process an appeal. Though recent developments in the litigation involving the U.S. Department of Health and Human Services (HHS) and American Hospital Association (AHA) offered little hope for a resolution, OMHA’s implementation of new settlement initiatives may present a better strategic option for appellants.
DME Compliance Alert: Department of Health and Human Services, Office of Inspector General, updated its work plan in January 2018 to include heightened scrutiny of off-the-shelf orthotic devices, specifically back braces for HCPCS Cods L0648, L0650 and L1833 due to one MAC identifying improper payment rates as high as 79 to 91 percent. Of specific concern is the lack of documentation of medical necessity, including Medicare beneficiaries being prescribed back braceswithout an encounter with the referring physician within 12 months prior to an orthotic claim being filed. The OIG plans to analyze billing trends nationwide, and expects to issue a report sometime in 2019.
Medicare claims are processed by organizations (i.e. Medicare Administrative Contractors (“MACs”)) that contract with the Centers for Medicare & Medicaid Services (“CMS”) to act as liaisons between the Medicare program and providers and suppliers. As CMS continues to evolve its enforcement strategies to reduce fraud and abuse in the system, post payment reviews utilizing statistical sampling still remain as one of its key methods. These reviews are conducted not just by MACs but also by Zone Program Integrity Contractors (“ZPICs”). When a review is completed, providers and suppliers often face large extrapolated overpayment amounts based on the analysis of a small sample of claims. Therefore, providers and suppliers need to understand the process and most importantly, how to effectively navigate the system.
ZPICs are a part of Medicare’s integrity program and took the place of Program Safeguard Contractors (“PSCs”) that operated with the same goal in the past. ZPIC reviews initiate in various ways such as from whistleblower complaints, through ZPIC investigations (e.g. using data mining), and from referral from the Office of Inspector General (“OIG”).
Since the implementation of the ZPIC audit and RAC audit programs, healthcare providers and suppliers have experienced increased scrutiny in the pursuit of overpayments and fraud. Medicare’s most vital tool in its progressive search is the use of statistical sampling. In theory, statistical sampling offers a reliable and low cost approach to addressing large volumes of claims. However, this process gives the government a huge advantage as it places a heavy assumption on a large number of claims without actual review of the claims. Thus, it is important for providers and suppliers to understand the process and know how to challenge such studies in order to minimize potential repayment obligations and retain their revenue.
What is statistical sampling?
Statistical sampling draws a random sample from a universe of claims and extrapolates or projects the results of the sample to the entire universe of claims. In other words, the Medicare contractor will select a sample of claims to review from a look back period or examination period of typically two or three years. For this example, let’s say that the review finds a 40 percent error rate in the sample, meaning 40 percent were not found to meet Medicare requirements for payment. In this case, a contractor will apply the 40 percent finding to the entire two years’ worth of claims and deny these claims based on the sampling results.
Medicare payment suspension can place serious financial strain on a company’s operations. As a result, many companies face the risk of closing its doors when a suspension is initiated. Nevertheless, CMS is able to issue such suspensions by meeting a relatively low threshold. Additionally, suspension decisions are not appealable leaving affected providers and suppliers with little options. Therefore, it is important to understand the suspension process and how to counter if a notice of suspension is received.
CMS can suspend payments to providers and suppliers based on “reliable information” of any of the following: (1) fraud or misrepresentation; (2) when an overpayment exists but the amount has not yet been determined; (3) when reimbursement paid to a provider or supplier may be incorrect; or (4) when a provider or supplier fails to submit requested records needed to determine amounts due. Suspensions are initiated by a request to CMS’ Office of Program Integrity by either law enforcement or a Medicare administrative contractor.
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